COURT FILE NO.: FS-02-2286-0001
DATE: January 22, 2014
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Terry Lynn Veres and Donald John Ellison
BEFORE: The Hon. Mr. Justice R.J. Nightingale
COUNSEL: Howard E. Staats, for the Applicant
Cindy M. Ebben, for the Respondent
ENDORSEMENT
[1] The applicant brings a motion to change the order of Milanetti J. dated January 23, 2004 under the Family Law Act whereby the respondent was ordered on consent to pay child support for their two daughters Meaghan Brittany Allison born September 22, 1998 and Erin Breanna Allison born November 22, 1999 in the applicant’s custody.
That order required the respondent to pay child support in accordance with the Child Support Guidelines in the amount of $211 per month based on the respondent’s stated annual income of $14,000.
[2] Paragraph 6 of the order specifically stated that the respondent shall serve the applicant with annual copies of his income tax return and notice of assessment on or before August 31 of each year which obviously related to his disclosure requirements in order to properly calculate his ongoing child support obligations to the applicant.
[3] The respondent, although he made each of the $211 monthly child support obligations under the original order, did not comply with paragraph 6 to disclose ( without being asked by the applicant) his annual income tax returns and notices assessment from 2004 forward. Moreover, the respondent not attempt to voluntarily increase his child support payments even though his tax returns which were ordered to be produced in this action confirm that his income significantly increased in 2005 and for each year thereafter. The following chart provided on consent of Counsel confirms the actual income earned, the monthly shortfall of the respondent’s child support obligations under the Guidelines and the total annual outstanding amounts based on that short fall.
Actual income
CSG support payable
Monthly shortfall
Annual Shortfall
2005
$52,081
$727
$516
$6192
2006
$72,980
$958 (4)
$747
$2988
2006
$72,980
$1075 (8)
$864
$6912
2007
$29,185
$433
$222
$2664
2008
$62,504
$937
$726
$8712
2009
$69,295
$1033
$822
$9864
2010
$74,679
$1094
$883
$10,596
2011
$59,544
$894
$683
$8196
2012
$64,500
$959
$748
$8976
2013
$49,458
$735
$524
$6288
Total
$71,388
[4] In addition, the financial statements recently provided by the respondent from his private concrete company when he was self-employed showed that he earned $30,000 in dividend income in 2004 as compared to his stated income of $14,000 for the purposes of the original court order.
[5] Moreover for the years 2005 to 2007, the applicant’s position is that the respondent’s actual income for child support purposes may be higher than his gross self-employed income shown on his tax returns from this company.
[6] The applicant claims she is entitled to an order for ongoing child support as of January 1, 2014 based on his annual income of $50,000 per year or $743 in monthly child support for both children under the Guidelines. She also claims that the respondent should pay now the entire sum of $71,388 being the shortfall of his actual child support obligations since 2005 by reason of his failure to disclose his actual income as required by the original order of Milanetti J. plus accumulated interest on that shortfall of 4% per annum which amounts to $13,445.41.
[7] The respondent’s position is that the original order should be varied to allow for ongoing monthly child support of $388 per month based on his ongoing annual income of $26,000 per year from his receipt of employment insurance benefits .Furthermore, payment of the recalculated child support obligations based on his actual income should only be ordered on a final basis now for each of the years 2010 to 2013 inclusive which totals $34,056 of total retrospective child support plus interest of $3353.76. His alternative position is that his child support obligations should be recalculated on a final basis now only going back to January 1, 2008, an additional two years. The balance of the applicant’s claim for retrospective child support should be determined at trial.
Ongoing Child Support Order:
[8] The respondent is 54 years of age and although he admits to the significant income he has earned from employment on a full-time basis for the last five years described above, he states he was laid off in December 2013 shortly before this hearing and is likely now receiving employment insurance benefits of $501 per week. He states that he had an injury at work in December 2012 and received WSIB benefits but it appears he returned to work in mid 2013 .
