COURT FILE AND PARTIES

COURT FILE NO.: 3933/13

DATE: 2015/11/16

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

LISA DUFFUS

Applicant

– and –

ERIC FREMPONG-MANSO

Respondent

Esther L. Lenkinski, for the Applicant

Eric Frempong-Manso, Self-represented

HEARD: January 8, 12, 13, 15 and 22, 2015

REASONS FOR JUDGMENT

fitzpatrick J.

Background to Motions to Change

[1] The parties, Lisa Duffus (the Applicant) and Eric Frempong-Manso (the Respondent), were never married. They have one child, namely Zaiah Nana Frempong-Manso, born September 6, 2000 (“Zaiah”).

[2] The parties had a lengthy trial in June 2012, which resulted in the consent Final Order of Justice Wildman dated June 6, 2012 (the “Wildman Order”). The Wildman Order provided:

a) Mr. Frempong-Manos access to Zaiah on alternating weekends plus every PD day plus all “Major holidays” in odd years plus 5 weeks during the summer in odd numbered years and 6 weeks in even numbered years;

b) That Mr. Frempong-Manso pay arrears of child support in the amount of $60,000 calculated to December 31, 2011;

c) That Mr. Frempong-Manso pay ongoing monthly child support of $1,887.50, based on his disclosed income in 2011 of $285,652.55, commencing January 1, 2012. No support was to be paid over the summer months given the extended time Zaiah shared with her father during the summers. Accordingly, Mr. Frempong-Manso was to pay the table amount of support for only 10 months of the year, pro-rated over 12 months. Income of $285,652.55 produces a table amount of $2,265, multiplied by ten months when support is owing results in annual total of $22,650. $22,650 divided by twelve monthly payments results in a monthly payment of $1,887.50; and,

d) For an annual review effective in July of each year based upon Mr. Frempong-Manso’s income tax return and notice of assessment for the prior year. The first such review was to be in July, 2013 using Mr. Frempong-Manso’s 2012 income tax return.

[3] This proceeding arises from two Motions to Change child support brought by Mr. Frempong-Manso:

a) In July 2013, he brought a Motion to Change child support to $900.83 per month based on his reported taxable income of $140,000 for 2012, effective July 1, 2013 (“First Motion to Change”).

b) In August 2014, he brought a second Motion to Change child support to $1,067.91 per month based on his reported taxable income of $152,000 for 2013, effective August 1, 2014 (“Second Motion to Change”).

[4] Ms. Duffus disputes Mr. Frempong-Manso’s motions. In her Response to both Motions to Change, Ms. Duffus sought her own amendments to the Wildman Order to clarify the holiday access provisions and to require the annual review of Mr. Frempong-Manso’s support obligations to be based upon his income from all sources determined in accordance with the Child Support Guidelines (the “Guidelines”), as opposed to just relying on the figure noted on his income tax returns.

[5] There was no evidence presented by either party respecting the holiday access schedule issue. Both Ms. Duffus and Mr. Frempong-Manso took the position that they would rely on submissions only. As such, the evidence presented during this trial was entirely directed to determining Mr. Frempong-Manso’s 2011, 2012 and 2013 income and the related amount of child support.

Disclosure and Credibility Issues

[6] Given this was effectively a trial to address the Respondent’s two Motions to Change, Mr. Frempong-Manso had the onus of establishing a material change in his financial circumstances and providing evidence sufficient to determine his income for child support.

[7] Mr. Frempong-Manso is a university educated man who earns his income providing IT consulting services. He initially provided these services and was compensated for his work as an employee for the Herjavec Group Inc. (“THG”). 1858910 Ontario Inc. was incorporated in September, 2011. Mr. Frempong-Manso is the sole shareholder of 1858910 Ontario Inc. Beginning in September, 2011, THG paid 1858910 Ontario Inc. for Mr. Frempong-Manso’s consulting services until August, 2013 when that relationship appears to have ended. Thereafter, Mr. Frempong-Manso continued to offer consulting services through 1858910 Ontario Inc.

[8] This should have been a straightforward case where Mr. Frempong-Manso marshalled all relevant evidence to permit the Court and Ms. Duffus to be satisfied that his income had materially changed since the Wildman Order and to allow the necessary analysis to calculate his income for child support purposes. It goes without saying that it would be in Mr. Frempong-Manso’s interest to provide all relevant information to demonstrate that he has suffered the material reduction in income he alleges thus warranting a related adjustment to the amount of child support he pays for Zaiah. For reasons only known to him, this was not the path Mr. Frempong-Manso chose to pursue.

