COURT FILE NO.: FS-18-166
DATE: 2019 11 29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ROCCO PAOLUCCI
The Applicant, self represented
Applicant
- and -
DARLENE PAOLUCCI
Michel Bouchard, agent for the Respondent
Respondent
HEARD: November 22, 2019
UNCONTESTED TRIAL
REASONS FOR JUDGMENT
FRAGOMENI J.
[1] This matter first appeared before me on November 18, 2019 for an uncontested trial. Ms. Paolucci had filed a Form 23C Affidavit for Uncontested Trial sworn October 31, 2019. It was my view that the October 31, 2019 Affidavit was insufficient and incomplete and on that basis I adjourned the matter to November 22, 2019, to permit Ms. Paolucci an opportunity to file a more complete Affidavit with documentary support.
[2] At the hearing on November 22, 2019, Ms. Paolucci filed an Affidavit sworn November 21, 2019 and was assisted by her counsel, Michel Bouchard.
Endorsement of Barnes J. Dated September 18, 2019
[3] Barnes J. sets out the following at para. 24 of his endorsement:
Mr. Paolucci’s overall conduct warrants striking his pleadings, however, since the disclosure is available, it is just in all the circumstances to fashion another remedy. Mr. Paolucci shall pay Ms. Paolucci $5,000 by October 31, 2019, failing which his pleadings shall be automatically struck on November 1, 2019 and Ms. Paolucci shall proceed with her motion to change on an uncontested basis.
[4] Ms. Paolucci testified on November 22, 2019 and indicated that she did not receive the $5,000.00 by October 31, 2019. As a result the pleadings of Mr. Paolucci were automatically struct and she set this matter down for an uncontested trial on November 1, 2019.
[5] Ms. Paolucci received the $5,000.00 by mail.
Background
[6] The parties were married on August 31, 1991. They separated in April 2001. They have a son, Andrea Paolucci, born November 10, 1999. He is now 20 years of age.
[7] Ms. Paolucci works on contract for Dynamic Construction. She earns around $3,000 - $4,000 per month.
[8] Mr. Paolucci is employed by Cedar Oak Homes as a site supervisor building new subdivision homes.
[9] Mr. Paolucci also carries on business as a contractor doing home renovations and improvements. He carried on this business through 1417995 Ontario Limited.
[10] There has been significant difficulties encountered by Ms. Paolucci in obtaining disclosure from her husband.
[11] At the hearing before Barnes J. Ms. Paolucci was seeking an order striking the pleadings of Mr. Paolucci for failing to comply with the financial disclosure order of Justice Petersen made on January 2, 2019.
[12] Justice Petersen ordered that the following disclosure be provided to Ms. Paolucci on or before February 8, 2019:
- Complete Income Tax Returns (including schedules and attachments) for 2010-2017 inclusive, both personal and corporate.
- Complete Notices of Assessment and any Notices of Reassessment from the CRA for 2010-2017.
- Financial Statements for his business Rockwell Developments for 2010-2017 inclusive, or any other business.
- Bank Statements for each bank account in the Applicant’s name (whether a sole or joint account) from January 1, 2010 to present showing deposits, withdrawals and balances.
- All credit card statements in the Applicant’s name (as primary or supplementary card holder) from January 1, 2010 to present.
[13] Ms. Paolucci testified that she has done her best to obtain as much information as she could to support the claims she is making but has been frustrated to a large degree because of the lack of complete disclosure by her husband as it relates to his personal and corporate tax returns. Corporate financial statements have not been provided. Attachments to these documents were not provided. Several months relating to bank statements are still missing. Credit card information is incomplete. At para. 4 of her November 21, 2019 Affidavit she states that he has not provided any income tax information for 2018. He has not produced any “as filed” returns with all attachments and inserts, notwithstanding several demands to produce them. There are no T4 slips or other slips which can be referred to.
