ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 5002/06
DATE: 2012-08-08
B E T W E E N:
Lynda Butcher
Self-represented
Applicant
- and -
Humberto Varela
Self-represented
Respondent
HEARD: August 3, 2012
The Honourable Justice C. A. Tucker
ENDORSEMENT
[ 1 ] Mr. Varela seeks to change the child support order of Mr. Justice Turnbull made March 22, 2007. That order made pursuant to Minutes of Settlement provided for child support in the amount of $1,226.00 per month effective April 1, 2007 based upon Mr. Varela’s income of $146,000.00 in 2005. The order also fixed the arrears owing to that date of $17,500.00 and provided that those arrears were to be paid within 60 days of the order. As at July 17, 2012 the Director’s statement of arrears shows $69,956.00 of child support owing.
[ 2 ] It is Mr. Varela’s evidence that all of his assets, including his home and those assets that he owned through corporations, were put into receivership in June of 2007 and he was left with $80.00 in cash. Since that time, he testified, he has not had a bank account and the one property that was not put into receivership has been lost to its mortgagee. Mr. Varela remained in receivership until April 2012. As a result of the loss of his properties, which provided his income, he was unable to make child support payment leading to the accumulation of arrears noted above.
[ 3 ] Mr. Varela, through his numbered company, entered into an arrangement with the Portuguese Credit Union whereby he managed a club that he had previously owned which provided him with some income in 2008 and part of 2009. The Portuguese Credit Union went bankrupt in 2009 and this income source was lost. Since that time, Mr. Varela reports no income at all, living, he says, on monies from his present wife and his parents and social assistance. He says he has looked for work but provided no evidence of such attempts. He reports at trial that he will begin work hopefully in mid-August making $500.00 per week. It appears curious to the court that Mr. Varela after five years only finds employment once the trial has occurred. Mr. Varela provided no medical evidence as to why he was unable to work, although he says the stress of the receivership and trying to recapture some of his assets led to high blood sugar and the loss of 60 pounds.
[ 4 ] Marcus is now 20 years old and is in fulltime attendance at Fanshawe College and residing with his mother and her new husband during the summer. No claim was made for any amount other than guideline support although Ms. Butcher testified that she is providing her son with financial support for school. Marcus is also on student loans.
[ 5 ] Mr. Varela seeks to have his child support obligation reduced to zero to reflect his difficult financial situation. Ms. Butcher is suspicious that Mr. Varela is diverting money to relatives but has no evidence of same. Mr. Varela said he had assets of over $54 million in 2006 but has none at all now.
[ 6 ] He filed various income tax notices and assessments as evidence of his income for a number of years. He did not file for 2007 and 2008 as he said that was the responsibility of the receiver. He only filed 2009, 2010 and 2011 to obtain social assistance.
[ 7 ] His notice of assessment for 2007 shows an income of $137,644.00 for the tax year 2006. He filed a letter from a former controller of his numbered company, 1049560, together with T4A slips to show that his 2007 income was $90,000.00. It also showed 2008 income of $39,000.00 and $17,250.00 in 2009. According to his testimony, those last two years of income relate to his agreement with the Portuguese Credit Union. Although he owns 1049560 Ontario Limited he testified that it has no assets and only held the operating license for the property he managed. In 2007, to make ends meet, he sold sports memorabilia for $15,000.00.
[ 8 ] His notices of assessment for 2009, 2010 and 2011 show no income at all and a debt owing to Revenue Canada in the amount of $1,728,243.40. He does not understand the amount shown as due, but reported that it may be capital gains as a result of the receiver’s sale of his assets. He reports no income in 2012 to date. He plans to declare bankruptcy now that he is out of receivership.
[ 9 ] Marcus is still a child of the marriage, given his attendance at school and is still entitled to support. Mr. Varela brought this motion last year.
[ 10 ] I find the order of Mr. Justice Turnbull should be varied. Child support is ordinarily based upon the income of the payor from the previous year. Given that Mr. Varela earned $137,644.00 in 2006, the child support ordered by Mr. Justice Turnbull for 2007 is slightly greater than his actual income. Although it was a consent order, I find that a substantial change in Mr. Varela’s circumstances occurred in 2007 after the Minutes of Settlement were entered into.
[ 11 ] Accordingly, I will change the order of Mr. Justice Turnbull and I order that the support payable shall be as follows: For 2007, commencing January 1, 2007, based upon Mr. Varela’s income of $137,644.00, his child support obligation shall be fixed at $1,162.00 per month. Based upon his 2007 income of $90,000.00 and $15,000.00, or $105,000.00 in total, his child support payable I hereby fix at $916.00 per month for the year 2008 commencing January 1 st . He reported income for 2008 was $39,000.00 and, as such, I order child support of $358.00 per month commencing January 1, 2009 to be paid. For 2009 he reported $17,000.00, and in 2010 and 2011 Mr. Varela reports no income at all, nor provides reason for that other than stress. I understand that the receivership would have caused stress but Marcus is his obligation and he should have tried to at least find a minimum wage job to help support his child. Accordingly, I will impute minimum wage income to him for $22,000.00 per year for those years. His child support therefore for 2010 and 2011 based upon $22,000.000 I fix at $188.00 monthly commencing January 1, 2010. This amount will be changed to $176.00 as at January 1, 2012 based upon the same income but using the new Child Support Guidelines.
[ 12 ] The parties shall exchange income tax returns and notices of assessments in each year by June 1 st of each year so that any adjustments that may be required can be determined. Ms. Butcher will provide confirmation of Marcus’ continued enrollment in school to Mr. Varela by September 15 th of each year that he remains in undergraduate school.
Tucker J.
Released: August 8, 2012
COURT FILE NO.: 5002/06
DATE: 2012-08-08
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Lynda Butcher Applicant - and – Humberto Varela Respondent ENDORSEMENT Tucker J.
Released: August 8, 2012