COURT FILE NO.: FS-18-1753 DATE: 20190114 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jason Donald Spring, Applicant AND: Danielle Vanessa Spring, Respondent

BEFORE: Madam Justice Kristjanson

COUNSEL: No one appearing for the Applicant as he resides outside Ontario Constance Nielsen for the Respondent

HEARD: October 23, 2018

Endorsement

[1] This is a confirmation hearing of a provisional order issued in Alberta. On the basis of a material change in circumstance, the Alberta Court issued a provisional order varying a 2008 child support order relating to a child resident in Ontario to set child support at $0. I decline to confirm the paragraphs of the provisional order setting child support at $0.

Background Facts

[2] Danielle and Jason Spring married in 2002, separated in 2006, and were divorced in 2008 in Alberta, where the parties lived. They have one child, AS, born in 2004. He is 14 years old and lives with his mother in Ontario. In 2008, E. Wilson, J. granted the divorce and ordered table child support based on Mr. Spring’s income of $125,000. Mr. Spring was ordered to pay guideline child support in the amount of $1,098 per month commencing in August, 2007, and 73% of section 7 expenses.

[3] Mr. Spring did not pay child support in accordance with the 2008 Order. Despite earning income of $125,000 in 2014, by December 2014 he was in arrears in the amount of $20,234. As Ms. Spring had relocated to Ontario, in 2014 she sought enforcement of child support through the Family Responsibility Office (“FRO”), which began to deduct $1,233 monthly. This included table child support of $1,098 pursuant to the 2008 Order and $135 monthly toward arrears.

[4] In March 2017, when AS was 12, Mr. Spring applied in Alberta for a provisional order to vary child support to zero, retroactive to January 1, 2016, on the grounds that he had been unemployed since June 2015. He also sought an order that child support payments made from January 1, 2016 to the date of the order be applied as a credit to reduce child support arrears. Erb, J. on March 29, 2017 granted a six-month stay of enforcement of ongoing child support (table support and arrears) which was continued by Jerke, J. until November 2, 2017.

[5] On November 2, 2017 McCarthy, J. of the Court of Queen’s Bench of Alberta ordered that the father’s ongoing guidelines child support be set at $0 retroactive to January 1, 2016 (para. 1), and that child support payable pursuant to the order should not be recalculated by the Alberta Child Support Recalculation Program (para. 2). The Order directed each party to provide the other party with a complete copy of his or her income tax returns and notices of assessment and reassessment on an annual basis on or before June 30 as long as there is a child of the marriage (para. 3) and directing enforcement through the Alberta Director of Maintenance Enforcement (para. 4). Since it is a provisional order, the order is of no force and effect until confirmed by a court of competent jurisdiction in Ontario, the reciprocating jurisdiction where the mother resides.

[6] On November 2, 2017 Justice McCarthy made a second order staying enforcement of ongoing child support for an indefinite period pending the outcome of the provisional hearing in the reciprocating jurisdiction where the mother resides, subject to the condition that the father shall pay the mother the sum of $25 per month on the first of the month commencing November 1, 2017.

[7] The matter was referred to the court in Ontario for a confirmation hearing of the provisional Order made by Justice McCarthy on November 2, 2017 in Alberta. On July 10, 2018 Stevenson, J. directed that an oral hearing be held given the responding materials filed, on notice to Mr. Spring. Mr. Spring was served with the affidavit materials filed by Ms. Spring, and was given notice of the oral hearing. He did not adduce evidence, make submissions, or attend the oral hearing as he resides in Alberta.

A. Inter-Provincial Child Support Variation of Orders In Divorce Act Proceedings

[8] Since the original child support order was made under the Divorce Act, R.S.C. 1985, c. 3 (2d Supp.) as am., this matter is a Divorce Act variation rather than a proceeding under the Interjurisdictional Support Orders Act (“ISOA”). The matter appears to have been treated procedurally as an ISOA matter by both Alberta and Ontario, but I find that for the purposes of the Ontario proceeding, there are no material differences in terms of applicable law, notice, or effective service. Mr. Spring was properly made aware of the motion hearing date and the materials that would be considered in Ontario.

