Court File and Parties
COURT FILE NO.: 198/16 DATE: 2019 03 12 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Joan Thomson, Applicant AND: Thomas Victor Delmoro, Respondent
BEFORE: Justice G.D. Lemon
COUNSEL: W. Gerald Punnett, Counsel for the Applicant Colin J. Thurston, Counsel for the Respondent
HEARD: February 5, 2019
Judgment
The Issue
1Ms. Thomson first brought this application in March of 2016. At that time, she claimed for spousal support and a declaration that Mr. Delmoro had been unjustly enriched as a result of her work and services.
2In response, Mr. Delmoro requested an order for spousal support, child support and a variety of other requests that are no longer in issue.
Background
3Although the parties did not marry, they resided together for 27 years. They have two children, aged 18 and 15.
4The children presently reside with Mr. Delmoro in Rockwood and it appears that Ms. Thomson resides in Florida.
Adjournment Request
5At the opening of trial, Mr. Punnett sought an adjournment of the trial as Ms. Thomson was still in Florida. It was not clear why she was not at the hearing.
6The parties agree that on August 14, 2017, Bloom J. ordered Ms. Thomson to make disclosure. It is agreed that she failed to do so.
7On October 24, 2017, the parties consented to an order that Ms. Thomson would pay child support in the amount of $395 per month based on an imputed income of $26,824.41. It is not disputed that Ms. Thomson has not paid the child support nor the costs order of $1,500.
8On October 24, 2017, Barnes J. ordered Ms. Thomson to provide 11 specific items of disclosure. They included her updated financial statement, disclosure verifying values of all items listed in her updated financial statement, details of her income over the past three years, investment income and all child tax benefits she had received.
9She was also ordered to provide details as to how she has supported herself without working since the parties separated, any records of employment she received since the parties separated and a summary of her efforts to obtain new employment since the date of separation. Finally, she was to provide any medical evidence that she might have to support any claim that she was off work due to health reasons.
10It is agreed that she has provided none of this information.
11On March 5, 2018, a trial management conference was held and a trial scheduling endorsement form followed. Both parties were required to produce a number of items. Ms. Thomson was to produce an updated financial statement, a net family property statement, a request to admit, copies of exhibits and case books prior to trial. It is agreed that she has provided none of those. Her most recent financial statement is dated in 2017.
12The Trial Schedule Endorsement Form confirms “We the undersigned confirm that we have read and understand this trial schedule endorsement and agree to be bound by the provisions and time estimates set out in it.” It is signed on behalf of Ms. Thomson by her counsel, a senior family law lawyer in this jurisdiction. I have no reason to think that Ms. Thomson would not be made aware of the orders in that endorsement and all prior orders.
13On September 4, 2018, the matter was adjourned on consent to the November 2018 assignment court to set a date for trial. On November 5, 2018, the matter was again adjourned to the January 7, 2019, trial list, but peremptory on Ms. Thomson.
14On January, 7, 2019, both counsel appeared and confirmed that the matter was ready to proceed.
15I was selected to be the trial judge. From my review of the file, I was concerned that the matter was not ready to proceed. Accordingly, I had a conference call with both counsel on January 24, 2019. Mr. Punnett agreed that his client had not produced the necessary records. Because of the seriousness of that matter, I adjourned the conference call to a trial management conference on the record, January 29, 2019.
16On January 29, 2019, Mr. Punnett advised that his client may be asking for an adjournment. He did not have many details as to why his client could not attend or had not complied with the various orders. I adjourned the trial management conference to the confirmed trial date of February 5, 2019. I advised the parties that the matter might well proceed but that I would hear from them at the commencement of trial.
17On February 5, 2019, Mr. Punnett had little further information on behalf of his client. Mr. Delmoro confirmed that he was ready to proceed and objected to any further adjournments.
18Given the history of the matter, the fact that Ms. Thomson had admittedly ignored the various orders and the fact that the matter was set peremptorily, I saw no reason to grant the adjournment. The matter then proceeded.
19Mr. Punnett called no evidence on behalf of Ms. Thomson. Without evidence, her claims were dismissed.
Mr. Delmoro’s Claims
20Mr. Delmoro elected to proceed with his claim for child support commencing April 1, 2014, along with a claim for s. 7 expenses for the children. He asked that all other claims set out in his Answer be dismissed.
