Mancini v. Mancini 2020 ONSC 5259

COURT FILE NO.: FC-16-846

DATE: 2020-09-02

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jessie Melanie Mancini, Applicant

AND

Eric Mancini, Respondent

BEFORE: The Honourable Mr. Justice Marc Smith

COUNSEL: Frédéric P. Huard, Counsel for the Applicant

Jillian Allen, Counsel for the Respondent

HEARD: August 17, 2020 by video conferencing

endorsement

M. Smith J

1The Respondent brings a Motion for the following:

a. An Order specifying that the parties’ child, Mikayla Mancini, born June 25, 2005 (“Mikayla”), resides in the primary, day-to-day care and custody of the Respondent since September 1, 2018;

b. An Order specifying that the parties’ son, Matteo Mancini, born November 25, 2011 (“Matteo”), resides in the shared custody of the parties on a 50/50 basis;

c. An Order that the Applicant’s income be imputed pursuant to section 19(1) of the Federal Child Support Guidelines;

d. An Order that the previously imputed income of the Respondent be reduced to reflect his actual income;

e. An Order adjusting the quantum of spousal support retroactively and ongoing and that the spousal support arrears owing with the Family Responsibility Office (“FRO”) shall be adjusted to reflect the overpayment from September 1, 2018 onward;

f. An Order adjusting the quantum of child support retroactively and ongoing and that the child support arrears owing with FRO shall be adjusted to reflect the overpayment by the Respondent from September 1, 2018 onward; and

g. An Order that the Applicant pay costs on a full recovery basis.

2In response, the Applicant seeks the following:

a. An Order that the parties were sharing custody of the children on a week on, week off basis from November 11, 2015 to April 1, 2019. As of April 1, 2019, Mikayla’s primary residence is with the Respondent. The Applicant is to have reasonable parenting time with Mikayla as per Mikayla’s wishes. The parties shall continue to share custody of Matteo on a week on, week off basis;

b. An Order compelling the Respondent to comply with paragraphs 5 and 8 of Justice Shelston’s Order dated May 25, 2018 and to pay the full amount owing in arrears to FRO; and

c. An Order that the Respondent pay costs on a full indemnity basis.

3The Applicant takes no issue with the Respondent’s request for an Order that Mikayla resides in the primary, day-to-day care and custody of the Respondent. The Applicant disagrees that this has been the case since September 1, 2018. Rather, she claims that it started on April 1, 2019.

4The Applicant also agrees with the Respondent’s request for an Order specifying that Matteo resides in the shared custody of the parties on a 50/50 basis.

5The Applicant opposes the balance of the Respondent’s Motion.

6For reasons that follow, there shall be an Order to issue that Mikayla’s primary residence is with the Respondent, but the effective date of this change is to be determined at trial. There shall be an Order to issue that Matteo resides in the shared custody of the parties on a 50/50 basis. The Respondent’s motion to vary the imputed income of the parties is dismissed.

BACKGROUND

7The parties have been involved in litigation since April 21, 2016, the date upon which the Applicant commenced her application. There have been several orders issued throughout the years, the most recent being Justice Shelston’s Order dated May 25, 2018. The facts and litigation history are summarized in Justice Shelston’s decision (see Mancini v. Mancini, 2018 ONSC 3282).

8In May 2018, the Respondent was seeking a temporary order for the following:

a. An Order for a retroactive determination that no spousal support is payable by the respondent retroactive to November 1, 2017;

b. An Order setting the appropriate amount of child support retroactive to November 1, 2017 with the Respondent being credited with payments made;

c. An Order for the imputation of income on the part of the Applicant;

d. An Order for the rescission of all support arrears attributed to the Respondent; and

e. An Order that the Applicant pay the Respondent’s costs of this motion.

