COURT FILE NO.: FC988/19

DATE: September 30, 2020

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Brandy Lynne Paltrinieri

Applicant

• and -

Fabio Paltrinieri

Respondent

COUNSEL: Carolyn J. Lloyd for the applicant Fabio Paltrinieri in person

HEARD: December 13, 20, 2019; January 31 and February 28, 2020; written submissions due April 20, 2020

MITROW J.

A. INTRODUCTION AND BRIEF LITIGATION HISTORY

[1] These reasons for judgment deal with the only remaining issue, which is child support, including whether retroactive child support should be ordered and, if so, the quantification of child support arrears. This is a divorce proceeding. The claim for divorce is severed and will proceed pursuant to r. 36 of the Family Law Rules, O. Reg. 114/99 as provided in the order below.

[2] The application was issued on August 27, 2020. The applicant's claims included custody, child support, spousal support, equalization of net family property and an order vesting the matrimonial home in the applicant's sole name.

[3] The respondent was served personally on September 7, 2019. He failed to file an answer and the consequences of r. 10(5) apply to the respondent. The respondent also has failed to comply with orders dated December 13, 2019 and January 31, 2020 that included an obligation to serve and file a form 13.1 financial statement and various financial disclosure.

[4] The respondent did serve some of the financial disclosure ordered but failed to file anything in the continuing record. Consequently, pursuant to an order made February 28, 2020, the applicant was put to the expense of filing with the court, in a separate volume of the continuing record, an affidavit of the applicant appending as exhibits all of the financial disclosure that was actually received. This did not include the respondent's unsworn financial statement.

[5] Notably, the respondent's financial disclosure failed to include a sworn form 13.1 financial statement and financial statements for businesses owned or operated by the respondent.

[6] Given the respondent's failure to file an answer, the applicant was entitled to request a hearing for an undefended trial and this was scheduled to proceed on December 13, 2019. Pursuant to the Rules, the respondent was not entitled to receive notice of the hearing. On that date, a final order was made for custody of the two youngest children pursuant to the Children's Law Reform Act, R.S.O. 1990, c. C.12. The other two children were not included in the custody order as they were age 18 or over. An order also was made on that day ordering the respondent to pay interim child support in the amount of $1,181 per month for the three youngest children based on an imputed income of $59,500 commencing September 1, 2019.

[7] The undefended trial was adjourned to December 20, 2019. At that time, orders were made that included an order vesting the matrimonial home in the name of the applicant and ordering the respondent to pay forthwith a partial equalization payment in the amount of $112,677. The balance of any issues relating to the equalization of the parties' net family properties was adjourned to January 31, 2020.

[8] Written reasons were provided for the order made on December 20, 2019. Those reasons included the finding that the respondent's equity in the matrimonial home was approximately $113,836, which was very close to the partial equalization payment that was ordered. The effect of the order was that the partial equalization payment was satisfied by the vesting order.

[9] The respondent did not appear on either December 13 or December 20, 2019.

[10] On January 31, 2020, the respondent did appear. He had provided some financial disclosure to the applicant's counsel, but he had not taken any steps to seek leave for an extension of time to file an answer. The balance of the undefended trial was adjourned to February 28, 2020 and the respondent was ordered to provide the balance of his financial disclosure by February 14, 2020.

[11] On February 28, 2020, the respondent did appear. His financial disclosure remained incomplete.

[12] It was the applicant's submission that day that she was prepared to conclude the issue of equalization of net family properties by accepting the partial equalization payment ordered by the court. The applicant had been claiming pre-judgment interest, together with an unequal division of net family property. Further, the applicant was content that the issues of spousal support and claims relating to post-separation adjustments be withdrawn.

[13] As a result, the issue of child support remained the sole issue to be determined on a final basis.

[14] On February 28, 2020, an order was made requiring written submissions, and the order provided filing deadlines for same. Notwithstanding that the respondent was not entitled to participate in the proceeding, the order did permit the respondent the limited right to participate in the remaining issue of child support by serving and filing written argument and a proposed draft order.