[14] At paras. 5 to 7 of her November 21, 2019 Affidavit, Ms. Paolucci deposes the following:
It is to be noted that for the years 2012 and 2013 the Applicant claims to have had an income from employment of only $15,000.00 and $34,000. To my knowledge, it was at this time that the Applicant chose to demolish the old home which he owned at 1826 Appleview Road, Pickering, Ontario, and to build an exquisite custom built home having in excess of 3,500 square feet of living space.
The Applicant lived in this brand new home for a period of approximately six months before putting it on the market and selling it for $1,200,000.00. Attached as Exhibit “B” to this my affidavit is a true copy of the listing marked “sold”, which shows that the property was in fact sold for $1,200,000.00 on the 9th day of December, 2013, and that the closing date was the 18th day of December, 2013. The documentation provided to me by the Applicant concerning his personal bank account shows that he made a deposit of $448,405.00 on the 18th day of December, 2013. Accordingly, it appears that at the very least, the Applicant has received this sum from the sale of the new home he constructed. I verily believe that this sum should be added to his income for Family Law purposes. Attached as Exhibit “C” to this my affidavit is a true copy of the relevant page of the Applicant’s personal chequing account history as provided to me by the Applicant.
The Applicant has refused to provide any information concerning the cost of demolition, construction and the profit that he made from the construction and subsequent sale of the new home. The reporting letter including the trust reconciliation statement on the sale of the home were specifically requested but were never produced. Accordingly, in my view, an income should be imputed to him for these years which reflects the fact that the Applicant kept himself busing constructing and selling a new home. Accordingly, an income from employment of at least $100,000.00 should be attributed to him for each of 2022 and 2013.
Orders Being Sought
[15] Ms. Paolucci is seeking the following relief:
- Income to be imputed to Mr. Paolucci in the sum of $120,000 per year, retroactive to 2010.
- Child support for Andrea in the amount of $1,068.00 per month based on an annual income of $120,000.00 per year.
- Arrears of child support to be fixed in the sum of $49,728.00.
Mr. Paolucci’s Income
[16] Ms. Paolucci prepared a summary of Mr. Paolucci’s Income Reported to Revenue Canada from his employment as a construction site supervisor. Exhibit A to her November 21, 2019 Affidavit contains the income tax returns for the period from 2010 to 2017. The summary sets out the following:
2010 70,123.00 2011 68,100.00 2012 15,000.00 2013 34,000.00 2014 60,000.00 2015 70,000.00 2016 81,800.32 2017 90,476.00
[17] Ms. Paolucci explained the reason for the lower incomes in 2012 and 2013 at paras. 5-7 of her November 21, 2019 Affidavit as set out earlier in these reasons.
[18] Ms. Paolucci also prepared a chart relating to his total income, personal and corporate and it is useful and informative to reproduce that chart in these reasons:
Digital Corporate Tax Return Copies Without Attachments
1417995 Ontario Limited
| Gross Revenue | Operating Expenses | Salaries & Wages | Travel Expenses | Meals & Entertainment | |
|---|---|---|---|---|---|
| Year ending 04/10 | 95,000.00 | 91,975.00 | 63,546.00 | 10,211.00 | 3,892.00 |
| Year ending 04/11 | 95,000.00 | 95,518.00 | 71,725.00 | 8,532.00 | 1,641.00 |
| Year ending 04./12 | 71,250.00 | 76,957.00 | 52,152.00 | 7,942.00 | 3,456.00 |
| Year ending 04/13 | 28,534.00 | 31,333.00 | 10,396.00 | 5,432.00 | 3,142.00 |
| Year ending 04/14 | 101,091.00 | 83,299.00 | 54,592.00 | 10,304.00 | 2,489.00 |
| Year ending 04/15 | 84,000.00 | 87,835.00 | 66,333.00 | 5,645.00 | 1,842.00 |
| Year ending 04/16 | 84,000.00 | 85,416.00 | 66,060.00 | 5,762.00 | 1,813.00 |
| Year ending 04/17 | 110,000.00 | 100,663.00 | 83,600.00 | 5,617.00 | 1,696.00 |
| Year ending 04/18 | 110,000.00 | 110,697.00 | 91,684.00 | 6,511.00 | 1,573.00 |
| Totals | 778,875.00 | 763,693.00 | 559,888.00 | 65,956.00 | 21,544.00 |
No indication of who salary and wages are paid to. Do not match what is being declared as personal income of Rocco Paolucci to Revenue Canada. Very significant credit for travel expenses. Requesting the salaries and wages be imputed to Rocco Paolucci as additional income otherwise the corporation is not making any revenue.