[9] When a child support order made pursuant to the Divorce Act in one province is sought to be varied and the responding party lives in another province, sections 17 - 19 of the Divorce Act govern the variation. The originating court makes a provisional order based on the evidence heard in the originating province, which does not have effect until confirmed in the jurisdiction in which the responding party resides. The matter is remitted through the Attorneys General in both provinces to a court in the province of residence of the responding party. On a confirmation hearing in the reciprocating jurisdiction the responding party has the right to adduce additional evidence, and “may raise any matter that might have been raised before the court that made the provisional order”: s. 19(5). The responding party may request that the court remit the matter to the originating jurisdiction for taking evidence, leading to an adjournment of the proceeding in the reciprocating jurisdiction while additional evidence is provided in the originating jurisdiction: s. 19(6).

[10] There are restrictions on the role of the court in the reciprocating jurisdiction. The court may confirm, with or without variation, or refuse to confirm the order from the originating jurisdiction pursuant to s. 19(7) of the Divorce Act. Before making an order confirming the provisional order with variation or an order refusing confirmation of the provisional order, the court must decide whether to remit the matter back for further evidence to the court that made the provisional order: s. 19(8).

[11] Where the court in the reciprocating jurisdiction remits the matter to the originating court for further evidence, the court in the reciprocating jurisdiction may make interim orders pursuant to s. 19(9) and (10).

B. Evidence in Alberta and Ontario

[12] The respondent mother in Ontario adduced evidence not before the court in Alberta, which is material and relevant to the disposition of the variation proceeding.

1. Evidence in Alberta Proceeding

[13] In Alberta, the only evidence before the court was that of Mr. Spring. He gave evidence that he has been unemployed since June 2015. He gave no evidence as to the circumstances in which his employment ended. Although his counsel made submissions that he had received a $50,000 severance package which took him to the end of December, 2016, there was no evidence before the Alberta court of the amount and terms of the severance. Submissions by lawyers are not evidence. The severance package itself was not attached to Mr. Spring’s affidavit. He did not file a financial statement. Mr. Spring’s line 150 income in 2014 was $172,639, and in 2015 was $127,235. There is no explanation as to why child support arrears by December 2014 were $20,234 given this historical level of income, and why arrears were $18,426.81 as at the date the Alberta application to reduce child support was made.

[14] There was almost no information filed with the Alberta Court in respect of Mr. Spring’s job search. The totality of the evidence before the court was a statement in his affidavit that:

Due to being unemployed, I had no source of income in 2016 and despite best efforts this unfortunate situation continues. I am seeking employment and am unable to predict my potential income for 2017.

[15] Although the affidavit states that he attached copies of his personal income tax returns, as well as Notices of Assessment/Reassessment for 2014, 2015 and 2016, the Alberta court file provided to Ontario did not contain the full income tax returns, just the assessments and reassessments for these years. The full income tax returns, with schedules, were required to provide critical information given Mr. Spring’s evidence.

[16] As importantly, on the Provisional Order Information Form FL-19 which Mr. Spring filed with the Alberta Court, Mr. Spring failed to complete any of the financial information, including the information as to motor vehicles, real estate, assets and credit cards. This basic financial disclosure is critical in a variation application.

[17] Mr. Spring’s 2014 Notice of Reassessment indicates:

• Line 150 income of $172,639
• Gross rental income of $37,416; net rental income of -$2,015
• Capital Gains/Losses:
  • Line 131, total proceeds of disposition of shares and mutual funds, $2,068,449
  • Line 132, capital loss re shares of $106,883
  • Line 136, total proceeds of disposition of real estate, property $476,554
  • Line 138, capital gain re real estate/property of $20,144

[18] The 2015 Assessment shows line 150 income of $127,235, including gross rental income of $40,700 and net rental income of -$3,435. There is no evidence about the expenses claimed against gross rental income.

