SUPERIOR COURT OF JUSTICE - ONTARIO

NEWMARKET COURT FILE NO.: FC-07-27107
DATE: 20140715

RE: MARIE ABBALLE, Applicant

AND:

ANTONIO ABBALLE, Respondent

BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY

COUNSEL:
I. Mang for the Applicant/Respondent
M. Maltz for the Respondent/Moving Party

HEARD: June 12 and 13, 2014

ENDORSEMENT

Nature of the Proceeding

[1] This is a motion to change the divorce order of Mr. Justice O’Connell dated May 28, 1999. The moving party, Mr. Abballe, pleads that the support order made therein be terminated effective December 1, 1999, that all arrears be rescinded, and that support for the two children be set at zero.

[2] The order of Justice O’Connell provides that Mr. Abballe shall pay child support to Mrs. Abballe in the sum of $762 per month for the support of Victoria, born April 22, 1992, and Julia, born October 8, 1994, commencing February 1, 1999 and continuing for so long as they are children of the marriage as defined by the Divorce Act.

Background Facts

[3] The parties were married on August 19, 1989 and separated after a short marriage on October 1, 1994.

[4] Mrs. Abballe (now Ms. Frasca) is 46 years of age; Mr. Abballe is 48 years of age.

[5] Following the separation, an order was made by Justice Nevins in 1995 in the Provincial Court for payment of child support in the amount of $500 per month. When Ms. Frasca later commenced the divorce action in the Superior Court, which resulted in the support order of Justice O’Connell for $762 per month, Mr. Abballe did not file an Answer, nor did he attend at court. Under the Child Support Guidelines, the Table amount of $762 requires an annual income of $52,000.

[6] Both daughters currently attend York University and live with their mother, who in turn lives with her parents. Victoria has worked part time throughout her education for Adidas, and has now completed her 4th year and will be entering her 5th in September, 2014. She is majoring in psychology and hopes to complete a Masters degree. Victoria has not taken a full course load because of her work schedule; Julia so far has carried a full course load. Julia has completed her 2nd year as an English major, and is expected to start her 3rd year in September. She also works part time throughout the year, at an outdoor recreation store. Because Ms. Frasca is employed by York University as an administrative assistant at Osgoode Hall, Victoria and Julia receive a tuition waiver.

[7] Mr. Abballe currently works part-time as an edge polisher for a stone countertop fabricator, earning $10.25 per hour, with his hours varying between 20 to 30 per week depending on demand. He has held this job since December 2013.

[8] The parties are in agreement that during the 19 years that have passed since the first support order was made, the amount of support to be paid by Mr. Abballe totals $160,762. There is also no dispute that he has paid $98,284.68 under the two orders. As of June 2014, the statement of arrears from the Family Responsibility Office indicates that arrears are owing under the 1999 order of $70,739.32. Mr. Abballe agrees that this calculation is correct, subject to a credit of $7,000 for child support paid directly to Ms. Frasca, and a further credit for an order for costs in the amount of $500. The parties are in agreement that the outstanding amount of the debt currently owed for child support is $70,739.32 - $7,500 = $63,239.32.

[9] Mr. Abballe bases his claim for retroactive reduction of the monthly child support amount, along with a rescission of child support arrears, on the premise that he has never earned $52,000 in annual income since 1999.

Issues for Trial

[10] The issues to be determined at trial were:

1. Whether there has been a change in Mr. Abballe’s circumstances that justifies varying the order of Justice O’Connell;

2. If a variation is warranted, the date at which such a variation should take effect, and the amount of child support that Mr. Abballe should have paid during the relevant period based on his income or imputed income;

3. Whether there should be any rescission of arrears; and

4. The amount of Guideline support to be paid presently.

The Applicable Law

[11] As the order sought to be varied was made pursuant to the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), the provisions of s.17 of that Act apply to this proceeding.

[12] The applicable sections are:

17. (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,

(a) a support order or any provision thereof on application by either or both former spouses; or

(b) a custody order or any provision thereof on application by either or both former spouses or by any other person.

17.(4) Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that a change of circumstances as provided for in the applicable guidelines has occurred since the making of the child support order or the last variation order made in respect of that order.

17.(6) In making a variation order, the court shall not take into consideration any conduct that under this Act could not have been considered in making the order in respect of which the variation order is sought.