21The principle issue with respect to child support was what income should be imputed to Ms. Thomson. A second was the commencement date of that support.
Evidence of Mr. Delmoro
Income
22Mr. Delmoro was the only witness to testify. He said that he is presently employed as an automotive mechanic making approximately $70,000 per year. At the time of the parties’ separation, he was self-employed. However, that business failed in approximately January of 2013.
23At that time, Ms. Thomson was employed at an insurance brokerage, as she had been for 14 years prior. Her income tax returns had been produced and were entered into evidence on consent. In 2010, she earned approximately $53,000. In 2011, she earned approximately $62,000. In 2012, she earned approximately $57,000 and in 2013, she earned just short of $62,000.
24Almost immediately after the collapse of Mr. Delmoro’s business, the parties separated on a final basis in March or April of 2014. With the assistance of a local mediation service, the parties attempted to resolve their outstanding issues, including child support. Unfortunately, by June of 2014, they were unable to do so.
25After separation, the children remained with Mr. Delmoro.
26In the midst of the mediated negotiations, Mr. Delmoro found out that Ms. Thomson was no longer employed. He was never given a reason as to why she was not employed.
27After separation, Ms. Thomson provided approximately $5,000 to Mr. Delmoro to assist with home expenses.
28Mr. Delmoro testified that Ms. Thomson was not helpful in the process of the sale of the home but they were able to sell it prior to the bank taking it from them. Both parties netted approximately $3,000 from the sale proceeds.
29As set out above, on October 24, 2017, the parties consented to an order “on an interim without prejudice basis” that Ms. Thomson would pay child support in the amount of $395 per month based on an imputed income of $26,824.41. That support was to be “subject to retroactive adjustment as to quantum and start date by the Justice disposing this matter on a final basis.”
30Mr. Delmoro is aware that Ms. Thomson resides in Florida since they have been able to make arrangements so that one of their daughters could visit with her.
31Since separation, Ms. Thomson’s income tax returns suggest that her employment came to an end sometime during 2014 and she has been cashing in RRSP’s since that time. Mr. Delmoro is not aware of any reason that Ms. Thomson has not been employed. She was never dismissed from employment while they were residing together.
Child Support
32The parties’ youngest daughter (15) is still residing with Mr. Delmoro in Rockwood. Their oldest daughter (18) has been attending college in Toronto since September of 2018.
33While they were together, the parties maintained an RESP that will cover the oldest daughter’s post-secondary education and leave some for their youngest. Although both parties contributed to this RESP when they were together, Mr. Delmoro is not aware if either have made any contribution since separation.
34Both children work part-time in the summer at the same location that Mr. Delmoro works.
35The oldest daughter is able to cover her education expenses through the use of the RESP, OSAP assistance and her summer employment. Mr. Delmoro was not certain whether the OSAP was a loan or a grant. He also contributes approximately $100 per month for her groceries.
36Mr. Delmoro agrees that Ms. Thomson has been paying for the youngest daughter’s dance expenses as well as buying clothes for her and providing a holiday in Florida. Unfortunately, Ms. Thomson is estranged from the eldest daughter.
Imputing Income
37Mr. Delmoro asks that I impute an income of $60,000 per year to Ms. Thomson for child support purposes. Mr. Punnett submits that I should impute income at the same amount as the interim order; that is to say, $26,824.00 based on her RRSP income.
38Pursuant to s. 19(1) of the Child Support Guidelines, I may impute such income to a parent as appropriate in the circumstances, including where the parent is intentionally under-employed or unemployed or where the parent has failed to provide income information when under a legal obligation to do so.
