Introduction

[1] The trial of this matter took more than two weeks to complete; the trial began during the week of June 20, 2011, and was adjourned to and completed in the first week of the November, 2011 fall sittings.

[2] The original Application and Answer and Claim by Respondent included claims by each party for equalization of net family property. As well, the applicant, Deborah Cherry-Francey (now Deborah Cherry) claimed damages for battery from the respondent, her former husband, William Francey. Ms. Cherry also claimed retroactive and ongoing child and spousal support. Mr. Francey states that he has overpaid child and spousal support and seeks a return of funds paid to Ms. Cherry between separation and the present.

[3] These parties were married on October 5, 1991. There are two children of the marriage, namely Branden Francey, born May 20, 1994 and Joshua Francey, born April 28, 1998. The parties physically separated on May 5, 2005 when Mr. Francey was charged with assault and removed from the home (although Ms. Cherry insists that they separated a year earlier). Those charges were later dismissed for delay. The parties divorced on July 3, 2007; Mr. Francey has since remarried.

[4] After separation, the children resided with the applicant. Custody and access were live issues and the Office of the Children’s Lawyer appointed counsel for the children. Branden went to live with the respondent in January, 2011; Joshua remains with the applicant. With the assistance of the Children’s Lawyer, custody and access issues were settled by way of Minutes of Settlement on a final basis on the first day of trial.

[5] These proceedings were commenced by Ms. Cherry on May 16, 2005 and have been exceedingly lengthy and acrimonious. The parties have fought over almost every issue, using every means possible in various tribunals, including the criminal courts, this court and the bankruptcy court. Over the past 6 years, both parties have expended enormous sums on legal resources, leaving them with very little today. I can say little more than did Gilmore J. of this court, who in March, 2010 heard a default hearing and a motion to set aside the striking of Mr. Francey’s pleadings; in her consideration of those issues, she observed both parties to be both physically and emotionally exhausted by their ongoing battle. The net result of these proceedings has left the parties, in my view, battling over territory already largely devastated by the war itself; the scorched earth tactics employed by the parties and the enforcement authorities have left little to be gained today by either party by way of result from the present litigation.

[6] After Ms. Cherry commenced proceedings, there were a series of orders for disclosure; Ms. Cherry and her business valuator said that Mr. Francey had complex and murky business dealings which made his income and assets impossible to determine. Support orders were made which were not honoured by Mr. Francey. Eventually, Ms. Cherry obtained an order striking Mr. Francey’s pleadings due to non-disclosure and non payment of support. After this, in 2009, Mr. Francey suffered a judgment for support in the amount of $14,500 per month retroactive to Ms. Cherry’s date of separation after an uncontested trial. Arrears of support eventually exceeded $600,000; as a result aggressive attempts were made to collect that support by the Director of the Family Responsibility Office. The orders striking the respondent’s pleadings and for the support noted above were eventually set aside by Gilmore J. in March, 2010; the spousal support was stayed and child support reduced to $468 per month.

[7] As Mr. Francey went bankrupt in 2007 and remains undischarged, the question arose as to the prosecution of the property and debt issues in this proceeding. Both parties were prosecuting equalization claims; Ms. Cherry was also claiming damages of $500,000 related to the assaults she alleged were committed against her. At the beginning of the trial, I noted that Ms. Cherry did not have leave to proceed in the face of the automatic stay of proceedings of personal claims against a bankrupt under s. 69(1)(a) of the Bankruptcy and Insolvency Act,[^1] and that accordingly her equalization claim and her claim for damages were only provable in the bankruptcy and not in this trial or these proceedings. I also noted that Mr. Francey’s claims for equalization of property could only be prosecuted by his trustee in bankruptcy, Harris & Partners, in whom his equalization claim had vested under s. 71 of the Bankruptcy and Insolvency Act. According to the trial management endorsement of Rogers J. dated April 14, 2011, the trustee was ordered to be served with that endorsement and to appear at trial to provide its position. It was unclear as to whether the trustee was actually served, although Mr. Francey stated that the trustee was aware of the trial. Mr. Francey attempted to telephone his trustee that morning, and then stated that he wished to give the trustee a chance to appear to make the claim for equalization. When we were 3 days into the trial, on Wednesday, June 23, 2011, we spoke again to the matter and it was acknowledged that the trustee had again been advised of the proceedings and was not present and that Mr. Francey’s equalization claim accordingly appeared to be abandoned by the trustee.

[8] At the recommencement of the trial on November 14, 2011, a representative of the trustee, Mr. Dominic Serra of Harris & Partners, was present. By that time, Ms. Cherry had put in much of her evidence on the presumption that there were no equalization issues before the court. I asked Mr. Serra if the trustee was intent upon obtaining counsel to pursue the equalization payment. I noted that there would be a potential liability for costs and that Ms. Cherry would be given leave to call further witnesses to deal with the equalization issue, as well as a potential adjournment so that Ms. Cherry could obtain leave to proceed with her equalization and damages claim at trial. Mr. Serra stated that there was no money in the estate to retain counsel and that the trustee would not be participating in the trial. He confirmed on the record that the trustee was abandoning the equalization claim made by Mr. Francey.

[9] The parties each gave evidence during the trial. The applicant also called her bankruptcy lawyer, Bob Klotz to give evidence as to why Mr. Francey remained undischarged in the bankruptcy; she further called Jonathan Hames, who completed the forensic accounting regarding Mr. Francey’s businesses and his income. Ms. Cherry also called her mother, Marion Cherry to give evidence of the abuse that Ms. Cherry suffered at the hands of the respondent as well as to the fact that there was hidden income in the business. She finally called a friend, Diana Astolfi to give evidence as to her present circumstances. Mr. Francey gave testimony and also called his wife, Catherine Francey as a witness; she testified as to the parties’ present financial circumstances.

[10] Because the property and damages issues were either stayed or abandoned, the only matter to be decided by me was spousal and child support payable by the respondent and any set off child support payable by the applicant to the respondent. Both parties raised issues of retroactivity, the applicant claiming retroactive child and spousal support and the respondent claiming a return of the overpayment of support to the applicant.

[11] For the reasons set out below, I have determined that Mr. Francey’s income is imputed at $50,000 per annum and Ms. Cherry’s income is $17,880 per annum from ODSP benefits. I have accordingly determined that Mr. Francey will pay ongoing child support to the applicant in the monthly amount of $309 commencing December 1, 2011. Mr. Francey shall pay $600 per month for spousal support commencing April 1, 2013. I have further determined that there will be no retroactive adjustment for overpayment of support or for retroactive support payable by the respondent.

Background Facts

(a) Events Leading Up to Separation

[12] These parties met in 1985. At that time, Ms. Cherry was a student at Ryerson taking Information and Technology Management. She graduated with a degree in that discipline in 1987.

[13] Ms. Cherry grew up on a farm owned by her parents in Haldimand County in Southern Ontario. The farm was a cattle and milk operation. Ms. Cherry’s father tragically died in a farming accident in 2007 and the farm has now been sold. Presumably her farming background was the reason that she was initially able to obtain a position in the Queen’s Park office of the Provincial Minister of Agriculture after graduation.

[14] That job came to an end with the defeat of that government and Ms. Cherry eventually obtained a position as an executive assistant to a vice president of Pillsbury; she enjoyed this job but eventually when her department closed, she was involved in shutting down her section and assisted in the lay off of employees of her department. She remembers this as a particularly difficult and painful episode in her employment history. That job ended in 1991 after she had worked there for two years.

[15] The parties moved in together in February, 1991 and were married on October 5, 1991. Mr. Francey states that they had planned an earlier wedding in 1990, but that they broke up for a short period of time due to an incident when Ms. Cherry showed up at his apartment intoxicated.

[16] Mr. Francey was initially at Seneca College, but moved over to Ryerson soon after the parties met. He graduated with a business degree in 1990. He initially obtained a position in sales with a company called Calabco; he also worked at the post office where he had worked during university. In late 1991, he and another individual decided to open a company dealing with computer components and software; that corporation was Ultratech Distribution Inc. (“Ultratech”).

[17] The parties operated this business and others together for many years during the marriage. Their stories differ vastly. Mr. Francey states that his wife was incompetent in her duties and was a wastrel who overspent without regard to the bottom line. Ms. Cherry states that her husband was an extremely angry and abusive man, who lost his temper with customers and staff alike, and were it not for her intervening on a constant basis the various businesses operated by the parties would have either failed or lost important customers and staff. Each party blames the other for the various business failures which eventually did occur.

[18] In any event, Ultratech opened its doors in December, 1991; it is common ground that the partner who was to open the business with Mr. Francey had pulled out by the time the business commenced operations, but there is little further agreement as to how this business began or operated. Ms. Cherry states that she and Mr. Francey started the business together; he worked in sales and in constructing generic computers while she managed the office setting up a working bookkeeping system and dealing with personnel. Mr. Francey states that he opened the business on his own and operated it on a profitable basis for about a year until Ms. Cherry was fired from Pillsbury and basically moved into the Ultratech office and began working there. He states that she moved in without his consent, but there was little he could do to remove her. Whether forced on him or not, however, Ms. Cherry had 50% of the shares of the corporation and held the office of vice president of the corporation; Mr. Francey was the president and treasurer.

[19] In any event, it appears that the company was initially successful. According to Mr. Francey, Ultratech took advantage of a niche that was quite profitable due to the high cost of name brand computers and the ability to market software in the “grey market” which existed at that time. Because name brand computers were quite expensive, running at about $3,000 apiece, there was a thriving market for generic computers; small operators could market computers or components for generic desktop computers which allowed consumers to purchase these computers for a lesser price. Software such as Windows and Word could be sold and reinstalled on a number of computers; although the software was legal, it could be loaded on a number of machines without the need for individual licenses for each computer.

[20] Accordingly, Ultratech went through a period of growth. From a small operation, the company grew to have a number of employees and moved in 1994 to larger premises. Technicians and sales people were hired as was a receptionist. At its height the business had 8 employees in addition to Ms. Cherry and Mr. Francey. The parties took out a $350,000 line of credit with the Bank of Montreal in order to finance operations; that line of credit was secured against the jointly owned matrimonial home which had been purchased by the parties at 757 Shanahan Boulevard in Newmarket in 1992.

[21] After the move to the larger premises, the parties’ relationship began to deteriorate. The parties moved the business about a month before Branden was born on May 20, 1994. After Branden’s birth, Ms. Cherry almost immediately came back to work; her office was in a quiet part of the building where she could work and care for her son at the same time. Ms. Cherry states that during this time, Mr. Francey was becoming increasingly abusive. She said that inventory was disappearing and the bank was concerned. She thought there was employee theft, but now thinks that Mr. Francey was responsible for the removal of the inventory. She stated that she worked closely with the bank which infuriated Mr. Francey and caused the abuse to increase due to his control issues. She states that her husband’s spending practices were out of control, and that the only reason that the bank did not step in was because of her. She was pregnant with Joshua and she felt increasingly excluded by her husband, who was associating with a group of men having what she referred to as an “ethnic origin” which did not respect women. She stated that her treatment at the hands of Mr. Francey eventually became unbearable and that it became apparent that she was being forced out of the business.

[22] Mr. Francey states that it was not himself, but his wife, who spent money without regard to business realities. He states that in 1996 and 1997, the company operated at a substantial loss, largely because of the spending habits of the applicant. He states that Ms. Cherry would hire employees without consulting with him. He recounted an incident where he was away in Thunder Bay on business; when he returned he found construction workers at the business premises doing substantial renovations that he knew nothing about. On another occasion, he came home to find $15,000 worth of landscaping work at the home which had been done without his approval. He states that all of this was paid for by the business line of credit which was almost always maxed out. By 1997, he felt that the survival of Ultratech depended on Ms. Cherry being removed.

[23] Accordingly Ms. Cherry was bought out of the business. The parties and Ultratech signed an agreement on March 31, 1998; that agreement provided that Ms. Cherry was to receive the sum of $325,000 from the corporation; Mr. Francey also agreed to transfer $50,000 in RRSPs to Ms. Cherry as well as his interest in 757 Shanahan Boulevard and the boat. Ms. Cherry surrendered her shares in the corporation, and gave up her employment with Ultratech. It is to be noted that Joshua was born by way of caesarean section on April 28, 1998, about a month after this agreement was signed.

[24] Pursuant to that agreement, Ms. Cherry surrendered her shares and she also states that she received the transfer of the home into her name; she says that she did not register the house transfer until October, 1998. Other than one payment of $2,400, she never received any funds from the corporation largely due to the fact that it shortly thereafter went into receivership. She states that she never saw any money from the RRSP as the parties used those funds to live on. The boat was sold and she did not receive it either. Mr. Francey states that the home, in fact, was never actually transferred, and was subject to the Bank of Montreal line of credit in any event.

[25] The agreement almost appears to be a separation agreement, although it is not stated to be. It is apparent that the relationship between the parties had deteriorated significantly by this time, and Ms. Cherry states that her husband was “AWOL” from the marriage. There appears to have been severe financial stress as Ultratech was struggling to survive. She says that the abuse was increasing, and she felt like she was separated from her husband.

[26] Mr. Francey confirmed that the parties were not getting along, but that he was struggling to keep the business alive. He states that his wife had also become involved in a new age group that he called the “Keys of Enoch” and that this had exacerbated the divide between the parties. It is common ground that by 1999 Mr. Francey was seeing someone else and that he did not hide this from his wife.

[27] By the fall of 1998, it became apparent that Ultratech could not survive. In December, 1998, after a meeting with the bank, the respondent agreed with the bank that there would be a voluntary receivership of Ultratech. The locks were changed, and the business was shut down. Mr. Francey states that the bank agreed to accept $250,000 by way of payout of the line of credit and the matrimonial home was mortgaged to pay out the Bank of Montreal line of credit. Mr. Francey states that he assisted in the orderly winding up of Ultratech, including the sale and distribution of inventory on site.

[28] Ms. Cherry states that around the time of the receivership she was approached by the bank because of Mr. Francey’s inability to manage the business. She says that she was hired as a consultant by the bank to assist them in the receivership; again she states that this upset Mr. Francey, again because of his control issues. She states that she met with Mr. Francey and the bank during the receivership, and that she was there as a representative of the bank. Mr. Francey on the other hand states that this is ridiculous; he questions as to whether a bank would realistically hire a debtor on a substantial line of credit to assist in the execution of that line of credit. He is correct that it would be unorthodox for a bank to request a debtor to assist in the winding up of their own business; in any event, not a lot rests on this issue as, one way or another, Ultratech came to an end in December, 1998.

[29] Mr. Francey had incorporated a business known as Premier Direct Computers Inc. in 1997; in February, 1999, he began operating this company as a business styled as Premier Peripherals. The focus of this business was no longer in the construction of computing systems or desktops as had been the focus of Ultratech; Premier Peripherals sold, as its name suggested, peripheral items such as mice, keyboards and components. The business also provided printing of logos on these items. Finally, the business was able to market “grey market” software as noted above. This business became moderately successful.