| Personal | Business | Total | |
|---|---|---|---|
| 2010 | 70,123.00 | 63,546.00 | 133,669.00 |
| 2011 | 68,100.00 | 71,725.00 | 139,825.00 |
| 2012 | 15,000.00 | 52,152.00 | 67,152.00 |
| 2013 | 34,000.00 | 10,396.00 | 44,396.00 |
| 2014 | 60,000.00 | 54,392.00 | 114,392.00 |
| 2015 | 70,000.00 | 66,333.00 | 136,333.00 |
| 2016 | 81,800.32 | 66,060.00 | 147,860.00 |
| 2017 | 90,476.87 | 83,600.00 | 174,076.87 |
| 2018 | not disclosed | 91,684.00 | TBD |
| TOTALS | 489,500.19 | 559,888.00 | 957,703.87 |
8 year average $119,712.98 (does not include 2018 which should be even higher)
[19] Ms. Paolucci also prepared a chart setting out personal and business use of his Royal Bank Visa which she states demonstrates a significant use of his credit card:
Royal Bank Visa ending 4793
| Period | Amount |
|---|---|
| Mar-Apr 2012 | 1,892.23 |
| Apr-May 2012 | 8,645.41 |
| May-June 2012 | 20,598.50 |
| June-July 2012 | 18,907.63 |
| July-Aug 2012 | 7,113.81 |
| Aug -Sept 2012 | 15,026.94 |
| Sept-Oct 2012 | 4,539.34 |
| Oct-Nov 2012 | 4,048.26 |
| Nov-Dec 2012 | 4,559.33 |
| Total | 85,331.45 |
| Jan-Feb 2013 | 2,247.54 |
| Feb-Mar 2013 | 8,684.95 |
| Mar-Apr 2013 | 16,573.33 |
Ending 5057
| Period | Amount |
|---|---|
| Apr-May 2013 | 2,912.05 |
| May-June 2013 | 6,361.54 |
| June-July 2013 | 7,636.64 |
| July-Aug 2013 | 2,680.50 |
| Aug-Sept 2013 | 1,870.93 |
| Sept-Oct 2013 | 5,188.03 |
| Oct-Nov 2013 | 7,033.57 |
| Nov-Dec 2013 | 4,741.62 |
| Total | 65,930.70 |
| Dec-Jan 2014 | 7,595.03 |
| Jan-Feb 2014 | 1,480.74 |
| Feb-Mar 2014 | 51.63 |
| Mar-Apr 2014 | -446.92 |
| Apr-May 2014 | 875.24 |
| May-June 2014 | 3,474.41 |
| June-July 2014 | 623.06 |
| July-Aug 2014 | Missing |
| Aug-Sept 2014 | 8,253.73 |
| Sept-Oct 2014 | 11,508.27 |
| Oct-Nov 2014 | 4,247.36 |
| Nov-Dec 2014 | 1,722.92 |
| Total | 39,385.47 |
| Dec-Jan 2015 | 3,547.40 |
| Jan-Feb 2015 | 2,097.37 |
| Feb-Mar 2015 | 2,922.37 |
| Mar-Apr 2015 | 886.55 |
| Apr-May 2015 | 3,953.01 |
| May-June 2015 | 4,766.35 |
| June-July-2015 | 2,479.07 |
| July-Aug 2015 | 2,373.02 |
| Aug-Sept 2015 | 3,585.84 |
| Sept-Oct 2015 | 678.02 |
| Oct-Nov 2015 | 1,285.32 |
| Nov-Dec 2015 | 2,089.78 |
| Total | 30,664.10 |
| Dec-Jan 2016 | 830.27 |
| Jan-Feb 2016 | 1,481.94 |
| Feb-Mar 2016 | 1,348.30 |
| Mar-Apr 2016 | 1,078.92 |
| Apr-May 2016 | 8,038.79 |
| May-June 2016 | 9,934.47 |
| June-July 2016 | 2,302.15 |
| July-Aug 2016 | 5,174.68 |
| Aug-Sept 2016 | 1,196.52 |
| Sept-Oct 2016 | 2,664.64 |
| Oct-Nov 2016 | 4,639.89 |
| Nov-Dec 2016 | 9,256.80 |
| Total | 47,947.37 |
| Dec-Jan 2017 | 1,693.05 |
| Jan-Feb 2017 | 2,242.92 |
| Feb-Mar 2017 | 906.07 |
| Mar-Apr 2017 | 1,071.25 |
| Apr-May 2017 | 3,321.68 |
| May-June 2017 | 848.54 |
| June-July 2017 | 751.53 |
| July-Aug 2017 | 1,846.56 |
| Aug-Sept 2017 | 4,630.02 |
| Sept-Oct 2017 | 934.81 |
| Oct-Nov 2017 | 6,452.96 |
| Nov-Dec 2017 | 973.44 |
| Total | 25,672.83 |
[20] Ms. Paolucci submits that this evidentiary record supports a finding that an annual income of $120,000 is reasonable.
