­­­­­­ CITATION : Lapp v. Dunn, 2020 ONSC 1720

Court File and Parties

COURT FILE NO.: FC-11-1412-1 DATE: March 23, 2020

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN : Jennifer Beatrice Lapp Applicant/Responding party COUNSEL: Gregory A. Ste. Marie for Applicant

- and -

Jefferey D. Dunn Responding/Moving party COUNSEL: Aaron MacKenzie for Respondent

HEARD : March 10, 2020

JUDGMENT

JUSTICE SALLY GOMERY

Endorsement

1 . On October 13, 2011, following an uncontested trial, Jefferey Dunn was ordered to pay $415 each month to Jennifer Lapp as child support for their daughter. Mr. Dunn says he was never aware of the order, and so never made any payments. As of May 1st, 2018, he owed $32,785 in child support.

2 . In this motion, Mr. Dunn asks that the order be reduced to $350 monthly to reflect his current level of annual income of just over $39,000, and that child support arrears be reduced to $8000. Mr. Dunn contends that he has experienced a material change of circumstances since the October 2011 order was made. He further argues that he should not have to pay the full arrears because Ms. Lapp failed to take any steps to enforce the order for over six years.

3 . For the reasons that follow, I am dismissing Mr. Dunn’s motion.

4 . Section 37(2.1) of the Family Law Act, R.S.O. 1990, c. F.3 provides that, if the court is satisfied that there has been a change in circumstances within the meaning of the Federal Child Support Guidelines, SOR/97-175, it may vary the monthly support payable and reduce or eliminate any arrears of support that would otherwise have to be paid. A drop in the payor’s income, which would presumptively result in a lower monthly support payment, may constitute a change in circumstances; Gray v. Rizzi, 2016 ONCA 152, at para. 39.

5 . In his October 13, 2011 order requiring Mr. Dunn to pay child support, Justice Kane imputed Mr. Dunn with an annual income of $45,000. The amount of $415 that Mr. Dunn was ordered to pay each month was the amount of monthly support for one child in the Guidelines’ tables, based on this imputed income.

6 . Justice Kane’s endorsement does not state what specific evidence he took into account in imputing an annual income of $45,000 to Mr. Dunn. The endorsement simply states that Ms. Lapp testified, and Mr. Dunn was not in attendance. Neither party has filed a transcript of the hearing.

7 . In her November 26, 2018, Ms. Lapp states that, prior to Mr. Dunn’s employment at the pawn shop, he worked full-time as a mason. She alleges that he also sold fentanyl and marijuana, and that he continues even now to obtain an income from drug sales. In her March 3, 2020 affidavit, she repeats these allegations, which she says were the subject of her evidence at the 2011 trial. She asserts that Mr. Dunn’s tax returns never indicated his actual income as he consistently earned money “under the table”. She therefore takes the position that the annual income of $45,000 imputed by Justice Kane was and remains a reasonable determination of his actual income.

8 . In his sworn change of information form dated August 21, 2018, Mr. Dunn states that his employment has changed from year to year and he has earned “significantly less” than the annual income of $45,000 imputed to him. According to his financial statement sworn the same day, he was employed by Howard’s Pawn Shop in Ottawa in 2018 and this was his only source of income. Through his affidavit of October 31, 2019, Mr. Dunn provides notices of assessment from 2009 forward that state that his income for tax purposes – typically referred to as “line 150 income” - varied from a low of $7239 in 2011 to a high of $39,260 in 2017 and 2018.

9 . Nowhere does Mr. Dunn explain when he began working at the pawn shop or what he was doing, prior to getting this job, to support himself. He provides no information about any past employment. He does not however deny Ms. Lapp’s allegations in her November 2018 affidavit that he earned income by working as a mason and by selling drugs.

10 . I accept Ms. Lapp’s evidence about Mr. Dunn’s income-generating activities. Her allegations about his sources of revenue from his masonry business and drug sales are not directly contradicted. I cannot conclude, in these circumstances, that Mr. Dunn has accurately reported his income to the tax authorities.

11 . As a result, I do not accept that the income Justice Kane imputed to him in the October 2011 order was or is inaccurate.