39With respect to under-employment or unemployment, the leading case in this area is the Ontario Court of Appeal decision in Drygala v. Pauli, [2002] 61 O.R. (3d) 711 (C.A.). In Crowe v. McIntyre, 2014 ONSC 7106, Chappel J. summarized Drygala along with other cases since, as follows:
[31] The Ontario Court of Appeal addressed the issue of imputation of income pursuant to section 19(1)(a) of the Guidelines on the basis of intentional unemployment or under-employment in Drygala v. Pauli. The following general principles derive from that decision and other cases which have considered section 19(1)(a):
a. Section 1 of the Guidelines stipulates that one of the objectives of the Guidelines is to establish a fair standard of support for children so as to ensure that they benefit from the financial means of both parents after separation. In attempting to carry out this purpose, courts must recognize that parents have a joint and ongoing obligation to support their children after the breakdown of their relationship. In order to meet this obligation, parents must as a general rule earn what they are capable of earning. Imputing income is a means by which the court can give effect to the support obligations of each parent after separation.
b. The first question which the court must address in deciding whether to impute income pursuant to section 19(1)(a) is whether the spouse is intentionally under-employed or unemployed. In determining this issue, the court should consider the payor party’s capacity to earn income in light of their age, education, health, work history and the availability of work that is within the scope of the party’s capabilities.
c. A finding of deliberate under-employment or unemployment does not require evidence of bad faith on the part of the payor spouse or an attempt on their part to thwart support obligations. A parent is intentionally under-employed within the meaning of this section if they earn less than they are capable of earning having regard for all of the circumstances. The parent is intentionally unemployed when they choose not to work when capable of earning an income.
d. In deciding whether a party is deliberately under-employed or unemployed, the court should consider the following principles:
i. There is a duty on a payor parent to actively seek out reasonable income earning opportunities that will maximize their income potential so as to meet the needs of their children.
ii. A self-induced reduction of income with no realistic prospect of future financial advancement is not a basis upon which to avoid or reduce child support payments. Accordingly, the court may find the party to be deliberately under-employed and impute income where the party has persisted in un-remunerative employment or self-employment, or where they have pursued unrealistic or unproductive career aspirations.
iii. A party may also be imputed income on the basis of deliberate under-employment or unemployment if they quit their employment for selfish or bad faith reasons or if they engage in reckless behaviour which affects their income earning capacity.
e. Even if it is determined that the payor parent is deliberately under-employed or unemployed, the court has the discretion to decide whether or not income should be imputed to them. This decision will turn on the court’s overall assessment of the reasonableness of the payor’s decisions and actions in relation to their income.
f. The onus is on the recipient spouse to establish that the payor parent is intentionally under-employed or unemployed. If this hurdle is crossed, the court must turn to the question of whether the under-employment or unemployment falls within the exceptions set out in section 19(1)(a). The onus at that point shifts to the payor spouse to satisfy the court that their situation falls within one of the exceptions.
g. If the payor alleges that their under-employment or unemployment should not result in an imputation of income because it is required due to their reasonable educational needs, the court must embark upon a two- step inquiry, as follows:
i. First, the court must determine whether the educational needs which the payor relies upon are reasonable. This analysis involves a consideration of the course of study and whether the studies will realistically lead to meaningful financial benefits in the long term. This inquiry must be undertaken keeping in mind that a spouse cannot be excused from their child support obligations “in furtherance of unrealistic or unproductive career aspirations.”
ii. If the court is satisfied that the course of study is reasonable, it must then determine what is required by virtue of those educational needs. In other words, the payor must satisfy the court that the payor’s level of under-employment or unemployment is required by virtue of their reasonable educational needs. If the payor does not satisfy the court on this point, the court may impute income at a level that it considers appropriate having regard for the educational program and the demands and expectations of the program. Questions which the payor must address include: How many courses must be taken and when? How much time must be spent in and outside of the classroom to ensure continuation in the program? Are the academic demands of the program such that the payor should be excused from pursuing part-time work? Could the program be completed over a longer period of time with the payor taking fewer courses at a time so that they could work on either a full-time or part-time basis? Is summer employment possible? Can the payor take co-operative courses as part of the program in order to earn income?
h. Finally, in determining the amount of income to impute on the basis of deliberate under-employment or unemployment, the court must consider what is reasonable in the circumstances of the particular case. The factors that the court is required to consider include the age, education, experience, skills and health of the payor, their past earning history and the amount of income that the payor could reasonably earn if they worked to capacity. [Citations removed.]
40Taking those cases into consideration, I have no difficulty finding that Ms. Thomson should be found to be able to earn $60,000 per year. That was essentially what she was making on separation. She has refused to provide any information to explain her financial circumstances now.
