Boyer v. Brown, 2017 ONSC 501
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HELENE GEORGETTE BOYER Applicant
– and –
MICHAEL BROWN Respondent
COUNSEL:
Catherine Calvert, for the Applicant
Tanya C. Davies, for the Respondent
HEARD: January 17, 2017
REASONS ON motion
sheard j.
1This is a motion for a temporary order for the payment of child support arrears and ongoing child support. The moving party (“Mother) also seeks an order imputing income in the hands of the respondent (“Father”).
2The Father resists the motion. He stated that when lost his job in 2012 he was unable to find replacement employment. As a result, he embarked on a new self-employed business venture, but it has not come anywhere close to replacing his previous employment income. The Father asserts that his business will ultimately prove profitable, but it will take some time. In the meantime, the Father has not kept up with his child support payments.
3Based on the evidence before me the Father’s income has fallen from a high of $143,341.00 in 2011, the year the parties separated, to a low of $10,807.00 in 2015.
4The Mother asserts that the Father is deliberately underemployed and/or failing to disclose all his income. She asserts that he is living in a million dollar home owned by his current partner, with whom he has also engaged in a joint business venture. The Mother asserts that the Father is either deliberately not taking income from the business or is refusing to disclose his true income.
Child Support Arrears
5Based on the affidavit evidence filed by the Mother, and using the Father’s undisputed line 150 income, the Father has not paid child support in accordance with the Child Support Guidelines.
6In submissions, counsel for the Father argued that the Father did not accept the Mother’s evidence of what had been paid by the Father and that he had made payments that were not reported by the Mother. There was no evidence before me to support those submissions. The Father’s counsel asked the Court to accept that, due to a recent retainer, she did not have a proper opportunity to obtain copies of cancelled cheques, that would show what the Father had actually paid in child support for these years.
7The motion was brought by the Mother in October 17, 2016. Therefore, the Father had three months in which to retain counsel and to obtain and produce any evidence that might show what he had paid in child support. There is no such evidence before me and the Father’s affidavit is silent on that point. Therefore, I have no evidence to contradict the Mother’s evidence to what she has received.
8This motion is for an interim order only and must be based on the evidence presented at the motion. The Father will have an opportunity at the ultimate disposition of his Motion to Change to put whatever additional evidence before the judge that he deems appropriate.
Background
9The parties were married on June 3, 1995 and separated on September 1, 2011. They have three children: Stephanie Brown, born November 28, 1995; Olivier Brown, born March 6, 1997; and David Brown, born June 26, 1999.
10By the time of the separation, Olivier and David remained living with the Mother on a full-time basis and their daughter, Stephanie, lived with the Father from December 2011 until the end of May 2013. Since June 2013, she has lived with the Mother. The parties have not entered into an agreement nor has a court order been made for child support.
Child Support Obligations
11In her affidavit, the Mother has disclosed her own income and set out the income reported by the Father, as evidenced by his Notices of Assessment, attached as Exhibits to her affidavit.
12The Mother has also included DivorceMate calculations upon which she bases her claim for arrears in the Father’s child support obligations.
2012
13In 2012 the Father’s line 150 income on his 2012 notice of assessment was $145,550.00. The Mother’s line 150 income for that year was $79,969.00.
14The evidence before me is that the Father paid a total of $500.00 for child support in 2012.
15The DivorceMate calculations of child support, calculated on the basis that two children lived with the Mother and one child lived with the Father and using the parties’ incomes as set out above, I calculate monthly child support payable in 2012 by the Father to the Mother of $1,236.00. Calculated on an annual basis, in the year 2012 the Father should have paid child support of $14,832.00. He paid $500.00 which leads to a calculation of arrears of $14,332.00 for 2012.
2013
16The Father’s income in 2013 was $102,604.00. The Mother’s income for that year was $23,667.00. The Mother does not explain why her income dropped between 2012 and 2013.
17The Mother has attached DivorceMate calculations for 2013: One calculates child support payable from January to May 2013 on the basis that two children lived with the Mother and one child lived with the Father; the second calculates child support payable from June to December, during which months all three children lived with the Mother.
18Based on the incomes set out above, I calculate monthly child support payable by the Father of $1,258.00 from January to May 2013 for a total of $6,292.00. For the period June to December 2013 the Father’s monthly child support payable increased to $1,886.00 for a total of $13,302.00. Those two figures total $19,492.00.