9At the same motion in May 2018, the Applicant sought her own relief, as follows:

a. An Order that the Respondent pay child support for the two children of the marriage retroactive to November 11, 2015, or, alternatively, retroactive to June 1, 2016;

b. An Order that the Respondent pay his share of the children's special and extraordinary expenses;

c. An Order that the Respondent pay spousal support to the Applicant retroactive to November 11, 2015;

d. An Order imputing an income to the Respondent;

e. An Order that the support be enforced by FRO;

f. An Order compelling the Respondent to comply with paragraph 2 of Justice MacLeod's order dated June 28, 2016 by December 31, 2017; and

g. costs on a full indemnity basis.

10Justice Shelston ordered, amongst other things, the following:

a. The Respondent’s income shall be imputed at $100,000;

b. The Applicant’s income shall be imputed at $20,000 and commencing on January 1, 2018, her income shall be imputed at $28,000;

c. Commencing on August 1, 2017, the Respondent shall pay to the Applicant the sum of $1,110.00 per month as child support. On January 1, 2018, the child support payments shall decrease to $1,019.00 per month; and

d. Commencing on August 1, 2017, the Respondent shall pay to the Applicant the sum of $1,380.00 per month as spousal support. On January 1, 2018, the spousal support payments shall decrease to $1,113.00 per month.

11It is not disputed that the Respondent is in arrears of child and support payments. The Applicant claims that the amount owed is $32,628.73, while the Respondent suggests that it is $20,000.61, as found in the written confirmation from FRO dated March 23, 2020.

POSITION OF THE PARTIES

The Respondent

12The Respondent posits that four issues need to be determined by the Court:

a. Has there been a change of circumstances that would result in a different order?

b. In the affirmative, what is the appropriate quantum?

c. Should the Respondent or Applicant be imputed an income?

d. What is the effective date of the change of circumstances?

13The Respondent submits that since Justice Shelston’s Order, there have been two changes of circumstance. The first is that the Respondent now has financial documents proving his actual income. It is argued that, at the time of the May 2018 motion, the Respondent had recently become an employee on January 1, 2018 of Stone Edge Inc. (the “Company”) and as such, he was unable to provide any financial disclosure, which led to the imputation of income in the amount of $100,000. In support of his position that he earns a salary of $40,800 per year, he relies upon the following evidence:

a. Two affidavits from his mother, Ms. Maria Mancini, his current employer. Ms. Maria Mancini is the current sole Director of the Company. She deposes that her son is a salaried employee, earning $3,400.00 gross per month.

b. The Company’s Corporate tax returns (2017, 2018 and 2019), Statement of Operations and Retained Earnings (2017), Profit & Loss ledger for the period of January 1 – October 10, 2019 and Financial Statements for the year ended December 31, 2018 and 2019 prepared by Michael Brown & Associates CPA;

c. A Financial Statement sworn March 16, 2020, including, amongst other things, a 2019 T4 Statement of Remuneration Paid from the Company setting out his employment income of $38,300.00, Notices of Assessment for the 2017 and 2018 taxation years; an updated Financial Statement sworn on August 10, 2020, which includes a receipt from docbraces for Mikayla and his unsigned 2019 Income Tax and Benefit Return prepared by Michael Brown & Associates CPA.

14The second change relates to the custody arrangements with Mikayla. The Respondent claims that she has been residing with him, full-time, since September 1, 2018.

15The Respondent states that he has now more than fulfilled his financial disclosure obligations, clearly demonstrating his actual income level and that the past financial information is not a good predictor for determining income. His financial situation has forced him to return living with his parents.

16The Respondent argues that there is sufficient evidence for the Court to vary the Applicant’s imputed income of $28,000. The Respondent disputes that the Applicant has earned a total income of $429.00 for 2019. The Respondent relies extensively upon the Applicant’s bank account statement for July 2020, arguing that it shows that she has earned $4,193.00 in income, as evidenced by e-transfers from her clients. Moreover, the Respondent states that the Applicant’s lifestyle suggests that her income is higher than what is reported.

17The Respondent indicates that the Applicant may not have disclosed all her financial records. As an example, although the Applicant claims a mortgage expense, no payment is evidenced in the July 2020 bank statements.