12 . This is not the first time that a parent who was ordered to pay child support on the basis of imputed income has later sought to vary the order based on line 150 income. In Trang v. Trang, 2013 ONSC 1980, Justice Pazaratz considered a motion like that of Mr. Dunn. In Trang, as here, the moving party failed to make any financial disclosure prior to the trial that resulted in the order and failed to attend the trial. Justice Pazaratz’s comments at paras. 51 and 52 about how to approach a motion like this are directly relevant to Mr. Dunn’s motion:

When a court imputes income, that’s a determination of a fact. It’s not an estimate. It’s not a guess. It’s not a provisional order awaiting better disclosure, or further review. It’s a determination that the court had to calculate a number, because it didn’t feel it was appropriate to rely on – or wait for -- representations from the payor.

A party who argues that an imputed income level is no longer appropriate must go beyond establishing their subsequent “declared” income. They must address why income had to be imputed in the first place. They must present evidence of changed circumstances which establish that either:

a. It is no longer necessary or appropriate to impute income . The payor’s representations as to income should now be accepted, even if they weren’t accepted before.

Or,

b. Even if income should still be imputed, changed circumstances suggest a different amount is more appropriate.

13 . Mr. Dunn has not proven, or even explained, why it is “no longer necessary or appropriate to impute income” to him. He simply asserts that the court should accept his line 150 income. I agree with Pazaratz J. that this is not enough:

If “declared income” automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place. It might even be a disincentive for payors to participate in the initial court process. They could simply ignore support Applications – as they often do. They could wait to see if the court imputes income, and how much. If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong. (Trang, para. 53)

14 . I further agree with Pazaratz J.’s conclusion that, if a payor fails to appeal a support order based on imputed income, he faces a presumption, on any later motion to change, that the order was correct. He wrote at paras. 59 and 60 that:

If an aggrieved party feels income was wrongly imputed, they can take timely steps to correct the original determination. They can appeal. They can bring a motion to set aside the order based on mistake or misrepresentation.

But if a payor proceeds by way of motion to change, they must face the presumption that the original order was correct – and the original imputation of income was correct. If they want to rely on their declared income, they must establish why this time their representations should be accepted by the court.

15 . In Gray v. Rizzi, at para. 34, the Court of Appeal endorsed the decision in Trang v. Trang, writing that “[t]o allow a party who ignores his or her financial disclosure obligations to later satisfy the requirement and argue that the late disclosure constitutes a material change in circumstances would eviscerate the financial disclosure regime”.

16 . Mr. Dunn argues that this reasoning does not apply to him, because he was not aware of the October 2011 order or his child support obligation until April 30, 2018, when he received a letter from the Family Responsibility Office (FRO) informing him of the arrears. On the evidence, however, I conclude that Mr. Dunn either knew about the order or wilfully took steps not to become aware of its contents.

17 . The parties separated in 2010, when their daughter was six years old. Mr. Dunn paid $4500 in child support that year.

18 . In June 2011, after Mr. Dunn had ceased to pay support voluntarily, Ms. Lapp applied for a divorce and ancillary relief. In her application, she sought custody, child support, spousal support, equalization of family property and a restraining order. On or around June 22, 2011, Mr. Dunn signed partial minutes of settlement that resolved the property issues. In paragraph 4 of the agreement, the parties reserved all other issues in dispute.

19 . Both parties were represented by lawyers in 2010 and 2011. Ms. Lapp retained Mr. Ste. Marie, who continues to represent her today. According to Ms. Lapp’s uncontradicted affidavit of March 3, 2020, Mr. Dunn was represented by two firms over the course of the proceedings: first by Lorna Baldwin, from September to November 2010, then by two lawyers at Sicotte Guilbault LLP in September 2011, when his interest in the family home was transferred to Ms. Lapp. Mr. Dunn was apparently not represented when he signed the partial minutes of settlement, but he had access to legal advice before and after he did so.

20 . Mr. Dunn accordingly knew that he was legally required to contribute to the financial support of his daughter, and that Ms. Lapp expected him to pay support. The record also shows that Mr. Dunn was notified of the October 13, 2011 hearing, something that he does not in fact deny. He simply chose not to participate.

21 . After the trial, the record further shows that Mr. Dunn was provided with a copy of Kane J.’s support order. Ms. Lapp’s lawyer sent a letter to him on October 25, 2011, attaching it. The letter was sent to Mr. Dunn at the same address where Ms. Lapp’s application had been served on him, which is also the same address used on the partial minutes of settlement he signed in June 2011.

