SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: D46926/02

DATE: 2012-02-01

RE: JULIA FRASER v. DAVID FRASER

BEFORE: SNOWIE J.

COUNSEL: MELANIE A. MANCHEE, for the Applicant
G. WILLIAM MCKECHNIE, for the Respondent

HEARD: January 26 and 27, 2012

ENDORSEMENT

[ 1 ] The parties were married in June 1994 and separated in July 2002. There are two children of the marriage, ages 16 and 13. The children have resided with their mother since separation in 2002.

[ 2 ] Prior to the separation the family enjoyed a lavish lifestyle. They resided in a two million dollar home and the children attended a private school. The respondent father was a successful psychiatrist earning $300,000.00 plus per year.

[ 3 ] All issues were resolved by the Consent Order of O’Connor J. dated May 7, 2007. Paragraph 11 of the May 7, 2007 Order states:

THIS COURT ORDERS AND ADJUDGES THAT Barry Smith or such other solicitor(s) as Barry Smith may direct or the parties agree or the Court orders, shall receive and hold in trust the sum of $200,000.00, pursuant to paragraph 13(b) of this Order. The Respondent Husband’s funds shall be invested in short term interest bearing securities. Any interest earned on the sum shall be paid to the Respondent Husband. Such funds shall not be disbursed without the Consent, in writing, of both parties, or further Order of this Court, except in the event of the Respondent Husband’s death, when such funds shall be paid forthwith to the Applicant as a fund for future support for the children. If the Respondent Husband, after three years, has met his child support obligations from September 1, 2007 to September 1, 2010, and is then meeting his reasonable child support obligations, such funds, or the balance then remaining, shall be returned to him. In the interim, if the Respondent Husband has failed to meet his reasonable child support obligations, the Applicant may apply to the Court for an Order directing payment of such funds, at any time, for child support, to cover any period following September 1, 2007, or costs awarded to her in any future litigation with the Respondent. After September 1, 2010, if any part of the funds remains in trust, the Applicant may apply to the Court for an Order directing payment of such funds, at any time, for child support, or costs awarded to her in any future litigation with the Respondent relating to the fund. In the event of a dispute in regard to the release of such funds, either party may apply to the Court for Directions.

[ 4 ] The $200,000.00 referred to in paragraph 11 of the said Order was set up in a trust. At the time of the settlement, the respondent father was mentally disabled and unemployed. His licence to practice psychiatry had been suspended and a hearing had been set for August 2007 to review if his licence to practice should be reinstated.

[ 5 ] The respondent father had a history of non-payment of child support and the $200,000.00 trust was set up to ensure that for a three year period there were funds available to cover his support obligation (September 2007 to September 2010). Child support was suspended from January 1, 2007 to August 2007 on consent. The respondent father was expected to follow a course of active treatment and return to work.

[ 6 ] The respondent father did not meet his child support obligations from September 1, 2007 to September 2010 and as such the applicant mother “may apply to the court for an order directing payment of such funds, at any time, for child support to cover any period following September 1, 2007…” (para. 11 of the May 7, 2007 order).

[ 7 ] After five years, the respondent father has not returned to gainful work. The respondent father has now brought a motion to have the $200,000.00 paid out to himself in full. The respondent father has not made any payment of child support and/or section 7 expenses for the two children since September 1, 2007.

[ 8 ] The respondent father alleges that his total earned income since 2007 is as follows:

2007 – $70.10

2008 – $8,593.39

2009 – $18,626.44

2010 – $4,688.55

[ 9 ] It is clear that the respondent father has, however, been using his capital of approximately $700,000.00 to $800,000.00 in lieu of income to live on. The question then arises, as stated by Perkins J. in Fung v. Lin – Re: Lai Ha v. Hon-Man Lin, 2001 28193 (ON SC), 2001, Carswell Ont., 488, 2001 O.J. No. 456:

“…If the father is using capital to live on, why should his child (children – mine) not do so?”

[ 10 ] The applicant mother has been the sole support of the two children since 2007. The applicant mother is seeking that the $200,000.00 be paid out in full to her for past, present and future child support and section 7 expenses as a lump sum. I find that a lump sum with respect to future child support and section 7 expenses is appropriate in all the exceptional circumstances of this case. In particular, the respondent father’s long history in this marriage and his first marriage of non-payment of supports orders.

[ 11 ] The respondent father had been utilizing capital in lieu of income to support his lifestyle since 2007. He received approximately $340,000.00 in 2008 for his rare wines that he sold at auction. The applicant mother was not told that they were sold. At approximately the same time, the respondent father withdrew $159,000.00 from his RSP portfolio. The applicant mother had no knowledge of this fact either. The respondent father then received $269,000.00 from a personal injury claim in 2009. He did not acknowledge receipt of these monies to the applicant mother or this court until January 2012. In fact, he swore an affidavit for the May 2011 motion in this court that he had no money at all on deposit. This was a false statement. The fact was he had approximately $160,000.00 on deposit at that time from these personal injury monies. The respondent father has received the interest income on the $200,000.00 held in trust also. Additionally, the respondent father has earned limited income as previously stated. He is also in receipt of CPP in the amount of $13,900.00 per year, including a lump sum retroactive payment.

[ 12 ] The respondent father purchased a home in August 2008 for $391,000.00. Pursuant to the evidence before this court, he has spent approximately $100,000.00 in the last seven months. This included the cost of new carpeting, a new driveway, renovations and air conditioning for his home. The house remains mortgage free.

[ 13 ] The respondent father has an obligation under the Family Law Act to support his two children. The court has an obligation to ensure that a fair standard of support is established for the children’s benefit based upon the financial means of both parents after separation.