[30] In 2001, the parties attempted reconciliation. Ms. Cherry states that Mr. Francey told her that he would stop “fooling around” and would cease the abuse. The parties decided to sell the Shanahan Boulevard home and purchase a home which was large enough to operate the business out of; although this would involve a large mortgage debt, that debt would be carried through the rental of part of the home to Premier Peripherals. At this time, as well, Ms. Cherry was working on her Reiki and aromatherapy qualifications; she also intended upon opening up a therapy business in the new home.

[31] In May, 2001, the parties purchased a residence at 51 Abbotsford Road in Stouffville. This was a large home and the back of the home opened on a small lake. Ms. Cherry states that the home was purchased for $800,000; all of the funds for the Newmarket home, which she says was hers, were used in the purchase of the Abbotsford Road property. The mortgage on the home was $600,000; the accelerated payments on the mortgage were about $5,000 to $6,000 per month, but most of this was intended to be paid by the business. She says that she was “blinded” by her husband’s talk of reconciliation and in hope for the future. The home was renovated to accommodate the business as well as therapy rooms for Ms. Cherry’s Reiki business.

[32] The parties began to live a fairly luxurious lifestyle; the children were going to a Montessori school and the family enjoyed the parkland by the lake. Things, however, began to sour quickly as it became apparent that the move to Stouffville was detrimental to the business as most suppliers and customers were centred in Markham, where the old premises for Premier Peripherals had been located. As well, business conditions deteriorated. Components were less in demand as the prices for new computers, including name brand computers, fell substantially during these years. As software companies tightened up on the use of licenses for their software, the grey market sales of software began to deteriorate as well. The fundamental areas of business in which Premier Peripherals operated were becoming increasingly difficult from which to earn a profit; Mr. Francey states that his margins were dropping, and he was not able to keep up with the costs of the Abbotsford Road property or the lifestyle of the family.

[33] Mr. Francey states that he tried to discuss these problems with Ms. Cherry but she refused to see the reality of the situation. He says that Ms. Cherry became re-involved in the “Keys of Enoch” and that Ms. Cherry went on several conventions with this group; he states that Ms. Cherry lied about whether she attended at a convention on at least one occasion. He states that this group gave his wife a sense of entitlement and that it was clear that his values were substantially diverging from those of his wife’s.

[34] There were accordingly serious money and values issues between the parties. Mr. Francey states that he objected to the private schooling for the children but Ms. Cherry insisted upon the children continuing at a Montessori School. He testified that he tried to get Ms. Cherry to agree to lower the accelerated mortgage payments on the home, but she refused to do this as well. He states that the parties fought constantly about money, and the marriage quickly deteriorated as it became increasingly apparent to him that the parties could not afford to reside at Abbotsford Road. Because matters were deteriorating, Ms. Cherry insisted that she no longer wished to participate in income from the business being attributed to her. Mr. Francey fell behind in payments to the Canada Revenue Agency, both in income tax and in GST remittances.

[35] In April, 2004, he moved the business from the home to premises in Markham because he felt that this might assist the business as he would be closer to suppliers and customers; unfortunately this backfired as business continued to deteriorate and he now had a rental payment to make. Ms. Cherry states that she considers the day that Mr. Francey moved the business from the home to be the date of separation. She states that after that date, the parties did not have sexual relations and that they were living separate and apart under the same roof.

[36] Ms. Cherry denies that the family was suffering financially and that Mr. Francey was hiding money from her. She attributes the problems in the marriage to Mr. Francey’s increasingly abusive behaviour. She states that Mr. Francey was abusive to the children and the Children’s Aid Society had to become involved on several occasions. She states that she was pregnant with twins, and that Mr. Francey had kicked her in the stomach; a week later, and as a result of the assault, she miscarried at a party that she was forced to go to. She went on two occasions to the hospital after being assaulted, but did not allow the hospital to call the police. She acknowledges that she went to several conferences involving the Academy of Future Sciences (the same group that Mr. Francey referred to as the “Keys of Enoch” which was actually the name of the book that the group was based upon); she did lie about a conference in Cancun in 2002, but says that she had to go to the conference to escape from the escalating cycles of abuse perpetrated by Mr. Francey. She states that she has been permanently injured and disfigured as a result of the abuse and suffers from post traumatic stress disorder; she had originally, prior to the bankruptcy, sought substantial damages from Mr. Francey for the physical abuse that she says that she suffered at the hands of Mr. Francey. She has, however, filed no medical evidence to prove the alleged injuries suffered by reason of the abuse of her husband other than a statement from her present physician who was told by Ms. Cherry that she suffered from post traumatic stress disorder as a result of the abuse.

[37] Ms. Cherry attempted to set up a Reiki and aromatherapy practice in the new home. Unfortunately, this enterprise was not a success. The respondent states that she was active in the practice and appeared to be working full time; he also claims that Ms. Cherry did bookkeeping for Premier Peripherals. The applicant states that she attempted to set up the business but Mr. Francey sabotaged the operations of the business. She states that when she had clients in, Mr. Francey would purposefully turn up the intercom and the phone making the therapy atmosphere unpleasant; clients refused to return as a result.

[38] An issue was raised regarding a herd of Holstein cattle that Ms. Cherry had on her parents’ farm. Ms. Cherry acknowledges having this herd of Holsteins, but the evidence from both her and her mother was that much of the herd sickened and died. Some cattle had to be sold to cover expenses. The enterprise came to nothing and by the date of separation had little or no value.

[39] The parties’ financial problems continued. Mr. Francey says that he could not afford the accelerated mortgage payments; he tried to have Ms. Cherry attend with him to reduce the payments and increase the amortization, but she would not. He eventually put a stop payment on the mortgage payments so that Ms. Cherry would be forced to go to the bank with him; the payments were eventually lowered. Mr. Francey was also not paying his taxes or his GST remittances; on January 5, 2005, the Canada Revenue Agency froze Premier Direct Computers’ bank accounts and Premier Peripherals went out of business.

[40] Mr. Francey had another corporation named Digiprint Depot Inc. which had been incorporated in 2003. He utilized this company to start a new business which became known as Premier Distribution. From the beginning this company was dogged with misfortune. In May, 2005, Mr. Francey sold some LCD televisions; the purchasers paid with a stolen credit card, but because Mr. Francey did not confirm the transaction, the funds were reversed from his account resulting in a $13,500 loss. He also purchased some counterfeit flash drives which resulted in a $10,500 loss. Around this time, Mr. Francey consulted with a family law lawyer and a trustee; he had not paid income tax in the last 4 to 5 years, and he realized that he would have to declare bankruptcy.

[41] On May 5, 2005, there was an altercation between the parties which began over the fact that Mr. Francey had failed to buy white bread rather than whole wheat bread on his way home from work that day. After the children were in bed, Ms. Cherry alleged that there was a pushing and shoving match between the parties resulting in Mr. Francey being charged with an assault. Mr. Francey states that nothing happened between the parties; he was doing some work on his computer when the police showed up. Ms. Cherry acknowledges having called the police, and they preferred charges against Mr. Francey for assault. He spent the night in the detention centre and never returned to the matrimonial home.

[42] Almost immediately after the separation of the parties, Ms. Cherry commenced proceedings in this matter by way of a handwritten application prepared without counsel. In her consideration of a motion to set aside the striking of Mr. Francey’s pleadings, Gilmore J. of this court completed as a part of her endorsement a comprehensive history of these proceedings. Gilmore J. characterized these proceedings as “tortuous” and I cannot think of a more appropriate adjective than that to describe the process followed by these parties over the more than six years since separation. Based upon her endorsement, and based upon my review of the Endorsement Volume of the Continuing Record, I have summarized the pertinent orders made in this proceeding in Schedule “A” of this decision.

(b) Ms. Cherry’s Situation Since Separation

[43] Ms. Cherry has not had an easy time since separation. Other than one month when she worked in a bakery, she has not been able to obtain gainful employment since Mr. Francey left the home. She is presently receiving social assistance, and her file was transferred to the Ontario Disability Program (ODSP) in July, 2011. She blames Mr. Francey for her inability to work; in effect she states that she would be working but for the abuse suffered at the hands of Mr. Francey as well as her child care role within the marriage. It appears, however, that Ms. Cherry has spent considerable energy in prosecuting her claims against Mr. Francey to the exclusion of improving herself and obtaining some modicum of self-sufficiency since separation.

[44] When the parties separated, Ms. Cherry remained in the matrimonial home with the children. She fairly quickly obtained a support order on consent. It was agreed that the matrimonial home which was in her name alone would be listed for sale. She says that she paid the mortgage after separation; Mr. Francey denies this to be the case but the mortgage discharge statement filed as an exhibit indicates that the mortgage was in good standing on the date of the sale of the home, which indicates to me that Ms. Cherry had been paying the mortgage pending the sale of the matrimonial home. Mr. Francey states that Ms. Cherry forged signatures on cheques in order to keep the children in Montessori School and to obtain funds from him notwithstanding the collection of the order through the FRO. Ms. Cherry denies having forged any signatures on any cheques; she says that the cheques were provided to her by Mr. Francey and that she was authorized to use them. She states that if anyone forged signatures, it was Mr. Francey who had filed income tax returns on her behalf using a forged signature, in which he put income in that was not earned by Ms. Cherry and that was done without her consent. She later contested the filing of a number of income tax returns on her behalf, resulting in an increased tax liability to Mr. Francey.

[45] In the meantime, the matrimonial home was sold and the sale closed on October 18, 2005. The statement of adjustments indicates that the home sold for $1,161,000; the disbursement of funds was set out in the trust statement of the real estate lawyer, D. John Pierce. That trust statement indicates that the first mortgage in the amount of $430,098.23 was paid out; there was also a second mortgage paid out in the amount of $65,464.45. It appears that this mortgage was taken out after separation; Mr. Francey states that this money went to the applicant; the applicant denies this and states that the money was used for necessary repairs to the home resulting from leakage into the basement and mould problems.

[46] It is clear from the statement of adjustments that realty tax arrears were paid in the amount of $25,680.60; as well the amount of $9,470.34 was paid to a contractor for repairs to the home. Several payments were made to the benefit of Ms. Cherry; the first was her moving costs of $765.05 and there was also a six month pre-payment of Ms. Cherry’s rent in the amount of $13,194. After legal fees and utility holdbacks, the remaining amount of $554,500 was paid into the trust account of Ms. Cherry’s solicitors, Epstein Cole.

[47] The trust statement showing the payouts from the trust account of Epstein Cole was never submitted as an exhibit at trial notwithstanding Ms. Cherry’s promise to provide that during her evidence at the hearing. Accordingly, I can only go by the court orders which indicate when and how the matrimonial home proceeds were distributed:

Date

Received By:

Amount

Authority for Disbursement

Comments

October 18, 2005

Royal Bank of Canada; funds alleged to have been originally disbursed to Ms. Cherry

$65,464.45

Statement of Adjustments/Second mortgage registered against the matrimonial home

Mr. Francey states that this amount was to the benefit of Ms. Cherry; Ms. Cherry denies this and says that this amount was necessary for the payment of necessary expenses to the home; no independent agreement or evidence was filed regarding the circumstances of the funding or registration of this mortgage.

October 18, 2005

Ms. Cherry

$765.05

Statement of Adjustments/Agreement between parties

Moving costs for Ms. Cherry

October 18, 2005

Ms. Cherry

$13,194.00

Statement of Adjustments/Agreement between parties

Pre-paid rent for Ms. Cherry

July 15, 2006

Ms. Cherry

$70,000.00

Court Order on Consent

Release of funds which may be credited against support

July 15, 2006

Mr. Francey

$10,000.00

Court Order on Consent

Funds to be applied to Mr. Francey’s legal fees

November 1, 2006

Ms. Cherry

$200,000.00

Court Order on Consent

Payment to Ms. Cherry which may be credited against support or property

November 1, 2006

Mr. Francey

$7,500.00

Court Order on Consent

Funds to be applied to Mr. Francey’s legal fees

November 26, 2006

Ms. Cherry

$26,000.00

Court Order on Consent

Payment to Ms. Cherry on consent

December 7, 2006

Ms. Cherry

$5,000.00

Court Order on Consent

Payment to Ms. Cherry on consent (consent signed November 1, 2005)

December 7, 2006

Mr. Francey

$2,000.00

Court order on Consent

Funds to be applied to Mr. Francey’s legal fees on consent (consent signed November 1, 2005)

March 14, 2007

Ms. Cherry

$21,000.00

Court Order

Order for $21,000.00 to be paid to be applied to Mr. Francey’s support arrears

March 14, 2007

Ms. Cherry

$4,500.00

Court Order

Order for $4,500.00 to be paid out of trust on account of costs owing to Ms. Cherry

February 27, 2008

Ms. Cherry

All remaining funds

Court Order

At the final stage of the uncontested trial, Nelson J. ordered that all remaining funds held in trust be paid to Ms. Cherry. He also ordered that Mr. Francey reimburse Ms. Cherry for the $19,000 that he received from the home proceeds.[^2]

[48] It is not clear as to how much was remaining in trust when the uncontested trial was completed in February, 2008. As stated above, no trust statement from Epstein Cole was ever entered into evidence. However, Mr. Francey did give evidence that most of the $12,246.54 holdback for utilities was paid to Epstein Cole as the utilities had, in fact, been brought up to date prior to closing. If Epstein Cole received at least $10,000 more as a result, they had then received $564,000 to the credit of the applicant. The evidence of the applicant was that she paid Epstein Cole about $200,000 in legal fees; this means that she was paid a figure net of that amount, and also net of $19,500 which appears to have been advanced to the respondent under the various court orders noted above. Accordingly, not taking into account the second mortgage in favour of the Royal Bank as noted above, the applicant received a net amount of about $345,000 ($564,500 – ($200,000 + $19,500). These calculations are in accordance with the applicant’s own evidence which was that she received about $348,000 from Epstein Cole.

[49] However, prior to the payment of funds to Epstein, Cole, Ms. Cherry also received $13,959.05 towards moving expenses and pre-paid rent for her rental accommodations. If we add that back in, the applicant then received a net amount of about $358,959 ($564,500 + 13,959) – ($200,000 + $19,500). If we further add back in the second mortgage, the applicant may have received a net benefit of as much as $424,423.45 from the equity in the matrimonial home.

[50] The respondent also notes that subsequent to separation, the applicant also received about $120,000 in child and spousal support payments since separation. The Director’s Statement of Arrears filed in this matter indicates that $118,644.70 was paid to the Director by the respondent to the credit of the applicant by March 15, 2010, including a large lump sum payment made by the respondent on August 6, 2009 in order to avoid incarceration.

[51] This means that, since separation, and not including the Royal Bank second mortgage, the applicant has received, net of legal fees, the sum of $477,603.70, much of which was paid on a tax free basis.