[15] Subsequently, the COVID-19 pandemic intervened and normal court operations ceased. Eventually, I did receive the applicant's written submissions, together with a copy of the affidavit ordered to be filed by the applicant containing the respondent's financial disclosure. Although the respondent failed to file his written submissions, he did forward same via email to the applicant's counsel and the emails were included in the applicant's reply submissions that were due April 20, 2020. Again the applicant was tasked with the burden of providing the court with the respondent's material – this time being his written submissions – because of the respondent's failure to do so.

[16] The evidence in this undefended trial consisted of affidavits from the applicant, including financial statements filed by the applicant, and the applicant's oral evidence on December 20, 2020, which dealt primarily with the equalization payment and vesting order issues.

B. ORDERS SOUGHT BY THE PARTIES

[17] I would note that, at the commencement of the undefended hearing, that the applicant's current counsel, Ms. Lloyd, appeared as agent for the applicant's previous counsel of record and that it was only later that Ms. Lloyd assumed carriage of this matter and became counsel of record.

[18] The applicant, in her draft order, seeks orders in relation to child support that include the following:

(a) requiring the respondent to pay ongoing child support of $1,181 per month for the three youngest children commencing March 1, 2020 based on an imputed income of $59,500;

(b) requiring the respondent to pay retroactive child support pursuant to the tables in the amount of $52,328; and

(c) retroactive s. 7 expenses in the amount of $4,318.

[19] The respondent did not submit a proposed draft order. He made no specific submissions as to retroactive child support. The respondent refers to having a $38,000-per-year job. He submits, in his email dated April 9, 2020 forwarded to the applicant's counsel, that he has been laid off from work due to COVID-19.

C. RELEVANT BACKGROUND

[20] The parties were married in 1997 and separated on October 19, 2016. The separation occurred as a result of domestic violence charges laid against the respondent. It is not clear on the evidence as to how those charges were dealt with on a final basis.

[21] There are four children of the marriage, namely: Joshua, born December 2, 1997; Luca, born May 1, 2000; Dante, born March 4, 2002; and Isabella, born March 23, 2003.

[22] The applicant deposes in her most recent evidence (her affidavit sworn February 24, 2020) that Luca was attending his first year at Fanshawe College, Dante was in grade 12 and Isabella was in grade 11.

[23] The eldest child, Joshua, was in his fourth year at York University but he returned home in early February 2020 as he had not been able to obtain financial assistance from OSAP. The evidence was that Joshua planned to find employment and "hopefully" would return to York University for a summer semester in May 2020.

[24] The evidence at trial was that the applicant and all four children continued to reside at the matrimonial home.

[25] At the time that the parties separated, the respondent was employed at General Dynamics Land Systems ("GDLS") as a forklift operator. The applicant had estimated the respondent's base salary to be in the range of $59,500. The applicant was not aware as to what income the respondent may have received from bonuses, performance pay or overtime.

[26] According to the applicant, the respondent ceased being employed at GDLS in or about the month of April 2017. However, the applicant had no knowledge as to the reasons for the respondent terminating his employment at GDLS, nor was the applicant aware as to whether the respondent received any payment as a result of terminating his employment.

[27] Soon after the respondent's employment at GDLS had terminated, the respondent moved from London to Kitchener with his girlfriend.

[28] It was the applicant's evidence that the respondent paid no child support or spousal support subsequent to separation. The applicant's last affidavit indicated that she had received no child support pursuant to the interim order dated December 13, 2019.

[29] While in Kitchener, the respondent started a sticker company called "Sticker Canada," which apparently had its own website. The respondent and his girlfriend then moved to Innisfil, Ontario, apparently as a result of a job transfer for the respondent's girlfriend by her employer, "Liaison College," which is described by the applicant as being a culinary college.

[30] The applicant subsequently received information from two of her children that the applicant and his girlfriend opened their own franchise of Liaison College and that the respondent had given two of his children a tour of the facility.

