COURT FILE NO.: F-878/96

DATE: 2013-02-27

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Linda Marie Kulchycki, Applicant

AND:

Robert William Hollis, Respondent

BEFORE: The Honourable Mr. Justice Robert Nightingale

COUNSEL:
Applicant- Self Represented

John K. Venn, Counsel, for the Respondent

HEARD: February 14, 2013

ENDORSEMENT

[1] The Respondent Robert Hollis brought a motion to change the order of Mr. Justice Steinberg dated January 25, 2011.

[2] Steinberg J.’s final order was a change of McLaren J.’s order of May 22, 2008 which latter order required the Respondent to pay spousal support to the Applicant in the amount of $500 per month.

[3] Steinberg J.’s order required the Respondent to pay spousal support to the Applicant in the amount of $1400 per month retroactive to July 1, 2008 based on his inferring that he earned or was capable of earning approximately $50,000 per year.

[4] The Respondent takes the position that because he says he can now prove that he did not in fact earn $50,000 for the years 2009 and 2010 but significantly less, that entitles him to a change in the order and a reduction or elimination of his spousal support obligations for those two years.

[5] I disagree with that position and dismiss his motion for the reasons noted below.

Background Facts

[6] The Applicant at present is 62 years of age and the Respondent is 65. They married on June 16, 1973 and separated in 1996.

[7] There was an initial order by Justice Czutrin of spousal support $1400 per month payable by the Respondent on June 11, 1997 as well as child support of $600 per month.

[8] Justice Mazza on October 12, 2001 reduced the child support for one child to $178 per month and the spousal support to $300 per month.

[9] Justice McLaren on February 28, 2003 increased the spousal support to $500 per month and child support to $318 per month.

[10] As noted by Justice Steinberg in his reasons of January 25, 2011, the Respondent had a history of not paying his support obligations and was incarcerated on the application of the Family Responsibility Office in or about July 23, 2004 until approximately $2500 of arrears was paid. On November 12, 2004 the Respondent was again incarcerated until he paid $4000 of support arrears.

[11] Justice McLaren on May 22, 2008 ordered that the Respondent pay spousal support of $500 per month and terminated the child support for the youngest child Kelly as of April 30, 2007.

[12] In the Applicant’s proceedings to change the spousal support order of Justice McLaren leading up to the hearing before Justice Steinberg, an order was made by Justice Pazaratz on October 1, 2010 on consent of the parties requiring the Respondent to produce relevant documents with respect to his financial position by October 31, 2010.

[13] Apparently he did not do so and on the Applicant’s motion, Justice Maddalena on November 26, 2010 struck out the pleadings of the Respondent because of his failure to comply with the order of Pazaratz, J. The matter then proceeded at the hearing before Steinberg J. on January 14, 2011 as the order of Justice Maddalena was not appealed or moved to be set aside by the Respondent.

[14] Counsel for the Respondent attended at the hearing before Justice Steinberg on January 14, 2011 but Justice Steinberg ruled that because of the order of Justice Maddalena which was still in effect, the Respondent was precluded from participating in the hearing in any way.

[15] Steinberg J. after hearing the Plaintiff’s evidence regarding her limited financial means after her employment position was terminated in 2008 and her significant medical restrictions resulting in her being supported by funding from Ontario Works and from her 92-year-old mother and children, made an order increasing spousal support payable by the Respondent to $1400 per month.

[16] In doing so, he also considered the evidence that was before him which came from the Applicant and also from the Respondent’s own financial records that were available. This included the Respondent’s history of employment income to which he made specific reference in his reasons as follows:

• 2002-$113,226

• 2003-$34,463

• 2004- $64,721

• 2005- $26,437

• 2006 - $80,244

• 2007- $65,759

• 2008- $50,000

• 2009- $21,000

[17] For 2010, Justice Steinberg noted that the Respondent himself projected his 2010 income at about $25,000 and the information for his 2009 and 2010 income came from the Respondent’s financial statement.

[18] Justice Steinberg also noted the evidence of the Respondent’s employment history and his “up-and-down career” which he described as a “financial career” given his accounting background. He noted that he had been a controller in the past for a company earning in excess of $100,000 per year and also worked for another employer as a manager at the time of the divorce. He also did some freelancing in 2006 and worked for another company.

[19] Justice Steinberg had evidence before him that the Respondent and his present wife at that time operated a business to do accounting work in the energy field. He noted that the Respondent’s position in his material was that his income had fallen but also noted that the Respondent had provided to the court or the Applicant no details of his business, financial or otherwise at the time. As noted above, it was because of the Respondent’s failure to abide by the order he had consented to before Justice Pazaratz that resulted in his pleadings being struck by Justice Maddalena in November 2010.