17.(6.1) A court making a variation order in respect of a child support order shall do so in accordance with the applicable guidelines.

[13] The Child Support Guidelines (Ontario), O.Reg. 391/97, as amended, also address the making of a variation order pursuant to subsection 17(4) of the Divorce Act, as follows:

Circumstances for variation

14. For the purposes of subsection 37 (2.2) of the Act and subsection 17 (4) of the Divorce Act (Canada), any one of the following constitutes a change of circumstances that gives rise to the making of a variation order:

15. In the case where the amount of child support includes a determination made in accordance with the table, any change in circumstances that would result in a different order for the support of a child or any provision thereof.

16. In the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either parent or spouse or of any child who is entitled to support.

17. In the case of an order made under the Divorce Act (Canada) before May 1, 1997, the coming into force of section 15.1 of that Act, enacted by section 2 of chapter 1 of the Statutes of Canada, (1997).

18. In the case of an order made under the Act, the coming into force of subsection 33 (11) of the Act. O. Reg. 391/97, s. 14; O. Reg. 446/01, s. 3.

[14] These legislative provisions give jurisdiction to the court to alter the amount of support payable retroactively, and to relieve against arrears, by setting the proper amount in accordance with the Child Support Guidelines.

[15] The leading case on the interpretation of subsection 17(4) of the Divorce Act continues to be Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670. Willick sets out the approach to be taken by the court when faced with an application to vary a previous support order. First, the court should determine whether the conditions for variation exist, being a material change in circumstances, and if such conditions do exist, what variation of the existing order should be made in light of the change in circumstances. Willick leaves no doubt that a payor spouse may use subsection 17(4) to address a drop in income that prevents him or her from maintaining the existing level of support payments. Also, DiFrancesco (Couto) v. Couto, 2001 8613 (ON CA), 2001 CarswellOnt 3858 (C.A.) confirmed that once a moving party has met the threshold of establishing that there has been a change in circumstances, or that evidence that was not available at the time the order was made is now available, the issue becomes whether a retroactive change to rescind arrears or reduce the amount of support payable is justified in the context of the changed circumstances.

[16] In this case, Mr. Abballe is asking the court to review, and ultimately vary, the support order over a 14 year period. Courts have done variations spanning lengthy time periods: see, for example, Fraser v. Fraser, 2013 ONSC 815, where Korpan, J. recalculated child support payments and arrears over a ten year period; Trembley v. Daley, 2012 ONCA 780, in which the Court of Appeal dismissed an appeal of the motions judge’s ruling on a motion to change that varied support payments for a four year prior period; and White v. White, 1985 CarswellOnt 1824 (Ont. Prov. Ct., Fam. Div.), affirmed on appeal 1986 2444 (ONSC), in which adjustments were made to the payor’s income over a 6 year period, with partial discharge of arrears. In all of these cases, arrears accrued during periods of time during which the courts found that the payors did not have the ability to pay the amounts that had accrued.

[17] Ms. Frasca’s counsel argues that there has been no change in circumstances in Mr. Abballe’s income that would justify a variation. Should the court disagree, Ms. Frasca’s secondary position is that the court should not consider any variation for the period of time prior to January, 2012, which is the date that Mr. Abballe commenced his motion to change, and the first time in 17 years that she received notice of his intention to reduce or rescind arrears. She relies on the case of S.(D.B.) v. G.(S.R.), 2006 SCC 37 [“D.B.S.”], and cases decided thereafter, in particular Corcios v. Burgos, 2011 ONSC 3326, to support her position.

[18] Mr. Abballe’s counsel argues that the comments of Bastarache J., at para. 98 of D.B.S. foreclose such arguments where arrears of child support have accumulated. That paragraph provides:

98. Before canvassing the myriad of factors that a court should consider before ordering a retroactive child support award, I also want to mention that these factors are not meant to apply to circumstances where arrears have accumulated. In such situations, the payor parent cannot argue that the amounts claimed disrupt his/her interest in certainty and predictability; to the contrary, in the case of arrears, certainty and predictability militate in the opposite direction. There is no analogy they can be made to the present cases.

