ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FC-07-2403-2

DATE: 2014/02/25

BETWEEN:

Karoline Millson
Applicant

– and –

Luc Boudreault
Respondent

Self-Represented

Self-Represented

HEARD: February 5, 6, 7, 2014

REASONS FOR JUDGMENT

Blishen, J.

INTRODUCTION

[1] This case deals with the respondent’s request to change child support.

[2] On July 6, 2011, Mr. Boudreault filed a Motion to Change the child support clause of a final order granted 9 months earlier, on September 9, 2010. That order, made on consent when both parties were represented by counsel, required Mr. Boudreault to pay $663/month Child support for the parties’ child, Tristan born April 2 , 2008, on a deemed income of $72,000, commencing May1, 2010 . Ms. Millson had earlier obtained a final order of sole custody.

[3] After a case conference in Oct. 2011 where disclosure was ordered, Mr. Boudreault did not pursue his motion until being served with a Notice of Approaching Dismissal in July 2012. A Settlement Conference was then held on Oct. 17, 2012 and a time extension was granted. Again, no action was taken and the case was administratively dismissed on Jan. 30, 2013. The dismissal order was set aside in April, 2013 and, after a Settlement Conference on July 31, 2013, the case was ordered to trial.

[4] The trial was held from Feb. 5-7, 2014. Both parties represented themselves.

[5] Mr. Boudreault argued that his child support should be reduced retroactive to May 1, 2011, given a reduction in his income as a self-employed roofing subcontractor. He asks that child support be varied to be payable on an imputed annual income of $38, 000, an amount of $349 per month based on the Quebec Child Support Table. He now resides in Pontiac, Quebec.

[6] Ms. Millson argued there has been no material change in Mr. Boudreault’s income to justify any variation of child support and asks that the motion be dismissed.

BACKGROUND FACTS

[7] The parties lived together in a common law relationship commencing in 2006. They separated for some months in the late summer of 2007. In Sept., 2007 Ms. Millson filed an application regarding the sale of the jointly owned family home, which she abandoned after the parties reconciled prior to the birth of their son Tristan on April 2, 2008.

[8] Ms. Millson’s son Justin, born March 10, 1994 resided with them and Mr. Boudreault’s son Zakeri, born Sept. 22, 1998 also resided with them in 2008. Mr. Boudreault has custody of Zakeri pursuant to an order made under s. 57.1 of the Child Family Services Act, R.S.O. 1990, c. C. 11, as am. on June 16, 2008.

[9] The final separation occurred in June 2008 when Ms. Millson, Tristan and Justin left the home and began residing with Ms. Millson’s parents where they remain. Mr. Boudreault moved from the family home to rental accommodation in Woodlawn, where he resided until July 2011, when he moved to his sister’s home in Gatineau. In Jan. 2012 he began renting a home in Pontiac Quebec with Zak who is now 15.

[10] The family home was sold in December 2008. The net proceeds were held in trust and eventually divided as outlined in the final order of Sept. 9, 2010. From his share of the proceeds, Mr. Boudreault was ordered to pay arrears of child support that had accrued pursuant to a temporary order made Jan. 20, 2009.

[11] In Jan. 2009, Ms. Millson filed an application seeking: custody, child support and a division of the proceeds of sale of the jointly owned family home. On Jan. 20, 2009, on consent, a temporary order was made without prejudice and without a finding of income (as that was in dispute), for $410 per month child support.

[12] Mr. Boudreault had limited access to Tristan after separation. Despite a court order for access, Mr. Boudreault has not seen Tristan since he was approximately 8 months old. He has not pursued court action regarding access.

[13] Mr. Boudreault has been a roofing subcontractor since 1999. He is a sole proprietor and operates his business under the name “Spider Roofing”.

[14] When the parties resided together from 2006 – 2008 Mr. Boudreault’s company did roofing subcontract work mostly on new construction jobs for Ken McCormack Construction and Ritesco Enterprises. From time to time in the winter months, he did some snow ploughing. Mr. Boudreault also did the odd re-roofing job. This pattern of work continued after the parties separated in June, 2008.