19The Mother states that the Father paid child support of $6,182.00 in 2013 leaving a shortfall of $13,310.00. Again, in the absence of evidence from the Father as to the amounts that he claims to have paid, I am left with only the Mother’s evidence on that point. Accordingly, I conclude that there are child support arrears owing by the Father for 2013 in the amount of $13,310.00.
2014
20In 2014 the Father declared income of $49,628.00. The Table amount for three children payable by the Father is $951.44 per month or $11,417.28 for the year. The Mother states that the Father paid nothing in child support in 2014.
21For the purposes of this interim support motion, I am not prepared to impute any income in 2014 to the Father. Instead, I rely upon the income the Father declared in his Income Tax Return. However, that conclusion is made on a without prejudice basis, without prejudice to the right of either party to argue that the court finally determining the issues should impute a different income to the Father (or to the Mother.)
22Based on the calculations set out above, I conclude that the Father owes child support arrears for 2012 – 2014 of $39,059.28 as follows:
2012 $14,332.00
2013 $13,310.00
2014 $11,417.28
Child Support Calculations for 2015, 2016 and Ongoing
23I will deal with these years separately. The Father reported income of $10,807.00 in 2015 and invited the Court to impute an income to him of $22,500.00 being the income that one could earn on minimum wage.
24The Mother urges this Court to impute income in the hands of the Father on the basis of either his average incomes between 2010-2012 which would lead to an imputed income of $143,734.00 for all the years after 2012. Alternatively, the Mother seeks an order imputing income of $130,498.00 which represents the Father’s average income between 2011 and 2013. As a further alternative, the Mother asks the Court to impute income to the Father of $102,604.00 which was his 2013 declared income.
Lack of Disclosure
25In his responding affidavit the Father asserts that he was unable to find replacement employment when he lost his job in 2012. His 2012 income was a combination of severance pay and employment insurance. He states that he looked for a job for ten months but was unable to find anything. Apart from his bald assertion that he looked for a job for ten months after he lost his job, the Father provided no evidence of any jobs to which he applied or any evidence of his job search.
26The Father asserts that there was no reasonable prospect of his obtaining suitable employment. He is an industrial designer. Beginning at paragraph 29 of his affidavit sworn January 12, 2017, the Father explains that he was laid off in 2012 and applied to “every design job available in the region for ten months.” He further states that the only other option available to him was to work on contract, without explaining whether and which contracts were available to him.
27The Father states that at the end of 2014 started a “product and consulting company with engineering partners as the best future prospect.” Three of his six initial partners left this new company in July 2016 “due to hardship.” His affidavit goes on to say that the “product business” is his best future earning option but that he has had to assume responsibility for a $50,000.00 BDC loan and that a further $150,000.00 will have to be borrowed in 2017. He predicts however that “if successful” he will be in a good position to support his children’s futures sometime in the coming years.
28Apart from his personal tax returns on which he reports corporate income of $10,807.00 in 2015, the Father has failed to provide any disclosure of the corporate financial records; he has failed to provide a copy of 2013 Income Tax return and has failed to provide any disclosure or information about the business owned by his current partner, in which he claims to have a 40% interest.
Disclosure Orders
29There have been two disclosure orders made requiring the Father to provide income information: November 1, 2013 - the Order of Justice Ratushny and September 22, 2016 - the Order of Justice Trousdale. The Father has not complied with those disclosure orders.
30In his financial statement sworn January 12, 2017 the only income reported by the Father is rental income derived from the rental of the house he purchased post-separation. He lives with his current partner and rents out his house for $22,500.00 annually. In his budget, the Father shows expenses related to that house of $4,144.56 per month which, accepted, would lead to a conclusion that the house is operating at a monthly net loss of $2,269.56.
31The Father’s financial statement also shows monthly meals outside the home of $150.00, pet care of $150.00 per month, and car expenses of $425.00 per month. Lastly, he includes $100.00 a month for his spending on alcohol and tobacco. His financial statement reports yearly expenses of $40,494.72. The Father shows a zero value for his 9.5% in his company, Tungsten Collaborative, and zero value for his 40% interest in Synergy Product Design, the company he owns with his new partner.
32What is unexplained in his financial statement is how the Father can have annual expenses of over $40,000.00 but have no debts or liabilities apart from the mortgage on the house he rents and $2,000.00 owing for legal fees.
33With respect to the value of the house the Father purchased post-separation, 1659 Des Broussailles Terrace, he shows an estimated market value of $385,000.00 and a mortgage of $296,194.00. That leaves equity in that property of close to $89,000.00.