[19] In Trembley v. Daley, the Ontario Court of Appeal stated that D.B.S. is of limited assistance in an application for retroactive reduction of support because of Bastarache J.’s comments at para. 98 that "these factors are not meant to apply to circumstances where arrears have accumulated." Similarly, in Brown v. Brown, 2010 NBCA, the New Brunswick Court of Appeal held that the factors that the Supreme Court of Canada set out in D.B.S., supra, do not apply in cases where a retroactive reduction or rescission of arrears is sought on a motion to change a child support order, referencing Bastarache J.’s comments in support of this conclusion. The same conclusion was reached by Zuker, J. in Cole v. Freiwald and Freiwald, 2011 ONCJ 395, 2011ONCJ 395 at paras. 106-108.

[20] In Corcios v. Burgos, Chappel, J. conducted a thorough review of the law, and noted at para. 52 that the Supreme Court in D.B.S. was not called upon to address the applicable principles in cases where the moving party requests a retroactive reduction of child support, or rescission or reduction of arrears, and therefore the Court did not engage in a comprehensive analysis of this issue. At paras. 52 and 53 she wrote:

52. … The comments of Bastarache, J. at paragraph 98 which the New Brunswick Court of Appeal relied on in Brown v. Brown, supra, must be considered in this context. In making these comments, Bastarache, J. did not indicate whether he was referring to situations where a child support payor seeks to reduce or rescind arrears on the basis of changes in circumstances that arose while the arrears were accumulating, or to situations where the payor had the ability to pay at the time that the arrears accumulated but seeks relief based on current and future inability to pay the arrears, or to both situations. In the latter case, the principles of predictability and certainty with respect to child support orders must be considered paramount given the lack of excuse for non-payment of arrears at the time that they accrued, and the importance of ensuring that parents comply with their obligation to support their children. In the former situation, however, the circumstances of each case will be somewhat unique. The exercise of judicial discretion may be required in order to fashion remedies that ensure child support payors are treated fairly, and the child support recipients do not suffer inappropriate hardship as a result of retroactive child support reduction or rescission claims.

53. In attempting to reconcile the comments of Bastarache, J. in D.B.S., referred to above, with the principles set out in Haisman v. Haisman, supra, in which leave to the Supreme Court of Canada was denied, and the Ontario Court of Appeal decisions that have addressed the issues in question, I conclude that the comments of Bastarache, J. were intended to apply in circumstances where the child support payor fails to establish a change in circumstances affecting their ability to pay during the period when the child support arrears accrued, but seeks to rescind or reduce arrears based on current hardship and inability to pay the arrears. When the comments are interpreted in this manner, they are consistent with the principles which the Alberta Court of Appeal established in Haisman v. Haisman, supra, to the effect that the court's discretion to adjust arrears is extremely limited in those circumstances.

[21] In this case, for the reasons that follow, I do find that Mr. Abballe has proven that he experienced a change in his financial circumstances following the divorce order. Accordingly, if Chappel J.’s thoughtful analysis is correct, this is a case in which the principles in D.B.S. do not apply, and considerations of blameworthiness on the part of the payor parent, or considerations of predictability and certainty, do not come into play. Further, I consider that I am bound by the decisions of Tremblay v. Daley, supra, and Brown v. Brown, supra, both courts having before them the same issues as those which are before this court. Accordingly, the additional cases relied on by Ms. Frasca, in which a D.B.S. analysis is applied, and which pre-date the foregoing Court of Appeal decisions, are of no assistance. In the result, the date on which the motion to change was commenced has little bearing on the court’s wide discretion to review the support order, if warranted, as far back as the year 2000 as requested by the payor.

The Facts

[22] In the case at bar, the court finds the following facts:

[23] At the time of the parties’ marriage, Mr. Abballe was working as a bookkeeper for Snow & Manock, a position that he held until the middle of 1993. He held the position for approximately 4 years in total, never earning more than $31,000 per annum. On the evidence, this is the highest salary ever earned by Mr. Abballe.

[24] While still working for Snow & Manock he became involved in a sports store partnership, into which he had invested his total savings of $20,000. After leaving Snow & Manock he began to operate the sports store full-time, without a partner, and worked seven days per week. This went on for a period of approximately 2 years, during which the parties’ separation occurred. The store was closed around the middle of 1995; Mr. Abballe described that while going through the separation, he began to get behind with the store operations and business faltered.

[25] Thereafter, Mr. Abballe did not work for two-an-a-half to three years. He indicated that he was stressed and unable to function. Other than taking a couple of computer courses, he made little progress in obtaining a job. He explained that he tried to get back into accounting, but due to the time that he had taken off from such a position, he was unable to get a job. From 1995 to 1998 he had no source of income, and lived with his parents, who supported him.