[20] Justice Steinberg had evidence before him that the Respondent at the time of the hearing was supporting his present wife who he stated in his last financial statement did not work. He made an adverse inference against the Respondent because of his failure to provide the court or the Applicant with any details of his business, financial or otherwise.

[21] Steinberg J. indicated that he was prepared to find that the Respondent earned or is capable of earning about $50,000 a year and it appears from his reasons that he had evidence before him to support that finding especially given the employment history of the Respondent from his own income tax returns since 2002 and the Applicant’s evidence.

[22] On that basis and given the Applicant’s dire need and his findings that the Respondent had earnings or that he was capable of earning $50,000 a year, Justice Steinberg ordered that spousal support payable by him to the Applicant be increased to $1400 per month and made that order retroactive to July 1, 2008.

[23] The Respondent according to his affidavit and financial information filed on this motion in fact worked on a full-time basis in 2011 after the date of the order of the Justice Steinberg and earned $55,500 in employment income plus his Canada Pension income of approximately $6000 for a total of $61,500. This of course was significantly higher income in 2011 than Justice Steinberg had imputed to him of $50,000.

[24] The Respondent chose not to appeal the order of Justice Steinberg and took no steps to move to set it aside initially.

[25] Rather, he commenced this motion to change that order on June 4, 2011 asking that the spousal support order of Justice Steinberg be terminated effective January 1, 2008. Alternatively, he asked for an order terminating his spousal support obligations for 2009 and 2010 and for an order fixing spousal support for 2008 and 2011 in accordance with the spousal support guidelines. This motion proceeded on the basis of a request to rescind or change the order of support for 2009 and 2010 only.

[26] There was no evidence advanced or submissions made by the Respondent that the Applicant’s financial circumstances had changed since the date of Justice Steinberg’s order.

[27] The Applicant opposes the Respondent’s motion and asks that it be dismissed.

Analysis

[28] The Respondent’s position is that he is entitled to a variation of Justice Steinberg’s order under Section 17 of the Divorce Act based on his evidence that he can now prove that he in fact earned significantly less income in 2009 and 2010 than the $50,000 annual income that Justice Steinberg imputed to him in his order. He submits that that constitutes a material change in circumstances entitling him to a variation of and a rescission of Justice Steinberg’s order requiring him to pay $1400 per month for those two years.

[29] The legal authority provided by the Respondent for his position stems from a line of decisions from British Columbia, Saskatchewan, and the Northwest Territories which don’t appear to have been considered by any Ontario court to date.

[30] The main decision is that of Pelley v. Pelley 1995 252 (BC CA), 1995 CanLII252 in which the Court of Appeal rescinded an original court order for spousal and child support granted in an uncontested divorce proceeding of $1200 per month. Because of the failure of the Payor spouse in that case to provide a financial statement or make representations concerning his ability to pay support, the court said that the original order made was based on no information with respect to his income.

[31] In fact, the Payor’s income at the time of the original order and the proceedings he commenced to vary the order was significantly less than the income which must have been attributed to him at the time the original order was made. His affidavit indicated that in the four year period leading up to the court order in 1992 he earned between $8200-$22,000 per year. The Court found that the judge making the original support order imputed an income to him that was considerably higher than the $15,000 per year he was actually making at that time and found that it was obvious that no judge acting judicially would make an order for maintenance in the amount of $14,400 per year when the income of the Payor was only $15,000 per year.

[32] However, what is significant is that the Court went on to find that this would be the case in the absence of evidence that the Payor was not working to capacity or was otherwise misrepresenting his financial circumstances. In that case, there was no evidence at the time of the original order that the Payor’s income or income earning capacity was significantly greater than $15,000 per year on average.

[33] That is not the case in the matter before me. The reasons of Justice Steinberg make it clear that he did have significant evidence before him including the Respondent’s own income tax returns since 2002 and the evidence of the Applicant to conclude that his income earning capacity at the time of his order in January 2011 and in the two previous years of 2009 in 2010 was $50,000 annually. He also made specific reference to the failure of the Respondent to provide the relevant financial information which he had been ordered to do by Justice Maddalena.

[34] Section 17 of the Divorce Act provides that before the court makes a variation order in respect of spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the original spousal support order and in making the variation order, the court shall take that change into consideration.