[15] Since Jan., 2001 Ms. Millson has worked for Health Canada in the Program Office. Her current income is approximately $58, 585. She also ran a painting business which has not been active since Tristan was born.

[16] Mr. Boudreault’s 2008 tax return (Exhibit 4) revealed a gross business income of $89,947.12 and a net line 150 income of $50,982.30. His 2009 return (Exhibit 5) noted a gross business income of $78,808.43 and a net line 150 income of $43,717.88.

[17] As noted above, on consent and with both parties represented by counsel, a final order was made on Sept. 9, 2010 for $663 per month child support as of May 1, 2010, on a deemed income of $72,000. Arrears of child support and child support owing prior to the temporary order were ordered to be paid from Mr. Boudreault’s share of the net proceeds of sale of the home. An order was also made for Mr. Boudreault to pay a portion of special and extraordinary expenses pursuant to s. 7 of the Child Support Guidelines, on the provision of receipts. He has not paid nor has he brought a motion to vary this clause of the final order. Ms. Millson has chosen not to pursue this issue. The order remains in effect.

EVIDENCE RE CIRCUMSTANCES SINCE FINAL ORDER:

Mr. Boudreault

[18] Mr. Boudreault testified that as of mid-2009 /2010, there was a slowdown in the construction of new homes. He began to do more reroofing which was less lucrative and not possible in the winter months. Other than some work in December 2009, Mr. Boudreault did no subcontract roofing work for Ken McCormack and Ritesco from May 2009 to July 2012. He briefly worked for them again from July – Sept. 2012. A letter from the manager of Ken McCormack Construction/Ritesco Enterprises (Exhibit 1 Tab O) confirms that Mr. Boudreault’s firm, Spider Roofing, was employed by them as long “as they had roofing contracts” and that the reason there were no other contracts was due to “the slowdown in the industry”. Mr. Boudreault’s evidence was somewhat inconsistent with the letter as he indicated there were roofing contracts but they were given to other roofers who had more experience with Ken McCormack Construction.

[19] Although Mr. Boudreault hadn’t worked for Ken McCormack Construction and Ritesco since May 2009, he testified he expected business to pick up. He indicated he felt “bullied” into agreeing to a final order based on his previous income history and on an estimate of his income for 2010. When he did his 2010 tax return, his income was lower than anticipated. The tax return (Exhibit 6) showed gross business income of $46,503.51 and net line 150 income of $27,794.55.

[20] Mr. Boudreault testified that from May 2009 until May 2010 he did some smaller roofing jobs. In May 2010 he began working as a roofing subcontractor for Top Hat Home Comfort Services where he continues today.

[21] Mr. Boudreault testified he fell significantly behind in his income tax payments and in 2011 declared bankruptcy. His 2011 tax return (Exhibit 11) shows post- bankruptcy gross business income of $33,704 and net income of $6,128. His 2012 return (Exhibit 12) notes a gross business income of $51,648 and net income of $10, 836. There were significant business expenses that year for hiring a subcontractor and to buy a truck.

[22] Exhibit 2 is a print out of the money paid to Mr. Boudreault’s company Spider Roofing by Top Hat Home Comfort for 2013, a total of $46,446.63 without accounting for business expenses.

[23] Mr. Boudreault indicated he has been trying to find other work on new construction or reroofing but, given the slowdown in the new construction industry, the market has been flooded with roofing subcontractors looking for work and he has only been able to obtain a few jobs. There are few reroofing jobs in the winter months. He has done some jobs shovelling snow off roofs. Mr. Boudreault stated he has also been looking for more stable employment possibly as a construction manager. He filed 3 email responses he sent to job postings he found on the internet from May, 2012, Mar. 2013 and May 2013 (Exhibit 1 Tab Q).

[24] Mr. Boudreault agrees that he should pay child support based on an imputed income but requests a reduction from $72,000 to $38,000 imputed income, upon which child support payable according to the Quebec Child Support Table is $349 per month.

Ms. Millson

[25] Ms. Millson argues that Mr. Boudreault’s evidence is in no way credible or trustworthy.