[9] He did not state that he did not expect his income in 2014 would be significantly reduced from the almost $50,000 he earned in 2013 from all sources although he did not have any prospects for employment in the concrete finishing industry in which he had experience at this time. From 2008 to 2012, he earned between $59,500 and $74,700 annually. His financial statement sworn December 4, 2013 confirmed he had monthly employment income of $3185 or $38,222 annually.
[10] Based on this evidence, it would not be inappropriate to base his ongoing child support obligations for his two children as of January 1, 2014 on an annual income of $50,000. Accordingly, commencing January 1, 2014, the respondent shall pay to the applicant on a temporary basis ongoing child support for Meaghan Brittany Ellison born September 22, 1998 and Erin Brianna Ellison born November 22, 1999 in the amount of $743 per month and the order of Milanetti J. of January 22, 2004 is amended accordingly.
Retrospective support:
[11] The Supreme Court of Canada in the D.B.S. v. S.R.G. 2006 SCC 37, [2006] 2 SCR 231 ( “DBS”) set out the four factors the court must consider in determining whether and to what extent a retrospective order of child support should be made:
a) whether there is any reasonable explanation for why support was not sought earlier;
b) the conduct of the payor parent;
c) the circumstances of the child; and
d) hardship occasioned to the payor by a retroactive award.
[12] None of these factors is decisive and the court should strive for a holistic view of the matter and decide each case based on its particular factual matrix. The court further held that retroactive child support awards should not be regarded as exceptional orders to be made only in exceptional circumstances.
[13] There has been no questioning of the parties on their respective affidavits filed but most of the relevant facts are clear.
a) Explanation why support not sought earlier
[14] The applicant’s evidence was that she feared for the safety of herself and her daughters because of the respondent’s mental health issues and his physical assaults on her during the cohabitation including his threats to kill her. For those reasons, she did not want the respondent to be aware of her current residence. She did not expressly state that this was her explanation for the delay in her asking for increased support or financial disclosure from the respondent since 2004 until the commencement of this motion to change in July 2013 although that may be implied to some extent.
[15] The respondent’s evidence was that he had supervised access in the presence of a counsellor with his two children now age 14 and 13 until February 23, 2008 when that access ceased. That apparently was at his instance according to the applicant and he has not attempted any communication with them since. He admits only one physical confrontation with the applicant and states the applicant did not ask to see any financial disclosure of his or seek to vary his child support obligations until he was served with these proceedings.
[16] However, he did not deny the applicant’s evidence that when she talked to the respondent in 2012 on the telephone about their daughters’ getting braces for their teeth, the respondent indicated he could help with the costs but only if she would give him her home address. When he was told that was not necessary, the respondent replied he would not help her with the girls’ braces if she did not give him her address. She did not give him the address and he not help her with the braces cost.
[17] The respondent admitted that he voluntarily had a stay in a psychiatric ward at a local hospital and a diagnosis of schizophrenia.
In view of the circumstances, the applicant has provided a reasonable explanation for a good part of the delay in her bringing this motion to change.
b) Conduct of the respondent
[18] Bastarache J. in DBS made it clear that any conduct of the payor parent that places his own interests over his children’s right to an appropriate amount of support should be characterized as blameworthy conduct. While there is a presumption that the payor parent acted reasonably by complying with the terms of a previous court order or agreement, this presumption may be rebutted where the change in circumstances is sufficiently pronounced in determining the reasonability of the payor parent’s belief that his or her obligations were being met, the court should compare the amount the parent actually paid with how much he or she should have paid. DBS; Baldwin v. Funston (2007) 2007 ONCA 381, 85 O.R.(3d) 721 (OCA) at paragraph 18.
[19] In this case, there was more than just the implied obligation on the respondent referred to in Baldwin v. Funston to disclose the increase in his income to the applicant. He was in fact required by court order without being asked further by the applicant to produce his tax returns and notices of assessment on an annual basis obviously so that his child support obligations could be increased given the meagre amount of support that he was paying based on his stated annual income of only $14,000 in 2004.