41As set out above, despite court orders, Ms. Thomson has admittedly failed to produce an updated financial statement, details of her income over the past three years, investment income and all child tax benefits received by her. She has failed to provide details as to how she has supported herself without working since the parties separated, any records of employment received by her since the parties separated and a summary of her efforts to obtain new employment since the date of separation. Finally, she has not provided any medical evidence that she might have to support any claim that she was off work due to health reasons.
42Mr. Punnett submits that I should find that Ms. Thomson can earn no more than as set out in her income tax returns because she is apparently supporting herself by cashing in RRSPs. However, I am satisfied that the onus has shifted to Ms. Thomson to show why she is not gainfully employed and she has failed to meet that onus.
43I can draw an adverse inference against Ms. Thomson that this information would not have assisted her case. I can find that she can work but has simply refused to do so despite her ongoing obligation to support her children. I have no evidence of any reason why she cannot earn approximately what she earned in 2013 just prior to her separation. While there may be a reason for relying on her RRSPs, I have been provided with no information to make such a finding.
44There was some hearsay evidence given as to her present circumstances. I choose to ignore that. However, Mr. Delmoro was able to testify that Ms. Thomson has the ability to have their youngest daughter visit with her and pay for the travel expense, her dance expense and clothing. She has means that she refuses to disclose.
45I find that she is intentionally underemployed or unemployed. There is no requirement that she be so.
46I can also find that she has such an ability to earn income from her failure to provide income information as set out above. Given her ability to earn income prior to separation, I see no reason to reduce the imputed income below that rate. I find and impute an income to Ms. Thomson of $60,000 per year as requested by Mr. Delmoro.
Commencement Date
47Mr. Delmoro asks that support commence April 1, 2014, just after they separated. On behalf of Ms. Thomson, Mr. Punnett submits that the support should commence the October 24, 2017, when support was first ordered or, at latest, the date of Mr. Delmoro’s application in 2016.
48In D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, the Supreme Court of Canada said:
- Once a court determines that a retroactive child support award should be ordered, it must decide the amount of that award. There are two elements to this decision: first, the court must decide the date to which the award should be retroactive, and second, the court must decide the amount of support that would adequately quantify the payor parent’s deficient obligations during that time. I will consider each issue in turn.
5.4.1 Date of Retroactivity
Having established that a retroactive award is due, a court will have four choices for the date to which the award should be retroactive: the date when an application was made to a court; the date when formal notice was given to the payor parent; the date when effective notice was given to the payor parent; and the date when the amount of child support should have increased. For the reasons that follow, I would adopt the date of effective notice as a general rule.
Separation is a difficult time for families. But especially when the interests of children are at stake, it is vital that parents resolve matters arising out of separation promptly. The Guidelines and similar provincial schemes facilitate this task by providing a measure of consistency and predictability in child support matters. Still, as I have noted above, these child support regimes do not go so far as to provide for automatically enforceable support orders. Whether dealing with an original order, or circumstances that may merit a variation, the responsibility always lies with parents to negotiate the issue honestly and openly, with the best interests of their children in mind.
Disputes surrounding retroactive child support will generally arise when informal attempts at determining the proper amount of support have failed. Yet, this does not mean that formal recourse to the judicial system should have been sought earlier. To the contrary, litigation can be costly and hostile, with the ultimate result being that fewer resources — both financial and emotional — are available to help the children when they need them most. If parents are to be encouraged to resolve child support matters efficiently, courts must ensure that parents are not penalized for treating judicial recourse as a last resort. Accordingly, the first two start dates for retroactive awards — i.e., the date of application to court and the date of formal notice — ought not be used. So long as the enforcement of child support obligations is triggered by formal legal measures, a perverse incentive is created for recipient parents to avoid the informal resolution of their disputes. A recipient parent should not have to sacrifice his/her claim for support (or increased support) during the months when (s)he engages in informal negotiation.
Choosing the date of effective notice as a default option avoids this pitfall. By “effective notice”, I am referring to any indication by the recipient parent that child support should be paid, or if it already is, that the current amount of child support needs to be re-negotiated. Thus, effective notice does not require the recipient parent to take any legal action; all that is required is that the topic be broached. Once that has occurred, the payor parent can no longer assume that the status quo is fair, and his/her interest in certainty becomes less compelling.