[26] She testified that while they resided together, Mr. Boudreault had a pattern of not paying bills. On one occasion hydro was cut off for non-payment. She co-signed on a loan to purchase a snowmobile and when he defaulted on the payments, she paid. This pattern was one of the reasons she left the relationship.

[27] In addition to his work with Ken McCormack and Ritesco, Ms. Millson testified Mr. Boudreault did extra roofing work on the weekends. In addition, during the winter months, he attached a snow plough to his truck and ploughed driveways for $350 - $400 cash each. She was also aware of cash reroofing jobs and provided the examples of: her parents’ home for $7,000.00, a neighbour’s home for approximately the same amount and some chimney work on another home in Carp. Mr. Boudreault acknowledged some snow ploughing but denied receiving cash that was not declared as income.

[28] Ever since the first court order for child support made on Jan 20, 2009, Mr. Boudreault has been in arrears as outlined in the printout from the Family Responsibility Office (FRO) (Exhibit 1 Tab V). The balance owing as of Dec. 13, 2013 is $7,580.90. Enforcement proceedings have been initiated and, given that he did not apply for a refraining order, Mr. Boudreault’s driver’s licence has been suspended three times, resulting in fees for reinstatement. Most child support payments are made by way of diversion or garnishment. There have been very few voluntary payments.

CREDIBILITY/RELIABILITY:

[29] On this Motion to Change child support, the onus is on Mr. Boudreault to prove, on a balance of probabilities, a change in circumstances (his income) justifying a change in child support. The burden of proof is his.

[30] There are a number of difficulties with the credibility/reliability of Mr. Boudreault’s evidence as follows:

Documentary evidence

[31] Section 21 of the Ontario Child Support Guidelines, Ontario Regulation 391/97 Child Support Guidelines, outlines the required income information from a parent applying for an order for child support. This section is equally applicable in Mr. Boudreault’s case to a parent applying to vary an order of child support. In Mr. Boudreault’s case, the applicable sub-sections of s. 21 are as follows.

21. (1) A parent or spouse who is applying for an order for the support of a child and whose income information is necessary to determine the amount of the order must include with the application,

(a) a copy of every personal income tax return filed by the parent or spouse including any materials that were filed with the return for each of the three most recent taxation years;

(b) a copy of every notice of assessment and reassessment issued to the parent or spouse for each of the three most recent taxation years;

(d) where the parent or spouse is self-employed, for the three most recent taxation years,

(i) the financial statements of the parent’s or spouse’s business or professional practice, other than a partnership, and

(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the parent or spouse does not deal at arm’s length;

[32] At the request of the court during the trial, Mr. Boudreault filed a copy of his personal income tax returns for the three most recent taxation years. He had previously filed copies of his notices of assessment for those years. However, he did not file nor provide to Ms. Millson the financial statements for his business, Spider Roofing. In addition, at the case conference held on October 3rd, 2011, Master Roger ordered Mr. Boudreault provide: statements from all of his bank accounts for the last three years; all invoices for his business for 2008 through to 2011; credit card and line of credit statements for the past three years; records of all payments to sub-contractors for the last three years; and applications for credit for the last three years.

[33] At trial, Mr. Boudreault produced some bank statements for 2011 and 2012, some invoices and receipts for those years and letters from the contractors for whom he worked as noted above. He did not produce or file the other documents outlined in Master Roger’s order.

[34] There are some bank statements for 2011 and 2012 scattered among photocopies of receipts found at Tabs W and X of Exhibit 1. There are a number of photocopied receipts and invoices on each page of those exhibits for expenses such as gas, supplies, phone and others. There is a hodgepodge of photocopied documentation which is incomprehensible.

[35] Mr. Boudreault did file as Exhibit 22 his 2012 bank statements for his business account at Scotia Bank. Again, however, these documents are incomplete. Numerous pages are missing. Most months’ statements include only page 1 of 2 or pages 1, 3 and 5 with pages 2, 4 and 6 missing. Even without the missing pages, the bank statements for Mr. Boudreault’s business account in 2012 indicates deposits in the amount $47,142.70. There were deposits in all months but February and March but again, those months are missing page 2 of the statements. Mr. Boudreault did not produce bank statements for his personal bank account. In addition, he acknowledged using a Money Mart account from time to time to obtain cash but no records were produced from that account.