[52] Subsequent to the closing of the sale of the matrimonial home, the applicant moved into rental accommodations which were located at 29 Misty Well Drive, Richmond Hill, Ontario after the sale of the matrimonial home. Ms. Cherry then purchased a small home located at 103 Selwyn Road, Richmond Hill, Ontario. She says that she did this in 2007 after she received the payout of funds from the matrimonial home noted above. However, her own financial statement dated November 15, 2006 indicates that she owned the home at that point, well prior to the payout of the last payment of funds made in February, 2008.

[53] It is probable that she purchased Selwyn Road with the $200,000 ordered to be paid out on November 1, 2006. However, she was unclear as to what she put down or purchased the home for and her evidence in this regard was completely inconsistent. She had none of the documentation in respect of the purchase of the home. She stated at one point that she had put everything that she got from Epstein Cole into that home, being $348,000; she later stated that she bought the home for $415,000 and put down about $280,000 on the home. Later in the evidence she stated that she put down about $125,000 on the home, and that she held back about $70,000 from the payment out of court to live on during the next year.

[54] Ms. Cherry was not able to remain in that home. She stated that because her husband did not pay his support, she eventually defaulted on the mortgage; until then, she had put a line of credit on the home to live on, which used up all of the equity in the home. She eventually lost the home in power of sale proceedings. Again, she was unable, notwithstanding promises made during testimony, to provide documentation concerning the power of sale proceedings, or documentation regarding the line of credit from the Italian Credit Union which she says that she subsisted on for some time while in that residence. She was forced to move out of Selwyn Road; again the exact date that she vacated that home is unclear. She stated that it was sometime in 2009; later she said that she and the children moved into rental accommodations located at 41 Allison Ann Way in Vaughan on November 1, 2008 and this was confirmed by the documentation from the Landlord and Tenant Tribunal noted below.

[55] She was unable to maintain the rent at this residence; by decision of the Landlord and Tenant Tribunal dated March 24, 2010, Ms. Cherry and the children were evicted owing about $10,000 in rent. It is surprising that Ms. Cherry was unable to pay the rent during this time; according to the Statement of Arrears, during the 17 month period between November 1, 2008 and March 24, 2010, Ms. Cherry received support payments of $77,886.06. According to the summary attached to the order made by the tribunal under the Residential Tenancies Act, 2006,[^3] Ms. Cherry paid no rent whatsoever from November 1, 2008 to March 1, 2010, other than the initial deposit made by her of $2,400. One has to wonder where the funds went if Ms. Cherry did not pay rent during that period of time, the net amount of which totalled $15,240.43 according to the tribunal. Ms. Cherry stated that she could not pay rent due to the children’s expenses including Branden’s rep hockey expenses which were $17,687 in 2006 and $19,904 in 2007. Hockey expenses in subsequent years were unproven.

[56] In any event, for a short period of time the applicant lived at the residence of her friend, Diana Astolfi; she then lived with Joshua at Sandgate Women’s Shelter in Richmond Hill for about six weeks and by the end of June, 2010, she moved into a public housing unit at 25 – 103 Deverill Court, Markham. Branden lived with his father during this time. Since May 1, 2010, Ms. Cherry has been receiving public assistance through Ontario Works.

[57] As noted above, since separation, Ms. Cherry’s only employment was for about a month at a bakery; she states that she was only able to do this because of the favourable situation when she owned the residence in Maple. She states that her child care responsibilities have prevented her from working because Branden came home from school at 2:00 p.m. She states that she had retrained and obtained a certificate in psychological counselling from the Transformational Arts College in Toronto in 2005 or so; she said that to complete the program, she had to do a practicum which involved setting up a counselling practice with an office. It was her evidence that she was unable to because she never had the resources to obtain and rent office space for her internship. Since April, 2010, Ms. Cherry no longer has had a vehicle in working order, and this has also prevented her from obtaining employment. She notes that she has uncontrolled diabetes, diverticulitis and heart problems. She says that she still suffers from the effects of the abuse including depression and post traumatic stress disorder. She states that even if she could get a job interview, she would be unable to get to that interview; there is very poor public transit service to her address and she has numerous medical appointments to attend. She states that she has not been able to get work and that Mr. Francey is “directly responsible” for this being the case. She accuses Mr. Francey of sabotaging any attempt that she made to become self-sufficient, and blames Mr. Francey for her inability to obtain employment.

[58] As noted, Ms. Cherry has had health problems which have prevented her from working. As of July 1, 2011, her file was transferred to the Ontario Disability Program, and she is now receiving ODSP which implies that the Ontario Works has agreed that she is incapable of working. Her medical report from Dr. Nicolle, her family doctor, confirms that she is unable to work and is eligible for ODSP. It appears from the evidence that Ms. Cherry is unable to work due to illness.

[59] After the order of Gilmore J. setting aside the striking of Mr. Francey’s pleadings and the order made at the uncontested trial, this matter was scheduled for hearing during the fall, 2010 sittings. Ms. Cherry appeared with a new lawyer, Mr. K. Larsen, who stated that he wished an adjournment from the fall sittings to prepare for trial. Mr. Larsen stated that he needed time to prepare for trial and that Ms. Cherry had legal aid authorization to proceed to trial. The matter was adjourned to the May, 2011 sittings; however, in April, 2011, Mr. Larsen removed himself as solicitor for Ms. Cherry. Apparently, this was partly due to illness; however, Ms. Cherry states that this was really because Mr. Francey complained to legal aid about the funds that she had received and as a result her legal aid certificate was pulled.

[60] Since then, Branden moved in with Mr. Francey as of January, 2011 (although there was some issue as to whether Branden lived with his father as of March, 2010 when Gilmore J. set aside the order of Nelson J.). The parties have agreed that custody of the children be split; Ms. Cherry has custody of Joshua and Mr. Francey has custody of Branden as set out in a final order dated June 20, 2011.

(c) Mr. Francey’s Situation Since Separation

[61] Since separation, Mr. Francey says that his business operations have become increasingly marginal. He says this is largely because of unreasonable enforcement steps taken by the Family Responsibility Office resulting in several removals of his driver’s license which made it impossible for him to operate his business. He notes that he went bankrupt; Ms. Cherry prevented his discharge without good cause, again impairing his ability to operate a business or obtain employment. Apart from business reversals having nothing to do with the separation, Mr. Francey also states that his wife’s actions prevented him from making any sort of reasonable income after separation and has asked that this be taken into account in the assessment of retroactive and ongoing support.

[62] Because of the criminal charges, the respondent initially had to live with his mother who was his surety. The applicant remained in the matrimonial home. Ms. Cherry almost immediately commenced court proceedings and Mr. Francey was quickly ordered to pay $3,300 per month in support, an order that also quickly went into default. He later changed residences; with the permission of the criminal courts, Mr. Francey moved into an apartment in Toronto in August, 2005. The criminal charges against Mr. Francey were eventually dismissed for unreasonable delay; Mr. Francey cannot recall exactly when that took place.

[63] In October, 2005, due to problems with Premier Distribution, Mr. Francey moved that business into smaller premises at 450 Alden Road, in Markham. In June, 2007, because of non-payment of support, Mr. Francey lost his driver’s license. He says that he could not longer operate Premier Distribution because he needed to drive to pick up and deliver product. He also needed a vehicle to commute to his business premises in Markham. By July, 2007, Mr. Francey states he was unable to pay the rent for Premier Distribution, and that he was locked out from his business premises and Premier Distribution and Digiprint Depot Inc. then went out of business. From this time onwards, Mr. Francey’s ability to earn income appears to have been seriously compromised.

[64] Mr. Francey went bankrupt in April, 2007. Included in his debts was approximately $225,000 in taxes owing to the Canada Revenue Agency; by the time that Mr. Francey applied for his discharge, the amount of CRA tax debt proven in the bankruptcy was $405,697.99. He was due for his automatic discharge in 2008. In June 2008, based upon an objection filed by Ms. Cherry and after argument, the bankruptcy registrar in Toronto ordered that prior to discharge, Mr. Francey pay $10,000.00 to Deborah’s counsel, Mr. Klotz, in order to fund an examination of the respondent for bankruptcy purposes. Mr. Francey states that this order was obtained because his lawyer did not do his job, and failed to advise the Registrar in Bankruptcy that Ms. Cherry had received almost all of the net proceeds of the matrimonial home. In any event, the order was not appealed and the respondent has not paid the $10,000.00 and as such remains an undischarged bankrupt. Mr. Francey states that this situation has further impaired his ability to earn income.

[65] Mr. Francey states that he was out of work from July, 2007 on. He discussed some sort of business arrangement with an individual named Adam Cirelli who ran a company known as Ace Trading; apparently nothing came of that although there were advertisements that spoke of Digiprint merging with Ace Trading. Mr. Francey was unemployed until October of that year when he began working for a former driver for Ultratech, Greg Smith, who had opened a business named Starcom Peripherals with two other former customers; that business operated in Durham. He says he worked for four or five months doing phone sales; his income during that time was about $1,000 per month. He appears to have been more than a salesman at Starcom, as he completed the T4 slips for himself and other employees at that company. He acknowledges providing the customer lists from Premier to Starcom as he was doing sales for that company; he also gave them some old furniture from Premier to use.

[66] In any event, in January, 2008, Mr. Francey got his license back. He lost his license again, however, in July, 2008 and found himself out of work again. He states that Starcom closed within a year of its inception. He states that he began printing labels at home and eventually, in August, 2008, incorporated 3D Domed Labels Inc., which operates as 3D Domes. He continues to operate that business today; he states that although the business has gross income of up to $125,000 per annum, his income is in the range of about between $10,000 and $12,000 per annum. In order to be near to Branden’s school, he has leased a portion of a commercial unit located at 40 Shields Court, Unit 102 in Markham. He still sells wholesale computer parts; he wishes to increase the labelling portion of the business and has several large format printers for this purpose.

[67] In February, 2007, as previously noted, Mr. Francey’s pleadings were struck as a result of non-compliance with disclosure orders and as a result of non-payment of support. After this, he no longer was an active participant in the family law litigation. Mr. Francey again blames his lawyer for this; he states that there was an affidavit that should have been filed prior to the motion but was not; he was also on holidays when the motion was heard. He says that when the date for the motion was set, he told his lawyer about the planned holiday and his lawyer told him not to worry about that as he did not have appear at the motion; however, in her decision to strike Mr. Francey’s pleadings, Rogers J. commented negatively on the fact that the respondent was away on holidays when the motion was heard.

[68] As a result of the striking of the respondent’s pleadings an uncontested trial was held in two stages before Nelson J. of this court. Nelson J. relied upon a report that was prepared by Jonathan Hames which stated, inter alia, that Mr. Francey’s income around the date of separation was well in excess of $400,000 per annum. Based upon this income report, Nelson J. found the respondent to have income of $410,000. He ordered child and spousal support and section 7 expenses totalling $14,508.00 per month retroactive to the date of separation as alleged by Ms. Cherry (April 4, 2004). It is to be noted that this is notwithstanding the fact that Mr. Francey and Ms. Cherry had been living under the same roof for at least one year after that date. When adjustments were made, the order immediately created support arrears owing by Mr. Francey of more than $460,000. Ms. Cherry was ordered to receive all of the remaining proceeds of the matrimonial home held in trust by her solicitors; by this time, she had already received payment of the vast majority of those funds. As well Mr. Francey was ordered to return the sum of $19,000 that had been paid to his credit from the matrimonial home net proceeds in earlier interim orders. There was an award of $5,000 for punitive damages respecting the assaults that Ms. Cherry stated had been committed against her by Mr. Francey.

[69] By the time of the striking of the respondent’s pleadings and the uncontested trial, the Director had already commenced enforcement proceedings against the respondent. Presumably because of the substantial increase in support arrears arising from the uncontested trial, but also perhaps due to the efforts of Ms. Cherry to have the support collected, the efforts by the Director to collect support became increasingly shrill. The enforcement proceedings by the Director took the respondent on a roller coaster ride of inconsistent and contradictory court orders. As noted above, the first event was the respondent losing his driver’s license in June, 2007. In January, 2008, Mr. Francey secured a reinstatement of his driver’s license on the basis that he would pay $1,000 per month; this was short lived; in July, 2008 based upon the fact that the respondent should have paid $14,000, the Director again suspended Mr. Francey’s license. In August, 2008, at a default hearing, Mr. Francey was ordered to pay $1,000 per month; in default of payment of any of these instalments, Mr. Francey would spend five days in jail. On March 8, 2009, Mr. Francey was ordered to pay $300 per month, which appears to be a reduction of the amount payable under the order of August 13, 2008. On May 27, that amount was increased to $2,500 per month, however, without sanction. On July 8, 2009, Mr. Francey was ordered to pay $25,000 to the Director, failing which he would be incarcerated; less than a month later that amount was increased to $33,000; the oral reasons for that decision were not on the record. On December 9, 2009, the respondent was ordered to pay $10,000 by two instalments, failing which he would be incarcerated; by that point, the arrears were in excess of $607,000. On January, 21, 2010, the default hearing was adjourned on terms that the respondent pay $10,000 in two instalments pending the adjournment, again on terms that if the payments were not made, he would be incarcerated for 30 days. Mr. Francey testified that his mother sold a property and loaned him the funds which he had to pay to avoid incarceration; those funds were paid within the time limits contained in the various orders. Mr. Francey says that he now owes his mother over $80,000 for monies paid towards support and legal fees.

[70] Throughout both the family law proceedings as well as the default proceedings brought by the Director, the issue of disclosure was raised on numerous occasions. Mr. Francey states that he provided volumes of disclosure and that most of the information concerning his pre-separation business affairs were left in the home; he states that he provided boxes of disclosure on several occasions but that these were always found to be lacking. An example of what was being requested is set out in the endorsement of Rogers J. dated October 26, 2009 wherein the respondent was ordered to provide extensive disclosure for 15 different firms or corporations within 14 days of the date of that order; the disclosure appears to include bank statements, credit card statements, lines of credit and statements, copies of loan or credit applications, corporate and business tax returns as well as financial statements and supporting documentations all for the years between 2005 to the date of the order. Only a few of those companies or businesses were raised as being in issue at the trial; as well Mr. Francey gave evidence that several of the companies had already been wound down by the date of the order and several did not exist at the date of separation. There was no evidence that Mr. Francey had an interest in at least two of the companies, but had only been employed by them. Were all those companies in existence, and had Mr. Francey had a team of accountants to assist him, he would not have been in a position to satisfy the disclosure ordered within the 14 day limit set out in the order. It appears to me that the disclosure requests of the applicant and the Director were both counter-productive and a recipe for failure as many of the requests were impossible to achieve considering the diminished resources of these parties.