18The Respondent submits that the Applicant’s income should be imputed at the average income for a hairstylist in the amount of $42,900, despite his belief that she earns more.

The Applicant

19The Applicant agrees with the Respondent that there has been a change of circumstance with regards to Mikayla’s custody arrangements. However, as stated earlier, it is submitted that this change took place on April 1, 2019 and not on September 1, 2018. She argues that this discrepancy cannot be reconciled on the materials before the Court.

20The Applicant says that she is in a dire financial situation, on the brink of losing her house. She has taken advantage of the bank’s mortgage deferral program (as of April 2020) and she has received financial assistance from the government (Canada Emergency Response Benefit) in the total amount of $6,000.00.

21The Applicant’s home hairstyling business resumed in June 2020. Prior to that, she had obtained employment at Costco, earning $650.00 but resigned because her daycare expenses were too high ($300.00 - $400.00 per week). In response to the Respondent’s submission that she earned $4,193.00 in income, she says that these amounts included some expenses that were incurred on behalf of the clients (i.e. Skip the Dishes).

22The Applicant argues that the Respondent is attempting to re-litigate the May 2018 Motion and that these issues should be addressed at trial. She submits that the Respondent has not shown that a substantial change in circumstance exists with respect to his imputed income and that based upon the evidentiary record, the Court is unable to make a determination.

THE LAW

23Sections 15.1 and 15.2 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp) govern child and spousal support, respectively. Section 15.2(6) outlines the objectives of spousal support orders.

24Section 17 of the Divorce Act provides that a Court may make an order varying, rescinding or suspending prospectively or retroactively a support order. Prior to making a variation order, the Court must satisfy itself that a change has occurred. The factors to be considered for child and support orders are found at sections 17(4) and 17(4.1), respectively.

25Section 19(1) of the Federal Child Support Guidelines, SOR/97-175 provides that a Court can impute an amount of income to a spouse that it considers appropriate in the circumstances.

26The test for variation of temporary orders was summarized by Justice Chappel in Damaschin-Zamfirescu v. Damaschin-Zamfirescu, (2012) ONSC 6689:

18 The Divorce Act does not specifically address the issue of variation of temporary spousal support orders. Section 17 of the Divorce Act sets out a framework for the variation of support and custody orders, however that section only applies to variation of final spousal support orders made pursuant to section 15.2(1) of the Act.

19 Despite the lack of specific provisions in the Divorce Act regarding variation of temporary orders, the court does have the authority to make changes to temporary spousal support orders in response to developments in the parties' situations and the availability of more fulsome evidence relevant to the spousal support analysis. The power to vary temporary spousal support orders made under the Act derives from the court's inherent jurisdiction to amend interlocutory orders. This ability to vary such orders is critical to ensuring fairness and justice as between the parties, given that temporary orders are often imperfect solutions based on very limited and usually untested information. As Sachs, J. stated in Chaitas v. Christopoulos, temporary corollary relief orders are intended to provide "a reasonably acceptable solution to a difficult problem until trial."

20 The test that applies on a Motion to vary a temporary spousal support order has evolved within the parameters of the general principle that parties in matrimonial proceedings should be encouraged to advance their case to trial as soon as possible. Using this foundational principle, the Ontario Court of Appeal determined in Lipson v. Lipson that proceedings to vary interim support orders should not be encouraged. It held that in order to succeed on a Motion to change a temporary spousal support order, a party must establish that there has been a substantial change in circumstances since the previous temporary order was made. Variation proceedings relating to temporary orders should not become the focus of the parties' litigation. The onus on a party who seeks to vary a temporary spousal support order rather than waiting until trial is a heavy one.

27There is a heavy onus on the party seeking to vary a temporary support order, in that the change of circumstances must be substantial since the previous order was made. A substantial change must also be material, meaning that “had it existed at the time…would likely have resulted in a different order (see Colivas v. Colivas, 2016 ONSC 715).