[20] In Costa v. Perkins 2012 ONSC 3165, the Divisional Court 2012 dealt with the father’s failure to comply with a previous order requiring him to provide his tax returns and notices of assessment on an annual basis when compliance almost certainly would have triggered an increase in his child support obligations years earlier. The court found that there was no question that his default was blameworthy conduct under this second DBS factor and that his disregard for the original court order must be afforded significant weight and might have justified going back more than just three years when retrospectively adjusting his child support obligations.
[21] The evidence is clear and uncontradicted in this case that the respondent’s actual child support obligations for his two daughters were substantially higher in 2005 forward than what he was actually paying based on this declared income of only $14,000 in 2004. The original order required that he disclose his tax return information without being asked by the applicant. His conduct was obviously blameworthy as by logical inference, he knew that he should be paying significantly increased child support than what he was actually paying for those years.
[22] In fact, as indicated above, even for 2004, his dividend income from his company was more than twice the amount he had declared as his income that year for child support purposes.
c) Circumstances of the children
[23] Although the respondent’s evidence was that he had never been told that his daughters had to do without, that they participated in extracurricular activities, wore clean and appropriate clothing during access visits, that he was never advised that the applicant was struggling and that he would have provided additional monies to remedy the situation, he has not exercised access or had any communication with his daughters since February 2008. His evidence consists of bald statements only without any foundation in fact.
[24] Moreover, the uncontradicted evidence of the applicant is that the children have been deprived in participating in many activities they would like to have done had the respondent been paying support in accordance with the Guidelines based on his actual annual income. They have missed out on music lessons, swimming classes, summer camps, cheerleading, skating, concerts and even clothing expenses because the applicant could not afford them. The applicant had to shop for second-hand clothing which embarrassed them in front of their friends.
[25] The applicant asked the respondent for money to help pay for the girls braces in 2012 but he refused unless she gave him her home address. She refused and he refused to help her.
These children clearly did not enjoy all the advantages they would and should have received if the respondent had paid the appropriate child support since 2005. They do not enjoy an affluent lifestyle by any means.
d) Hardship to the payor
[26] As indicated above, the respondent is 54 years old and states that he was injured at work in 2012 when he received WSIB benefits for a time. He states he was laid off from his employment in December 2013 allegedly due to a shortage of work. He anticipated receiving employment insurance benefits commencing 2014 of $501 per week.
[27] His evidence was that at this time he does not have any prospects for employment in the concrete finishing business and that he canvassed many potential employers in the industry who he said do not wish to employ him. He cannot operate his self-employed business without a crew of employees who do not want to work for him because of his prior mental health condition and schizophrenia.
[28] Accordingly, he suggests his present financial hardship should result in his only having to pay retroactive child support to January 1, 2010 or alternatively back to January 1, 2008 on a final basis with the applicant then proceeding to trial on her claim for further retroactive child support for the previous years.
[29] The affidavit evidence and financial statement of the respondent disclose that since the original court order, the respondent has obtained two properties in his own name. The first is valued at $260,000 with a mortgage of $163,000. The second is valued at $139,250 with a mortgage of only $40,000. He declares that the monthly mortgage payments are approximately $1500 together with monthly property taxes and insurance of $417 and $360 respectively. He does not state that he is not making those payments or cannot afford them based on his present income. He admitted a minimum net worth of over $165,000 in assets but does not include in that the value of any equipment or assets from his private company that were still owned by it when it ceased business at the end of 2007. The applicant’s uncontradicted evidence was that some time likely in mid-2013, she drove by the respondent’s property in Dundas and saw three cement trucks there inferring they are his assets.
[30] The respondent also does not state if he receives income from one of the properties in which he is not residing and if he is not receiving income from it, why not.
There is no evidence provided by the respondent that he cannot obtain financing within a reasonable time on those properties or sell one of them to fund the payment of a significant lump sum amount for retroactive child support obviously owing to the applicant.