[21] Mr. Paolucci has not provided disclosure to explain to whom the salaries and wages are paid to with respect to his company 1417995 Ontario Limited. Ms. Paolucci submits that some of that amount ought to be attributed to him.
[22] In all of the circumstances Mr. Paolucci submits that the $120,000 figure is reasonable.
[23] I agree with the position of Ms. Paolucci. I am satisfied that the evidentiary record is sufficient to establish that an imputed annual income for Mr. Paolucci can be fixed at $120,000 retroactive to 2010.
Child Support Arrears
[24] The child support order of Mr. Justice Perkins was made on January 28, 2005, and provided for child support in the amount of $500.00 per month. At paras. 4, 5 and 8 of her October 31, 2019, Affidavit Ms. Paolucci states:
Every year since the child support order was made I asked the Applicant father to provide the income information required by the Child Support Guidelines, and every year the Applicant father responded that $500.00 was all that he could afford.
In or about 2012, the Applicant father, after numerous requests, voluntarily increased the child support payments by $50.00 to $550.00. However the Applicant father still neglected or refused to provide the financial disclosure required by the Child Support Guidelines.
Accordingly, I am seeking a retroactive recalculation of child support from January 1, 2010 and ask that the arrears of child support be fixed at $49,728.00 as of April 1, 2018. The said sum is the difference between what the Applicant father has been paying me and the amount which he should have paid me on a monthly basis for the period from January 1, 2010, to April 1, 2018.
[25] I am prepared to fix the arrears as requested.
Ongoing Child Support for Andrea
[26] Andrea graduated from high school in 2017. He then attended Humber College for one year. After one year he decided he wanted to obtain his Master Electrical Licence. He is registered with the Ontario College of Trades. Andrea was enrolled in an electrical pre-apprenticeship program at the Skilled Trades College of Canada from September to December 2018.
[27] Since April 2019 he has been working as an Apprentice Electrician with Riverline Group Inc. A letter from Eric Silva at Riverline dated November 20, 2019 sets out the following:
To whom it may concern:
This letter confirms that Andrea Paolucci is working with Riverline Group Inc. as an Apprentice Electrician. He has been working with us since April 2019. Mr. Paolucci is working towards his full Journey Person Electrical Licence and he works anywhere from 30 to 40 hours per week with a current wage of $14 per hour. Currently Mr. Paolucci is scheduled to return to school as part of his apprenticeship program in January 2020.
Please reach out with any questions or concerns.
[28] In January 2020 Andrea is required to complete a ten to twelve week program and will have to write his exams.