28“A party cannot rely on his own failure to provide adequate disclosure to argue that the decision based on inadequate disclosure should be given less deference.” (see Colivas v. Colivas, at par. 29).

ANALYSIS

Mikayla’s primary residence

29It is undisputed that since Justice Shelston’s Order, there has been a change of circumstances in respect to Mikayla’s primary residence. It either occurred on September 1, 2018 (the Respondent’s position) or on April 1, 2019 (the Applicant’s position). The previous custodial arrangements provided for shared custody on a 50/50, week on/week off basis, while now, Mikayla resides full-time with the Respondent.

30The Respondent deposes at paragraph 25 of his January 10, 2020 affidavit that “Mikayla has been residing with me since September 2018 and is estranged from Jessie. There was an incident involving Mikayla and a male friend of Jessie’s which ultimately led to the estrangement.” No further evidence has been provided to substantiate this statement or demonstrate that this incident was the cause of the change in the custody arrangements.

31Conversely, the Applicant deposes at paragraph 4 of her March 24, 2020 affidavit that “as of April 1, 2019, Mikayla’s primary residence has been with Eric.” Equally problematic, no further evidence has been provided in support of the Applicant’s contention that this change occurred in April 2019.

32I am satisfied that a change of circumstance has occurred in respect to Mikayla’s primary residence. However, on the evidentiary record before me, I am unable to determine the effective date of this change and as such, a trial will be required on this issue. There is insufficient evidence from both parties for me to conclude at which point in time Mikayla started to reside full-time with her father. The trial judge will be in a better position to assess the events leading up to and including the incident that took place in September 2018 and determine when Mikayla moved into her father’s residence.

The Respondent’s Income

33The Respondent submits that at the May 2018 Motion before Justice Shelston, he was unable to provide financial disclosure to the Court. The reason for this lack of disclosure, he says, relates to the fact that he had recently started working as a salaried employee at the Company (January 2018) and as such, he had no financial information to disclose. The change in circumstance, he argues, is that he now has financial disclosure, as provided by way of his mother’s affidavit with supporting accounting and income tax documentation.

34I accept that at this Motion, the Respondent has filed more financial information than what was before Justice Shelston. Had this evidence been available at the May 2018 Motion, I am not persuaded that the outcome would have been different.

35One must be reminded that Justice Shelston was very suspicious of the Respondent’s evidence. It is true that the lack of financial disclosure was concerning but it went beyond that issue. There was lack of information regarding the Company, the Respondent’s new employment status and several contradictions in the evidence that were left unexplained. To fully appreciate the concerns that Justice Shelston expressed in his decision, I find it important to reproduce some of his concerns, findings and analysis:

20 There is little information provided about Stone Edge Inc. The only documents disclosed by Mr. Ianni are a copy of the incorporation information and the letter dated March 8, 2018. Despite the question of the true ownership of Stone Edge Inc. being a central issue in this proceeding, Mr. Ianni did not file any affidavit material in this proceeding confirming his ownership or providing any information regarding the company. Mr. Ianni simply filed a letter setting out the respondent's income earned as a subcontractor in 2017. There is no evidence as to the nature of the business, the number of employees or why the business was incorporated on February 10, 2017, one month before the respondent ceased the operations of Stone Edge Construction. In submissions, counsel for the respondent indicated that the reason the names are so close is because the respondent believed there was some goodwill in Stone Edge Construction.

21 In the respondent's affidavit dated April 26, 2018, he states that he was a subcontractor for Stone Edge Inc. from approximately May 2017 until December 2017. However, in the letter dated March 8, 2018, Mr. Ianni states that the respondent was paid $30,822.60 gross income in 2017 as subcontract income from February 10, 2017 to December 31, 2017. There is no explanation of the contradiction in the letter and the respondent's affidavit.

22 It is very suspicious that the respondent ceased operating his business in March 2017 and that, one month earlier, his cousin incorporated a company with almost the exact name of the respondent's sole proprietorship.