[19] In 2015, Mr. Spring liquidated assets of $2,545,003.00. It is possible that all of the assets were fully encumbered so that he received no equity or proceeds net of liabilities. However, prima facie he received over $2.5 million in proceeds in 2015, a year in which he was in child support arrears of over $18.000.00. The burden is on Mr. Spring to explain where the equity went, if any; otherwise, the question is why the assets were not invested to provide income for child support. In the absence of disclosure, I draw an adverse inference against Mr. Spring in relation to the $2.5 million of proceeds liquidated in 2015.

[20] In his affidavit Mr. Spring swore his gross annual income for 2016 was zero, even though his 2016 assessment shows line 150 income of $21,345, including gross rental income of $38,900 and net rental income of -$774. There is no evidence of expenses. In 2016, on the Notice of Assessment Schedule 3 Capital Gains/Losses shows line 131 proceeds of disposition of shares of $31,152, with a capital loss of -$475. There is no evidence as to whether the equity from share disposition was encumbered. There is no evidence of expenses claimed against gross rental income so I disregard those expenses, meaning that his income for 2016 is $60,000, plus unexplained proceeds of liquidation of shares of $31,152, rather than the $0 asserted by Mr. Spring.

2. Additional Evidence in Ontario

[21] The respondent mother provided affidavit and oral evidence in the Ontario hearing. I find on the evidence that:

(1) During the marriage (2002-2008), Mr. Spring had a successful career in IT and software consulting/sales/business development, consistently earning over $100,000 per annum, and often closer to $175,000. He held mid-range to senior level roles during the marriage, including ten years at Telus. (2) Mr. Spring is educated; he is a graduate of Mount Royal College and Phoenix University; (3) Mr. Spring owes over $30,000 in child support arrears, most of which pre-dates the claimed period of “unemployment”, as set out in the FRO Statement of Arrears; (4) A stay order was continued by the Alberta Court of Queen’s Bench on November 2, 2017 staying enforcement pending the provisional hearing in Ontario so long as Mr. Spring paid $25.00 per month. Mr. Spring has made none of the required $25.00 monthly payments; (5) Mr. Spring has never contributed to section 7 expenses for the child AB, even though the order requires him to pay 73% of section 7 expenses. Those include tutoring, hockey, day camps and overnight camps. Based on receipts filed in the Ontario proceedings, Mr. Spring owes approximately $8,717.29 in section 7 expenses; (6) In the Alberta Provisional Order Information Form Mr. Spring declared one dependent, the child AS. However, I accept the evidence of Ms. Spring that Mr. Spring has remarried, and has two children. This information should have been disclosed; (7) Ms. Spring has requested a financial statement from Mr. Spring but has not received it; (8) A title search of Mr. Spring’s address dated September 20, 2017 revealed that he and his new wife are joint registered owners of a property purchased in July, 2012 with a stated value at that time of $978,000; (9) Ms. Spring conducted an internet search using “Glassdoor”, for sales consulting, focusing on IT/software and sales/business development positions in Calgary, and she was immediately able to find numerous jobs for which Mr. Spring is qualified; (10) Although paragraph 2 of the 2008 Order provided for generous access, Mr. Spring has failed to exercise access for many years. The last time Mr. Spring saw AS was in 2011; the last time Mr. Spring spoke with his son was about three years ago; (11) The 2008 Order required the parties to exchange complete copies of income tax returns, notices of assessment and reassessment by June 30 each year. Mr. Spring failed to provide any income tax information as required after the first couple of years; (12) The 2008 Order required the parties to conduct a child support review annually and adjust child support in accordance with the Federal Child Support Guidelines; the parties have never conducted a child support review; (13) Ms. Spring’s annual income is approximately $75,000.

C. Discussion

[22] The issue in this case is whether the court should confirm, vary or refuse the retroactive reduction in child support pursuant to the Alberta Court Order dated November 2, 2017. Mr. Spring made the application based on a material change in circumstances, namely the termination of his employment in June, 2015 and his lack of income in 2016.

[23] For the reasons that follow, I find that Mr. Spring has not met the onus of establishing a material change in circumstances, I decline to confirm the reduction of child support in the provisional order, and I order that the existing 2008 Order continue in force.