Accordingly, by awarding child support from the date of effective notice, a fair balance between certainty and flexibility is maintained. Awaiting legal action from the recipient parent errs too far on the side of the payor parent’s interest in certainty, while awarding retroactive support from the date it could have been claimed originally erodes this interest too much. Knowing support is related to income, the payor parent will generally be reasonable in thinking that his/her child’s entitlements are being met where (s)he has honestly disclosed his/her circumstances and the recipient parent has not raised the issue of child support.
Once the recipient parent raises the issue of child support, his/her responsibility is not automatically fulfilled. Discussions should move forward. If they do not, legal action should be contemplated. While the date of effective notice will usually signal an effort on the part of the recipient parent to alter the child support situation, a prolonged period of inactivity after effective notice may indicate that the payor parent’s reasonable interest in certainty has returned. Thus, even if effective notice has already been given, it will usually be inappropriate to delve too far into the past. The federal regime appears to have contemplated this issue by limiting a recipient parent’s request for historical income information to a three-year period: see s. 25(1)(a) of the Guidelines. In general, I believe the same rough guideline can be followed for retroactive awards: it will usually be inappropriate to make a support award retroactive to a date more than three years before formal notice was given to the payor parent. [Citations removed.]
49I have no doubt that support should commence April 1, 2014, as requested by Mr. Delmoro. By then, the parties had separated and were discussing their various financial issues. Child support was one of them. Ms. Thomson was aware that Mr. Delmoro had no income because his business had failed. The children were residing with Mr. Delmoro. There would be no doubt in her mind that she had an obligation to support the children.
50While Ms. Thomson contributed approximately $5,000 to the household, I accept Mr. Delmoro’s evidence that those funds went towards their debt position, particularly the mortgage. He had no way to contribute to them. I find that she has contributed nothing to child support since separation.
51Mr. Punnett submits that Mr. Delmoro could have moved to vary the interim order if he so wished. Given Ms. Thomson’s complete abdication of her responsibilities to the children and to comply with the orders of the Court, I cannot object to Mr. Delmoro’s decision not to move to vary the interim order for further support. That would have been a waste of time and money.
Result
52Based on an annual income of $60,000, the Child Support Guidelines in April of 2017 required that Ms. Thomson pay child support in the amount of $892 per month for two children. That amount changed in December of 2017 to $915.
53Accordingly, Ms. Thomson shall pay child support to Mr. Delmoro for the children C. E. D. (born July 5, 2000) and M. G. D. (born July 2, 2003) pursuant to the Child Support Guidelines and an imputed annual income of $60,000, in the sum of $892 per month, effective and commencing April 1, 2014, and ending November 1, 2017, and $915 per month thereafter until August 1, 2018, after which C.E.D. commenced post-secondary education. As no payments have been made to date, child support arrears owing pursuant to this paragraph are fixed in the sum of $47,483.
54Given that C.E.D.’s education expense appears to be covered by her own efforts and the RESP, Mr. Delmoro does not seek contribution towards her post-secondary education from Ms. Thomson. That may not be the law in Ontario but it is a practical position.
55Instead, he asks only that Ms. Thomson pay support for M.G.D. pursuant to the Child Support Guidelines on an imputed annual income of $60,000 commencing September 1, 2018, with payments continuing on the first of each month thereafter. That amount is $556.00 per month. I accept that as appropriate. The arrears are fixed in the amount of $3,892 as at March 2, 2019.
56The arrears should, of course, be reduced by any payment that Ms. Thomson may have made as a result of efforts by the Family Responsibility Office, of which I am not aware. If my arithmetic is incorrect, I encourage counsel to advise me in writing before an order is issued and entered.
57Given the differences in income, I agree that Ms. Thomson should pay Mr. Delmoro 46% of any s. 7 expenses for the children within 15 days of receiving written proof of such an expense as requested by Mr. Delmoro. He does not ask for any such expense at this time.
Costs
58If costs cannot be agreed upon, Mr. Delmoro shall provide his costs submissions within the next 15 days. Ms. Thomson shall provide her response within 15 days thereafter. No reply submissions shall be filed unless I request them.
59Each submission shall be no more than three pages, not including any Bills of Costs or Offers to Settle.
60Written submissions shall be forwarded to me at my office at the Superior Court Office, 74 Woolwich Street, Guelph, Ontario, N1H 3T9.
Lemon J.
Date: March 12, 2019