[36] In addition to the difficulties with the bank statements, receipts and invoices, there are some questionable claims on Mr. Boudreault’s tax returns. His 2011 tax return (Exhibit 11) claims a deduction for support. The only support paid by Mr. Boudreault was child support not spousal support. In addition, the amount which he claimed is different than the amount paid for child support as per the FRO statement filed at Tab V of Exhibit 1. Mr. Boudreault’s 2012 tax return (Exhibit 12) claims an Ontario Tax Credit of $8,784.00 for a spouse. Mr. Boudreault testified that he has no common law partner or spouse.

[37] The letters filed from the manager of Ken McCormack Construction/Ritesco Enterprises (Exhibit 1 Tab O) and the letter from Top Hat Home Comfort Services (Exhibit 1 Tab P) do confirm that there has been a slowdown in the new construction industry and the need for roofing sub-contractors, as well as the fact the roofing division of Top Hat Comfort Services experienced a slowdown in 2012 and 2013. There was no evidence provided as to what could be predicted for this year.

Mr. Boudreault’s testimony

[38] In addition to the difficulties with the documentary evidence filed by Mr. Boudreault, there were a number of difficulties with his testimony as follows:

(1) Mr. Boudreault denied receiving any cash payments that he did not declare, yet he failed to produce any comprehensible evidence in this regard. As noted above, complete bank statements for the last three years were not produced and the statements from his personal account and the Money Mart account were missing.

Ms. Millson testified that Mr. Boudreault did snow ploughing and the odd re-roofing job for cash which was not declared. Mr. Boudreault acknowledged that when he resided with Ms. Millson he did have a snow plough on his truck and did some snow ploughing as well as some private re-roofing.

Mr. Boudreault acknowledged continuing to do the odd re-roofing job and some roof top snow removal.

I find Mr. Boudreault continues to do cash jobs which are not accounted for in his income.

(2) It is unclear from Mr. Boudreault’s testimony where he has resided and when. He testified he moved from the rental accommodation in Woodlawn, Ontario in July 2011 as the rent was too high, then resided with his sister in Gatineau for a time until January, 2012 when he moved to rental accommodation in Pontiac, Quebec. Despite this testimony, all the court documents for 2011 and 2012 indicate the Woodlawn address. In addition, all Mr. Boudreault’s tax returns including the return for 2012 and the bank statements for 2012, indicate the Woodlawn, Ontario address. As of April, 2013 Mr. Boudreault provided his address as a P.O. Box in Dunrobin, Ontario. He testified this was his business address but he also listed this as the address for service of court documents despite his testimony that he only checks the P.O. Box approximately once per month. It is only Mr. Boudreault’s most recent financial statement of December, 2013 which provides his Pontiac, Quebec address. I find Mr. Boudreault has used the Ontario addresses for court and income tax purposes. This may be of benefit to him from a tax perspective. I find at this time he resides in Pontiac, Quebec.

(3) As noted above, Mr. Boudreault has a pattern of non-payment of child support necessitating F.R.O. enforcement proceedings. His driver’s license has been suspended on three occasions, as he made no application for a refraining order. He did not pursue his Motion to Change and a notice of approaching dismissal was served. As he took no further action, the case was dismissed necessitating a motion to set aside the administrative dismissal.

(4) Mr. Boudreault filed an affidavit that he served Ms. Millson with the motion to set aside the dismissal. This affidavit of service states service took place at a neighbour’s address. Mr. Boudreault was well aware of Ms. Millson’s address. She testified she never received service of these documents at her address nor did her neighbour receive the documentation at the address outlined on the affidavit of service. I find, based on Ms. Millson’s testimony which I found logical and credible, that Mr. Boudreault did not serve Ms. Millson with the motion to set aside the dismissal. Nevertheless, the dismissal was set aside and the matter proceeded.