[71] By this time, Mr. Francey was without counsel. Ms. Cherry also had not had counsel since her lawyers completed the uncontested trial before Nelson J. The default hearing along with a motion to set aside the striking of Mr. Francey’s pleadings and to set aside the order made by way of uncontested trial were heard before Gilmore J. of this court on March 4, 23 and 30, 2010. Gilmore J. released her decision on April 28, 2010. Her decision was that the striking of the respondent’s pleadings as well as the judgments made at the uncontested trial of this matter be set aside and that the issues of equalization, spousal and child support proceed to trial. The Director’s application for a default order was dismissed, and Justice Gilmore ruled that adequate disclosure had been provided to the FRO under the circumstances and that Mr. Francey’s income for support purposes should be set at $30,000 rather than the $410,000 as alleged by the applicant. Enforcement proceedings were stayed so long as Mr. Francey paid the support under this order. Mr. Francey was not ordered to pay spousal support and the child support was reduced to $468 per month. Mr. Francey was ordered to request a review of the bankruptcy order in this matter; apparently this was not done, and Mr. Francey remains undischarged.

[72] Mr. Francey misunderstood the order and did not pay the support. The Director accordingly began to enforce the sum owing under the earlier default hearings which totalled $50,000. Mr. Francey’s license, which had been reinstated pursuant to the Gilmore J. order of April 28, 2010, was again removed. Gilmore J., who heard a request for an adjournment of the trial brought by the applicant, ordered that the FRO proceedings be stayed upon the respondent paying the support owing from December 1, 2010 on. Mr. Francey received back his driver’s license as well as his passport in January, 2011.

[73] It appears that Mr. Francey is correct to some extent that both the enforcement proceedings and the bankruptcy have affected his ability to earn an income since separation. This, combined with the general changes in the business that Mr. Francey is involved in, has resulted in Mr. Francey’s income shrinking substantially.

[74] Mr. Francey has now remarried. He met his wife, then Catherine Watters, in September, 2005; she is a legal assistant at a major Toronto law firm. The parties commenced cohabitation in April, 2006 in a condominium owned by Ms. Watters. She eventually sold that condominium and purchased a home. After renting for about a year, Mr. Francey and Ms. Watters moved into Ms. Watters’ new residence located at 22 Dolby Crescent, Ajax, Ontario in April, 2008. Both Mr. Francey and Catherine Francey (formerly Catherine Watters) gave evidence that the entire down payment for this property came from Ms. Watters’ condominium that she had sold earlier; the home went into the name of Ms. Watters alone and apparently she was able to qualify for a mortgage for $413,000 based on her income of about $53,000 per annum without contribution from Mr. Francey. On September 11, 2008, Mr. Francey and Ms. Watters signed a marriage contract excluding that home as well as any other assets from equalization of property; on September 14, 2008, Mr. Francey married Ms. Watters.

[75] The evidence from Catherine Francey is that she and Mr. Francey get along well, but are barely making ends meet. They cannot pay their expenses on Catherine Francey’s income alone; there is minimal contribution from Mr. Francey. He states that he buys things for the household through the business, but that the contributions are small and are wholly declared. They both provided evidence that the means of paying the bills are through a line of credit which was registered against the home as a second mortgage; as they pay down the first mortgage, it leaves further room on the line of credit (which allows advances up to 65% of the value of the home) which allows them to draw amounts down to pay the mortgage. This means that 22 Dolby Crescent is always mortgaged up to 65% of its value. Catherine Francey states that they are often a month behind on the mortgage and the property taxes are in arrears.

[76] As with Ms. Cherry, Mr. Francey has had mental health issues as well that he states have impaired his ability to earn an income. He has filed correspondence from his psychiatrist and his family doctor who both say that Mr. Francey suffers from depression resulting from financial and other stress related to the separation and the court proceedings for enforcement and out of the bankruptcy. The correspondence from the psychiatrist suggests that the problems are situational in nature; if the outside problems relating to his separation clear up, Mr. Francey would have the ability to work and be more productive. Mr. Francey is taking medication, and the correspondence states that his concentration suffers resulting in an inability to earn income; Dr. Yatsynovich, the psychiatrist, suggests that Mr. Francey look at Ontario Disability Support Assistance as he cannot make an income. Mr. Francey has done little to address these problems since the diagnoses in 2007; he participated in group therapy which he found to be of little assistance and the order of Gilmore J. which resulted in a relaxation of enforcement proceedings does not appear to have helped Mr. Francey’s mental state.

(d) Credibility Issues

[77] Regarding the evidence led by the parties, it is concerning to me that Ms. Cherry had little by way of documentary evidence regarding a number of salient points. She did not enter into evidence the power of sale documentations which would have indicated whether there was a surplus of funds from the sale of the home at Selwyn Road. She did not provide a trust statement which would have indicated exactly what she received from trust from the sale proceeds of the matrimonial home, and, other than for 2008, she did not provide documentary evidence of a job search or of what happened to the funds that she received throughout the period of separation. She failed to provide proof of the disclosure that she requested prior to the striking of the respondent’s pleadings in 2007 or of his failure to disclose at that time. She failed to provide copies of exhibits to Mr. Francey and requested court staff make copies of exhibits which exceed one hundred pages in length.

[78] She blames her lawyer for this. She says that she provided a number of boxes of material to Mr. Larsen; when she got her material back from Mr. Larsen, a number of those boxes were missing. Certainly, Ms. Cherry did not have her documents in order and she did not have copies of her documents for Mr. Francey. There were poverty issues at play; Ms. Cherry states that she did not have the funds to make copies of exhibits for Mr. Francey. However, there were large gaps in the evidence presented by Ms. Cherry in this matter and it is not the responsibility of the court to ensure that Ms. Cherry have her case in order for trial.

[79] That being said, and in any event, I generally found Ms. Cherry’s evidence inconsistent throughout. There were large gaps in her memory, and an inability by her to put her evidence in coherent form. She gave conflicting evidence throughout her examination in chief, especially about the funds received after separation, and generally her evidence did not appear to be as organized or well documented as did that of Mr. Francey. The thrust of her evidence throughout was to blame Mr. Francey for all of her problems and she was not able to take any responsibility for the situation in which she finds herself. She blamed Mr. Francey for failure to disclose; however she generally failed to make any disclosure whatsoever as to the income she was receiving or had throughout.

[80] Generally, I did not find her evidence credible and her evidence was often inconsistent or, at times, somewhat incredible in nature. For example, I do find it highly unlikely that the bank would hire a debtor to be a consultant in a voluntary receivership of her company, especially where she had surrendered her shares in that company. I also find it unlikely that a hospital would not call the police in the face of the serious assaults that Ms. Cherry states that she suffered at the hands of Mr. Francey. Throughout this trial, where Ms. Cherry’s evidence conflicted with that of Mr. Francey, I found the evidence of Mr. Francey to be more credible.

Analysis

[81] There are four issues to be determined in this matter:

(a) What income, if any, is to be imputed to the respondent, Mr. Francey?

(b) What income, if any, is to be imputed to the applicant, Ms. Cherry?

(c) What is to be the ongoing spousal support and child support payment owing to be paid by the respondent to the applicant?

(d) Is there to be any retroactive award of either child or spousal support or alternatively a return of any overpayment of support in this proceeding?

[82] I will consider each of these issues in turn.

[83] I will also finally comment on the bankruptcy issue. Mr. Francey had asked me to order his discharge from bankruptcy; although I have jurisdiction, I am not sitting in bankruptcy, and such a motion or application would normally have to be brought before the Registrar in Bankruptcy. The trustee was neither notified nor was present for any such determination; although I will not make an order, I will provide comments which Mr. Francey may wish to bring to the attention of the Registrar in any motion which may be brought concerning his bankruptcy.

(a) What income, if any, is to be imputed to the respondent, Mr. Francey?

[84] Mr. Francey has filed both his income tax returns and tax information from 2000 to 2010 as well as his profit and loss statements from 3D Domes. A summary of Mr. Francey’s taxable income based upon those tax returns is as follows:

Year

Income

2000

$95,000

2001

$55,000

2002

$50,000

2003

$110,000

2004

$155,000

2005

$46,000[^4]

2006

$103,542[^5]

2007

$6,750[^6]

2008

$12,000

2009

$7,300

2010

$9,822

[85] It is unclear as to why Mr. Francey’s income was less in 2001 to 2002 than in 2003 and 2004; this may be a result of the income split which was the subject matter of Ms. Cherry’s Tax Objections for the years 1999 to 2002 inclusive. Ms. Cherry states that she filed those Notices of Objection because her husband had fraudulently filed income tax returns on her behalf; Mr. Francey states that he divided the business income between the parties during those years for the purpose of achieving an income split to save taxes and that his wife was well aware of those returns being filed. He acknowledges that after 2003, his wife had requested that no further income be attributed to her, and he complied notwithstanding the negative tax consequences. In any event, assuming the 2002 return was the product of an income split, the tax returns indicate that Mr. Francey’s taxable income in 2003 and 2004 was $110,000 and $155,000 respectively. As can also be seen from the above, Mr. Francey’s evidence is that he suffered a drastic drop in income after the date of separation; his 2005 taxable income dropped to $46,000; it then reduced in 2006 to $30,000 after which Mr. Francey had taxable income of less than $15,000 per annum up to 2010, the last year for which income figures were available.

[86] The financial statements of 3D Domes paint an even more dismal picture. Those financial statements show that in 2009, 3D Domes had net income of $6,643.04; in 2010, the company lost $11,671.

[87] Mr. Francey states that his income became nominal for a number of reasons, and, as was the case for Ms. Cherry, he fails to take responsibility for his situation after separation. He firstly states that he was mentally and physically unable to work; he has filed correspondence dated October 8, 2009 from his physician, Dr. Habert, indicating that Mr. Francey was being treated for depression which “has certainly affected his productivity.” He also filed a letter from his psychiatrist, Dr. Viktor Yatsynovich dated February 3, 2010; that correspondence states that Mr. Francey is suffering from depression “resulting from the situation he is in from his divorce.” The correspondence refers Mr. Francey to several coping groups and states that the problems are “external,” and that Dr. Yatsynovich cannot help him with these types of issues. The correspondence concludes that it is “extremely difficult for [Mr. Francey] to work” and suggests that he speak with his family doctor about Ontario Disability Support payments.

[88] He also states that the harassment suffered at the hands of the applicant and the FRO resulted in a complete impairment of his income earning ability. He notes that the applicant has refused to permit him from being discharged from bankruptcy; as a result he was unable to obtain employment as an Investment Advisor for Investor’s Group. Moreover, Mr. Francey gave evidence that the loss of his driver’s license resulted in Digiprint going out of business in July, 2007 because he could not then deliver product. He notes that he was able to work between January and July, 2008 but he lost his position with Starcom in 2008 when his license was again removed through FRO proceedings.

[89] Finally, Mr. Francey notes that his business was shrinking in any event. He notes that he had several severe business set backs with Premier Peripherals; he also was in the business of generic computers and grey market software, which shrunk drastically with the fall in price of name brand computers and software registration protection. He was no longer able to market generic computers on a realistic basis or market “grey market” software. He was left with a business in printing labels and logos, as well as a small business selling computer components.

[90] In sum, Mr. Francey states that his productivity was accordingly severely impaired, and he lays much of the blame for this at the foot of both the applicant and the FRO. He states that his income is as set out in his income tax returns which is, in effect, nominal. He states that as a result, he should be excused from payment of child and spousal support.

[91] Ms. Cherry states that the respondent’s position is nonsensical. She states that Mr. Francey should be imputed with substantial income as suggested in the report of Jonathan Hames, who gave evidence in this proceeding. As will be seen below, Mr. Hames attributed pre and post separation income to Mr. Francey of about $410,000 per annum; Ms. Cherry acknowledges that Mr. Francey’s income has shrunk, but she says it should still be found to be in the range of $200,000 per annum.

[92] It is to be noted that the conclusions of Mr. Hames were based solely upon the lifestyle of the parties prior to separation as disclosed in the financial statements filed by the parties; Mr. Hames stated that he had insufficient disclosure with which to prepare a complete income valuation in this matter. He provided with his report an appendix containing a list of documentation which would be necessary for him to prepare a comprehensive income valuation for Mr. Francey.

[93] Ms. Cherry also notes that the respondent continues to be extremely active in business. He continues to operate websites and owns expensive printing equipment. She notes that he lives in a home worth $600,000 with a home theatre. She states that income should be imputed to him based upon the report of the business valuator, Mr. Francey’s present business activities, his lifestyle and his present income earning abilities.

[94] The criteria for imputation of income for child support purposes is contained in s. 19 of the Child Support Guidelines^7, the relevant portions of which read as follows:

(1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;

(g) the parent or spouse unreasonably deducts expenses from income;

[95] In s. 18, the Guidelines also speak to issues of income where the payor is a shareholder of a corporation:

(1) Where a parent or spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the parent’s or spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the parent or spouse for the payment of child support, the court may consider the situations described in section 17 and determine the parent’s or spouse’s annual income to include,

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) an amount commensurate with the services that the parent or spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

[96] The same considerations apply to the imputation of income for spousal support purposes as for child support: see Rilli v. Rilli, [2006] O.J. No. 2142 (S.C.J.) and Perino v. Perino, 2007 46919 (ON SC), [2007] O.J. No. 4298 (S.C.J.).

[97] The onus is on the applicant to provide an evidentiary basis for the imputation of income: see Homsi v. Zaya, 2009 ONCA 322, 2009 CarswellOnt 2068 (C.A.). Once the onus to provide that evidentiary basis is met, the burden then shifts to the respondent to disprove imputation of income: see Bekker v. Bekker, 2008 CarswellOnt 173 (S.C.J.) at para. 25 and Joy v. Mullins, [2010] O.J. No. 4202 (S.C.J.) at para. 15.

[98] To summarize the applicant’s evidence, her grounds for imputation of income are as follows:

(a) She attempts to prove that the applicant has failed to adequately disclose his income and as such, an adverse inference should be drawn against him: see the Child Support Guidelines, s. 19(1)(f). She gave evidence that the applicant had failed to provided disclosure on a timely basis, and relied upon the evidence of Jonathan Hames as well as her own evidence to prove this;

(b) She states that the respondent earns hidden income through business or cash income which remains undeclared: see the Guidelines, ss. 19(1)(d) and (g) and s. 18. In making these allegations, she relies upon her own evidence and, again, the evidence of Jonathan Hames as well as the present lifestyle of the respondent;

(c) She states that the evidence shows that the respondent is presently underemployed and as such should have additional income imputed to him: see Guidelines s. 19(1)(a).

(i) Disclosure Issues

[99] With regard to disclosure issues, the applicant firstly relies upon Mr. Hames’ report dated November 29, 2006. In that report, Mr. Hames confirmed that he did not have adequate information with which to do an income analysis based upon business income. She notes that the report found numerous discrepancies in Mr. Francey’s business income as declared; she notes as well that a list of disclosure was provided with that report which she says was never complied with. Mr. Hames states that he was not provided with the books and records of Premier after April 1, 2004, the books and records of DigiPrint for 2005 and 2006 nor Mr. Francey’s bank records. He says at p. 12 of his report, “it would appear that Mr. Francey had not provided full disclosure with respect to the income that he earned in 2004 and 2005.” On March 13, 2007 (after Mr. Francey’s pleadings had been struck), Mr. Hames reviewed a document brief received from Mr. Francey and stated in correspondence to Ms. Cherry that “there is still substantial amount information (sic.) that has not been provided.” He updated the disclosure schedule originally attached to his November 29, 2006 report, which still showed substantial deficiencies.

