SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-03-10312-01
DATE: 20140526

RE: Laurie Lynn Millar, Applicant

AND:

Herbert Gladding, Respondent

BEFORE: Andre J.

COUNSEL:
Laurie Lynn Millar – In Person

Herbert Gladding – In Person

HEARD: April 9, 2014

ENDORSEMENT

[1] The support payor, Mr. Gladding, has brought a motion for an order directing the Director of the Family Responsibility Office (FRO) to refrain from seeking to suspend the payor’s Ontario driver’s licence, and a motion to change to eliminate child and spousal support.

[2] The support payor deposes that his income has plummeted significantly since a court order requiring him to pay spousal and child support was made in 2006. Consequently, FRO should be stopped in suspending his driver’s licence on account of his failure to meet his support obligations pursuant to the 2006 court order and that the court should terminate the 2006 support order.

[3] Ms. Millar vehemently opposed the motions on the ground that Mr. Gladding has consistently failed to meet his financial disclosure obligations under s.21 of the Federal Child Support Guidelines.

OVERVIEW:

[4] The parties lived together as common-law spouses from March 1987 to May 16, 2003. They have two children, Luke Herbert, who is 22 years old and Eric Gunter Gladding, who is 15 years of age.

[5] The parties consented to a court order on March 1, 2006, which provided, among other things, that the payor, based on an estimated annual income of $90,000 in 2005, that:

a. Mr. Gladding pay child support for the two children of the marriage in the amount of $1,281 per month.

b. Mr. Gladding pay forty-one percent of all reasonable and agreed upon special and extraordinary expenses;

c. Mr. Gladding pay spousal support to Laurie Millar in the amount of $1,224 per month through the Family Responsibility Office.

d. No later than by August 16, 2006, Herbert Gladding shall provide Laurie Millar with all financial statements, tax returns and documentation set out in s. 21 of the Child Support Guidelines, for both himself personally and the company, Gladdings Graphics Ltd., and for any other business or corporation he controls, operates or owns.

e. In each calendar year thereafter, starting in 2007, the parties shall exchange all financial disclosure contemplated by s.21 of the Child Support Guidelines by June 30th of each year, if either party makes a request for such disclosure in writing, and all such financial disclosure shall be provided by the parties to one another within sixty (60) days of such request.

[6] On December 19, 2012, FRO sent a letter to Mr. Gladding advising him that “immediately after January 27, 2013”, it will be directing the Registrar of Motor Vehicles to suspend his driver’s licence. The letter indicated that FRO would resort to that action given that “our records show that as of December 19, 2012, you owe $19,198.50 in unpaid support payments.”

[7] Mr. Gladding did not comply with the request for payment of support arrears by FRO. The latter then directed the Registrar of Motor Vehicles to suspend his licence. The suspension expired after a period of six months.

[8] Mr. Gladding filed his motion seeking to refrain FRO from directing the Registrar of Motor Vehicles to suspend his driver’s licence on January 17, 2013. He filed an affidavit deposing that he did not make the support payments because of a significant decline in his business income, outstanding balances on two lines of credit and significant debts to a number of financial institutions.

[9] On January 22, 2013, the court granted Mr. Gladding’s motion for a Refraining order for six months.

[10] On November 19, 2013, a court dismissed Mr. Gladding’s motion to extend the Refraining Order.

[11] On December 12, 2013, Lemon J. extended the Refraining Order of January 22, 2013 to May 1, 2014. No one appeared for FRO, neither did Ms. Millar attend the hearing.

ANALYSIS:

ISSUE NUMBER ONE: Should the court grant Mr. Gladding’s request for a Refraining Order?

[12] The Family Responsibility and Support Arrears Enforcement Act (the Act) provides FRO with the authority to initiate steps to suspend a payor’s driver’s licence, and pursuant to which a payor is taking steps to obtain an order to require FRO to refrain from doing so. In that regard, Sections 34 and 35 of the Act provide as follows:

First notice

34. When a support order that is filed in the Director’s office is in default, the Director may serve a first notice on the payor, informing the payor that his or her driver’s licence may be suspended unless, within 30 days after the day the first notice is served,

(a) the payor makes an arrangement satisfactory to the Director for complying with the support order and for paying the arrears owing under the support order;

(b) the payor obtains an order to refrain under subsection 35 (1) and files the order in the Director’s office; or

(c) the payor pays all arrears owing under the support order. 1996, c. 31, s. 34.

Order to refrain

35. (1) If a payor is served with a first notice under section 34 and makes a motion to change the support order, the payor may also, on notice to the Director, make a motion for an order that the Director refrain from directing the suspension of the payor’s driver’s licence under subsection 37 (1), on the terms that the court considers just, which may include payment terms. 2005, c. 16, s. 18; 2009, c. 33, Sched. 8, s. 2 (14).

Exceptions

(4) Despite subsection (1), a motion for an order to refrain may be made,

(a) before making a motion to change the support order, on the undertaking of the payor or the payor’s lawyer to obtain, within 20 days after the date of the order to refrain, a court date for the motion to change the support order; or

(b) without making a motion to change the support order, if the payor has started an appeal of the support order and the appeal has not been determined. 2005, c. 16, s. 18.

[13] It appears that Mr. Gladding is in general compliance with the Act. He filed his motion for a refraining order on January 17, 2013 and obtained one on January 22, 2013. While this order was obtained outside the 30 day limit set out in s. 34 of the Act, Mr. Gladding cannot be faulted for this, given the number of public and government holidays at that time of the year.