[26] Mr. Abballe eventually found a bookkeeping job in 1998, a position that he held until mid-1999. He earned $29,000 per annum. The impetus for leaving this position was that Mr. Abballe had been approached by partners of Tiffany Tile and Bath, who offered him a partnership interest in return for an investment of $50,000. At that point he approached his then-girlfriend, Diane Sekula, who agreed to lend him the money. The intention was that he would be both salesperson and bookkeeper for the company, and would receive the same salary that he had made in his bookkeeping position, plus a bonus at the end of the year. Mr. Abballe was unaware of the dire financial straits that that business was already in at the time of his investment. The business quickly failed and the bank's receiver closed the door several months later. Mr. Abballe was able to retain $50,000 worth of product.

[27] That marked the beginning of Mr. Abballe opening his own plumbing fixtures retail showroom, operating under the name Charles Anthony Bath and Tile. In 2000, he opened the business at a warehouse location on Steeles Avenue, but soon discovered that designers would not travel that far north for retail purchases. At that point he spoke to two other investors, who were intending to each put $50,000 into the business. A corporation was opened to facilitate the ownership structure of the three intended investors. They found a high-end retail location on Avenue Road in Toronto. The location had formerly housed a branch office of the Royal Bank, and the space had to be remodelled to suit the business. However, the investors did not come through with the money and that three-way venture dissolved. However, Mr. Abballe carried on alone, as he had signed a lease and still had bath and kitchen product to sell. Again he approached Diane Sekula, who agreed to provide an equity infusion into the business of $150,000 in exchange for being a silent partner. She became his partner in 2000. The showroom opened toward the end of 2001, with Mr. Abballe doing all of the work himself to remodel the space.

[28] Ms. Sekula was a compellingly believable witness. She is a chartered accountant and presently works as a controller for a financial company. She met Mr. Abballe in 1994. She described in eloquent terms the unfortunate story of Charles Anthony Bath and Tile. When she became involved at the end of 2001, Mr. Abballe was running the business entirely on his own, doing purchasing, sales, installations, managing client requests and sourcing new products. The intention of the business was to provide high-end imported stock from Europe, but consumer demand for the product did not exist at that time. It was her view that the remodeling of the showroom on Avenue Road never met the standard of the area, so customers and designers were not enticed. Because she could see that Mr. Abballe was struggling with the amount of work involved in the day-to-day operations, she agreed to do the bookkeeping and accounting for the business, and prepared Mr. Abballe's income tax returns. When not working at her own job, she attempted to provide additional support by answering phones and dealing with customers and suppliers.

[29] Ms. Sekula explained that the business was never profitable. It always operated at a loss for a number of reasons. Her infusion of capital only went so far as to build out the show room, which was more expensive than initially anticipated. Because there was no other cash flow for start-up, there was insufficient money to build up the inventory. The business was always scrambling to meet cash flow needs. If a job did not go well, Mr. Abballe suffered the loss when customers did not pay. He was not aggressive in collecting receivables. Additionally, the rent was exceptionally high, going up to as much as $10,000 per month, and utilities and insurance were extra. She explained that the margin on sales was only 30% in this business. Additionally, running the business was too much for one person. She described that there was never a moment of peace; operating the business being a never-ending cycle of trying to pay suppliers and make sales. Mr. Abballe borrowed money from his grandmother and also from her. She tried to give him money to pay off the expenses of the business whenever she had extra on hand. She also helped by using her good credit rating to apply for multiple credit cards at low interest rates for the introductory periods offered, as a means of financing, in order that they would have an extra 30 day grace period to pay off the bills. Mr. Abballe went through all of the five major banks when the business was open as a result of the number of bounced cheques going through his accounts. Ms. Sekula was the primary card holder on a credit card that Mr. Abballe had for business use, and she was usually the one to pay off the balance.