[24] Mr. Spring has sought both a retroactive and prospective reduction in child support obligations. Section 17(1) of the Divorce Act provides that a court may make an order varying, rescinding or suspending a support order, prospectively or retrospectively. Where child support is in issue, the court must satisfy itself that a change of circumstances has occurred since the making of the last child support order (s. 17(4)), and the Federal Child Support Guidelines apply to such a variation order (s. 17(6.1)). Section 14 of the Federal Child Support Guidelines provides that where the amount of child support includes a determination made in accordance with the table, then any change in circumstances that would result in a different child support order (including a change in the payor’s income) constitutes a change of circumstance for the purposes of section 17(4) of the Divorce Act. In this case, the child support was based on guidelines income, and paragraph 17 specifically contemplates annual child support review and adjustment in accordance with the child support guidelines. As a result, Mr. Spring’s 2016 income on its face would constitute a material change in circumstances for the purposes of child support. However, I must consider the appropriate variation order taking into account the retroactivity of the change, as well as income imputation and lack of financial disclosure.

[25] As set out by Chappel J. in Templeton v. Nuttall, 2018 ONSC 815 at paras. 42-43:

[42] There are four general stages to dealing with a claim by a support payor for retroactive relief from an existing child support order, as follows:

1. As discussed above, the court must first determine whether the threshold test on a Motion to Change has been satisfied;
2. Second, the court must determine whether retroactive relief is appropriate;
3. Third, if the court concludes that retroactive relief is appropriate, it must craft a remedy that is fair and just based on all of the facts of the case. If the court determines that a retroactive reduction of support is appropriate, it must at this stage of the analysis determine the appropriate date of retroactivity; and
4. Finally, after determining the general framework for the appropriate remedy, the court must quantify any adjustments to support that are required as a result of the remedy, and any overpayment that the recipient must reimburse to the payor. The court should also determine whether it is appropriate to include terms in the order relating to the manner of payment of any arrears, including terms to address any potential concerns regarding financial hardship.

[43] There are three main interests that must be carefully considered and balanced in determining whether retroactive relief is appropriate and crafting an appropriate remedy, as follows:

1. The child’s interest in receiving the appropriate amount of support;
2. The interest in fostering certainty and predictability when financial obligations appear to be settled; and
3. The need for overall fairness and flexibility in order to ensure a just result (D.B.S.; Gray v. Rizzi; Colucci).

[26] In the application brought in March, 2017, the Alberta order set ongoing child support at $0 effective January 1, 2016. At the time the application was brought, child support arrears were $18,426.81. Despite earning line 150 income in 2014 of $172,639 (well above the $125,000 income on which child support was calculated), by December, 2014 Mr. Spring was in arrears in the amount of $20,234. In respect of the arrears, I find that Mr. Spring had the ability to pay child support as it came due. In Gray v. Rizzi, 2016 ONCA 152 at para. 58, the Court of Appeal held that in this kind of situation, the court should require full compliance with existing court orders, and only exercise its discretion to reduce or rescind arrears where the payor establishes, on a balance of probabilities, that they cannot and will not in the future ever be able to pay the arrears. Mr. Spring has not done so. There are no grounds to order any relief from arrears that accumulated to the date of the application.

[27] I consider whether to exercise my discretion to confirm the order setting retroactive child support to $0 from January 1, 2016 to the date of the application, and $0 on a prospective basis. I consider that Mr. Spring failed to comply with the existing 2008 Court Order, and failed to provide Ms. Spring with his income tax returns. In two of the three prior years this would have resulted in the payment of a higher level of child support. I consider the ongoing needs of AS, and the support recipient, who are living at a substantially decreased level than during the marriage. I also consider the conduct of Mr. Spring in relation to child support, as set out by Chappel, J. in Templeton at para. 48:

In relation to conduct, the court should consider both positive conduct and any evidence of blameworthy conduct. An expansive view of what constitutes “blameworthy conduct” is appropriate in claims for retroactive relief, and the phrase encompasses “anything that privileges the payor parent’s own interests over his/her child’s right to an appropriate amount of support” (D.B.S., at para. 106). The analysis of the payor’s conduct should include the following inquiries:

(i) Whether they have made any voluntary payments on account of arrears; (ii) Whether they have cooperated with enforcement agencies in addressing the issue of child support; (iii) Whether they have kept the recipient fully apprised of the changes in their circumstances over time as those changes occurred; (iv) Whether they have complied with obligations and requests for financial disclosure in an effort to address the child support issue; (v) Any evidence respecting their willingness to support the child or alternatively to avoid their child support obligation. Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission of or reduction of arrears (D.B.S.; Gray v. Rizzi; DiFrancesco; Corcios). Further, failure to disclose a material change in circumstance to the recipient for an extended period of time may also be relevant (M.(D.) v. A.(S.)). (vi) The motivating factors behind the payor’s decision to pursue relief may also be relevant. Where the payor has only initiated Motion to Change proceedings to seek relief from significant arrears due to default proceedings by the FRO and under threat of coercive enforcement measures, this may influence the court to either deny relief altogether or to carefully circumscribe the relief granted to the payor. To allow retroactive relief as a matter of course in such circumstances would provide an incentive to payor parents to simply declare an inability to pay, ignore child support orders, and abandon their children financially unless the FRO comes knocking on their door (Szitas; Morden).

[28] The onus is on Mr. Spring to establish a material change in circumstances based on his current lack of employment. I find that he has not met this onus. He has not made full financial disclosure. He has not provided any evidence of the circumstances of his unemployment (voluntary or not), or any attempts to find employment. I find he is voluntarily unemployed.

[29] Although the 2008 Order required Mr. Spring to provide his income tax returns annually to Ms. Spring, together with Notices of Assessment/Reassessment, I find that he has failed to do so. Mr. Spring has had no communication with Ms. Spring, and has not kept Ms. Spring apprised of his change in circumstances. He has not complied with requests for financial disclosure. He has not complied with the 2008 Order, and the steady accumulation of substantial arrears demonstrates that he has avoided his child support obligations.

[30] The 2008 Order was based on income of $125,000. His line 150 income from 2002-2006 was $100,000 to $175,000; his line 150 income in 2014 was $172,639, and in 2015 (when he left employment in June) was $127,235. Mr. Spring’s 2015 Notice of Assessment shows total proceeds of disposition of shares and mutual funds of $2,068,449, and total proceeds of disposition of real estate, property of $476,554, with no explanation. He received but did not disclose the severance amount or the terms of a package in 2015. There is no information as to debts or loans, as no financial statement was provided, and the relevant financial portions of the Alberta Court form were not completed. He jointly owns a house with his new wife which was valued at $978,000 when they purchased it, and he has a second family (with two children) not disclosed to the Alberta Court. There are jobs in Calgary for which Mr. Spring is suited. Despite this, Mr. Spring sought to be relieved of all child support obligations for his first family, the child AS. He declared net losses for property rental income for 2014-2016, with no disclosure of expenses. He did not inform Ms. Spring that he had lost his job, and has made no efforts to keep her apprised of his changing circumstances over time. He failed to disclose income in excess of $125,000, thereby depriving AS of child support to which he was entitled for prior years. He did not pay down arrears in years he had substantial income. He bought a house worth almost a million dollars with his new wife, while failing to pay down child support arrears. This is clearly wilful non-compliance with a court order.

[31] Mr. Spring has not produced necessary disclosure to allow the court to determine his true income for child support purposes. Section 19(1)(a) of the Federal Child Support Guidelines provides that a court may impute income to a spouse as it considers appropriate in the circumstances, which include that “the spouse is intentionally under-employed or unemployed.”