Allegations against the Mother
34Despite that the parties have been separated since 2011, in his affidavit sworn January 12, 2017, the Father references the Mother’s “multi-year affair” which allegedly took a financial toll on the family and resulted in $15,000.00 of credit card debt. He complains that the agreement reached between them with respect to the division of property was signed by him “under extreme pressure and stress” and that it was an improvident settlement. The Father complains that the Mother kept 85% of the household contents which required him to start from scratch on furnishing his new home.
35Those 13 paragraphs in the Father’s affidavit are unhelpful to addressing the concerns on this motion but do offer some insight into the acrimonious history between the parties and, perhaps, are intended to justify the Father’s non-payment of child support.
36The parties have resolved their property issues and, therefore, that information does not assist in determining support obligations.
37Even accepting that self-employment was the only option available to the Father to earn income, his business has not been successful and he must look to other ways to support his children. On the motion the Father argued that in a couple of years, his business will prosper and he will then be in a position to help his children and to help them pay off their student loans. In reality, those children need support now. In a couple of years they may have graduated from university and would have no way to enforce the Father’s offer today to help them pay off their student loans in the future.
38I conclude that the Father has been allowed more than enough time to pursue a business venture. Not only is it not even providing him with an income equal to minimum wage, he states that he will be required to go deeper into debt in order for the business to survive. Three of his six partners have already left, having recognized the lack of profitability.
39The Father’s refusal to provide any meaningful financial disclosure and his lack of debts on his financial statement lead to a conclusion that the Father is refusing to disclose income or to provide information that would reveal his true income. If that conclusion is not correct then his failure to provide income shows that the Father is failing to take proper steps to earn an income and to discharge his obligation to support his children.
40While it may be appropriate to allow a person who has been laid off in his late 50’s to start a business of his own, it is now 2017 and that endeavor has not wielded any returns. Worse, according to the Father, he will be required to incur an additional $150,000.00 in loans this year. In paragraph 64 of his January 12, 2017 affidavit the Father states:
There is light at the end of the proverbial tunnel, but this type of business requires a good deal of patience and financial sacrifice before profits can be obtained. Unfortunately, I am at the “sacrifice” stage, but I am confident that in a year or two, my position will be much better; …
41It is difficult to accept the foregoing assertions by the Father given that he has virtually no debt (as shown in his financial statement); he owns a rental property with equity of almost $89,000.00 and he lives, apparently expense-free in a home owned by his new partner. By contrast the Mother records debts of $18,000.00 to MasterCard which was registered as a lean against her house; $45,000.00 owed to CRA, again secured by lean against the house; and property arrears of $58,000.00. While she does own a house which she values at $760,000.00, it is subject to a $500,000 mortgage and if you add to this the lean amounts and the property taxes, there is approximately $621,000.00 owing against the home. While that would leave her with equity of approximately $139,000.00, it is also the home that she is providing for the parties’ three children. The Mother’s financial statement does suggest that she is unable to pay her credit card debts although her financial statement does not document the debts as at the date of separation.
42In addition to the ongoing child support calculations, the Mother has calculated s. 7 expenses for the children’s medical and dental expenses of $3,758.00 and university tuition and related education costs that she has incurred for Stephanie of $16,820.97; for David of $11,716.87 and for books of $2,166.86. The Mother states that the Father has not contributed to these post-secondary education costs. The parties did have an RESP which has been collapsed to pay for early university costs.
43The Mother also provides a detailed listing of expenses and evidence of the expenses incurred for medical expenses for her children including medical expenses for their son David who is a diabetic and who requires insulin.
44As stated above, the Father’s glib statement that his children will be proud of him in a couple of years and that these are the “sacrifice years” is not persuasive. It is the Father’s children who appear to be sacrificing and, possibly sacrificing their education; in her affidavit the Mother stated that the children are behind on university payments; cannot log on to their financial accounts and may find it difficult to continue at school.
Imputation of Income
45The Federal Child Support Guidelines, s. 19(1) allow the court to impute income as it considers appropriate. This consideration is appropriate in certain circumstances including when the spouse is intentionally under-employed or unemployed; when the spouse has failed to provide income information when under a legal obligation to do so.
46Parents have an absolute obligation to support their children (Drygala v. Pauli, 2002 CanLII 41868 (ONCA)). A court will consider a parent intentionally underemployed if the parent chooses to earn less than he or she is capable of earning (Drygala at paragraphs 27-28).