[29] At para. 20 of her November 21, 2019 Affidavit Ms. Paolucci sets out Andrea’s expenses as follows:
Andrea expenses include car insurance of approximately $1,500.00 per year. He has to drive to and from the various jobs sites and school. His gas expenses are at least $100.00 per week. His car repair expenses this year were approximately $1,500.00 to date. His tuition for his upcoming course in January, 2019, will be $450.00. Andrea has also been building up his tools required for his work on the job and has spent approximately $1,500.00 to date.
[30] Andrea does not pay room and board to his mother.
[31] At $14.00 per hour working between 30 and 40 hours per week Andrea earns about $2,200 per month. During the 10 to 12 weeks he is in courses he will not have this income.
[32] Section 3(2) of the Child Support Guidelines sets out the following:
(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is
(a) the amount determined by applying these Guidelines as if the child were under the age of majority; or
(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.
[33] In Hollman v. Hollman, [2015] O.J. No. 3995, the Court set out that when awarding support with respect to an adult child, the court must specifically refer to s. 3(2)(b) or at least provide a rationale departing from the table amount. At para. 42, the court noted:
Mr. Holman argues that the motion judge was entitled to deviate from the CSGs by virtue of s. 3(2)(b) of the CSGs. This section provides that if the court considers the table amount of support to be inappropriate for a child over the age of majority, the court may order the amount of support “that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.”
[34] The jurisprudence also supports the proposition that the closer the circumstances of the child are to those upon which the usual Guidelines approach is based, the less likely it is that the usual Guidelines calculation will be inappropriate. See Rebenchuk v. Rebenchuk, 2007 MBCA 22, [2007] M.J. No. 130; Albert v. Albert, 2007 CanLII 29972 (ON SC), [2007] O.J. No. 2964 (Ont. S.C.J.); Gagnie v. Gagnie, [2002] O.J. No. 2183 (Ont. S.C.J.).
[35] It is also clear that there is some duty on the child to assist the parents in helping to relieve the financial burden of post-secondary school education. This is a factor in assessing whether it would be inappropriate to apply provisions of s. 3(2)(b) of the Guidelines.
[36] In this case the amount of income that Andrea earns while he is doing his apprenticeship is not insignificant. At approximately $2,200 per month he can earn about $26,400 per year. Even if the 10 to 12 weeks are subtracted from this total (3 months at $2,200 per month = $6,600, $26,400 less $6,600 = $19,800) i.e. income is substantial for his purposes.
[37] Andrea is still able to generate about $20,000 for the year. Considering the expenses he has this income is more than sufficient to meet those needs. The income is also sufficient to meet his needs in the circumstances he is in. Although he doesn’t pay room and board at this time to his mother, even if he did pay room and board he has sufficient income to do so and to take care of his daily needs.
[38] I am satisfied that Andrea is entitled to the table amount from April 1, 2018 to April 1, 2019. Mr. Paolucci calculated the arrears up to April 1, 2018. Andrea started earning an income from his apprenticeship on April 1, 2019. The evidentiary record establishes that Andrea is able to earn an income from his apprenticeship such that child support is not required. As such there will be no ongoing child support from April 1, 2019 onward.
Costs
[39] Mr. Paolucci’s counsel filed a Bill of Costs seeking total fees and disbursements in the sum of $7,995.00. I am satisfied in all of the circumstances that costs ought to be fixed in the all-inclusive sum of $5,000.00.
Order to Issue as Follows:
- that Mr. Paolucci’s income is imputed at $120,000.00 retroactive to 2010.
- that the child support arrears are fixed at $49,728.00.
- that Mr. Paolucci shall pay to Ms. Paolucci child support for Andrea for the period April 1, 2018 to April 1, 2019 in the sum of $1,068 per month based on an annual income of $120,000.00
- that there shall be no ongoing child support from April 1, 2019 onward.
- Costs payable to Ms. Paolucci in the all-inclusive sum of $5,000.
Fragomeni J.
Released: November 29, 2019
COURT FILE NO.: FS-18-166
DATE: 2019 11 29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ROCCO PAOLUCCI
– and –
DARLENE PAOLUCCI
REASONS FOR JUDGMENT
Fragomeni J.
Released: November 29, 2019