[30] Ms. Sekula remained Mr. Abballe's business partner until 2005, when the stress caused by the financial state of the business took its toll on both their business partnership and personal relationship. During her tenure as a partner, the business never got to a point financially where it was more beneficial to run it is a corporation; no corporate returns were ever filed. She remained in the business until 2005 because neither of them wanted to give up on the commitment. She knew that Mr. Abballe was being overwhelmed, she could not handle the stress, and she did not want to put any more money into the business. However, even after she withdrew from the partnership, the evidence is clear that they remained friends and she continued to provide loans, on an almost annual basis, to Mr. Abballe. All of the money advanced to the business was documented in promissory notes prepared by Ms. Sekula and signed by she and Mr. Abballe. Between 1999 and July 31, 2013, the total amount of the loans given to Mr. Abballe is $338,983.48. Between last July and date of trial, further debt has accumulated, as he continues to have a credit card that he has used for personal expenses, and she has paid some of his utilities and other personal expenses. Since July 31, 2013, she has loaned him a further $6,000 to $7,000. He has been unable to repay any portion of the debt to date.

[31] After Ms. Sekula withdrew from the partnership in 2005, Mr. Abballe continued to run the business as a sole proprietorship, attempting to keep it afloat until 2010. He was able to do so in part because he had an extremely lenient landlord, who tolerated non-payment and underpayment of rent for many years. In evidence is a letter from the landlord dated March 25, 2009, which states that arrears of rent totalled $112,773.81 as of March, 2009, and demanding payment of $40,000 by April 15, 2009. Mr. Abballe testified that this entire amount was never paid, the landlord being indulgent once again, but by October 2010 Mr. Abballe’s luck had run out and the landlord demanded that he leave. By that time he owed the landlord over $150,000 in rent arrears. The landlord has never attempted to collect.

[32] Thereafter, Mr. Abballe moved Charles Anthony Bath and Tile back to the warehouse on Steeles Avenue. Sales continue to decline, but he still attempted to sell off some of his inventory throughout 2011. Some of his product still remains there on display, but the current landlord will take any money from sales to cover unpaid rent, as Mr. Abballe is in arrears of rent to that landlord in the approximate amount of $9,000.

[33] With the loss of the Avenue Road location, Mr. Abballe also lost his personal accommodation, as he was residing in the building’s basement. Thereafter he rented a property on Lawrence Avenue, at a cost of $1,500 per month. Mr. Abballe has an office at the Lawrence Avenue property and stores some tools there, attempting to sell inventory from his home and earning income by doing installations. He has not paid the rent since June 2013, and owes the landlord between $14,000 to $15,000. The house in which he resides is scheduled to be torn down later this summer, so he will be searching for new housing.

[34] The evidence regarding Mr. Abballe's lifestyle is uncontested. Mr. Abballe last owned a car in 1993 or 1994. Since then he has borrowed vehicles when necessary, or used the company truck that was purchased by Ms. Sekula. His driver's license was suspended by the Family Responsibility Office 10 or 12 years ago, and there was some question in the evidence, on which nothing turns, as to whether it has ever been properly reinstated. He has never owned a house. He made his home at the Avenue Road store location for 10 years, in a windowless basement where he built a small kitchenette and had a single mattress. Prior to that, following his separation he lived with his parents. He has no savings or investments; a registered retirement savings plan that he had at the time of the marriage was cashed to pay his lawyers at the time of his separation in 1994. He presently has $20 in his bank account. The last vacation he enjoyed was given to him as a gift by Ms. Sekula and his brothers for his 40th birthday. He is not gone to the dentist for over 10 years, or out to see a movie, and last purchased clothes 5 to 6 years ago.

[35] Mr. Abballe has provided the court with disclosure regarding his income since 2000; I have no reservations about its completeness, nor was its accuracy questioned by Ms. Frasca. Her counsel advised from the outset that it was her position that Mr. Abballe’s employment income was accurately reported to Canada Revenue Agency throughout the years. It was undisputed that Canada Revenue Agency conducted an audit regarding Mr. Abballe’s business income for the years 2000 to 2003, which resulted in no adjustments to income.

[36] An examination of the income tax returns shows that while operating Charles Anthony Bath and Tile, Mr. Abballe took a management salary when he was able to do so. By 2003/2004, he hired a receptionist and a part-time driver, because his business was growing, but that did not last. There was never a year in which the business did not operate at a loss; during the partnership years, one-half of such loss was written off against Mr. Abballe’s income, after 2005 he received one hundred percent of the write-off. The loss was not able to be deducted from income from 2010 onward.