26 The respondent has not provided any corroborative evidence of this statement. The respondent and his parents have not provided any information as to when money was loaned and in what amounts. There is no evidence as to when and in what amounts the respondent borrowed high interest loans that were co-signed by his parents. The respondent has not provided copies of the loans indicating when the loans were incurred, in what amount and the applicable interest rates. There are no statements from the lenders and no information as to the amounts of the loans paid out when his parents sold their home.

27 All this information should have been presented by the respondent. The respondent stated that he was able to carry all of the expenses based on this indebtedness.

28 I have serious concerns about the lack of transparency of the evidence provided by the respondent regarding his income. The expenses set out by the respondent in his financial statement coupled with the evidence of the applicant raises a serious doubt as to the accuracy of the respondent's declared income for support purposes.

30 I am also concerned about the lack of timely disclosure by the respondent. The respondent filed a financial statement on May 31, 2016. The respondent did not provide the disclosure ordered at the case conference on June 28, 2016 within the prescribed time. As late as July 24, 2017, disclosure still had not been made. The respondent's financial statement sworn November 14, 2017 was effectively blank and of no assistance to the court. Despite the motion being set in February for May 17, 2018, the respondent only filed an updated financial statement on April 27, 2018.

31 Financial disclosure is a basic principle of family law litigation. Both parties must provide updated and timely financial disclosure. A party who does not provide fulsome disclosure does so at his or her own risk. I find that the disclosure or lack of disclosure provided by the respondent raises more questions than providing answers.

32 The burden of proof is on the respondent to provide evidence to allow the court to conclude on a balance of probabilities that he borrowed money to cover the expenses in excess of his declared income. He has failed to do so in the circumstances where the applicant alleges there were no such loans. I draw an adverse inference and find that the respondent has met his evidentiary burden of proof. I therefore conclude that the respondent was able to maintain the monthly expenses based on income in excess of his declared income on his income tax returns.

33 I do not accept the respondent's income as declared on his income tax return to be an accurate reflection of his income for support purposes. The respondent indicates that his net employment income is $3,100 per month and that he worked for Stone Edge Construction until January 1, 2017. However, at paragraph 46 of the respondent's affidavit dated April 26, 2018, he indicated he was forced to close the business in March 2017. In that same affidavit he states that he was a subcontractor for Stone Edge Inc. from May 2017 until December 2017. These contradictions are significant.

34 Further, the respondent has contradicted his income allegedly earned as a subcontractor for Stone Edge Inc. On November 16, 2017, the respondent appeared on the motion without counsel where he agreed to an adjournment on terms such that the respondent would pay a combined child and spousal support order of $3,500 on an imputed income of $100,000 to the respondent and $12,228 to the applicant. Further, the temporary order was without prejudice to the applicant to further seek to impute income to the respondent or to her retroactive claims for child and spousal support or section 7 expenses. The order was not without prejudice to the respondent.

35 In the respondent's affidavit dated April 26, 2018, he states the following at paragraph 15:

15. It was therefore as a result of my financial situation that I was without legal representation at the time of the November 16, 2017 motion before Justice Engelking. As noted above, it was at this motion but I was ordered to pay Jessie $3500 per month in combined child support and spousal support, based on an "imputed income of $100,000"

36 What the respondent failed to address in his affidavit material was that he consented to the order. At the motion, counsel for the respondent acknowledged that the respondent consented to an order imputing an income to him of $100,000 and that he is not paid anything towards that court order. The respondent now seeks to vary the consent order while being in breach of the terms of the same order.

37 I find that the evidence from the respondent is contradictory and simply not credible. I do not believe the respondent's evidence regarding his income.

38 The question for this motion is based on the disclosure or lack of disclosure provided by the respondent and what is a fair and reasonable income to impute to the respondent. There must be an evidentiary basis upon which to impute an income.