[32] I consider the factors set out by Chappel, J. in Templeton v. Nuttall at para. 62 regarding the imputation of income on the basis of intentional unemployment or underemployment under section 19(1)(a) of the Guidelines:

1. 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. To this end, there is a duty on the part of the payor to actively seek out reasonable income-earning opportunities that will maximize their earning potential so as to meet the needs of their children. If a parent is earning less than they reasonably could be, they are intentionally underemployed and income may be imputed to them…
2. A finding of deliberate under-employment or unemployment does not require evidence of bad faith on the part of the payor parent or an attempt on their part to evade 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 …
3. In determining whether a party is intentionally under-employed or unemployed, the court should consider the 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…
4. A self-induced lack of income or reduction of income with no realistic prospect of future financial advancement is not a basis upon which to avoid or reduce child support payment s. 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…
5. The court may also impute income to a party on the basis of deliberate under-employment or unemployment if the party quits their employment for selfish or bad faith reasons…, or if they engage in reckless behaviour which affects their income-earning capacity …
6. When a party experiences an involuntary loss of employment or self-employment, they may be given a “grace period” to investigate options and seek out income earning opportunities in their field at a comparable rate of remuneration before income will be imputed to them... However, if they have been unable to secure comparable employment within a reasonable time frame, they will be required to accept other less remunerative opportunities or options outside of the area of their expertise in order to satisfy their obligation to contribute to the support of their children …
7. Even if the court determines that the payor parent is deliberately under-employed or unemployed, the court has the discretion to decide whether or not to impute income 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. If an employment decision results in a significant reduction of income, it must be justified in a compelling way …
8. 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 …(emphasis added; internal citations omitted)

[33] In this case, Ms. Spring submits that income should be imputed to Mr. Spring on the grounds that he is intentionally unemployed. She relies on the failure of Mr. Spring to disclose the alleged severance package, or a record of earnings which would indicate whether he quit his job or was terminated. Mr. Spring is young, and there is no evidence of health issues. She has provided evidence of a very healthy earnings history of annual earnings over $100,000 going back to 2002, income of $125,000 in 2008, and recent earnings (2014) of $175,000. The complete absence of evidence of a reasonable job search by Mr. Spring, coupled with the internet job search demonstrating a plethora of job openings for which Mr. Spring would be qualified, is also important. Absence of any evidence of a job search leads me to find that Mr. Spring is intentionally unemployed: Filipetto v. Timpano at para. 12. I draw an adverse inference against Mr. Spring for his failure to comply with his disclosure obligations, and his failure to provide the severance package and any information whatsoever about his job search. There is no evidence of submitting job applications, no evidence of correspondence with potential employers, no evidence that he has sought the assistance of a job search agency – nothing. As the Court of Appeal states in Drygala v. Pauli at para. 32, “Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning.” Mr. Spring has not led any evidence capable of rebutting the conclusion that he is intentionally unemployed.

[34] Mr. Spring’s failure to make full and complete financial disclosure is a significant barrier in respect of determining Mr. Spring’s income. I must consider Mr. Spring’s capacity to earn income in light of his health, age, employment and income earning history, standard of living and available employment opportunities. As Chappel, J. states in Templeton at para. 67:

In determining whether a parent has satisfied the onus on them of proving their stated income, the court must consider whether they have complied with all of their income disclosure obligations. A party cannot ask the court to make income findings that are favourable to them and contrary to another party’s interests while at the same time shielding information that is relevant to the determination of their income behind a protective wall. Parents involved in child support proceedings have a positive obligation to disclose all relevant evidence required to enable the other parties and the court to obtain a true and complete picture of their income for support purposes. This requirement flows from the standard obligation upon all litigants to produce any information that is relevant to the issues in the case. Pursuant to this obligation, a party whose income must be determined in a support case must provide full and frank disclosure of all personal and business information required to properly assess their reported earnings, their income earning potential, efforts which they have made to maximize their earnings, and the appropriateness of any deductions that they seek to claim against their income. On the latter issue, a parent who seeks to deduct expenses from their income for child support purposes must as part of their basic general disclosure obligation explain the reasons for the expenses and how they were calculated, and must provide documentary proof of significant expenses in an organized manner so that the court can make a proper determination as to the reasonableness of the expense from the standpoint of the child support calculation

[35] In terms of deductions against income, Mr. Spring has not provided any evidence supporting deductions for the rental property losses he claims. I have also considered the requirements for disclosure in section 21(1) of the Guidelines.