[31] While the foregoing information received by the applicant from her children must be regarded as inadmissible hearsay evidence, the applicant did locate an advertisement, appended as an exhibit to her affidavit, which was on the website of the County of Simcoe Economic Development Office and which showed that the respondent was renting out kitchen facilities at the premises of Liaison College in Barrie, Ontario. The advertisement that is appended as an exhibit is titled "Simcoe County Inspected Kitchen for Rent Directory."

[32] The foregoing evidence demonstrates that there is reason to believe that the respondent had an involvement in several businesses. I draw an adverse inference against the respondent for his failure to comply with the orders requiring the respondent to provide statements for all businesses owned or operated by the respondent for the period commencing January 1, 2017.

[33] The applicant was informed by one of the children in December 2019 that the respondent was working at Cabelas Retail Canada Inc. in Barrie. The respondent did provide pay statements for Cabelas Retail Canada Inc. for the pay periods ending December 14, 2019 through to January 25, 2020.

[34] From the limited paystubs provided by the respondent, he appears to be paid every two weeks and his hours appear to vary. His hourly rate is shown at $19 and $28 for overtime.

[35] At the time of the undefended trial, the applicant was working on a fulltime basis and she estimated her income to be in the range of $41,000.

D. IMPUTING INCOME TO THE RESPONDENT

[36] The issue of income imputation relates primarily, as discussed below, to the quantum of income to be used for ongoing child support.

[37] For the three years prior to the termination of his employment at GDLS, the respondent's income tax disclosure shows his "T4 Income" was as follows:

2014 2015 2016

$64,095 $65,202 $67,102

[38] It is apparent that the applicant's estimate of $59,500 as a baseline was conservative. This evidence indicates the income earning capacity of the respondent leading up to the time that his employment ceased at GDLS.

[39] Section 19(1)(a) of the Ontario Child Support Guidelines, O. Reg. 391/97 is relevant in considering whether to impute income:

Imputing income

19. (1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

[40] The word "intentionally" means a voluntary act and a parent is intentionally underemployed if that parent chooses to earn less than he or she is capable of earning; there is no requirement that bad faith must be demonstrated to find that a parent is intentionally underemployed: Drygala v. Pauli, 2002 CanLII 41868 (ON CA), 2002 CarswellOnt 3228 (Ont. C.A.), at paras. 28, 29. In Lavie v. Lavie, 2018 ONCA 10, the Court of Appeal for Ontario, citing Drygala v. Pauli, supra, stated, in part, at para. 26:

26 There is no requirement of bad faith or intention to evade support obligations inherent in intentional underemployment: Drygala v. Pauli, at paras. 24-37. The reasons for underemployment are irrelevant. If a parent is earning less than she or he could be, he or she is intentionally underemployed. …

[41] I find on the evidentiary record that the respondent is intentionally underemployed and that it is appropriate to use $59,500 as imputed income, except where the respondent's actual income as disclosed has exceeded that amount (with one minor exception as discussed below).

[42] While the respondent has made a submission that he has been laid off due to COVID-19, I take into account that the respondent has filed no sworn financial statement as ordered, that he has failed to provide a financial statement for business activities that he has been involved with and that there is no evidence from the respondent. Further, the imputed amount of $59,500 is less than the respondent was earning for the period 2014 to 2016 at GDLS. Finally, there is no evidence from the respondent as to the length of his layoff and as to any income that the respondent might be receiving as a result of his COVID-19 layoff.

E. RETROACTIVE CHILD SUPPORT

[43] In S.(D.B.) v. G.(S.R.), 2006 SCC 37 ("DBS"), the factors in relation to retroactive child support were discussed.

[44] The first factor relates to a reasonable excuse as to why support was not sought earlier. In the present case, there was evidence that the applicant had entered into discussions through counsel dealing with issues arising as a result of the parties' separation. However, it was the applicant's evidence that the respondent refused to provide financial disclosure.

[45] I find that it was reasonable for the applicant to attempt to engage in negotiations prior to issuing her application. Indeed, the applicant was forced to commence a legal proceeding due to the respondent's failure to provide financial disclosure.