[31] There is no evidence that his present layoff is anything but a temporary issue for him or that it is expected that he will earn considerably less income in 2014 than his admitted income of almost $50,000 that he earned in 2013 or the even higher amounts he earned in the previous four years.
[32] In my view, the respondent has not produced the appropriate required evidence to establish that his present financial condition presents a hardship that is the overriding factor to limit his retrospective child support obligations back to January 1, 2010 only. He should not be permitted to financially gain at the expense of the children by engaging in his blameworthy conduct.
[33] The Ontario Court of Appeal in Connelly v. McGouran 2007 ONCA 578 @paragraph 24 held that when a payor parent withholds information about a material change in circumstances such as income increases that would entitle the child to increased support, the presumptive retroactive date for increased child support will be the date of the material change rather than the date when effective notice was given by the recipient spouse to the payor spouse that child support needed to be renegotiated.
[34] In my view, it is clear that the respondent’s disregard for the 2004 order must be afforded significant weight in this case and that the long history of nondisclosure and resulting significant underpayment of child support by the respondent more than offsets any present inability to pay the arrears of child support created by a retrospective award. The respondent’s affidavit indicates that between 2005 and 2012 he had income of $484,768 during which time he only paid $211 per month in child support.
[35] In the result, the appropriate balancing of all of the relevant factors, including the applicant’s not asking for financial disclosure pursuant to the original court order until this motion was brought, can be made by making a final order now for retrospective child support back to January 1, 2008 based on the respondent’s actual annual income found in the agreed upon chart of the parties above.. The children have significantly suffered because of the respondent’s conduct which should be rectified as soon as possible so that they can enjoy the reasonable and modest lifestyle of an average teenager. An immediate lump sum payment for some retrospective support would not in any way be a wealth transfer to the applicant.
An order requiring the respondent to now provide a lump sum payment of the outstanding retrospective amount of child support payments owing back to January 1, 2008 totaling $52,632 plus interest at 4% per year on the “periodic arrears” of that outstanding shortfall payment by May 30, 2014 gives him a reasonable opportunity to refinance his properties or arrange for a sale of one of them to pay that lump sum. If the parties cannot agree on the calculation of interest, they can make arrangements to provide further submissions to me through the trial coordinator’s office in Brantford.
[36] This order being made on a final basis will be without prejudice to the right of the applicant to continue to trial with respect to her claim for further retrospective child support for the time period before January 1, 2008. The trial judge will be in a better position to determine whether further retrospective child support should then be ordered and if so, on what terms .He could consider then all of the evidence of the parties including all of the DBS factors, if the respondent has paid the lump sum amount determined under this order (and if not, why not), the respondent’s financial position at that time and his actual income and ability to pay further retroactive support, and what the respondent’s actual self- employment income was for the years 2004 to 2007 for child support purposes compared to what was stated in his income tax returns.
Costs:
[37] The applicant requests payment of her costs of this motion on a partial indemnity basis in accordance with a bill of costs provided on the hearing of the motion. The time spent by applicant’s counsel, a 47 year senior member of the bar, appears most reasonable as well as his partial indemnity rate of $275 per hour. The time claimed does not include his time spent for the two earlier court orders for which costs were awarded.
[38] As indicated in my concurrent decision with respect to the contempt motion matter, the applicant is entitled to her costs with respect to that motion.
[39] The respondent shall pay within 30 days the applicant’s costs of this motion and the contempt motion fixed in the amount of $3340 inclusive of HST.
[40] In addition, a support deduction order will issue.
NIGHTINGALE, J.
DATE: January 22, 2014
COURT FILE NO.: FS-02-2286-0001
DATE: 2014/01/22
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Terry Lynn Veres and Donald John Ellison
BEFORE: The Hon. Mr. Justice Nightingale
COUNSEL: Howard E. Staats, for the Applicant
Cindy M. Ebben, for the Respondent
ENDORSEMENT
NIGHTINGALE, J.
DATE: January 22, 2014