[36] Because of my serious concerns respecting deficiencies in disclosure of financial information, and the complete lack of information (a) about the job termination, and (b) about any job search, I find that Mr. Spring has not met the onus of proving a decrease in his income in 2016, or that the decrease will be long-standing. I thus find that he has not met the threshold of establishing a material change in income, and the provisions of the 2008 Order for child support remain in effect. If I had found a material change, I would have imputed an income of $125,000 per annum for the reasons set out herein.

[37] I dismiss Mr. Spring’s claim for a retroactive reduction of child support to January 1, 2016, and find that he has failed to establish a material change in circumstances that would justify a reduction in child support. I find that he is voluntarily unemployed, and is not making as much as he is capable of earning to meet his obligation, as a father, to support his child. The evidence a court would expect to be filed by Mr. Spring includes:

• 3 years of income tax returns (personal, corporate, and trust, if relevant) together with all schedules;
• if expenses are claimed such as rental income expenses, proof of expenses;
• evidence surrounding the alleged termination to establish that it was involuntary, together with a copy of the severance package and all information regarding the terms of severance;
• proof of job searches, including listing names, dates and specifics of job-search related phone calls, internet searches, applications, CV, interviews and results of interviews;
• a fully completed version, with attachments and documentary evidence, of the financial information required by the Alberta Court Rules and Forms, which includes disclosure of all assets;
• In 2015, Mr. Spring liquidated assets worth more than $2.5 million, and has not explained whether there are encumbrances on the assets, and whether the assets were invested to provide an income stream for payment of child support.

D. Decision Not to Remit to Alberta for Further Evidence

[38] Before refusing confirmation or varying a provisional order, I must decide whether to remit the matter back to the Alberta Court of Queen’s Bench for further evidence: Divorce Act, s. 19(8). I will not remit the matter back to Alberta for Mr. Spring to file further evidence. Mr. Spring was the applicant. He had the opportunity and the obligation to provide full disclosure and to explain why he could not provide child support for his then 12 year old son. He failed to do so. He failed to file his compete tax returns. He failed to disclose his alleged severance package. He failed to file any information about his alleged job search. He misrepresented his 2016 income. He has not explained significant liquidation of assets. He did not disclose the existence of a second family. Mr. Spring had the opportunity to put all relevant evidence before the court at the provisional hearing. He chose not to do so. In these circumstances, I decline to exercise my discretion to allow the applicant to have “another kick at the can”: Vanderlans v. Vanderlans, 2008 NLCA 37. A party who chooses not to make full disclosure in a family proceeding must bear the burden of that choice.

[39] Due to the bifurcated nature of provisional order proceedings, there has been significant delay to date. Mr. Spring has benefitted from the interim suspension of support enforcement by the authorities in Ontario and Alberta. Mr. Spring’s son continues to grow and he requires the child support his father has chosen not to pay. As Pazaratz, J. stated in Chree v. Chree, 2015 ONSC 6480 (SCJ) at paras. 54-55:

54. If the bifurcated provisional order system is somehow intended to save money or promote efficiency, this case is a classic example that neither of those objectives is being promoted.
55. If anyone ever did a financial analysis of the real cost of having two judges, in different provinces, in different years, trying to piece these puzzles together – it would soon become apparent that in this age of Skype and inexpensive travel, better options exist.

[40] I decline to remit the matter back to the Alberta Court of Queen’s Bench.

E. Costs

[41] The Court of Appeal in Mattina v. Mattina, 2018 ONCA 867 at paras. 9-15 has set out the following principles applicable to costs under the Family Law Rules:

[9] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that cost orders are in the discretion of the court. Rule 24 of the Family Law Rules sets out a framework for awarding costs for family law cases in the Family Court of the Superior Court of Justice, in the Superior Court of Justice and in the Ontario Court of Justice. Although the Family Law Rules do not expressly govern costs awards in the Court of Appeal, they have been used to guide this court’s analysis on costs in family law disputes: Family Law Rules, r. 1(2); Selznick v. Selznick, 2013 ONCA 35.