[100] Ms. Cherry is also correct when she states that disclosure was always a primary concern of her counsel during these proceedings. It is apparent from the court orders in this matter than requests for information were served on several occasions. Disclosure orders against the respondent were made on July 26[^8], November 1, November 23 and December 7, 2006. Mr. Francey’s pleadings were eventually struck by order dated February 23, 2007 in part due to a failure to provide disclosure pursuant to those orders. In evidence of this, Ms. Cherry has filed a list dated November 26, 2010 of approximately 70 items of requested disclosure which she states were never answered.

[101] As noted above, failure to disclose can be a ground for imputation of income: see s. 19(1)(f) of the Guidelines. Moreover, I can draw an adverse inference against a party based upon his or her failure to disclose: see Smith v. Pellegrini, 2008 46927 (ON SC), [2008] O.J. No. 3616 (S.C.J.). The difficulty, of course, lies with what Ms. Cherry failed to file in evidence of Mr. Francey’s failure to disclose. She was not able to provide copies of the requests to admit that she says were served on Mr. Francey’s counsel and that she says were not answered. She did not provide the material which she relied upon for the striking of Mr. Francey’s pleadings in 2007; neither was she able to provide a comprehensive list of requested disclosure, the date for the request for disclosure and where there was a failure to comply.

[102] This failure is not made up by the report of Jonathan Hames; in his examination, he acknowledged that all of the information that he received respecting disclosure was provided by the applicant or her counsel. He acknowledged having had no independent contact with Mr. Francey; neither did he make any requests for disclosure directly from Mr. Francey. In effect, Mr. Hames’ evidence of failure to disclose by Mr. Francey was “double hearsay” evidence, and as such inherently unreliable.

[103] As well, in all of this, I must consider the endorsement of Gilmore J. dated April 28, 2010, who decided that the noting in default of Mr. Francey would be set aside. She had a more complete record than was provided to me: see para. 71 of the endorsement which lists a number of documents that she had before her, none of which were provided to me by either the applicant or the respondent. She determined that Mr. Francey had complied to the best of his ability to the numerous requests for disclosure and as such, she decided that the striking of Mr. Francey’s pleadings should be set aside. Although this finding is not binding upon me, it is indicative that there are serious issues with the applicant’s contention that Mr. Francey failed to provide adequate disclosure in this proceeding.

[104] In addition, Mr. Francey gave evidence about his problems with disclosure. It was his evidence that he had fully complied with all of the disclosure requests of the applicant to the best of his ability. He noted that he was precipitously removed from the matrimonial home and that many of his business records remained in the home. He noted that he never returned to the home, and was not provided with access to the home prior to the sale and that he was accordingly not in a position to provide the business records which remained in the home. He gave evidence that the reason that his pleadings were struck was because his counsel failed to file the response to the Request for Information (which he said had been completely answered), and as well told Mr. Francey that he could go on holidays when the motion before Rogers J. was scheduled to be heard; Rogers J. was critical of Mr. Francey being away on vacation when the motion to strike was argued. Moreover, as I noted above, the disclosure requested was onerous; in reviewing the order of Rogers J. dated October 26, 2009, it was apparent to me that the numerous items of disclosure demanded for 15 different companies set out in that order could not possibly have been provided within the 14 days granted under that order.

[105] Finally, at trial, Mr. Francey provided more extensive disclosure regarding his income than did Ms. Cherry regarding hers. He provided his tax returns since 2001; he also provided his business bank account statements for 3D Domed Labels from October 27, 2008 to October 27, 2010 and from December 24, 2010 to May 27, 2011. He filed the constating documents for 3D Domed Labels Inc. as well as submitting his wife as a witness regarding the purchase of the home in her name and providing details of the mortgage application regarding the home that she and Mr. Francey live in. This is in contrast to the applicant who failed to provide any of her income tax returns or details of the purchase of her home and power of sale proceedings respecting that home, her bank statements, the trust statement of her lawyers regarding post separation disbursement of funds, or how those funds were used.

[106] In sum, the applicant has failed to provide an evidentiary basis for her position that Mr. Francey had failed to provide adequate disclosure in this matter, or that he should have income imputed to him for this reason.

(ii) Undeclared Income

[107] Ms. Cherry alleges that Mr. Francey continues to have extensive income from business. She states that he continues to have undisclosed businesses which are on the internet. She does not accept Mr. Francey’s evidence that his business has been in difficulty for some time and submits that Mr. Francey should be imputed with approximately ½ to 2/3 of the income which was attributed to him by Nelson J.

[108] Again, Ms. Cherry relies upon the report of Jonathan Hames. Mr. Hames’ firm, JMH Litigation and Financial Solutions, provided two reports dated November 29 and December 11, 2006. In his first report, Mr. Hames concludes that “Mr. Francey’s income, as presented in his income tax returns, is not an accurate assessment of Mr. Francey’s Guideline Income during the years 2004-2005.” Mr. Hames stated that there were significant gaps in the disclosure provided by Mr. Francey and that there were serious discrepancies between the financial statements of the businesses and the income tax returns provided by Mr. Francey. He noted that there was some evidence of unreported cash income which was hidden through purchases of inventory. He stated that because of the problems with disclosure he could not determine Mr. Francey’s actual income from the disclosure provided; instead he looked at the lifestyle of the parties as set out in the financial statements. His conclusion based upon his review of the two financial statements of the parties was that, at the date of separation, Mr. Francey would have had income of approximately $410,000 per annum in order to meet the household expenses; at pp. 2-3 of the report, he states:

I have provided an alternate calculation of Mr. Francey’s Guideline Income for each year by estimating the Francey Family Expenses at the date of separation (April, 2004). These expenses are detailed in both Mr. Francey and Ms. Cherry-Francey’s sworn Financial Statements filed with the court. Based on the Financial Statements and subject to certain adjustments, the Annual Francey Family Expenses or Net Income (after taxes) of Mr. Francey ranged between $203,000 and $269,000. Accordingly, the Gross Income (before taxes) that would be required to earn this amount in 2004 would range between $348,000 and $472,000 (average - $410,000). Mr. Francey’s Guideline Income for 2005 should be comparable to the 2004 amount with a potential downward adjustment if in fact sales have dropped since 2004, as Mr. Francey has suggested.

[109] Ms. Cherry also led evidence regarding Mr. Francey’s business activities; as I have also noted, this evidence was led in a fairly confused manner without regard to a logical sequence of events. However, to summarize her evidence, Ms. Cherry stated that during the marriage, Mr. Francey had stolen inventory and sold it for cash (she had no independent evidence of this other than her own suspicions). She stated that her former husband still used the same customer lists that he always had, and was able to make similar income to that made during the marriage. She noted that he had been involved in a number of businesses which were undisclosed and as such, he was most probably continuing to make a substantial business income. She further noted that Mr. Francey lived in a home worth $600,000 with his new wife; she stated that this was also indicative of Mr. Francey’s undisclosed income.

[110] In support of these contentions, Ms. Cherry filed the web page for 3D-wholesale.com, which indicated that the respondent was apparently still selling peripheral products (as he was when operating Premier Peripherals); she also filed evidence of several websites which were named francey.org and hostcherry.com which would seem to indicate several other businesses being operated by the respondent outside of 3D Domes. She finally noted that Mr. Francey appears to have been involved in a business known as Starcom as he had prepared T4 slips while at that business, and that business had access to Mr. Francey’s customer lists.

[111] Apart from the fact that it is somewhat stale-dated, the conclusions in the report from Jonathan Hames is not based Mr. Hames’ examination of the financial statements or books from the business which was then being operated by the respondent. He stated that the information from these businesses did not allow for conclusions as to income to be drawn. The conclusions were based upon lifestyle only; Mr. Hames states that taxable income of $410,000 per annum was necessary to pay the expenses of the Francey household based upon the financial statements filed by the two parties.

[112] However, when Mr. Francey went bankrupt, he owed $225,000 to the Canada Revenue Agency. This amount was presumably income tax which remained unpaid by Mr. Francey on his income up to and after the date of separation. By the time that Mr. Francey applied for a discharge, the proven claim in the bankruptcy by CRA was in fact $405,697.99. Mr. Francey also gave evidence that he had failed to remit GST by Premier Peripherals (which according to Mr. Francey was the major reason for Premier Peripherals going out of business); it is unclear as to whether the GST was assessed against Mr. Francey as a director of the corporation and whether this was part of the CRA debt owed on bankruptcy. In any event, it is apparent to me that the parties were living, not only on the income which was being earned by Mr. Francey’s business, but also on tax installments which should have been remitted by Mr. Francey to the Canada Revenue Agency by both himself and perhaps his business.

[113] Mr. Hames admitted as much on cross-examination, when he acknowledged that his report may very well have been adjusted or changed were he aware that Mr. Francey was not paying his taxes on the date of separation, a fact which he was apparently not made aware of or failed to take account of. That is particularly surprising when Mr. Francey had noted in the financial statements which he had filed prior to the date of Mr. Hames’ report that he owed $150,000 to CRA (Mr. Francey’s financial statement dated July 6, 2005) which estimated amount increased to $200,000 (Mr. Francey’s financial statement dated July 20, 2006). If Mr. Hames were relying upon the parties’ respective financial statements to come to his conclusion respecting income, he apparently did not account for that particular entry in Mr. Francey’s financial statements; this leads me to conclude that the reports of Mr. Hames were either completed with the goal of maximizing Mr. Francey’s income for support purposes or alternatively were completed without taking into account to all of the evidence that Mr. Hames had before him.

[114] This is corroborated by the fact that Mr. Francey gave evidence that the parties were not meeting their outstanding obligations at the date of separation, and he had been forced to cease paying the mortgage in order to force Ms. Cherry to change the accelerated mortgage payments to a regular amortized amount. Mr. Francey stated that there was little or no cooperation between the parties in regard to financial matters in the years leading up to separation; in fact, Ms. Cherry’s actions in forcing the re-assessment of taxes due to her allegation that she was not aware of the income allocation to her would have resulted in a greater tax liability to Mr. Francey and less money being available for the household.

[115] Although Mr. Hames also gave evidence that there were other corporate entities that appeared to be owned by Mr. Francey, such as Starcom, he admitted that no corporate searches were done of that entity or any others mentioned in his report. No independent verification was provided of the shareholders or directors of any of the corporations which Mr. Francey was alleged to have been connected through the report of Mr. Hames. Mr. Hames did not seek input from the respondent directly in the preparation of the reports.

[116] Under the circumstances, I cannot find Mr. Francey to have income anywhere near the amount of $410,000 per annum at the date of separation as set out in the Jonathan Hames report and I do not find that report to be a credible basis for imputation of income to Mr. Francey.

[117] Ms. Cherry has also filed a number of exhibits which are intended to show that Mr. Francey has a number of undeclared businesses that he continues to operate. Again, the only hard evidence provided were the fact that 3D Domes still appears to be marketing computer peripherals. There were also a number of websites which appear to be in respect of Mr. Francey’s businesses as noted above.

[118] As I stated at the beginning of this section of the judgment, Ms. Cherry has to provide an evidentiary basis for imputation of income, and her evidence simply does not do so in respect of her allegations of hidden business income. The fact that 3D Domes deals in computer peripherals is no surprise, and Mr. Francey does not deny the contents of the website for 3D Domes or Wholesale, or that he has continued to deal in computer peripherals; he states, however, that the margin for profits for peripherals is only about 10% and that the real profit comes through the printing side of the business. He does not deny that there are the two websites in the names of francey.org and hostcherry.com; he states that he was not responsible for setting up these websites and that these websites were a form of “cybersquatting” which involved effectively holding the name of a website for ransom from someone who might want to use it in the future. Mr. Francey states that these websites were never used by him, and continue to be held by unknown third parties. Mr. Francey did provide e-mail correspondence from domainsbyproxy.com which indicated, presumably, that he was not the account holder of these websites (although that e-mail does not specifically mention by name those two websites).

[119] In sum, Mr. Francey provided credible evidence as to the shrinkage in the computer component and software business that he operated. He provided credible and reasoned evidence in an orderly fashion of how the various businesses came to be and how they came to an end. I found Mr. Francey a believable witness respecting his explanations of his business difficulties and, as noted above, where his evidence conflicted with Ms. Cherry’s evidence, I found his evidence to be more believable. I simply do not believe that there is substantial business income outside of that disclosed to me at trial and I do not choose to impute income to Mr. Francey on that basis.

[120] Finally, respecting the residence that Mr. Francey resides in in Ajax, Ontario (22 Dolby Crescent, Ajax, Ontario), I received full answer to those concerns through the evidence provided to me by Mr. Francey and his wife, Catherine Francey. They both provided evidence that Mr. Francey had no interest in that home and that it was purchased with funds which came solely from Ms. Francey’s condominium, which was sold in June, 2006 to purchase the Dolby Crescent residence. Between the sale of the condominium and the closing date of Dolby Crescent (March, 2008), Mr. and Ms. Francey lived in rental accommodation. Ms. Francey obtained the mortgage on that property on her own, and in support of this, she provided both her mortgage application and her mortgage commitment, both of which were in her name alone. Mr. Francey also filed a marriage contract between himself and Ms. Francey (formerly Catherine Watters) confirming a separated regime as to property, including the matrimonial home.

[121] It was also Ms. Francey’s evidence that she has been solely responsible to pay the mortgage. She provided evidence about her own income and was cross-examined fully by Ms. Cherry. She states that she makes about $55,000 per annum in her work as a legal assistant at Borden, Ladner, Gervais, a large Toronto law firm. She stated that Mr. Francey does not contribute to the mortgage payments (although he did give evidence that he finished the basement of the home, allowing for an increase in equity in the home). Ms. Francey gave evidence that she and her husband are under some financial stress; she stated that she had only been able to pay her mortgage through a line of credit based upon the equity in the home; as their first mortgage was paid down, she was able to obtain advances on the line of credit to make payments on her first mortgage. She stated that her property taxes have not been paid, and she misses one mortgage payment a year, which is the maximum allowed under the mortgage.

[122] I am satisfied that Mr. Francey does not have an interest in the Dolby Crescent home or that there is hidden income which was used to purchase that property or pay the ongoing expenses on that home.

[123] In short, I do not find that Ms. Cherry has provided an evidentiary basis for imputation of income under ss. 19(1)(d) and (g) and s. 18 of the Guidelines. There was insufficient evidence made available to me for me to find that Mr. Francey was operating any businesses apart from 3D Domes, of which disclosure of that income was made by Mr. Francey. I do not find that Mr. Francey has hidden business income in addition to the income that he earns from 3D Domes or that income should be imputed to him for that reason.