[9] I am of the view that Mr. Frempong-Manso was evasive and non-compliant with respect to his disclosure obligations. There were numerous incidents of this in the evidence before me which were referenced by counsel for Ms. Duffus in her oral and written submissions at the end of this trial. I repeat a few of these below to demonstrate the point.

[10] By necessity, counsel for Ms. Duffus was left to pursue Mr. Frempong-Manso for disclosure and to create the predictable paper trail demonstrating these efforts. For example, Ms. Lenkinski sent a comprehensive letter to Mr. Frempong-Manso on October 1, 2014, which asked for:

a. His complete 2013 income tax return, with attachments;

b. Enclosures to his 2010 and 2011 Income Tax Returns, namely his T4s and T5s;

c. An explanation for the relationship between Mr. Frempong-Manso and another company he/1858910 Ontario Inc. had dealings with, namely 1895443 Ontario Inc., owned by his business associate, Ms. Charlotte Myall, including confirming ownership of 1895443 Ontario Inc. and what service it provided to either Mr. Frempong-Manso or 1858910 Ontario Inc.;

d. Copies of 1858910 Ontario Inc.’s bank statements and cancelled cheques from inception to July 25, 2013, and from May 1, 2014, to date, and ongoing to trial;

e. Copies of the supporting documents for the expenses deducted from income for 1858910 Ontario Inc. for the years ended August 31, 2012, through to August 31, 2014, and ongoing to trial;

f. Copies of the general ledgers and financial statements for 1858910 Ontario Inc. for the year-end August 31, 2014, and the general ledger from September 1, 2014, to date, and ongoing to trial;

g. Copies of all invoices submitted by 1858910 Ontario Inc. for services from inception onward;

h. An explanation of the arrangement between Mr. Frempong-Manso and THG for payment of services rendered and the arrangement between 1895443 Ontario Inc. and THG for services rendered, including whether a “Consulting Services Agreement” was ever executed;

i. Whether there are any bank accounts or financial statements prepared for a partnership that Mr. Frempong-Manso alleged to have with Ms. Myall, namely the Zadyn Group partnership, and what transactions/payments had been made pursuant to a related Shares Agreement;

j. An explanation as to why the 1858910 Ontario Inc. account is described as a joint account on his sworn financial statement when Mr. Frempong-Manso is the sole shareholder of 1858910 Ontario Inc. and proof of who the signatories to the account are;

k. Copies of all credit card statements on which Mr. Frempong-Manso has signing authority from January 1, 2012, onward;

l. An update as to the status of the litigation between Rogers and Mr. Frempong-Manso;

m. An explanation of the services 1858910 Ontario Inc. performs for IXIA and whether it is an arms-length company; and,

n. An explanation as to whom the payments made from the 1858910 Ontario Inc. account described as “PAY EMP-VENDOR” were to.

[11] The response received from Mr. Frempong-Manso to the above request was simply that “sufficient documentation to review my income in the years 2012 and 2014 has been provided”. Given my comments above, this statement is clearly not accurate but reflective of Mr. Frempong-Manso’s approach to this case generally.

[12] Prior to trial, Ms. Duffus served Mr. Frempong-Manso with a Request to Admit dated November 7, 2014. Mr. Frempong-Manso’s Response to the Request to Admit was at times confusing, evasive and argumentative. For example:

a. Mr. Frempong-Manso both admits and denies questions 63, 64, 163, 168 and 172 without providing any further information;

b. At question 113, Mr. Frempong-Manso was asked to admit that he received personal benefits from some of the expenses deducted on the year-end August 31, 2013, Statement of Income for 1858910 Ontario Inc. He denied this question, stating only “This statement does not indicate which expenses are in question.” The income analysis report dated January 5, 2015, prepared for Mr. Frempong-Manso by his expert, Mr. Tom Dyson (the “Dyson Report”), makes it clear that 1858910 Ontario Inc. paid for significant personal expenses of Mr. Frempong-Manso such as payments of at least $17,109 for personal furniture, $3,643 for personal legal fees and $564 for personal travel;

c. At question 115, Mr. Frempong-Manso was asked to admit that he used for personal purposes the vehicle for which expenses were deducted from the year-end August 31, 2013, Statement of Income for 1858910 Ontario Inc.. This was also denied by Mr. Frempong-Manso stating “Automobile was used significantly for business purposes and declared at the 30 per cent declining balance method.” The Dyson Report confirmed that $7,500 of the approximately $12,000 of automotive expenses in 2012 and 2013 should have been included in Mr. Frempong-Manso’s income;

d. At question 120, Mr. Frempong-Manso was asked to admit that one hundred per cent (100%) of the management fees on 1858910 Ontario Inc.’s year-end August 31, 2013, Financial Statement were paid to him for his personal benefit or to persons with whom he income splits. The request was also denied by Mr. Frempong-Manso stating “Management fees are income paid to the Respondent and these amounts are claimed as such on income tax statement.” In cross-examination, Mr. Frempong-Manso admitted that he was the only person who received management fees from 1858910 Ontario Inc., but he could not explain the difference between the amount showing as management fees on the Financial Statements of the corporation and his T4 income.