39 I impute an income of $100,000 as the respondent's income for the following reasons:

(a) on November 16, 2017, the respondent agreed to an imputed income of $100,000 when he was allegedly earning approximately $30,000 as a subcontractor for Stone Edge Inc. If the respondent was working as a subcontractor as he alleges, why would he agree to an imputed income of $100,000? The respondent operated a successful construction company where he grossed significant revenue during the marriage;

(b) despite the respondent alleging that the income of $100,000 is grossly inappropriate in the circumstances, he has not provided any evidence as to why he agreed to that figure on November 16, 2017. The court cannot guess as to why the respondent agreed. The court must make its decision based on the evidence in the evidentiary record. The only statement made by the respondent is contained in the respondent's affidavit dated April 26, 2018, at paragraph 16, where he states:

16. This imputed annual income of $100,000 is in no way representative of my actual income, as evidenced by my bankruptcy documents. Again, my monthly income is only $3100 a month;

(c) the respondent's spending pattern during the marriage indicates that he made more than his declared income; and

(d) the respondent has been able to cover significant expenses in excess of his income.

36Justice Shelston ordered that the matter be placed on the list of trial sittings for January 2019. For reasons unknown, this has not occurred.

37The Applicant argues that this matter is complex, requiring a trial where viva voce evidence can be presented. She further says that the Company’s ownership is being shifted to the Respondent’s mother, raising serious concerns about the reliability of the evidence. In response, the Respondent says that the financial documents speak for themselves, clearly outlined in black-and-white, that he is salaried employee earning $3,400.00. In sum, the Respondent says, “it is what it is”.

38I disagree with the Respondent. Although the financial and accounting documents filed purport to say that the Respondent is a salaried employee and earning $3400.00 per month, this information was provided by the Respondent’s mother, a non-arm’s length individual. Further, as set out below, not only does the new information filed by the Respondent fail to address many of the concerns raised by Justice Shelston, it has created new ones, leaving me with the inability to accept all the assertions made by the Respondent and his mother vis-à-vis his declared income.

Ownership of the Company

39At the 2018 Motion, little information was provided about the Company and there were questions raised about its true ownership. I find that with this new information, there are more questions than answers.

40In the Respondent’s affidavit dated January 10, 2020 (paragraph 11), he says that the Company is owned by his “extended family”. This statement is not entirely accurate. The Respondent’s mother (not a member of his extended family) is now the sole shareholder. This occurred sometime between 2017 and 2018. According to the 2017 T2 – Corporate Income Tax Return (Federal), Mr. Ianni was listed as the sole shareholder of the company. However, the 2018 – T2 Corporate Income Tax Return (Federal) lists the Respondent’s mother as 100% shareholder.

41The Respondent mother’s affidavits are silent when it comes to the ownership of the Company. She makes no reference to her purchase of the business, the reason for doing so, the details of the transfer, her involvement in the Company or her experience in running a company in the construction industry. Moreover, no explanation has been provided to the Court regarding the original questions posed by Justice Shelston as to the nature of the business and why the Company was incorporated in February 2017. I agree with Justice Shelston that the central issue in these proceedings is the true ownership of the Company.

42Despite this new evidence filed by the Respondent, I am left with more uncertainty and scepticism as to the true ownership of the Company and the Respondent’s involvement.

Subcontractor vs Salaried Employee

43At the 2018 Motion, the Respondent deposed that he was a subcontractor for the Company between May 2017 and December 2017. The Respondent also filed a letter from his then employer (Mr. Ianni) confirming the Respondent’s gross income as a subcontractor in the amount of $30,882.60 between February 10, 2017 to December 31, 2017. Justice Shelston commented that the Respondent provided no explanation of the contradiction between his affidavit and Mr. Ianni’s letter. It remains unanswered.

44To add to the confusion and contradiction, the Respondent’s mother deposes in her January 10, 2020 affidavit the following: “In 2017, Eric was employed as a subcontractor with Stone Edge Inc. and was compensated in the amount of $36,002”. In support of this statement, she attaches the Company’s Statement of Operations and Retained Earnings for the Company, which has a “subcontracting heading”.