[14] Mr. Gladding suggests that the refraining order should be extended without any obligation on him to pay a monthly sum of money, given his general impecuniosity. Undoubtedly, ability to pay based on current financial circumstances is a factor the court must consider in deciding whether to grant or to extend the refraining order.

[15] However, Mr. Gladding bears the burden of making a prima facie case that the refraining order should either be granted or extended. Furthermore, in seeking such an order, Mr. Gladding must come to court with clean hands to show that he has scrupulously complied with his obligations either to pay support or to provide updated disclosure about his financial situation. Garneau v. Director, Family Responsibility Office et al., 2010 ONSC 2804 2010 ONSC 2804 (S.C.J.)

[16] In this regard, there are significant gaps in the information provided by Mr. Gladding about his present financial circumstances. For example, Ms. Millar has indicated that as of April 9, 2014, she has not received the following disclosure from Mr. Gladding:

(i) Corporate Tax Returns;

(ii) Complete Notices of Assessment or Reassessment for any year;

(iii)His company’s tax returns on assessment;

(iv) A copy of his mortgage application which he was mandated to provide her as a result of a DRO conference on October 15, 2013;

(v) Documentation regarding a 35-foot boat he keeps in Simcoe, given that he admitted that he transferred ownership of the boat for “zero” consideration; and

(vi) His life insurance policy.

[17] Additionally, Mr. Gladding has not provided Ms. Millar with his financial information for the last four years.

[18] Given Mr. Gladding’s patent failure to comply with the disclosure provisions of the 2006 court order, his motion for a refraining order will be denied.

ISSUE NUMBER TWO: Should Mr. Gladding’s obligation to pay child and spousal support to Ms. Millar be eliminated?

[19] Mr. Gladding justifies his request to stop paying spousal and child support on the grounds that his son, Eric Gladding, has been living with him for the past four years and that secondly, has virtually no income.

[20] It is trite law that spouses are jointly obligated to support the children of their marriage in accordance with their relative financial abilities to do so. This obligation survives any break-up or breakdown in the relationship between the two parties.

[21] A party may seek a variation of a support order where there is a change in circumstances. See s.14 of the Federal Child Support Guidelines (the Guidelines).

[22] Pursuant to s. 21 of the Guidelines, a spouse who applies for a child support order must provide a copy of every personal income tax return and notice of assessment for each of the three most recent taxation years. Where the spouse is self-employed the spouse must provide, for the most recent tax years, the business’ financial statement and one giving a breakdown of all salaries, wages, fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm’s length. Failure to comply with s. 21 of the Guidelines may prompt the other spouse to move for judgment or may prompt the court to produce the non-disclosured financial documents. Furthermore, a court may draw an adverse inference against a spouse who fails to comply with the disclosure provisions set out in s. 21 of the Guidelines. See s. 23 of the Guidelines.

[23] Mr. Gladding provided the following documents in support of his motion to change.

a. Financial Statement dated March 24, 2014, which indicates that his 2013 income was $465. The statement did not provide any income for the first three months of 2014. It indicates that Mr. Gladding had total assets of $213,500 and total debts of $361,825.

b. A Statement of Account from the Canada Revenue Agency (CRA), dated December 10, 2012, which shows an outstanding balance of $6,214.92.

c. A Notice of Assessment from the CRA dated May 21, 2013 indicating that Mr. Gladding’s 2012 income was $107,975.

d. Part of a Notice of Assessment dated May 17, 2012 which shows a balance owing to the CRA of $7,754.37. However, it does not show Mr. Gladding’s income for the year 2010.

e. An Income Tax and Benefit Return form for 2013 indicating that Mr. Gladding’s Line 150 income for 2013 was $465.

f. Financial statements of Gladding Graphics Ltd. for 2010 and 2011.

[24] The documents provided by Mr. Gladding do not show his company’s income and disbursements for 2012 and 2013.

[25] Furthermore, and as already indicated, Mr. Gladding has not provided complete Notices of Assessment; a copy of the mortgage application which he undertook to disclose to Ms. Millar; his life insurance policy; and documentation regarding the transfer of any assets and the terms of such transfer.

[26] His 2014 Financial Statement does not show any income.

[27] Mr. Gladding’s failure to provide this information makes it difficult to assess whether or not he has experienced a change of circumstances that justifies the order he is seeking. Indeed, it appears that Mr. Gladding has carefully cherry picked the financial information he has chosen to provide to support his claim that he now has little or no income.

[28] The fact that Eric has resided with Mr. Gladding for the past four years may well constitute a material change of circumstances that justify a variation of a child support order. Whether or not it does, depends, to a significant degree, on Mr. Gladding’s income since the 2006 order.

[29] For example, Mr. Gladding earned $107,795 in 2012, some $17,000 more than his income for the year 2006, on which the spousal and child support was computed. But for his non-compliance with s. 21 of the Guidelines, his support payments should have increased. Given his failure to provide full financial disclosure, it is uncertain whether the reduction of Mr. Gladding’s obligation to pay child support as a result of Erik living with him is offset by the increase in his income.

[30] Mr. Gladding bears the burden, on a balance of probabilities, to prove that there has been a material change of circumstances that warrant a reduction in his child support payments.

[31] In my view, he has failed to do so. Accordingly, his motion for change is dismissed.

Andre J.

Date: May 26, 2014