[35] The leading Supreme Court of Canada decision of Willick v. Willick 1994 28 (SCC); 1994 3 SCR 70 held that in a variation proceeding, it must be assumed that at the time the original order was made, it accurately assessed the needs and means of the parties and the correctness of the previous order must not be reviewed during the variation proceeding. The previous order is not to be departed from lightly and will only be varied if the requirements under 17(4) of the Divorce Act are properly satisfied.

[36] Justice Sopinka at page 688 confirmed that section 17 (4) of the Divorce Act authorized the court to vary a previous support order if a change of circumstances occurs. The court must first determine whether the conditions for variation exist which is defined to be a material change of circumstances. This means a change such that if known at the time of the original order would likely have resulted in different terms. He went on to hold that that if the matter relied on as constituting a change was known at the relevant time, it could not be relied on as a basis for variation.

[37] In my view the decision in Pelley is clearly distinguishable from the facts of this case. As indicated above, unlike Pelley, Justice Steinberg had significant evidence before him of the actual income earned by the Respondent in the eight years prior to the date of his order as well as the details of his education and work history in the financial field. He also had evidence with respect to the Respondent working in a self-employed business with his new wife and his failure or refusal to provide financial documents notwithstanding he had agreed to an order on consent that he would. Lastly, Justice Steinberg was well aware of the Respondents failure or refusal to pay spousal support in the past since the original divorce in 1997 resulting in his being incarcerated on two occasions because of that. What is significant is his finding that the Respondent earned or was capable of earning about $50,000 a year which was certainly open to him to find on the evidence before him.

[38] The Respondent’s evidence before me in his affidavit and financial statement was that his income for 2008 as noted in his income tax return was $55,476 and for 2009, $21,467 plus his income from his self-employment business of approximately $5200 for a total of approximately $26,500.

[39] His evidence was also that in 2010 he earned $14,530 plus his income from his self-employment business attributed back to him approximately $6500 for a total income of $21,200.

[40] He said that between 2008 to 2010 it was “necessary” for him to “frequently refrain from employment” because of his having prostate cancer which he said went into remission in the latter part of 2010. He said he was in receipt of Ontario Works in 2009 and 2010. His submission was that this explanation for his not working fulltime in those years and not in fact earning $50,000 annually entitles him to a change of Justice Steinberg’s order.

[41] I do not agree with that position. The Respondent attached as an exhibit to his affidavit an unsworn letter from his doctor of April 4, 2011 which stated that his prostate cancer had in fact been diagnosed in May 2005 and although he had a series of biopsies after that in 2006, 2007 and 2008, he never had surgery. The initial suggestion of surgery in 2005 was deferred by him for financial reasons. Accordingly, there is nothing in the unsworn letter of the attending doctor that the Respondent was not able to work fulltime in 2009 or 2010 because of his having prostate cancer as the only concern was his having a small PSA jump in 2009 and 2010.

[42] It is also important to note that even though the Respondent was diagnosed with prostate cancer in May 2005, he apparently was able to continue to work on a full-time basis and earn significant income from 2005 to 2008 as noted above by Justice Steinberg. The Respondent’s suggestion in his affidavit that his prostate cancer went into remission in the latter part of 2010 and that he had now obtained employment again in 2011 certainly appears to be misleading if he is attempting to suggest to this court that he was not able to work because of his prostate cancer in 2009 in 2010. Simply put, this court is not satisfied with respect to his explanation especially given the unsworn letter from his attending doctor which does not suggest that there was a significant deterioration in his medical condition in 2009 and 2010 and that he was disabled from working because of that. Reid v. Reid 2013 ONSC 1071.

[43] I am even more convinced of that because of the further evidence of the Respondent and referred to in the submissions of his counsel. The Respondent states when he was working in 2011 on a full-time basis earning approximately $5500 per month, he could not continue to work because the Family Responsibility Office was seizing approximately 50% of his income, he had substantial income tax arrears of about $78,000, support arrears of about $65,000 and $500 per month in Go Transit transportation costs to get to his job in Toronto . His Counsel submitted he could not “afford” to keep working.

[44] Not surprisingly, the evidence that he provided confirmed that his employment ceased in October 2011 which was not long after he was being pursued again for payment of his spousal support arrears by the FRO.

[45] However, the Respondent had earlier sworn an affidavit in June 2011 in order to obtaining a refraining order to stop the FRO from suspending his driver’s license because of his failure to comply with the Court order for support . In that affidavit, he said that he needed his driver’s license since if he was not able to drive, he would not be able to work and would not therefore be able to work on reducing the arrears of support as he was employed in Toronto. He said he was required from time to time to drive himself to outlying areas. He obtained that refraining order allowing him to drive saying that he had to work but then shortly after he obtained the refraining order , he states he could no longer “afford” to work because of the same FRO enforcement proceedings .