[37] One of the pivotal issues in this case is to determine the point at which Mr. Abballe should have closed the doors of Charles Anthony Bath and Tile, based on its lack of profitability, in favor of securing better paid employment. It was argued by Ms. Frasca’s counsel that by the time Diane Sekula had determined in 2005 that the business was doomed, that was when Mr. Abballe should have also accepted that the business would never be profitable. It is argued that pursuant to section 19 (1) of the Child Support Guidelines, the court should impute income because there has been an unreasonable deduction of expenses from income from that year forward. Mr. Abballe's position is that he had invested so much financially and personally in the business that he felt that his perseverance would eventually pay off, and that he should not be penalized through attribution of income when he expended such effort to try to keep the business running.

[38] It is neither a goal of the court or the intent of the Child Support Guidelines to penalize entrepreneurship by imputing income where a parent genuinely tries to run a business with the goal of generating income with which to support his or her children. I accept that this was Mr. Abballe’s intent. Yet there does come a time when practicality must take precedence. In 2005 and 2006 the business was doing so poorly that Mr. Abballe was unable to take a management fee. In those years he lived entirely on the money that he was borrowing from Ms. Sekula to pay child support, and for his own living expenses. I find that by the end of 2004, the business having shown no profitability for four years and Mr. Abballe’s debts growing exponentially, that he should have refocused his efforts to find gainful employment. This should have become more apparent than ever in 2005. In that year, the rent being paid was close to $150,000, and while sales were up, there was a record income loss of $133,905 for the business. Accordingly, for 2005, income will be imputed by disallowing any loss that reduced Mr. Abballe’s total income reported on line 150 of his income tax returns.

[39] From that point onward, there was no indication that business was improving. Sales remained strong in 2006, but expenses remained high. From 2007 to 2009 the business did not file a statement of business activities with the return because, as explained by Ms. Sekula, Mr. Abballe was convinced that they should file corporate returns. Ms. Sekula was against the idea because of the additional expense, which she confirmed was not warranted by the business’ performance. The minimal management fee taken by Mr. Abballe in each of those years confirms that the business continued to perform poorly. As the business was wrapping up in 2010, with Mr. Abballe continuing his efforts to recoup some of his losses by selling product, his efforts to earn income in the years 2010 to 2012 were weak. For 2013, Mr. Abballe began to work for Trenton Stone Ltd, worked only part time, and earned only $1,250. The evidence shows that in 2014, he is on track to earn only $9,500 unless he obtains more hours, or another part time job. As previously noted, any additional “income” was derived from loans from Ms. Sekula in 2013 and 2014, some of which he obtained through use of a supplementary credit card, and other by loan through direct payment of living and business expenses. The level of income is unreasonable, and I find that he has been intentionally under-employed from 2006 onward. While Mr. Abballe has shown efforts to obtain employment in 2013 in the industry he knows, he has not satisfied the court that he has made exhaustive efforts to obtain minimum wage employment over the years, or to seek out opportunities as a bookkeeper. As pointed out by Ms. Frasca’s lawyer, his daughters have well exceeded his income through part-time employment while attending school. It is reasonable to attribute a minimum income to him equivalent to a full time job at minimum wage from 2006 to and including 2014, in the amount of $21,300.

[40] In the result, I find Mr. Abballe's income from 2000 to 2013 to be as follows:

2000 - $1,864
2001 - $8,895
2002 - ($15, 214)
2003 - ($32,484)
2004 - ($26,574)
2005 - $15,495
2006 - $21,300
2007 - $21,300
2008 - $21,300
2009 - $21,300
2010 - $21,300
2011 - $22,684
2012 - $31,380
2013 - $21,300
2014 - $21,300

[41] I find as a fact, and it is undisputed, that Mr. Abballe has paid the sum of $76,775 over the 13 year period from the beginning of 2000 to the end of 2013[^1].

[42] I also find as a fact that the amount of arrears calculated under the divorce order as of the end of June, 2014 stand at $63,239. This is calculated by taking the case balance on the statement of arrears from the Family Responsibility Office marked as Exhibit 6, and deducting $7,500 for cash payments and costs awarded to Mr. Abballe.