47The amount of income to be imputed must be based on some evidence. The obligation to support children is fundamental and “must take precedence over the parents’ own interests and choices”. (Vigneault v. Massey, 2012 ONSC 3445 at paragraph 73).
48The onus here is on the Mother who is seeking to impute income to establish an evidentiary basis for the imputation of income (Mann v. Mann, 2009 CanLII 23874 (ON SC) and Drygala v. Pauli).
49In this case the Mother has put evidence before the Court to show the appropriate income to be imputed. That evidence includes the historical earnings of the Father. In asking the Court to impute income based on the average of the Father’s gross incomes for the three years prior to separation, the Mother relies on Lawson v. Lawson, 2006 CanLII 26573 (ON CA) at paragraph 31.
50In her affidavit sworn January 12, 2017 the Mother has put forth evidence of jobs that she thought were suitable for the Father and to which she urged him to apply. At Exhibit “C” she attaches emails sent to the Father with job postings. At Exhibit “E” the mother provided print-outs of 2016 and 2017 job postings for which she believes the Father to be qualified and suited. None include rate of pay.
51The Mother’s evidence as to the availability and rate of pay of employment in the Father’s area of expertise and training in the years between 2010 and 2017 is found at Exhibit “D” to her January 12, 2017 affidavit. Based on that evidence as well as the Father’s historical income, I conclude that the low range of a senior industrial designer’s salary is between $46,000.00 and $91,000.00 per year.
Evidence of Employment Income
52As set out above, the Father has failed to provide any documentation or other evidence to support his claim that he looked for work after he was laid off in late 2012. He claims to have looked for only ten months in 2012/2013 but does not explain what he did in the months and years that followed prior to his starting up a company in late 2014. Most importantly, the Father failed to provide any information to back up his assertion that the bankers with whom his company is dealing with have faith in his business plan and anticipate a future profitability; he has not provided any information about his company that confirm the need for the company to incur significant debt or his prediction that the company will prove successful. By contrast, the Father states that three of his six initial partners left the company in July 2016 “due to hardship”. In short, the evidence of the Father leads to the conclusion that he has made choices that result in his being underemployed. For all of the foregoing reasons, I have concluded that the Father should have income imputed to him for 2015 and 2016.
53For the purposes of this interim motion only, and without prejudice to a court determining on a fuller record that a greater amount of income should be imputed to the Father, I find that annual income of $49,628.00 should be imputed to the Father in each of 2015 and 2016. That income amount is both in keeping with the evidence put forth by the Mother as to the low end of the range of salaries that are paid to industrial designers and it is also consistent with the salary earned by the Father in 2014.
54Based on the foregoing imputation of income, the Father should have paid child support for the children in 2015 and 2016 of no less than $11,417.28 for a total of $22,834.00.
Section 7 Expenses
55I have chosen not to address the issue of outstanding s. 7 expenses. The reason for my doing so is that the calculation is hampered by the absence of some evidence. In particular, the Mother does not explain her drop in income in 2013 and 2014. She has recovered her income earnings in 2016 but, as the allocation of s. 7 expenses is proportionate to the parties’ incomes, I am of the view that that issue is better determined when there is a fuller record. Also, with respect to the children’s university tuition, there is no evidence as to the children’s efforts to secure summer employment and/or to obtain student loans or bursaries. Therefore, the record is incomplete as to the proper allocation of those costs as against the Father.
Child Support Arrears
56For the reasons set out above, I grant the Mother’s motion, in part and find that the Father owes arrears in child support of $61,893.84 calculated as follows:
(a) Child support for 2012: $14,332.00
(b) Child support for 2013: $13,310.00
(c) Child support for 2014: $11,417.28
(d) Child support for 2015 $11,417.28
(e) Child Support for 2016 $11,417.28
TOTAL: $61,893.84
Ongoing Child Support
57For the reasons set out above, I impute income to the Father in 2017 of $49,628.00 and order him to pay monthly Guideline support for the three children of $951.44 commencing January 1, 2017 and monthly thereafter. Again, this interim order is subject to adjustment by the judge hearing the motion and who may have the benefit of a fuller record.
Costs
58The Mother has been successful on this motion and is entitled to her costs. If the parties cannot agree on costs, then they may submit written submissions not exceeding three pages, together with bills of costs and any offers to settle within 30 days of the date of release of this endorsement.
Sheard J.
Released: January 26, 2017