(iii) Mr. Francey’s Underemployment

[124] Ms. Cherry states that Mr. Francey is clearly underemployed, considering his skills and income earning ability. She states that the nominal income earned by 3D Domes is artificially low, and that Mr. Francey’s ability to earn income is greater than the amount set out in his disclosure and his business financial statements.

[125] Mr. Francey presently has very little taxable income. His income tax returns indicate that since 2007, his income has effectively been nominal. He made $6,750 in that year; in 2008, his income increased to $12,000, but since then, he has made less than $10,000 per year. He says that his income from his business is minimal, but the business does purchase a number of items for the household, and these items as purchased are declared as taxable income.

[126] Mr. Francey blames Ms. Cherry for much of these problems. He states that, were it not for the bankruptcy, he would be employed by now and making substantially more than he presently is. He filed as evidence of this correspondence from Investor’s Group dated May 19, 2009 confirming that they could not employ him as an Investment Advisor until he was discharged from bankruptcy.

[127] He also notes that the pressure put on him by both Ms. Cherry and by the Family Responsibility Office has caused situational depression which has prevented him from working to his maximum. He has filed medical evidence from both his family doctor and his psychiatrist confirming this; the correspondence from Mr. Francey’s psychiatrist states that he should apply for income assistance from the Ontario Disability Support Program as he cannot work. Mr. Francey states that he has difficulty in concentrating and he has memory issues; this is confirmed by the medical evidence that Mr. Francey filed. He states that if the issues with his wife were resolved, he could earn income in the range of between $30,000 and $40,000 per annum.

[128] My difficulty with this is that many of the issues that Mr. Francey was contending with in this litigation have now been resolved, and in Mr. Francey’s favour. Gilmore J. decided that the noting in default and default judgment would be set aside, and reduced the support substantially. As such, as of April 28, 2010, when Gilmore J. issued her decision, there should have been a commensurate increase in the respondent’s ability to work. Mr. Francey has had his driver’s license since January, 2011. Certainly, Gilmore J. thought that Mr. Francey was capable of working more than he was then working, imputing $30,000 per annum on a temporary basis to him, and ordering child support in the amount of $468 per month based upon this amount.

[129] Notwithstanding this, Mr. Francey continues to earn minimal income. He states that this is because the bankruptcy prevents him from working, but, other than the Investor’s Group correspondence, he provided no evidence of this or evidence of an active job search. Many bankrupt individuals are gainfully employed. Mr. Francey’s skills are in the computer and electronics area, and he has abilities in those areas which I presume would be marketable. He has connections in the computer sales and services industry that he retains to this day. He purposefully failed to file as evidence in the trial his own income analysis which was filed in response to the report of Jonathan Hames; he also confirmed that he was not presently taking any medication for his depression, and was not participating in any therapy groups as suggested by his own psychiatrist. When asked, he stated that he did not find the therapy group to which he was referred to to be “useful.” In other words, Mr. Francey is not taking steps to alleviate his own depression, and notwithstanding the fact that he has received substantial financial relief in this proceeding, continues to blame his former wife for his depression, and his inability to work. It is to be noted that notwithstanding this depression, he was able to finish the entire basement of the home in which he lives, allowing for an increase in equity and in the funds available through the line of credit second mortgage on that home.

[130] This is combined with the fact that Mr. Francey has a substantial incentive in not earning any sort of income at present. It is obviously in his interest to minimize his income for support purposes leading up to the trial of this matter. He also stated in his own affidavit sworn January 19, 2010 that he is “unable to make a decent living while [he is] bankrupt” due to the fact that “1/2 my (sic.) income would have to go the trustee.” It is also to be noted that the registrar’s order in the bankruptcy ordered that Mr. Francey “shall provide counsel for the opposing creditor $10,000 on account of her costs for conducting the s. 163 examination.” The order was that this was effectively security for the costs of the examination in the bankruptcy subject to assessment of Mr. Klotz’ account; notwithstanding the fact that Mr. Francey borrowed substantial sums of money to pay the support arrears, he did not see fit to raise these funds so that the bankruptcy could be completed and the discharge obtained. It is unclear to me that Mr. Francey has taken all steps within his power to obtain his discharge and in fact, that failure to obtain a bankruptcy discharge was relied upon by Mr. Francey in order to minimize his income.

[131] Moreover, Mr. Francey works on a full time basis in a business that he states is making little or no income. His business had gross sales in 2009 of $58,632; in 2010 his gross sales had grown to $153,892. Notwithstanding this, the net income in 2009 of $6,643 fell in 2010 to a loss of $11,671. If Mr. Francey is working full time at this business and this is the only income that he is making from that business, his time would be better spent at productive employment commensurate with his experience and skills.

[132] Accordingly, I believe that Mr. Francey’s income potential is well in excess of his declared income in this matter. He has had a number of years since separation to improve himself and branch out into more lucrative areas than his business enterprises which he admits is shrinking due to the nature of the business and the economy in general. He has not done so. Part of this, but not all of this can be explained by his own mental health, but I do not believe him to the victim of the applicant to the extent that he claims to be. Accordingly, I believe that, in light of the fact that Mr. Francey has achieved significant financial relief, that he should be imputed with a greater amount than that declared, or that found by Gilmore J. when she provided him with financial relief. It is clear to me that there is a major incentive to Mr. Francey not working and not earning income in the range to which he is able.

[133] Accordingly, for support purposes, I impute income to Mr. Francey in the amount of $50,000 per annum. He is an educated man, who is clearly capable of earning a reasonable income in excess to minimum wage. He has experience in computers and in printing and as such could work in sales or in service of computers or in print services. I believe that $50,000 per annum is a reasonable amount under the circumstances; were it not for the medical evidence provided, this would be a substantially greater amount.

(b) What income, if any, is to be imputed to the applicant, Ms. Cherry?

[134] Ms. Cherry states in her last financial statement, which was sworn November 15, 2010, that she was then receiving just $706 per month from social assistance. This translates into income of just under $8,500 per annum. She has been living in subsidized housing since July 1, 2010; her financial statement noted above states that her rent is $660 per month. She states that since then her income has been converted into ODSP payments as of July 1, 2011; she did not give evidence as to her present income from ODSP or file a further and more up to date financial statement. I received no bank account information, pay stubs or income tax returns indicating Ms. Cherry’s present income.

[135] Mr. Francey states that Ms. Cherry should be imputed with substantial income although he did not give a specific figure. He notes that Ms. Cherry is in the same position as he is; if she states that she has illness issues preventing her from working, so it is with him. He does not deny that she has not worked; however, he suggests that she is well able to earn an income and has been hoarding the more than substantial sums that she received. He points to an expensive Coach Purse that he alleges that she purchased, which goes to the issue of an excessive lifestyle inconsistent with Ms. Cherry’s receipt of welfare and residence in public housing.

[136] Mr. Francey states that Ms. Cherry is underemployed within the meaning of s. 19(1)(a) of the Child Support Guidelines. With respect, however, I do not think that he has provided sufficient evidence of this to allow me to impute income to Ms. Cherry.

[137] Ms. Cherry states that she has a number of disabilities which prevent her from working. She suffers from diabetes and diverticulitis. She also suffers from depression; she states that she was severely abused by Mr. Francey leaving her with a case of post traumatic stress disorder. She is on medication for her diabetes and for her depression which leaves her unable to function; she says that because of the diabetes, she often has to lie down to rest. She has cholesterol issues, but cannot take Lipitor because of her reaction to that drug; she uses a stronger drug with greater side effects. Ms. Cherry states that she regularly attends at counselling at Markham Stouffville Hospital. She states that because of her caesarean section, she has numbness in her stomach area; although she requires surgery to correct this, it is classified as cosmetic surgery and she cannot afford to have it done.

[138] This is confirmed, to some extent, by the correspondence dated September 20, 2011 from Dr. Eileen Nicolle, who is Ms. Cherry’s family physician. That correspondence states that Ms. Cherry “struggles to get through each day and has many physical challenges, including her obesity as well as mental health challenges including depression and very likely post traumatic stress disorder.” It confirms that Ms. Cherry is on medication for diabetes and that Ms. Cherry “has several issues causing disability and functional impairment.” The correspondence concludes that Ms. Cherry “is not able to work.”

[139] Ms. Cherry’s disability is also confirmed, to some extent, by her acceptance for ODSP assistance by the Ministry of Community and Social Services on July 11, 2011.

[140] This is also evidenced by my own observations at trial. There were a number of days that Ms. Cherry had difficulty getting through presentation of her evidence at trial; I was critical on more than one occasion of the frequent breaks that Ms. Cherry required to get through the day. Her lack of concentration in placing evidence before the court was also evident. My own observation of Ms. Cherry’s comportment during trial and her difficulties in presenting evidence lead me to believe that she would have difficulty in maintaining productive employment at present.

[141] Regarding the Coach purse, Ms. Cherry led evidence to indicate that was a gift to her. This was confirmed by the evidence of Diana Astolfi who testified that a group of friends had gotten together and bought a Coach purse for Ms. Cherry for several hundred dollars. Although there was some issue as to the colour, there was enough doubt as to whether it was pink or rose; in any event, I discount the purse as evidence of anything other than a gift from friends, or at its worst, evidence of overspending and not income.

[142] Gilmore J. imputed $20,000 per annum of employment income to Ms. Cherry; in light of the fact that Ms. Cherry has now been accepted for ODSP and in light of the medical evidence, I find this to be excessive. I do not think that Ms. Cherry will be in a position to remove herself from ODSP in the foreseeable future. As such, it is my finding that Ms. Cherry will not be imputed with income beyond her present income from ODSP.

[143] What is Ms. Cherry’s income from ODSP? As noted, the last financial statement filed by Ms. Cherry was from 2010, prior to her acceptance on the ODSP program. No information was filed in court respecting Ms. Cherry’s present income; her confirmation of her acceptance onto ODSP dated July 1, 2011 was largely redacted and contained no income information. I am left with attempting to determine Ms. Cherry’s present income from outside sources.

[144] I cannot make my own investigations into Ms. Cherry’s actual income once trial is complete, but I can take judicial notice of ODSP rates and payments which are public knowledge. Having reference to the website for the Ministry of Community and Social Services[^9] I have determined that Ms. Cherry and her one dependent son would be eligible to receive income support payments of $745 per month plus a shelter allowance of the same amount for a total of $1,490 per month or $17,880 per annum. These may not be the exact amounts received by her, but I am left with using my own figures in light of the failure of Ms. Cherry to provide evidence of her actual income. That I am able to do is confirmed by s. 19(1)(f) of the Child Support Guidelines as well as the adverse inference that I may draw from a party’s failure to disclose: see Smith v. Pellegrini, supra.

[145] Accordingly, I find Ms. Cherry’s income to be $17,880 per annum derived from ODSP benefits.

(c) What is to be the ongoing spousal support and child support payment owing to be paid by the respondent to the applicant?

[146] At this point in time, I have found Ms. Cherry to have income of $17,880 per annum from social assistance benefits. Joshua resides with her. Mr. Francey has been imputed with income of $50,000 per annum and Branden lives with Mr. Francey and his wife, Catherine.

(i) Child Support

[147] Under s. 8 of the Child Support Guidelines, as custody of the children is split between the parties, differential support is payable based upon the parties’ respective incomes.

[148] Accordingly, and based upon the income figures and split custody noted above, Mr. Francey is liable to pay differential support in the amount of $309 per month to Ms. Cherry.

[149] Ms. Cherry did not provide evidence of any ongoing extraordinary or special expenses of the child in her care under s. 7 of the Child Support Guidelines; Mr. Francey likewise led no evidence of s. 7 expenses for Branden. Accordingly, there will be no order for special expenses in favour of either party.

[150] Child support in this amount will commence on December 1, 2011, which is the first day of the month immediately following completion of the trial of this matter.

(ii) Spousal Support

[151] The applicant requests retroactive and ongoing spousal support from the respondent. I must first deal with issues of entitlement to spousal support and once this is determined, I will then determine the amount and quantum of spousal support.

[152] Considerations in the making of a spousal support order are set out in s. 15.2(4) of the Divorce Act,[^10] which reads as follows:

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

[153] Under s. 15.2(6) of the Divorce Act, the criteria for a spousal support award are as follows:

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[154] Under s. 15.2, accordingly, spousal support may be ordered in order to redress a number of concerns arising out of the breakdown of the marriage. Firstly, support may be compensatory, in order to redress a loss suffered by a spouse resulting from his or her role within the marriage relationship: Divorce Act, s. 15.2(6)(a) and (b) and Moge, v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813. However, it may also be non-compensatory, in order to address the disparity between the parties’ means and needs arising out of the marriage breakdown: Divorce Act, s. 15.2(6)(c) and Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420. It is my view that the applicant is entitled to spousal support under both of these headings.

[155] Ms. Cherry gave evidence that her role within the marriage was to care for the children and there is no issue as to whether she did this competently or not. She ended the marriage carrying out a child care role and she sold a home that was to have been transferred into her name under the share surrender agreement in order to purchase the matrimonial home owned by the parties on the date of separation. On the date of marriage, Ms. Cherry was working within the home, caring for the children; she had a small Reiki and massage practice; Mr. Francey urged me to find that this was a full time practice, but I do not, under the circumstances, find this to be the case as the evidence did not support the fact that she had any income whatsoever from that practice. Mr. Francey also urged me to find that there was some income from the herd of Holstein cattle that Ms. Cherry had prior to separation but again, however, I cannot find this to be the case based upon the very believable evidence of Ms. Cherry’s mother; the farm where that cattle was kept has now been sold. Ms. Cherry was otherwise not working on the date of separation. It is apparent to me that based upon her role within the marriage and the sacrifices that she made prior to separation in order to permit the purchase of the matrimonial home, she has a good and valid compensatory claim for spousal support.

[156] In addition, Ms. Cherry takes the position that the abuse that she suffered also gives her a compensatory claim to support. Ms. Cherry has stated that she suffered from severe abuse during the marriage relationship, both physical and emotional. She states that the respondent’s actions resulted in her miscarrying twins towards the end of the marriage and she had to attend at the hospital on several occasions. She says that she suffers from post traumatic stress disorder as a result and she is severely disadvantaged. She states that she never called the police or had the hospital call the police about those incidents. She claims that this is one of the major reasons that she is unable to work; as set out in the correspondence from Dr. Nicolle, she continues to recover from the abuse suffered at the hands of her husband. Ms. Cherry’s mother testified that she observed the emotional abuse suffered by her daughter at her husband’s hands; Branden apparently told the police that he observed an incident where his mother appeared to have been thrown down a set of stairs by his father.