[43] There is no question that Mr. Abballe’s inability to pay the full amount of child support ordered has had an effect on Ms. Frasca. It is clear that she has worked hard to improve her income from the time of the separation onward, finally obtaining a full-time position at Osgoode Hall in 2007 and now earning between $54,000 and $55,000. She has not been able to depend on regular payment from Mr. Abballe over the years. The last payment that she received from him was $375 in December 2013. It is clear that she has also never fully recovered financially following the parties’ separation, and that it is only through strict budgeting and being able to reside in her parents’ home that has allowed her to attain a debt-free existence. It has been of assistance to her that Victoria and Julia have worked throughout their schooling. Ms. Frasca described that it was good luck that she had a connection that helped her to obtain one of her jobs over the years, and further good luck that she was hired by York University. It is the case that success can often be fueled as much by such luck as by hard work; while the evidence disclosed that Mr. Abballe worked very hard in his business, he was not as fortunate as his former wife in his economic circumstances.

[44] The lives of each parent and those of their daughters have been affected by Mr. Abballe’s failed business venture and the low levels of child support that he has been capable of paying as a result. In no small measure, Victoria and Julia have been helped by the benevolent generosity of Ms. Sekula.

Analysis

[45] In terms of whether there was a change in circumstances since the 1999 divorce order, I find that Mr. Abballe has shown that from 2000 onward he has never earned an income of $52,000. That order is presumed to be correct, and should not be varied without good reason. However, based on the evidence presented there is no question that the order does not reflect Mr. Abballe’s true income, and that his motion to adjust the arrears is brought with bona fides. It makes little difference that Mr. Abballe did not commence his motion to change until faced with the threat of imprisonment through enforcement proceedings; to the court that delay in doing so reflects his continued optimism that sooner or later his entrepreneurship would pay off and he would both “catch up” with the arrears and pay back Ms. Sekula.

[46] Ms. Frasca has argued that there is no change in income after 1999 because the evidence shows that Mr. Abballe had equivalent income, or an available source of funds, in the ensuing years. In terms of earned income, the evidence does not bear out that he had an income close to that which the support order was based upon. And while it is true that Ms. Sekula testified that she would have loaned him money to pay child support if asked, there is no law to support the notion that a loan is income or should be treated as such. I am satisfied on the evidence that Mr. Abballe did not squander the money advanced to him by Ms. Sekula on himself or frivolous purchases, but used it primarily to try to keep the business afloat. And the evidence also bears out that some of it must have been used for payment of his support obligation, as there were several years during which Mr. Abballe’s management fee was less than the amount of child support paid.

[47] Based on his income, the following amounts of child support were payable under the Child Support Guidelines[^2].

Income
Table Amount
Annual Payment

2000
$1,864
$0
$0

2001
$8,895
$102
$1,224

2002
($15, 214)
$0
$0

2003
($32,484)
$0
$0

2004
($26,574)
$0
$0

2005
$15,495
$228
$2,736

2006
$21,300
$326
$,3912

2007
$21,300
$326
$,3912

2008
$21,300
$326
$,3912

2009
$21,300
$326
$,3912

2010
$21,300
$326
$,3912

2011
$22,684
$342
$4,104

2012
$31,380
$456
$5,472

2013
$21,300
$324
$3,888

Total
$36,984

[48] It becomes clear that the amount paid by Mr. Abballe has far exceeded that which could be supported by his income, actual or imputed. He does not seek to be reimbursed for any overpayments, but he is entitled based on the law to a rescission of all support arrears now shown as owing.

[49] Accordingly, this court orders:

1. All arrears owing under the order of O’Connell J. dated May 28, 1999 shall be rescinded.

2. Commencing January 1, 2014 and thereafter on the 1st day of each month the respondent shall pay child support to the applicant in the amount of $324 for the two children of the marriage, based on an imputed income of $21,300, for so long as either is a child of the marriage as defined by the Divorce Act.

3. The respondent shall disclose his income to the applicant by no later than June 30 for the previous taxation year, commencing on June 30, 2015, for as long as either child is a child of the marriage as defined by the Divorce Act.

[50] If the parties are unable to reach an agreement on costs, they may make brief written submissions not exceeding 3 pages in length, plus any Offers to Settle on which they rely, on a timetable to be agreed upon by counsel, but all submissions to be received by no later than July 28, 2014.

HEALEY J.

Date: July 15, 2014

[^1]: Based upon payments shown on the Director’s Statement of Account marked as Exhibit 6.
[^2]: Based upon the Federal Child Support Amounts Simplified Tables 1997 that were in force until May 1, 2006, the Simplified Tables that were in force between May 1, 2006 and December 30, 2011, and the Simplified Tables that came into force as of January 1, 2012.