(5) There are a number of difficulties with Mr. Boudreault’s December, 2013 financial statement. The financial statement reveals a monthly income of $3,851.00. He lists his expenses as $4,204.25 per month. Therefore, he appears to be going into debt in the amount of approximately $353.00 per month or $4,236.00 per year. However, under the debt section of his financial statement he reveals debts of only $1,500.00 to Visa and MasterCard. There is a $6,000.00 loan from a friend for court and legal fees. In addition, Mr. Boudreault lists a 2008 Ford F-150 truck which he purchased in 2012, as an asset having a value of $6,000.00. However, Exhibit 13 which is the vehicle registration states the wholesale value of the truck in 2012 was $13,800.00 and the retail value was $16,000.00. Mr. Boudreault is significantly underestimating the value of this asset.

[39] Overall, I find Mr. Boudreault’s documentary evidence incomplete and unreliable and his testimony lacking credibility.

LAW AND ANALYSIS

[40] Mr. Boudreault has filed his Motion to Change child support pursuant to s. 37 of the Family Law Act, R.S.O. 1990, c. F.3 which states:

S.37

(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and

(c) make any other order for the support of a child that the court could make on an application under section 33. 1997, c. 20, s. 6.

(2.2) A court making an order under subsection (2.1) shall do so in accordance with the child support guidelines. 1997, c. 20, s. 6.

[41] The Child Support Guidelines, Ontario Regulation 391/97 note in s. 14 that where the amount of child support includes a determination made in accordance with the child support table, any change in circumstances that would result in a different order for the support of a child constitutes a change of circumstances giving rise to the making of a variation order. In this case, Mr. Boudreault’s child support obligation as per the final order of September, 2010, was made in accordance with the Child Support Table based on an imputed annual income of $72,000.00.

[42] Mr. Boudreault acknowledges that income should continue be imputed to him but argues that, given his low net income in 2010, 2011, and 2012 that income should be $38,000.00 It is not clear how Mr. Boudreault arrived at that figure.

[43] In this case the court will impute income based on s. 19(1)(f) and (g) of the Child Support Guidelines as I find Mr. Boudreault has failed to provide income information when under a legal obligation to do so and has unreasonably deducted expenses from income.

[44] As previously noted, Mr. Boudreault did not produce the income information required for an accurate determination. What he did produce was incomplete and in some respect incomprehensible. Therefore, it is very difficult to be precise in determining income for child support purposes.

[45] It is clear and acknowledged by Mr. Boudreault that a portion of his business expenses deducted for income tax should purposes be included as income in determining child support. These include deductions for vehicle costs, meals and home office. I also question Mr. Boudreault’s current need to hire sub-contractors to assist with roofing when there has been a slowdown in business.

[46] In Osmar and Osmar, 2000 22530 (ON SC), 8 R.F.L. (5th) 368 (Ontario SCJ) the court noted that judicial discretion under s. 19 (1)(g) makes the determination of income more of an art than a science. The court must examine business expenses from the perspective of balancing the necessity for them against the alternative of using the funds for child support. It is appropriate for the court to question whether particular expenditures ought to be directly subsidised by lower child support.

[47] Given the failure to provide adequate income information; the unreasonable deduction of expenses from income; the general unreliability of the income information provided; and Mr. Boudreault’s questionable credibility, I will impute income to him for the purposes of child support in an amount significantly higher than $38,000.00.

[48] However, I do accept the evidence provided by Ken McCormack/Ritesco Enterprises and Top Hat Home Comfort, as to a down turn in the business available for roofing sub-contractors.

[49] For the purposes of determining child support I find Mr. Boudreault to have the following income sources: business income from his employment with Top Hat Home Comfort less some business deductions; some business expense deductions added back into income; and, cash income not declared from snow ploughing, roof top snow removal and other sporadic re-roofing jobs.

On-going Child Support

[50] In determining Mr. Boudreault’s income for the purposes of on-going child support I will exercise my judicial discretion and consider the following:

1. In reviewing Mr. Boudreault’s tax returns for 2008, 2009, and 2010 it appears that the difference between his gross business income and his net line 150 income is approximately 40% based on his business expenses. As previously noted a number of those including: some vehicle expenses, phone expenses, use of home expenses and entertainment should be added back for the purposes of determining child support. I find a reasonable deduction for business expenses in reviewing previous tax returns should be between 20 and 25% of the gross business income.