[ 14 ] There is no question that the respondent father is a very smart person. There is also no question, based upon the evidence before this court, that he is focused on not paying any child support to the applicant mother. He has a long history with his first marriage of not paying child support and, in fact, he depleted, for his own purposes, the assets (RESP) set aside for his child of that marriage’s post-secondary education. The respondent father has a history in his second marriage (this matter) of again not paying child support and/or section 7 expenses. The child support that has been collected to date has been collected primarily through lump sums and court orders. This extensive non-payment history is the reason the said $200,000.00 was originally placed in trust.

[ 15 ] There is evidence before this court that the respondent father has been actively attending fertility clinics with his third wife. His lack of responsibility persists. He has stated to his psychiatrist very recently that he has no intention of remaining involved after she (his third wife) gets pregnant.

“While Dr. Fraser has formed some emotional attachment to his wife (third – mine) and he would like to see her through getting pregnant as it is her wish to have a baby at this stage in her life, he stated that he was not going to be around beyond once the pregnancy is confirmed and underway, and he has done his duty. “

(from the Report of Dr. P.G. Turner, (Psychiatrist), dated December 9, 2011.)

[ 16 ] The respondent father has repeatedly complained to his attending doctors that he is paying “$18,000.00/month child support to FRO”. These are all false statements. The respondent father appears to be focused on the issue of his obligation to pay child support although he is paying nothing.

[ 17 ] I am satisfied that the respondent father has an illness. I am not satisfied that he is totally disabled and the victim of his illness.

[ 18 ] The respondent father is a chronic liar. His doctors have diagnosed him as a “habitual liar”. (See the medical reports dated August 20, 2007; December 30, 2007; August 7, 2009; April 30, 2010 and January 7, 2011.) He makes repeated false statements such as:

• he pays $18,000.00/month child support to FRO

• his father and uncles all committed suicide

• the judge ordered $400,000.00 held in trust in case he kills himself

[ 19 ] He has been diagnosed as:

(1) malingering

(2) dramatic

(3) a narcissistic personality

(4) having a propensity towards lying disorder

[ 20 ] There is medical evidence before this court that “there is no evidence of any psychotic symptoms” with respect to the respondent father.

[ 21 ] Dr. Gaind, M.D., described the respondent father in 2007 as “the architect of his own misfortunes”.

“It was clear that in many ways, he is the architect of his own misfortune and the various things he has done and the lies he has told lead him to greater and greater ruin. It is also clear that he had a great deal of difficulty engaging in any meaningful therapy with anyone and was simply going from person to person until perhaps he hears what he wants to hear…”

(from the Report of Dr. Gaind, M.D., dated May 17, 2007).

[ 22 ] The respondent father’s diagnosis on discharge was:

Axis I: malingering

Axis II: narcissistic personality disorder

[ 23 ] It is clear from the evidence that the respondent father has chosen not to follow any ‘active treatment’ plan. He has gone from place to place to ‘doctor-shop’.

[ 24 ] As a psychiatrist, the respondent father knows “the system”. The evidence before this court shows that the respondent father saw 209 different doctors from April 2004 to June 2011 (OHIP records) in various locations all across southern Ontario.

[ 25 ] Is he ill? Yes, he is ill.

[ 26 ] Is he able to get better? I agree with the applicant wife’s counsel that on the balance of probabilities the respondent father could get better except he has chosen to focus on not paying child support and, as a result, his illness has taken on a life of its own. He has gone to extraordinary lengths to avoid paying child support to his second wife.

[ 27 ] This is an exceptional case. For all of the above reasons, I am content to impute income to the respondent father in the amount of $80,000.00. This is a far cry from the $300,000.00 – $600,000.00 that he claims that he earned prior to the separation. The $80,000 (before taxes) is the approximate amount of capital that he has chosen to live on. I believe that if the respondent father would accept his responsibility to pay child support he could probably (balance of) return to work and earn at least $80,000.00/year. This amount then must be grossed up for tax - being approximately $118,000.00/year. This translates into a child support obligation of $1,621/month for the two children. This then translates into $97,534.00 in arrears of child support accrued from August 2007 to January 2012 owed by the respondent father to the applicant mother for child support.

[ 28 ] Additionally, the two children are presently only 16 and 13 and as such will likely require ongoing child support for at least another five years for the two children – being $97,260.00 and for one child at $1,016.00/month for an additional three years being $36,576.00.

[ 29 ] Both parents are university educated. The respondent father not only has a medical degree but also a speciality. There is no question that the section 7 post-secondary education expenses for these two boys (at a minimum) will be in excess of $15,000.00/year for at least four years – being $120,000.00. Even if the parents share the section 7(s) equally this is an additional $60,000.00 that the respondent father will owe. The arrears, on-going child support and future s. 7 post-secondary education expenses add up to $281,370.00. This will leave a huge shortfall for the applicant mother to absorb. However, with a lump sum payment now, the applicant mother will be able to invest some of these monies from the trust in the short term for the benefit of the two children.

[ 30 ] In 2007, the children were only nine and six respectively. Daycare costs would have been substantial and the applicant mother had to work as she has been the sole supporter. The sum of $281,370.00 provides nothing for retroactive section 7 expenses which should have also been addressed.

[ 31 ] In summary: This court orders that the balance of the trust account, originally in the amount of $200,000.00, including any presently accrued interest, be paid in full to the applicant forthwith in accordance with paragraph 11 of the Order of O’Connor J. dated May 7, 2007.

[ 32 ] All other relief sought is hereby dismissed.

Costs

[ 33 ] Each counsel may submit no more than three typed written pages to me re: costs on or before February 27, 2012.

Snowie J.

DATE: February 1, 2012