[10] This court has held that modern family cost rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants: Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8; Fong v. Chan (1999), 46 O.R. (3d) 330 (C.A.), at para. 22. Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: Family Law Rules, r. 2(2); E.H. v. O.K., 2018 ONCJ 578, at para. 8; Sambasivam v. Pulendrarajah, 2012 ONCJ 711, at para. 37. And Rule 24(12)[1], which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award.

[11] The Family Law Rules are a marked departure from some aspects of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. As such, case law pertaining to costs decided under the Rules of Civil Procedure should be approached with some caution: Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, at para. 11; E.H. v. O.K., at para. 34.

[12] Rule 24(1) creates a presumption of costs in favour of the successful party of a motion, case, or appeal: Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730, at para. 94. And the presumption that a successful party is entitled to costs applies equally to custody and access cases: Britt v. Britt, [2000] O.J. No. 5981 (S.C.), at para. 9.

[13] Consideration of success is the starting point in determining costs: Sims-Howarth v. Bilcliffe (2000), 6 R.F.L. (5th) 430 (Ont. Sup. Ct.), at para. 1. This presumption does not, however, require that the successful party always be entitled to costs: M.(C.A.) v. M.(D.), at para. 40. An award of costs is subject to: the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct of a successful party, r. 24(8) pertaining to bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party: Berta v. Berta, at para. 94.

[14] Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs:

(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues: (i) each party’s behaviour, (ii) the time spent by each party, (iii) any written offers to settle, including offers that do not meet the requirements of rule 18, (iv) any legal fees, including the number of lawyers and their rates, (v) any expert witness fees, including the number of experts and their rates, (vi) any other expenses properly paid or payable; and (b) any other relevant matter.

[15] The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g. where a party has behaved unreasonably, in bad faith or has beat an offer to settle under r. 18(14).

[42] Ms. Spring claims full indemnity costs in the amount of $7,305.61 inclusive of fees and disbursements. There is no evidence of Offers to Settle. At the same time, in the unusual circumstances of this case, where I have found grossly inadequate disclosure, a failure of Mr. Spring to provide financial information as required by the 2008 Court Order and the rules governing variation applications, and significant child support arrears, I do not find the failure to serve an Offer to Settle to be unreasonable.

[43] I have considered the factors set out in Mattina and the Rule 18 and 24 analysis. In particular, the issues were relatively complex given the rarity of inter-provincial provisional order proceedings, and the importance to Ms. Spring was very high, given that child support payments were set to $0 as of January 1, 2016. It was incumbent on her to make a robust response to the variation application. The time and rates are reasonable. She incurred the expense of a title search in Alberta, disclosing the existence of the house owned by Mr. Spring. I find the legal fees and disbursements reflect a reasonable and proportionate response. Mr. Spring’s grossly inadequate disclosure also requires a sanction.

[44] As a result, I order Mr. Spring to pay Ms. Spring costs in the amount of $6,800.00, fixed and payable in 30 days. If not paid in accordance with this court order, this costs award may be enforced as support through the Family Responsibility Office, pursuant to section 1(1) of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, as these are legal expenses arising in relation to the payment of child support.

F. ORDER

[45] Paragraphs 1 and 2 of the provisional variation order of McCarthy, J. dated November 2, 2017 made in the Court of Queen’s Bench of Alberta are not confirmed. Paragraphs 3 and 4 are confirmed, and the original Order of E. Wilson, J. dated March 18, 2008 continues in full force.

[46] The application for variation of child support is dismissed, with costs of $6,800.00, fixed and payable within 30 days.

[47] Mr. Spring shall provide complete copies of his income tax returns, with schedules, for 2014 through 2017 to Ms. Spring by March 1, 2018, together with notices of assessment and reassessment for 2017.

[48] Any moratorium as to enforcement of arrears is lifted, and those arrears are enforceable. There is no restriction with respect to enforcement.

Justice Kristjanson Date: January 14, 2019