[157] Mr. Francey, naturally enough, denies that the abuse took place. He states that there is little or no independent proof of the abuse that took place; he notes that the applicant had gone to both the Yellow Brick House women’s shelter and the hospital on several occasions, and the police were never called. He states that the abuse allegations were for the purpose of financial gain, and he points to the applicant’s claim for damages (now stayed by Mr. Francey’s bankruptcy).

[158] As there is no issue of damages before me, I do not have to make a finding on the issues of abuse raised by the applicant. What matters, however, is that the strong perception of that applicant that the abuse took place has greatly affected her, and has prevented her from working. Whether or not there was abuse, because of her perception that she was badly abused, Ms. Cherry is unable to work and is presently receiving disability payments from ODSP. Mr. Francey states that this is all a sham; I do not find this to be the case. Whether or not the abuse actually took place, Ms. Cherry sincerely believes that it did occur and that she is entitled to support as a result. This perception has been to her own detriment, and has obviously interfered in Ms. Cherry’s ability to obtain employment and become self sufficient. Furthermore, apart from her claim that there is post traumatic stress disorder, Ms. Cherry has a number of other medical ailments, including diabetes, depression and diverticulitis, which make her unable to become gainfully employed, and I so find.

[159] Based upon this perception, as well as the evidence before me that Ms. Cherry is effectively unable to obtain gainful employment, Ms. Cherry also has a good claim for non-compensatory spousal support based upon the respective means and needs of the parties. At this point in time, Ms. Cherry resides in public housing, and subsists on ODSP benefits. She cannot find employment, and is clearly in a position where she is presently unable to work. She is clearly in a subservient economic position as compared to that of Mr. Francey at present, and Mr. Francey should be well on the way to emotional and economic recovery at present, while Ms. Cherry is clearly stuck in economic limbo.

[160] This is combined with Ms. Cherry’s role within the marriage, which was to care for the children and perform domestic roles within the marriage; together, these lead me to make a finding that Ms. Cherry is entitled to spousal support arising out of this marriage both on compensatory and non-compensatory grounds.

[161] That being said, the issue then arises as to the quantum of support, the commencement date for support and the effect of the Spousal Support Advisory Guidelines (the “SSAGs”).

[162] In this case, because the disability payments received by the applicant are classified as social assistance payments and spousal support payments are deducted dollar for dollar from any social assistance payment, they are not income of the applicant for the purposes of determining spousal support under the SSAGs; as stated in see Rogerson and Thompson, Spousal Support Advisory Guidelines (July, 2008) at p. 46, “a recipient relying entirely on social assistance would be treated as person with zero income.” As such, the SSAGs give a range of monthly payments of spousal support of between $1,235 and $1,535; the midrange value is $1,380 per month. The duration of support is stated to be between 6 to 13 years from the date of separation.

[163] Furthermore, in setting the amount of support, I cannot take into account the fact that the recipient is in receipt of social assistance or that support is deducted from those social assistance payments: see s. 33(9)(m) of the Family Law Act.[^11]

[164] In Fisher v. Fisher, 2008 ONCA 11, [2008] O.J. No. 38 our Court of Appeal determined that the Guidelines were a “litmus test” for spousal support amounts. The court stated that in setting spousal support in any particular matter, a trial judge or motions judge must have consideration to the guidelines; if I am to depart from the guidelines, I must give reasons: see para. 103 of the decision.

[165] However, the case also makes it clear that the SSAGs do not provide for a fixed amount of support; I must also take into account “the parties' individual circumstances.” [para. 101]. As set out in para. 96 of the decision, “[i]mportantly, in all cases, the reasonableness of an award produced by the Guidelines must be balanced in light of the circumstances of the individual case, including the particular financial history of the parties during the marriage and their likely future circumstances.”

[166] In the present case, I find that the guidelines are inappropriate for a number of reasons. Firstly, I do not believe that there should be a fixed term of support; I have found that Ms. Cherry is presently disabled and as such, it may very well be inappropriate to have support terminate at any time in the future: see Bracklow, supra.

[167] However, I must also take into account the post separation financial circumstances of the parties and the fact that Ms. Cherry received almost all of the net proceeds of the matrimonial home notwithstanding Mr. Francey’s bankruptcy, and as well received nearly $120,000 in spousal support prior to trial. Mr. Francey states that Ms. Cherry was overpaid spousal support in the amount of $109,106.70 up to and including March 1, 2010. As noted above, Ms. Cherry received a net benefit of at least $477,603.70 from the home and through Ms. Cherry’s efforts to collect support. Mr. Francey received less than $20,000 from the home, and had to borrow a substantial sum of money to avoid going to jail as a result of FRO attempts to collect support. Ms. Cherry failed to explain what happened to much of these funds; again as noted above, Ms. Cherry between November 1, 2008 and March 24, 2010, Ms. Cherry received support payments of $77,886.06 and did not pay rent to her landlord during this time; she was unable to adequately explain why her costs were so high. She purchased a home but stated in evidence that she had kept back $75,000 to live off of; however, she eventually lost that home and had a line of credit that she also lived off of. Mr. Francey states that Ms. Cherry is hiding that money; there is no actual evidence of this but if she did go through all of these funds, Ms. Cherry appears to have been financially irresponsible resulting in her present penurious circumstances. Ms. Cherry chooses to blame the respondent for her present circumstances; she relies upon these proceedings to bring her out of poverty. Unfortunately, there is nothing left from the assets of the marriage or in Mr. Francey’s hands to achieve this goal.

[168] Finally, although I have imputed income to Mr. Francey, he is not actually presently earning anything like the amount that I have imputed to him. The FRO proceedings instigated in the name of Ms. Cherry were extremely destructive, resulting in situational depression on the part of Mr. Francey that helped no one progress. I am not going to permit this to occur again.

[169] Taking into account all of the circumstances, I do find that there was an overpayment of support in favour of Ms. Cherry based upon the respective incomes of the parties after separation. I do not find that Ms. Cherry has hoarded or hidden this overpayment; based upon her present circumstances, it is inappropriate to order her to repay these funds to Mr. Francey at this time. The remedy must be through the quantum of ongoing support herein.

[170] Accordingly, the quantum of spousal support that is appropriate under all of the circumstances is, in my view, $600 per month, which is about one half of the lower range of spousal support under the SSAGs. I am not going to commence payment of this support immediately; as noted, I have imputed income to the respondent but I am going to give him a year to actually obtain employment; the spousal support will accordingly commence on April 1, 2013. There will be no termination date for spousal support and I am specifically departing from the guidelines based upon the apparent disabilities of the applicant on one hand, along with the financial history of these parties which occurred after separation, including the fact that the applicant received almost all of the matrimonial property of these parties in the face of Mr. Francey’s bankruptcy, the actions taken by both the applicant and the FRO which impaired, rather than enhanced the abilities of the Mr. Francey to earn income, as well as the failure of Ms. Cherry to account for the funds received post separation.

(iii) Other Matters

[171] Ms. Cherry asked in her written submissions for life insurance to secure the ongoing support obligations of Mr. Francey.

[172] Ms. Cherry made no oral submissions respecting her claim for designation of beneficiary under Mr. Francey’s life insurance policy and did not lead any evidence in regard to that claim. She did not cross-examine Mr. Francey as to whether he continued to have life insurance available to secure support. I have no evidence as to whether Mr. Francey is insurable or whether he can obtain a new life insurance policy should he need to do so.

[173] It is unclear to me as to whether Mr. Francey still has a life insurance policy in his name or control. I do not know whether Mr. Francey could obtain life insurance if he was ordered to do so. The claim for support life insurance is dismissed.

(d) Is there to be any retroactive award of either child or spousal support or alternatively a return of any overpayment of support in this proceeding?

[174] Although I believe these questions to be largely answered above, I wish to address each party’s claim for retroactive relief.

[175] The applicant claims retroactive child and spousal support; she states that she is entitled to support beyond the amounts set out in the various temporary orders made between 2005 and trial.

[176] I have already made findings as to Mr. Francey’s ongoing income; implicit in these findings is the fact that I do find that Mr. Francey was unable to work for much of the time leading up to trial, and only now should be recovering an ability to earn income. I agree with Mr. Francey when he states that he was subjected to steps taken by the applicant and the enforcement authorities which were, in my view, unreasonable, and which I described earlier in this decision as a scorched earth campaign. Mr. Francey may very well have been in breach of a number of orders, and might have acted more expeditiously to deal with these various orders; however, he was unrepresented for much of the time, and he eventually came to suffer from resultant situational depression.

[177] As such, I do not find that the applicant was in any position to pay child or spousal support beyond the amounts which he paid, which were in excess of $118,000 as noted above. Even were I to find that to be the case, I would not exercise my discretion in order to do so. There will be no retroactive award of support and, although I do not believe it to be necessary, I am specifically confirming that there are no arrears under any of the interim orders made in this matter other than the order of Gilmore J. dated April 23, 2010, which remains in force until November 30, 2011.

[178] The respondent also requests retroactive relief. The respondent submits that the applicant has hoarded funds collected by her from the matrimonial home and from support. He claims an overpayment of child and spousal support in the amount of $109,106.70 which should be refunded to him.

[179] The respondent appears to understand that he cannot claim a return of funds paid from the matrimonial home to Ms. Cherry; that claim lies with the trustee in bankruptcy, which is the only individual with a right to set aside a preferred creditor’s claim in this matter.

[180] This issue of repayment of an overpayment of support was raised by Mr. Francey for the first time in final submissions made by the respondent subsequent to trial. He did not mention this issue in his opening submissions; although he stated that he wanted to be put back in the same place “as if this had not happened” (referring to the enforcement proceedings), he did not mention that he wanted funds to be returned. He cross examined Ms. Cherry on the disbursement of funds, but did not ask where the funds might be today or as to what bank accounts Ms. Cherry presently had; his cross-examination focussed on the applicant’s financial irresponsibility after separation rather than on the issue of hoarding the funds or committing some other sort of fraud on the court. He only raised the issue of return of funds after the close of evidence.

[181] As I have stated above, it is unlikely, in my view, that Ms. Cherry has hoarded funds. The evidence demonstrates to me that Ms. Cherry was not able to responsibly manage the large amount of funds that were funnelled to her through both the court and enforcement proceedings; the evidence does not support a finding that Ms. Cherry had hidden funds or sworn false financial statements in these proceedings declaring that she did not have assets when she actually did.

[182] Moreover, it is also apparent to me that, if Ms. Cherry did receive a substantial amount of support, she did receive it sporadically in a number of lump sums, making it impossible to plan for the future. Ms. Cherry received a number of court orders which were not appealed which provided her with those funds; Mr. Francey blames his lawyers for many of these orders, but that is not Ms. Cherry’s problem. Mr. Francey was chronically in default of the support awards including the first support award made soon after physical separation; certainly prior to the striking of his pleadings, he could have attempted to set aside or vary the support orders but he did not.

[183] As such, and as noted above, I have accounted for the post separation funds paid to Ms. Cherry by lowering the ongoing spousal support below the amounts called for by the SSAGs and by delaying implementation of the support award. The request of the respondent for return of funds would not achieve anything, as the funds have most probably been expended and could not be repaid by Ms. Cherry; to force her to pay funds back will not result in any practical result in this matter.

[184] Accordingly, the respondent’s claim for return of any overpayment of support is dismissed. There will be no retroactive adjustment to the temporary orders made prior to trial and no order regarding any overpayment of support by the respondent.

(e) Bankruptcy Issues

[185] The respondent requested at the end of trial that I order him to be discharged from his bankruptcy. I noted earlier that, although I have jurisdiction to make an order in bankruptcy, there was no claim for that relief made in the pleadings, and to do so could only be done on notice to the trustee in bankruptcy.

[186] Accordingly, I decline to make any order in the bankruptcy in this matter. Any motion to vary the registrar’s order or to obtain a discharge in the bankruptcy would have to go back before the Registrar in Bankruptcy.

[187] That being said, I indicated above that I would make comments respecting the issue of the bankruptcy in this matter. In my review of the evidence, it is apparent to me that the applicant received the vast majority of the assets of the parties in this litigation; as noted above, the applicant received $358,959 net of legal fees from the matrimonial home which was, in my view, the only major asset that the parties had on separation. This does not take into account the RRSP which was cashed in by the applicant or the second mortgage on the matrimonial home on the closing of the sale of the home, which the applicant states was used for necessary repairs on the home. If you include the $200,000 in legal fees charged by the applicant’s solicitor, her benefit from the matrimonial assets would be nearly $559,000. This vastly exceeds, I expect, any benefit that any other creditor might have received in the bankruptcy and probably exceeds the amount that she would have received had the home been equalized. As such, the applicant has little to complain of in the distribution of assets in the bankruptcy.

[188] However, I understand that one of the bases of the Registrar’s decision was income which was hidden by the respondent. Again, the applicant had relied upon the report of Jonathan Hames, which I found in this proceeding to be seriously flawed in its assumptions. The report was only based on the lifestyle of the parties which, on the evidence, was excessive considering their incomes leading up to the separation. The major reason in my view that the parties were able to lead that lifestyle was because the respondent was not paying his taxes. Moreover, I do not believe that throughout much of the post-separation period, that the applicant had excessive income, or any real income to speak of and for good reason, considering the medical evidence filed by the respondent. I have found that the respondent should be imputed with income of $50,000 per annum which is nothing like the income attributed to him by Mr. Hames. Not to belittle the comments of the Registrar, but I believe that at this late date, an examination under the Bankruptcy and Insolvency Act would not shed light on much at this time and certainly no more light than that disclosed at this trial.

[189] Finally, the applicant acknowledged when giving submissions that she did not advise Mr. Klotz of the funds received by her from the home. She stated during those submissions that the motion regarding the stay of the discharge of the bankruptcy proceedings took place “well before” the release of funds from the home. This is incorrect; the motion to prevent Mr. Francey’s discharge was heard in June, 2008; Ms. Cherry had received all of her money from the home well prior to this date; the final order for disbursement of remaining funds was made in the uncontested trial endorsement of Nelson J. on February 27, 2008 but most funds had been disbursed in 2006. If Ms. Cherry had indeed failed to advise her counsel of the fact that she had received all of the funds from the home prior to the hearing before the bankruptcy registrar, then she failed to disclose a crucial fact in the motion to prevent the discharge of Mr. Francey from bankruptcy and the order should be set aside as a result. Again, as noted above, Ms. Cherry was the one creditor of Mr. Francey who had received a substantial part of her debt repaid through the matrimonial proceedings; the other creditors received, presumably, almost nothing.

[190] It is my view that the respondent should be provided with a discharge so that these parties can get on with their lives, and so that Mr. Francey can make income to pay his support, free of the constraints of being an undischarged bankrupt. To do otherwise would, in my view, be unproductive. I cannot, however, make this determination, and an ultimate decision will have to be made by the Registrar in Bankruptcy.

(f) Other matters

[191] Mr. Francey asks that I order that certain childhood pictures be scanned and provided to him. Ms. Cherry states that these pictures are in the storage unit and that Mr. Francey received these pictures after separation in any event.