[46] The Respondent’s position that his now proof of his actual income earned in 2009 in 2010 rather than the $50,000 annual income figure used by Justice Steinberg entitles him to a change of Justice Steinberg order in my view is both unreasonable and wrong.

[47] Firstly, all that the Respondent has proven is that his income that he says he actually earned in 2008, 2009 and 2010 of $55,476, $26,500 and $21,500 respectively is in fact higher than or close to what was the information before Justice Steinberg for each of those years.

[48] Secondly, Justice Steinberg finding was clear that it was not just that Respondent earned $50,000 per year but also that he was capable of making that amount of money based on all the facts that he had before him. It is this “income earning capacity” finding that is the crucial difference in this case in my view compared to the Pelley decision.

[49] Thirdly, given the onus on the part of the Respondent to establish a material change in circumstances at the time of variation, in my view it is important to consider that the Respondent in 2011 actually earned significantly higher income than what Justice Steinberg had considered in imputing $50,000 in annual earnings or income earning capacity to the Respondent. This evidence and his own evidence that he worked full time with prostate cancer from 2005 to 2008 with no significant change in that condition in 2009 or 2010 and with no medical evidence to suggest he was disabled from working in those years, is even more supportive, not less, of Justice Steinberg’s decision to impute an annual income or income earning capacity of $50,000 for 2009 and 2010.

[50] In other words, if all of the relevant facts, including the evidence now put forth by the Respondent had been made available to Justice Steinberg at the time of his order, would the order of Justice Steinberg have been materially different than what he ordered? The onus is on the Respondent to prove that the order would have been different and in my view, the answer is no as the Respondent has clearly not met the required onus of proof on him.

[51] Justice Steinberg , given the previous work history of the Respondent prior to the date of the order, the refusals of the Respondent to pay spousal support in the past resulting in his incarceration, his actually working on a full-time basis since 2005 after he was diagnosed with prostate cancer resulting in no surgical intervention with no significant medical evidence to confirm a deterioration and disability preventing him from working in 2009 and 2010, was clearly entitled to impute an income earning capacity of the Respondent of $50,000 per year even if he didn’t in fact earn that income for those years. This would be even more so because of his actual income earned in 2011 of $61,000 rather than the $50,000 anticipated by Justice Steinberg.

[52] Respondent’s counsel in submissions did not disagree with the proposition that a Payor who is intentionally underemployed and not making the income or income earning capacity imputed to him at the time of the original spousal support order cannot expect the court to allow the change of a spousal support order at his request once his actual lesser income is proven.( He suggests, however, that the Respondent’s case is not that case). I do not believe that the Pelley decision suggests otherwise.

[53] This was not a case where Justice Steinberg had been misled with respect to the income earned of the Respondent or his income earning capacity in 2009 or 2010 or where he had been given incorrect information with respect to that by either the Applicant of the Respondent. In my view, this also distinguishes this case from the Pelley decision and the other decisions referred to by the Respondent in support of his motion which were referred to me as noted in schedule A of this endorsement.

[54] Based on the Respondent’s work history and sources of income, it is reasonable now and was reasonable for Justice Steinberg then to impute a level of income to the Respondent that is within the range of $50,000 annually imputed by Justice Steinberg for 2009 and 2010 and for me to conclude that there has been no material change in circumstances.

Conclusion

[55] In summary, the Respondent has not satisfied me that there has been a change in the condition, means, needs or other circumstances of either himself or the Applicant since the making of the spousal support order of Steinberg J. of January 25, 2011.The Respondent’s motion to change the order of Steinberg J. by rescinding or varying the Respondent’s spousal support obligations for 2009 and 2010 is hereby dismissed.

[56] I am prepared to consider submissions by the parties for costs if they cannot otherwise agree. If they cannot, the Applicant and the Ministry of Community and Social Services shall provide no more than 3 pages of written submissions and a bill of costs within 7 days after this order with the Respondent to respond similarly within 5 days after that.

The Honourable Mr. Justice R. Nightingale

Date: February 27, 2013

Schedule “A”

(1) Kaleniuk v. Kaleniuk 1996 2914

(2) Singh v. Singh 1996 3617

(3) Demeria v. Demeria 1998 13487

(4) Wilson v. Wilson 2000 BCSC 886

(5) Burnip v. Burnip 2001 BCSC 1542

(6) Children’s Aid Society v. R.E.S. 2005 BCSC 328

(7) Smith v. Smith 2005 Carswell B.C. 512

(8) Goudreau v. Goudreau 1996 Carswell B.C. 974