[46] The second factor relates to the conduct of the payor parent.

[47] Although the respondent has not paid child support, the applicant does disclose that the respondent did continue to make the mortgage payments on the matrimonial home until June 2017. It was after the respondent chose to stop making the monthly mortgage payments that the applicant was subjected to increased financial pressure.

[48] I find that the respondent's conduct in refusing to pay child support, at least starting July 2017 after he ceased making the mortgage payments, and his refusal to provide a sworn financial statement, constitute blameworthy conduct.

[49] The third factor requires a consideration of the circumstances of the children. I find that the children suffered financially. During most of the years following separation, the applicant had minimal to low income. It is the applicant's evidence that the eldest child withdrew from university due to financial pressures, as discussed earlier.

[50] The fourth factor relates to hardship occasioned by a retroactive award. A guiding principle is that courts should attempt to structure a retroactive award to minimize hardship. However, hardship becomes much less of a concern where it is the product of a payor's blameworthy conduct: DBS, at para. 116.

[51] I find, weighing all the factors, that this is an appropriate case for a retroactive child support award.

[52] The discussion in DBS, particularly at paras. 120-122 and 125, confirms that generally retroactive child support will be payable commencing the date that "effective notice" was given, meaning any indication by the recipient parent that child support should be paid or, if child support is being paid, that it should be renegotiated. However, it would usually be inappropriate to award retroactive child support to a date that is more than three years before formal notice was given.

[53] In the present case, I find that the effective notice occurred in early 2017. However, the fact that the respondent had been making the mortgage payments up to June 2017 is a factor that should be considered. The applicant deposes that she started making the mortgage payments July 2017. The applicant's financial statement sworn August 19, 2019, filed at the time of the application, discloses that the mortgage payments were $1,075.56 per month.

[54] I find, in relation to the table amount of child support, that the date of retroactivity should be July 1, 2017.

[55] However, in relation to the retroactive s. 7 child support payment, I find that the retroactive date should be the date that the expense was incurred, as discussed below.

F. CALCULATION OF RETROACTIVE CHILD SUPPORT – TABLE AMOUNT

(i) 2017

[56] Some of the applicant's calculations for retroactive child support were based on four children. In her first affidavit sworn December 10, 2019 (paragraph 12), the applicant deposed that she was seeking child support as of June 1, 2017 for the three youngest children. Regarding the eldest child, the applicant deposed that he was largely self-supporting while attending university.

[57] For 2017, the respondent provided a tax return showing his line 150 income totaling $98,004. Of that amount, $48,111 was employment income, $39,032 was RRSP income and the balance was employment insurance income.

[58] On December 13, 2018, Canada Revenue Agency issued a notice of reassessment to the respondent, assessing his line 150 income for 2017 at $77,942. It is unclear why there is a discrepancy between the respondent's line 150 income shown in the notice of reassessment, as compared with the tax return. However, I am prepared to accept and rely on the notice of reassessment dated December 13, 2018.

[59] Child support for 2017 should be based on an income of $77,942. The child support payable for the period July 1 to November 1, 2017 inclusive for three children is $1,497 per month x 5 months = $7,485. New tables came into effect late November 2017 and, for December 1, 2017, the child support is $1,545. Therefore, the child support payable for 2017 starting July 1 is $7,485 + $1,545 = $9,030.

(ii) 2018

[60] For 2018, the respondent's notice of assessment indicates line 150 income of $54,378. The respondent's tax return shows that his 2018 income was comprised mostly of RRSP income in the amount of $41,378, with the balance being employment income insurance and employment income. For 2018, I use $54,378 as the respondent's income, given that this actual amount is close to the imputed amount. The table amount for three children is $1,068 per month.

[61] The child support owing for 2018 for three children is $1,068 x 12 = $12,816.

(iii) 2019 (January to August)

[62] Given that the application was issued in late August 2019, it is reasonable to regard the "retroactive" portion of the child support as the child support payable to the end of August 2019.