22 . In his October 31, 2019 affidavit, Mr. Dunn does not deny that he received this letter. He likewise does not offer any explanation for why he would not have received it. He does not claim, for example, that he moved between June and October 2011. He simply makes the bald assertion that he was unaware of the order. This is not persuasive.

23 . At the motion hearing, Mr. Dunn argued that his reaction to the FRO letter in April 2018 shows that he was unaware of his support obligation. After he got the letter, he began making monthly payments of $415 as of May 2018. He asks the court to infer, based on this, that he did not know about the October 11, 2011 order earlier, and that he would have taken steps to challenge it years ago, if only he had known about it.

24 . The problem with this argument is two-fold. First, Mr. Dunn has not effectively rebutted the evidence that he was sent and received a copy of the order in October 2011. Second, a sudden realization that he owed child support is not the only thing that might have prompted Mr. Dunn to start paying child support in May 2018. When he received the letter from FRO stating that he owed over $32,000 in arrears, he must have realized that FRO now knew where he lived, and that it could take steps to garnish a portion of his employment income or otherwise enforce the support obligation.

25 . In her affidavit of November 28, 2018, Ms. Lapp says that Mr. Dunn has changed addresses 15 times or more since the court order, living sometimes in Ontario and sometimes in Quebec. She did not know where he worked until two or three years ago, when she found out he was employed at Howard’s Pawn Shop. When he was served with the notice from FRO in April 2018, she says that he swore at her and threatened to take unspecified actions if she did not withdraw the enforcement proceedings immediately.

26 . Mr. Dunn has not denied any of these allegations. He takes the position, however, that it is very unfair that he should have to pay child support arrears, given Ms. Lapp’s failure to take steps to enforce the October 2011 order prior to 2018. He advances theories about her motives and contends that he should not be “punished” by being required to pay the full amount owed.

27 . I would point out, first, that Ms. Lapp did take steps to enforce the order. In late October 2011, her lawyer sent Mr. Dunn a copy of the order and a letter explaining that the money that Ms. Lapp owed to him for his share of the family home would be offset by arrears in support that had already accumulated, as well as any future payments that Mr. Dunn did not make.

28 . Second, Ms. Lapp has explained why she did not take any further steps to enforce the order. Mr. Dunn has been an irregular, destabilizing presence in Ms. Lapp’s life and their daughter’s life. Every time she raised the issue of child support, Mr. Dunn swore at her. Ms. Lapp is frightened of him. He has a history of violent behaviour, some of it connected to drug abuse. A restraining order was issued against him in October 2011. The police have been involved on a couple of occasions.

29 . I accept Ms. Lapp’s explanation for why she made no further attempts to legally enforce the support obligation after October 2011. I find that, until recently, she was not sure where Mr. Dunn lived or the precise sources of his income. It was reasonable, in these circumstances, for her not to make further efforts to try to enforce the order.

30 . Despite Mr. Dunn’s erratic behaviour, his lack of financial support and his poor parenting, there is no credible evidence that Ms. Lapp ever denied Mr. Dunn time with their daughter when he showed up and asked for it. She instead focussed on obtaining professional skills for herself, getting a better job, obtaining counselling for her daughter and saving money for her post-secondary education. In short, Ms. Lapp did her best for her daughter in very difficult circumstances.

31 . But, in any event, the onus is not on Ms. Lapp to show why the existing child support order should be enforced. The onus is on Mr. Dunn to prove that there has been a change in material circumstances that could trigger a variation of the order and a reduction of the arrears. He has not done so.

32 . In light of this, I do not need to consider the factors relevant to a potential reduction of arrears. The threshold requirement for such consideration is not met.

33 . Mr. Dunn’s motion to vary is dismissed. I agree with the terms of the draft order proposed by Ms. Lapp, which would require him to pay $250 each month on account of arrears, as well as the existing support obligation of $415 each month, subject to two modifications.

34 . First, under the terms of the proposed draft order, Ms. Lapp would forego any claim for s. 7 expenses. I do not think it is appropriate for Ms. Lapp to unequivocally waive this right, which is for her daughter’s benefit. Mr. Dunn has not provided any consideration for this waiver, and it is impossible to assess what special and extraordinary expenses may be required in the future.

35 . Second, Mr. Dunn’s parenting time should be subject not only to his daughter’s schedule but also to her discretion. She is now sixteen years old, old enough to decide whether she wishes to have regular contact with her father.

36 . I make no order as to costs since Ms. Lapp has not sought them.

Justice Sally Gomery Released: March 23, 2020