e. At question 163, Mr. Frempong-Manso was asked to admit that 1858910 Ontario Inc. received revenue in calendar year 2013 of at least $290,000. He both denied and admitted the request with no explanation. However, Mr. Frempong-Manso admitted, at questions 131-162, all of the individual payments adding up to a total of at least $290,000, and the Financial Statement year-ended August 31, 2013, for 1858910 Ontario Inc. shows that the corporation had sales of $351,245.

[13] As one would expect, Mr. Frempong-Manso’s multiple sworn Financial Statements were filed as evidence during this trial. Some of these statements go back to the period leading up to the Wildman Order, with the others prepared for this proceeding. Regrettably, these various statements do not bring clarity to Mr. Frempong-Manso’s financial status. These sworn Financial Statements are conflicting on material points and otherwise contain incorrect details.

[14] Similar to the process of attempting to obtain disclosure, counsel for Ms. Duffus expended considerable effort during this trial reviewing the discrepancies between Mr. Frempong-Manso’s various Financial Statements with him. Counsel had no choice, in my view, given the numerous material conflicts and inaccuracies set out in these statements. Again, there were many incidents of this in the evidence before me referenced by counsel for Ms. Duffus in her oral and written submissions at the end of this trial. I repeat a few of these below to demonstrate the point.

[15] Mr. Frempong-Manso in his Financial Statement dated March 29, 2011, claimed that his income from all sources in 2010 totalled $190,356 and that his income for the then current year (2011) would be $108,000. However, his income tax returns for 2010 and 2011 noted that his line 150 income was in fact $438,914 and $286,271, respectively. When cross-examined on this issue, Mr. Frempong-Manso testified that he did not know how much he had been paid in 2011 when swearing the Financial Statement. When questioned further, Mr. Frempong-Manso admitted that there was a computerized system he could have accessed to receive pay stubs and determine how much he was paid by his then employer, the Herjavic Group (“THG”). This exchange was representative of Mr. Frempong-Manso’s documentation and testimony throughout this trial as the further examples below amply demonstrate.

[16] In his Financial Statement dated September 16, 2013, Mr. Frempong-Manso swore that he was unemployed although it is clear on the evidence before me that he was working and earning income through 1858910 Ontario Inc. at that time.

[17] The fact that Mr. Frempong- Manso did not disclose any interest in 1858910 Ontario Inc. until January 20, 2014, is particularly troubling. Instead, he served Ms. Duffus with three sworn Financial Statements (dated December 6, 2011, April 18, 2012, and September 16, 2013), each making no mention of this asset. Once the asset was disclosed in January, 2014, Mr. Frempong-Manso suggested he had only a fifty per cent (50%) ownership interest in the corporation. This is a position he maintained during this trial.

[18] Mr. Frempong-Manso’s failure to initially disclose any interest in 1858910 Ontario Inc. and his subsequent claim that he had only a fifty percent interest were compounded by the fact that the corporate documentation Mr. Frempong-Manso finally produced on January 23, 2014, unequivocally notes Mr. Frempong-Manso as the sole shareholder. I address this last point in more detail below.

[19] Mr. Frempong-Manso did not produce the 2012 corporate income tax return for 1858910 Ontario Inc. until trial, even though the information was fundamental to his motion to change. Mr. Frempong-Manso was seeking to change the Wildman Order based on his 2012 income, which was paid to him by 1858910 Ontario Inc. This reluctance is likely explained by the fact that these corporate tax returns also noted that he was the sole shareholder of 1858910 Ontario Inc. contrary to his current position that he is only a fifty percent owner.

[20] Mr. Frempong-Manso failed to offer any meaningful explanation for the various conflicts and omissions in his sworn Financial Statements. I would describe his testimony in chief as generally vague. He was an often reluctant witness in his evidence during cross-examination. Mr. Frempong-Manso attempted to avoid admitting to any of these inconsistencies or errors until repeatedly cross-examined by counsel for Ms. Duffus. All of this impacted adversely upon Mr. Frempong-Manso’s credibility.

[... continued verbatim in full as required ...]

Mr. Justice Dale F. Fitzpatrick

Released: November 16, 2015