[63] There was minimal income disclosure for the respondent for 2019. Using the imputed income of $59,500, the table amount is $1,181 per month for three children. The total owing is 8 months x $1,181 = $9,448.

(iv) Conclusion – Table Amount of Retroactive Child Support

[64] The total table amount of retroactive child support arrears is $9,030 (2017) + $12,816 (2018) + $9,448 (2019) = $31,294 for the period ending August 2019.

[65] I find that it is appropriate, considering all the factors in DBS, that the payment of child support arrears should be structured as set out in the order below.

G. RETROACTIVE S. 7 EXPENSES

[66] The applicant attaches receipts for February and April 2017 for dental treatment for the child, Dante, totaling $1,063. The applicant's evidence is that she paid that amount and then submitted the claim through the respondent's dental plan and that the respondent was reimbursed that amount but kept the money and failed to reimburse the applicant.

[67] I allow the amount of $1,063 as a retroactive s. 7 child support claim.

[68] The applicant's evidence is that in January 2019 she borrowed $5,000 from her mother for Joshua's post-secondary expenses. However, no receipts are attached for the expenses. Joshua's tax return for that year was not produced. This also contradicts the applicant's evidence, mentioned earlier, that Joshua was "largely self-supporting" while at York university. Given the insufficiency of evidence, the applicant's claim for a portion of the $5,000 as a s. 7 expense is denied.

H. ONGOING CHILD SUPPORT

[69] Commencing September 1, 2019, which is shortly after the application was issued, the ongoing child support should be consistent with the interim order in the amount of $1,181 per month for the three youngest children. However, there was no evidence as to whether Dante intended to pursue post-secondary education. Accordingly, the table amount of child support for Dante should cease effective June 30, 2020 when he would have completed grade 12 high school.

[70] In relation to the child, Luca, he was only in his first year at Fanshawe College and there was no suggestion that he was not going to continue at Fanshawe in September 2020. Therefore, it is appropriate for the table amount of child support for him to continue as the evidence is that he is residing at home. The child, Isabella, will still be in high school for the school year commencing September 2020.

[71] Accordingly, effective July 1, 2020, the child support should be reduced to $907 per month for the children, Luca and Isabella, based on an imputed income of $59,500.

[72] However, the order below is being made without prejudice to the applicant's right to commence a motion to change to obtain ongoing child support for Joshua and/or Dante.

[73] To the extent that the respondent has failed to make any payments of child support for "ongoing child support" starting September 1, 2019, the full amount of those arrears as they accrue can be enforced by the Director.

[74] The applicant's draft order requested ongoing child support commencing March 1, 2020 in relation to s. 7 expenses based proportionally on the parties' incomes. However, there are no specific ongoing s. 7 expenses that were discussed in the evidence or quantified in the evidence.

[75] I am not prepared to make a "general" order for ongoing s. 7 expenses, whatever they may be. For example, in relation to post-secondary expenses, it is generally not the case that those expenses are shared proportionally between the parents, but rather, those expenses are shared between the child and proportionally between the parents. This would require evidence as to the amount of post-secondary expense, the income and means of the child, whether the child has received any bursaries or scholarships and whether the child has received any OSAP assistance.

[76] If specific s. 7 expenses are incurred in the future, then the applicant will need to assess whether she wishes to commence a motion to change to request the respondent to contribute to those expenses.

[77] In relation to Luca, while it is known that he resides at home and attends Fanshawe College, there is no evidence regarding the amount of his tuition and other education expenses; nor is there evidence regarding Luca's income and ability to contribute to his education expenses.

I. OTHER ORDERS RELATING TO CHILD SUPPORT

[78] The applicant has requested a number of standard orders, most of which are included in the order below.

[79] However, the request for the respondent to obtain life insurance in the amount of $200,000 if he has no insurance, is denied. There is no evidence as to the cost of such a plan, nor is there any evidence as to whether the respondent has any health issues, which may either preclude him from obtaining life insurance or make life insurance unaffordable.