[192] Mr. Francey failed to cross examine Ms. Cherry on where these pictures were. He did not request this relief specifically in his Answer and Claim by Respondent. There is no evidence from the trial as to the existence of these pictures or where they are. The request of Mr. Francey for pictures is dismissed.

Order

[193] Accordingly, there will be an order to go on the following terms:

a) The respondent’s claim for equalization is abandoned.

b) The respondent shall pay differential child support to the applicant in the amount of $309 per month commencing December 1, 2011.

c) The said child support is based upon income imputed to the respondent in the amount of $50,000 per annum and the applicant’s ODSP income of $17,880, and on the basis that custody of the children is split, with one child in each party’s care.

d) The parties shall each make annual disclosure as required by s. 21 of the Child Support Guidelines commending July 1, 2012;

e) The respondent shall pay spousal support to the applicant in the amount of $600 per month commencing April 1, 2013;

f) The applicant’s claim to be named as beneficiary under the respondent’s life insurance policy is dismissed.

g) The retroactive claims of both parties are dismissed, and any and all arrears under any temporary orders made in this proceeding other than the support provisions of the order of Gilmore J. dated April 23, 2010 are hereby rescinded.

[194] In the event that either of the parties wishes to speak to the issue of costs, he or she may make an appointment to speak to that issue before me through the trial coordinator. If an appointment is made to speak to the issue of costs, both parties shall provide written submissions no longer than 5 pages in length, excluding any offers to settle or bills of costs.

McDERMOT J.

Released: April 3, 2012

SCHEDULE “A”

a) On May 16. 2005, Ms. Cherry Francey commenced proceedings and appeared before Wildman J. of this court and obtained an ex parte order for care of the children and exclusive possession of the matrimonial home. The proceedings were adjourned to May 20, 2005;

b) On May 20, 2005, both parties attended in court and entered into a temporary order on consent. The order made by Wildman J. provided for temporary custody of the children to Deborah, and supervised access to William. William was ordered to pay child and spousal support based on an income of $72,000.00 per year. This income was agreed upon as William had not produced any disclosure at that point. Child support payments were ordered at $948.00 per month and spousal support at $2,352.00 per month. Deborah was to have exclusive possession of the matrimonial home and it was to be listed for sale. A list of certain business and personal property was to be made available for pick up at the home by a third party on William’s behalf. An order for appointment of a Children’s Lawyer was also made. It is to be noted that this order was actually not filed until December 13, 2005, and was signed by Wildman J. on that date.

c) On July 5, 2005 a case conference was held before R. Clarke J.; it appears that that the applicant had not submitted the required forms for the Office of the Children’s Lawyer and a new order had to be made and both parties were ordered to submit the required intake forms for the Office of the Children’s Lawyer.

d) The matrimonial home was sold on October 5, 2005. On July 15, 2006, on motion by the applicant, Wildman J. ordered that on consent that $70,000 in net proceeds were to be released to the applicant with the right of the respondent to credit that amount against support. Mr. Francey received the sum of $10,000 for legal fees to be paid from the home. The motion was adjourned to July 26, 2006.

e) On July 26, 2006, Rogers J. ordered, on consent, that the respondent was entitled to take the children on a holiday to Florida on the terms set out in that order. The access in Florida was not supervised as had been earlier required by the order of Wildman J. dated May 20, 2005.

f) On November 1, 2006, by consent order of Rogers J., the respondent was to comply with a September 2005 Request for Additional Information, deliver a fresh financial statement and deliver an Affidavit of Documents within 30 days. As well, he was to allow the applicant’s accountant access to his business records. The applicant was to receive $200,000.00 from the house sale proceeds reserving the respondent’s right to argue that he should receive credit for the same amount against property or support. $7,500.00 of the sale proceeds was released to the respondent’s solicitors. The ongoing amounts of child and spousal support were not changed. The motion was adjourned to November 26, 2006.

g) On November 26, 2006, on consent, Rogers J. of this court ordered that a further $26,000 was to be released to the applicant from the net proceeds of the sale of the matrimonial home. The time for the respondent to provide his disclosure as required under the order of November 1, 2006 was extended from November 20, 2006 to December 7, 2006 and the motions of the parties were adjourned to December 13, 2006.

h) On December 7, 2006, by order of Rogers J. on consent (which was signed on November 1, 2005), further disclosure was ordered, which was to have been provided by November 20, 2006 (prior to the order having been made). The respondent was ordered to pay costs of $2,000 and a further $5,000 was ordered to be released to the applicant from the proceeds of the matrimonial home; the respondent’s solicitor was to receive a further $2,000. The consent states that all matters were adjourned to November 23, 2006.

i) On December 13, 2006, Nelson J. ordered on consent that the respondent have unsupervised access to the children and that he take an anger management course. The applicant’s motion to strike the respondent’s pleadings for lack of disclosure and payment of support was adjourned to January 24, 2007.

j) The motion to strike the respondent’s pleadings was heard by Rogers J. of this court on January 24, 2007. Mr. Francey was out of town at this time, and blames his lawyers for not filing his response to the Request for Information at the hearing of the motion; he states that when the motion date was set, he told his lawyer he could not be there at that time because the trip (for his 40th birthday) had already been booked. Mr. Francey’s lawyer told him he did not have to be there. On February 23, 2007, Rogers J. released her endorsement striking the respondent’s pleadings. At the time of the motion, Rogers J. found that arrears of spousal and child support totalled $33,000 and that disclosure had not been completed as required by the earlier orders of November 1 and December 13, 2006. She commented negatively on the respondent’s absence on holidays when the motion was heard. The respondent was given the right to reinstate his pleadings if he completed all of his disclosure, paid all costs outstanding and paid 60% of all child and spousal support outstanding before the uncontested trial.

k) The respondent brought a motion returnable March 14, 2007 to set aside Rogers J.’s order. In the meantime, the applicant brought a motion without notice to quash the respondent’s motion as his pleadings had been struck. That motion was adjourned to March 14, 2007. On March 14, 2007, the respondent’s motion was dismissed with costs of $2,500 by Nelson J. Nelson J. added a post-script to his endorsement indicating that 60% of support owed ($21,000.00 at that time according to Nelson J.) plus the outstanding costs of $4,500.00 “may be paid by the sale proceeds held in trust forthwith.” It appears that these funds were paid to the applicant from the funds held in trust; this does not appear to have resulted in the reinstatement of the respondent’s pleadings.

l) Ms. Cherry proceeded with her uncontested trial, which was considered by Nelson J. of this court. Nelson J.’s first decision from the Uncontested Trial was released June 7, 2007. In that decision, Mr. Francey’s income is imputed at $410,000.00 for 2004. Nelson J. relied on information about Mr. Francey’s income as set out in a report prepared by a forensic accountant retained by the applicant, Jonathan Hames of JMH Litigation and Financial Solutions dated December 11, 2006. The court requested that Ms. Cherry present further evidence on retroactive child and spousal support and the respondent’s income in 2005, 2006 and 2007. She was also to provide a schedule of section 7 expenses and a calculation of arrears. Ms. Cherry was awarded all the remaining house sale proceeds on the basis that she was the owner of the house and unlikely to owe Mr. Francey an equalization payment. The court indicated that was impossible to determine if any equalization payment was actually owed by Mr. Francey due to his lack of disclosure. Finally, the court requested further evidence in support of the applicant’s claim for $500,000.00 in damages and dismissed the claims in Mr. Francey’s Answer. A divorce was granted.

m) On February 27, 2008, Nelson J. issued his endorsement on the final stage of the uncontested trial in this matter. He found Mr. Francey’s income to be $410,000 pursuant to the report of Jonathan Hanes; he ordered spousal support in the amount of $7,500 per month, child support of $5,008 per month and $2,000 towards s. 7 expenses per month; the total support ordered was $14,508 per month. Ms. Cherry was given $5,000 in damages in respect of the assaults. Mr. Francey was ordered to provide life insurance of $500,000. Based upon the order as signed by Nelson J. on August 11, 2008, support was retroactive to April, 2004.

n) Mr. Francey had issued a Motion to Change by this point. On April 23, 2008, there was a return of default proceedings commenced by the Director. The respondent requested an adjournment; the Director requested that the matter be adjourned on terms that the ongoing support of $14,508 be paid and in default the respondent be imprisoned for five days. Perkins J. ordered the payment to be made, but refused to order incarceration.

o) A default hearing was heard before Rogers J. of this court on August 13, 2008. Mr. Francey was ordered to pay $1,000.00 per month towards arrears with five days of imprisonment to be served for each default of payment. A motion for committal was adjourned to October 8, 2008. That motion was adjourned until after the November 24, 2008 Case Conference on the Motion to Change.

p) On November 24, 2008, a case conference was held before Nelson J. on the respondent’s Motion to Change. Nelson J. stated that the proper approach should be to set aside the final order rather than bring a motion to change.

q) On March 11, 2009, the respondent’s motion to change was brought on before Ray J. of this court. The motion to change was dismissed without prejudice to the respondent bringing a motion to vary the order of Rogers J. dated January 24, 2007. Cost were ordered in favour of Ms. Cherry in the amount of $100.

r) Mr. Francey brought a motion to stay FRO enforcement. On March 24, 2009, that motion was adjourned on terms that the respondent pay $300 per month towards support.

s) On May 27, 2009, the respondent’s motion to stay was returnable before Perkins J. He granted a further adjournment so that the respondent could file reply material to the applicant’s material served that day. The respondent was ordered to pay $2,500 per month from May 24, 2009. Perkins J. refused to order incarceration in default.

t) On July 8, 2009, McGee J. dismissed the respondent’s motion to stay. Mr. Francey was ordered to continue to pay $2,500 per month as well as a lump sum payment of $25,000 failing which Mr. Francey would be incarcerated for 30 days. A trial management conference was set on the default hearing.

u) On July 31, 2009, Maddelena J. ordered the lump sum payment increased to $33,000, failing which the respondent would be incarcerated for 30 days.

v) On October 26, 2009, a trial management conference was held before Rogers J. of this court. Extensive disclosure was ordered to be made within 14 days of the date of that order. A five day hearing on the default was scheduled.

w) The default matter came before Nelson J. again on December 9, 2009. Mr. Francey was ordered to pay a lump sum on arrears of $10,000.00. This was to be paid in instalments of $5,000.00 on December 21, 2009 and January 15, 2010, failing which he was to be incarcerated for 30 days. The default hearing was set for January 21, 2010.

x) On January 21, 2010 FRO requested an adjournment of the default hearing due to late service of significant material from Mr. Francey. FRO sought terms of the adjournment. Mr. Francey was ordered to pay additional lump sums of $5,000.00 on the default on February 4 and February 25, 2010, failing which he would be incarcerated for 30 days.

y) The default hearing was held before Gilmore J. of this court on March 4 and 12 and the motion by Mr. Francey to set aside the noting in default was heard by Gilmore J. on March 23 and 30, 2010. Gilmore J. issued her endorsement on April 23, 2010. She radically changed the course of these proceedings insofar as she found that the striking of the pleadings and the uncontested trial judgment would be set aside. She ordered support to be fixed based upon income in the amount of $30,000 (Ms. Cherry was imputed with $20,000 in annual income) and ordered child support in the amount of $468 per month, a substantial reduction in the support. A trial management conference was ordered to be held with a view to having the trial of the matter heard in the November, 2010 sittings.

z) The trial management conference was adjourned on several occasions; on October 21, 2010, an urgent motion was brought by Ms. Cherry to adjourn the trial because she was obtaining counsel; Nelson J. dismissed the motion.

aa) The trial management conference was held on October 21, 2010; Rogers J. decided that the adjournment request could only be dealt with by the trial judge. A 6 day trial was scheduled for the fall sittings

bb) On November 26, 2010, Gilmore J. granted an adjournment of the trial. She noted that Mr. Larsen, counsel for Ms. Cherry, had recently had surgery and could not proceed with the trial. The adjournment was granted on the basis that Mr. Larsen would go onto the record and that it was peremptory on him to appear in this matter.

cc) On April 14, 2011, a further trial management conference was held. Mr. Larsen removed himself from the record. There was a direction that the trustee be served with the endorsement and advise of their position regarding equalization.

dd) On June 20, 2011, by way of final Minutes of Settlement, custody and access issues were settled by way of the applicant having custody of Joshua and the respondent having custody of Branden. Access was worked out. The remaining matters were set down for a trial which commenced the following day.

[^1]: R.S.C. 1985, c. B-3

[^2]: In my review, I find orders directing payment to Mr. Francey in the total amount of $19,500. The figure of $19,000 is not evident from the evidence or orders that I reviewed.

[^3]: S.O. 2006, c. 16

[^4]: Although Mr. Francey’s income tax return indicated an income of $46,000 in 2005, his 2005 Comparative Tax Summary which was attached to his accountant’s correspondence dated October 4, 2006 showed an income of $70,994 in 2005.

[^5]: In 2006, Mr. Francey’s income included $73,542 of RRSP income. His employment income was actually $30,000.

[^6]: In 2007, Mr. Francey went bankrupt. His pre-bankruptcy income was $3,750; his post-bankruptcy income was $3,000.

[^8]: I can find no disclosure order on the continuing record dated July 26, 2006; the only order in the continuing record which is dated July 26, 2006 allowed the respondent to take the children to Florida for a holiday. Rogers J. stated, however, in her endorsement, that disclosure was, in fact, ordered on July 26, 2006 and this was one of the disclosure orders that the respondent was in breach of warranting the striking of his pleadings.

[^9]: I reviewed the income calculations on both: http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSPDirectives/income_support/6_1_ODSP_ISDirectives.aspx; and http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSPDirectives/income_support/6_2_ODSP_ISDirectives.aspx

[^10]: R.S.C. 1985, C. 3 (2nd Supp.)

[^11]: R.S.O. 1990, c. F.3

Deborah Mae Cherry-Francey v. William Allan Francey, 2012 ONSC 2109

Case Summary

Introduction

Background Facts

(a) Events Leading Up to Separation

(b) Ms. Cherry’s Situation Since Separation

(c) Mr. Francey’s Situation Since Separation

(d) Credibility Issues

Analysis

(a) What income, if any, is to be imputed to the respondent, Mr. Francey?

(i) Disclosure Issues

(ii) Undeclared Income

(iii) Mr. Francey’s Underemployment

(b) What income, if any, is to be imputed to the applicant, Ms. Cherry?

(c) What is to be the ongoing spousal support and child support payment owing to be paid by the respondent to the applicant?

(i) Child Support

(ii) Spousal Support

(iii) Other Matters

(d) Is there to be any retroactive award of either child or spousal support or alternatively a return of any overpayment of support in this proceeding?

(e) Bankruptcy Issues

(f) Other matters

Order

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Expert Witnesses

Financial Outcomes

Issues

Statutory Provisions 9

Legal Tests 2

Legislation 5