45Although I am not asked to deal with retroactive issues in 2017, it is nonetheless a further example of a contradiction. The Respondent’s mother does not explain the discrepancy as between both figures ($30,882.60 and $36,002.00) which leads me to question the reliability of the amounts being presented to the Court.

Income amount

46In 2018, the Respondent submitted before Justice Shelston that his monthly income was $3,100.00. Considering the numerous contradictions that were left unexplained, Justice Shelston did not accept the Respondent’s income as declared on his income tax returns.

47The Respondent now says that his income is $3,400.00 per month. He relies upon his mother’s affidavit evidence, the Company’s financial statements, corporate income tax returns, accounting reports from the Company’s accountant, Michael Brown & Associates and his own personal income tax returns.

48I simply cannot accept the Respondent’s submissions that because the financial evidence is presented in a “black-and-white” fashion, “it is what it is”. The Respondent has filed his Income Tax and Benefit Returns, based on self-reported amounts. The Company’s financial statements are unaudited, meaning that the accountant does not examine the Company’s transactions to ensure that they are accurate. With the contradictions and discrepancies noted and so many questions left unanswered, I do believe to accept, at face value, the Respondent’s evidence as disclosed in the financial records.

49In reviewing the Respondent’s affidavits dated January 10, 2020 and August 10, 2020, nowhere does he explain his reasoning for consenting to an imputed income of $100,000.00 on November 16, 2017. His failure to explain it in May 2018 was concerning to Justice Shelston and is equally a concern to me, over two years later.

50Justice Shelston found that, during the marriage, the Respondent operated a successful construction company where he grossed significant revenue. He did not accept the Respondent’s declared income on his income tax returns. Likewise, I find myself in an identical situation to Justice Shelston where I am unable to accept the Respondent’s evidence that he earns $3,400.00 per month. The Respondent has not persuaded me to conclude otherwise.

51I agree with the Applicant that the Respondent is attempting to re-litigate the 2018 Motion.

52At this juncture, there are too many unanswered questions and contradictions in the evidence. The Respondent’s income is at the crux of this matter and I find that it must be thoroughly explored at a trial, with viva voce evidence, cross-examination and questioning of the parties involved in the Company.

53I find that the Respondent’s financial disclosure is not a substantial or material change of circumstances. In light of the contradictory statements and discrepancies as well as the credibility issues, I do not find that this recent disclosure would have resulted in a different order.

The Applicant’s Income

54At the 2018 Motion, Justice Shelston ordered that, commencing in 2018, the Applicant’s income be imputed at $28,000.00, the minimum wage applicable in Ontario. The following reproduced paragraphs of the decision summarizes Justice Shelston’s analysis:

47 The respondent's position is that the applicant should have an imputed income of $28,000 for the years 2016 going forward based on her declared income in 2016 and any cash income not reported. Further, the respondent submits that the applicant should have an imputed income of the minimum wage in the province of Ontario which is $28,000.

48 At the date of this motion, the respondent is 36 years of age and in good health. She has decided to operate a hair salon out of the basement of her rented townhouse. That is her choice. I find it fair and reasonable to impute an income to her where she is seeking spousal support as well as child support. She has an obligation to become self-sufficient within a reasonable period of time.

49 I do not find it reasonable that she would continue to work out of her basement earning $240 gross a month. She can and should work on a full-time basis. Further, her daughter Mikayla is, according to the parties, able to babysit her younger brother.

50 Considering all the circumstances, I find it is fair and reasonable to impute an income to the applicant in 2017 in the amount of $20,000. I do so considering the applicant moved three times and lived at a trailer in June, July and August 2017.

51 Commencing in 2018, I will impute to her an income of $28,000. This amount is consistent with income earned during the marriage and it is the minimum wage applicable in Ontario.