J. ORDER

[80] When the final order made below is signed and issued, any requirement for the respondent to approve a draft copy of the order is dispensed with.

[81] A final order for corollary relief under the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) cannot be made unless a divorce has been granted pursuant to the Divorce Act: Rothgiesser v. Rothgiesser, 2000 CanLII 1153 (ON CA), [2000] O.J. No. 33 (Ont. C.A.) and Okmyansky v. Okmyansky, 2007 ONCA 427 (Ont. C.A.). The order below is made pursuant to the Family Law Act, R.S.O. 1990, c. F.3 as a divorce has not been granted.

[82] I make the following final order:

1. The respondent shall pay child support to the applicant for the three children, Luca, Dante and Isabella, in the amount of $1,181 per month commencing September 1, 2019 up to and including June 1, 2020, based on an imputed income of $59,500.

2. The respondent shall pay child support to the applicant for the two children, Luca and Isabella, in the amount of $907 per month commencing July 1, 2020 and continuing monthly thereafter, based on the respondent's imputed income of $59,500.

3. Paragraph 3 of the interim order dated December 13, 2019 requiring the respondent to pay interim child support for the three children, Luca, Dante and Isabella, is vacated effective September 1, 2019, and is replaced by paragraphs 1 and 2 of this final order. Any payments received pursuant to the aforementioned interim order shall be credited to the child support obligation set out in paragraphs 1 and 2 of this final order.

4. The retroactive child support arrears pursuant to the tables for the three children, Luca, Dante and Isabella, for the period up to and including August 31, 2019 are fixed at $31,294 and shall be paid by the respondent to the applicant as follows:

(a) the sum of $11,294 shall be paid November 1, 2020; and

(b) the balance of $20,000 shall be paid at the rate of $500 per month commencing December 1, 2020 until paid in full.

5. The respondent shall pay to the applicant forthwith the sum of $1,063 for retroactive s. 7 expenses for the child, Dante.

6. Commencing June 1, 2021 and on June 1 of each year thereafter, the respondent shall provide to the applicant copies of his income tax return and notice of assessment, including notice of reassessment, if any, for the immediately preceding calendar year and his three most recent pay statements for the current calendar year. If any s. 7 expenses are being paid, then the applicant shall provide the same financial disclosure to the respondent.

7. The applicant's claims for spousal support and post-separation adjustments are withdrawn.

8. The respondent shall maintain the applicant as irrevocable beneficiary of any current life insurance policies that he may own or any group life insurance policies that are available to him through his employer for so long as he is obligated to pay child support. The respondent shall, within 30 days, provide the applicant in writing with the details of all such insurance policies and, if there is any change in the respondent's group life insurance available through his employer from time to time, then the respondent shall notify the applicant of same in writing within 30 days.

9. The respondent shall maintain any eligible children of the marriage as beneficiaries of any extended medical, dental and health benefits that he may have through his employer and the respondent shall provide the applicant within 30 days with details of all such coverage, including a copy of any booklet or other document describing the benefits. If any changes occur in such a plan, as a result of a change of employment or otherwise, then the respondent shall notify the applicant of same in writing within 30 days.

10. The divorce shall be severed from all other claims and shall be dealt with pursuant to r. 36 of the Family Law Rules.

11. The balance of all other issues in this proceeding, other than costs, are dismissed.

12. This order is made pursuant to the Family Law Act.

13. This order is without prejudice to the applicant's right to bring a motion to change for any claim for child support for the child, Joshua, for the period commencing May 1, 2020 and for the child, Dante, for the period commencing July 1, 2020, if either child is a dependant entitled to support within the meaning of s. 31 of the Family Law Act.

14. Within 30 days of the date of this order, the applicant shall file electronically any written submissions as to costs. The written submissions shall be limited to four typed pages, double-spaced, and any reference to authorities should be hyperlinked and the relevant passages shall be highlighted.

"Justice Victor Mitrow"

Justice Victor Mitrow

Released: September 30, 2020