2. Mr. Boudreault’s 2013 income for eight months from April to November as noted in the Top Hat Home Comfort printout found in Exhibit 2 was $46,447.00. In considering legitimate business expenses for car maintenance and gas as well as supplies based on previous year’s claims, I find approximately $9,200.00 to be reasonable business expenses, approximately 20% of the gross business income for those months. This results in a net business income for Spider Roofing for the purposes of child support of $37,247.00.

3. The more difficult task is to determinate a reasonable amount of income to impute to Mr. Boudreault for other work given his failure to provide adequate income information. As previously noted, I find that he continues to do some cash re-roofing jobs.

Ms. Millson testified that while residing together, Mr. Boudreault earned between $315 and $400 for snow ploughing laneways in the country. If Mr. Boudreault has 10 clients in a winter and clears some lanes in the city and in the country he could earn $3,500 in the winter months from snow removal. It is unclear how much Mr. Boudreault could and does earn for roof top snow removal but even if it were another $500.00 the total for snow removal in a winter season would be approximately $4,000.00 which, when added to the $37,247.00 of business income, equals $41,247.00.

To that figure should be added an amount for some private cash re-roofing jobs. Ms. Millson’s testimony was that Mr. Boudreau re-roofed her parents’ home for $7,000.00. Therefore, even if Mr. Boudreau did only three extra cash re-roofing jobs for $6,000.00 each, he could earn $18,000.00 for a total of $59,247.00. It is this income upon which I will base child support.

I note this amount is $22,000.00 more than what I found as Mr. Boudreault’s net business income. When Mr. Boudreault agreed to an imputed income of $72,000.00 in September 2010, he was agreeing to between $21,018.00 and $28,282.00 (an average of $24,650.00) more than his net business income in 2008 and 2009. Therefore to impute an extra $22,000.00 to him on this motion is similar to, in fact somewhat less than, what he agreed to in 2010.

Retroactivity

[51] Mr. Boudreault filed his Motion to Change child support in July, 2011. He requested any change in child support be retroactive to May, 2011. Although there has been a slow down in the industry and his income has been reduced, given his failure to provide adequate income information; failure to pursue his Motion to Change resulting in an administrative dismissal of his motion and failure to consistently voluntarily pay child support, I will only order a retroactive adjustment to child support from May 1, 2013, after the dismissal was set aside and the motion actively pursued.

ORDER

[52] Therefore the final order dated September 9, 2010 is changed as follows: Mr. Boudreault is to pay child support for the child Tristan in the amount of $526.00 per month pursuant to the Child Support Guidelines for Quebec, commencing May 1, 2013. His arrears to February 28, 2014 are not rescinded but are reduced by ($663 - $526 = $137 per month x 10 months) $1,370.00.

COSTS

[53] Pursuant to Rule 24 (1) of the Family Law Rules, O. Reg. 114/99. The successful party is entitled to costs. In this case, Mr. Boudreault provided Ms. Millson with an informal offer to settle in the amount of an imputed income of $38,000.00, which is what he argued at trial. Ms. Millson did not serve an offer to settle and argued that Mr. Boudreault’s motion should be dismissed. Offers to settle are essential in family law cases.

[54] Mr. Boudreault was partially successful on his motion in obtaining a reduction of his imputed income for the purposes of child support. However, I find Mr. Boudreault behaved unreasonably. He failed to pursue his motion in a timely manner and failed to provide adequate income information. His credibility was also questionable. Under the circumstances and considering the factors outlined under Rule 24(11) of the Family Law Rules, I decline to order any costs.

Blishen, J.

Released: February 25, 2014

COURT FILE NO.: FC-07-2403-2

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Karoline Millson
Applicant

– and –

Luc Boudreault
Respondent

REASONS FOR JUDGMENT

Blishen, J.

Released: February 25, 2014