55The Respondent does not believe that the Applicant’s total income for 2019 is $429.00. It is further submitted, inter alia, that the Applicant has received over $25,000.00 in support payments and the most recent bank statements reveal that she has received over $4,000.00 in individual e-transfer amounts from her clients, as a result of her hairdressing business. Moreover, the Applicant’s lifestyle (i.e. new home in Manotick, new vehicle, etc.) suggests that she is earning significantly more income than reported. For those reasons, the Respondent argues that the Applicant’s income should be imputed at $42,900.00, the average income for a hairstylist in Ontario.

56The Applicant argues that she is on the verge of losing her home and that she has opted for the mortgage deferral program offered by the bank, as of April 2020. She also attempted to work at Costco, earning $15.00 per hour, but resigned as all the monies earned only covered the day care expenses. The Applicant has restarted her hair salon business in June 2020 and the amounts received from her clients are not entirely income as it includes reimbursement of expenses (i.e. Skip the Dishes) that she incurred on their behalf.

57The Respondent is asking this Court to vary Justice Shelston’s temporary order by increasing the Applicant’s imputed income by approximately $15,000.00 on the belief that she is earning more than disclosed. This belief is based upon the following evidence: she purchased a home valued at $400,000.00, she has a 2019 Nissan Rogue valued at $33,720.00, her monthly income is significantly lower than her expenses, and more recently, her July 2020 monthly bank statements reveal income of $4,193.00 in comparison to what is found in the Applicant’s Financial Statement sworn March 24, 2020, listing her monthly income as $727.92

58I accept the Applicant’s evidence and her explanation regarding the contentions raised by the Respondent. She has made attempts at working (i.e. Costco) but resigned because it was economically sound to do so (income earned was less than the day care expenses). She has been unable to pay her current mortgage and has deferred payment, which supports her submission that no mortgage payments are found in the bank statements. Her current vehicle is a downgrade from her previous truck, and she has suspended payments as a result of her financial situation. She has only received three CERB (Canada Emergency Response Benefit) payments and she is currently working on rebuilding her home hairstyling business.

59The Respondent has not convinced me that the Applicant’s lifestyle is more congruent with someone earning significantly more than what has been presented to this Court. The Applicant has been able to maintain her current lifestyle by virtue of the deferral of payments and the receipt of CERB. I do not find that it is a situation where the lifestyle does not match the income.

60Therefore, considering the evidence before me, as well as the principles set out in section 19(1) of the Federal Child Support Guidelines, I decline the Respondent’s request to increase the Applicant’s imputed income. The Respondent has failed to meet the onus to prove otherwise. I find that Justice Shelston’s order is fair and reasonable in the circumstances and based upon the evidentiary record before me, there is no reason to disturb his order.

61The Respondent must pay the arrears of child and spousal support based on the imputed incomes ordered by Justice Shelston. However, those arrears should be reduced to take into account that Mikayla’s primary residence has changed. There shall be an order to adjust the amount of child support, as of April 1, 2019, the Respondent’s worst-case scenario at trial. This order is subject to further adjustments that may be made a trial, based on the finding of the effective date of Mikayla’s move to the Respondent’s residence. If the parties are unable to agree on the quantum of the arrears, a further appearance before me may be scheduled on this specific issue.

62This matter needs to proceed to trial as quickly as possible. Justice Shelston had ordered that it be placed on the trial sittings in 2019. Counsel for the Applicant and Respondent must take the appropriate steps to move this matter along to a trial as quickly as possible.

63In terms of costs, if the parties are unable to agree on the amount, the Applicant shall serve and file written submissions of no more than three pages, exclusive of her Bill of Costs and Offers to Settle, within 30 days of the date of this Endorsement. The Respondent shall then serve and file written submissions of no more than three pages, exclusive of his Bill of Costs and Offers to Settle, within 10 days thereafter. If required, the Applicant can file a brief reply (1 page), within 5 days of the receipt of the Respondent’s submissions.

M. Smith J