COURT FILE NO.: FC-20-136
DATE: 2021/04/26
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Holly Borutskie, Applicant
AND
Gordon Hanes, Respondent
BEFORE: Mackinnon J.
COUNSEL: Mimi Marrello, for the Applicant
Allison Lendor, for the Respondent
HEARD: April 22, 2021
ENDORSEMENT
[1] The applicant’s motion is for child support and related relief. The parties have three children who have been residing primarily with her since separation in December 2019. The application was issued in January 2020. The applicant asks for child support commencing that month based on an imputed annual income of $140,000 to the father. The father opposes the motion.
[2] These reasons explain the temporary order made without prejudice to the final determination of the merits of the issue of income imputation from January 2020 forward, requiring the father to pay child support for 2020 based on an income of $58,000 in the sum of $ 13,776, payable forthwith. The respondent obtained employment in mid-October at a base salary of $100,000. The table amount of child support for that income is $1,920 per month. Payments in that amount started in 2021 and shall continue to be paid pending adjustment when the respondent provides disclosure explaining the compensation he has or may receive in 2021 over and above the base amount.
Child Support
[3] The respondent is an electrical engineer. His employment income exceeded $100,000 in many years. In November 2017 he was laid off. That year his total employment income was $139,408 and he received actual dividends from his employer of $127,302. After this lay off the respondent did not look for outside employment. He describes himself as a stay at home father until the separation. This may have been unsatisfactory to the applicant but for the purpose of her motion it is from the date of the separation forward that his efforts to generate income must be considered.
[4] The respondent has not yet filed tax returns for any of the years after 2017. For the motion he produced a letter from his accountant stating that his estimated incomes for 2018, 2019 and 2020 were $23,000, $21,600, and $20,400 respectively. The sources of income included employment insurance, dividends, investment income, an RRSP withdrawal and some employment income in 2020.
[5] The respondent obtained employment on October 12, 2020. So far, he has produced an unsigned copy of his employment contract stating his base salary is $100,000 annually but no explanation of what compensation he might expect over that base. His affidavit does not provide any information at all about a job search after separation prior to obtaining that job.
[6] The respondent is the sole owner of a mortgage free two unit residential building located in central Ottawa. He disagrees rental income should be attributed to him because renovations he is making to the units are not complete. He says neither unit is yet fit for habitation. The respondent estimates it would cost $100,000 to complete both units. He did not provide any details of what remains to be done or how and when he will get it done. The applicant questions why the respondent is taking so long to complete the work given that he could earn approximately $4,000 per month rental income when he does. The property has been vacant for six years.
[7] The respondent shows a net worth of $995,000, including $350,000 for the rental property and $505,000 in RRSPs. In the current market the rental property is very likely worth significantly more than $350,000. The MPAC in 2016 was $427,000. Reasonable use of the property to generate income would include either selling it or mortgaging it to fund the completion of the renovations as soon as possible.
[8] The respondent’s first financial statement dated March 12, 2020 was significantly incomplete. On January 6, 2021 he consented to an order to deliver a complete financial statement and other disclosure by February 15 but did not do so. Even the disclosure delivered for this motion was incomplete and another order has been made, requiring basic productions of the sort that ought to be delivered voluntarily.
[9] The applicant relies on the following provisions of section 19 of the Child Support Guidelines, Child Support Guidelines, O.Reg. 391/97 as am. which address the imputation of income:
- (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;
(e) the parent’s or spouse’s property is not reasonably utilized to generate income;
(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;
[10] I find that the respondent has not made reasonable efforts to gain employment or utilize his property to generate income promptly upon separation and that he has not met his financial disclosure obligations on time or completely. The issue for determination is whether it is appropriate to impute income to him for the months prior to October 2020 when he did get a job, and before or after that date based on potential rental income available to him.
[11] In Bak v. Dobell, 2007 ONCA 304, [2007] O.J. No. 1489 the Court of Appeal described section 19(1) as intended to capture cases where in fairness an adjustment to the payor’s presumptive income is required. For this purpose, the court has a discretion to impute income if it is appropriate in the circumstances.
[12] The applicant earns between $47,000 to $54,100 annually. She alone supported the children in 2020. The respondent’s actual income for 2020 is not yet established. However, based on the unsigned employment contract he worked for 12 weeks in 2020 at the annual rate of $100,000, accordingly earning $23,077 in those weeks. Had he obtained a minimum wage job for even 30 other weeks in the year, he could have earned an additional $15,500. In 2019 he withdrew $20,000 from his RRSP. This was also a reasonable option available to him in 2021. Had he mortgaged the proposed rental property for $100,000 to fund the completion of the necessary renovations, he could have realized monthly rental income of $4,000 against which he would have mortgage, property tax and insurance payments, perhaps some ongoing repairs and maintenance, for an estimated net monthly rental income of say $2,500. Even for six months that would have generated $15,000 net rental income. His earned income, a minimum wage job and $20,000 from his RRSP would have given him an annual income for 2020 of $58,577. His earned income, six months net rental income and $20,000 from his RRSP would have given him an annual income for 2020 of $58, 077. Additionally, with no information from the respondent about a job search prior to October 2020, let alone a robust one, the court may also infer that a full time job equivalent to the one he did obtain could have been available to him earlier in the year.
[13] I accept that the intervention of the pandemic created confusion and uncertainty, but the respondent had a number of reasonable options available to him to generate income with which to contribute to the support of his children. The applicant has established a prima facie case under CSGs section 19(1). The absence of a cogent response from the respondent persuades me that is appropriate to impute an income to him for 2020. The income of $140,000 requested would assume full employment and full rental of the residential property for the entire year. This is not appropriate in the circumstances of the separation occurring in December 2019 and the pandemic impacting locally starting in March 2020. An income of $58,000 is appropriate and as noted is imputed on a without prejudice basis. It is open to either party to seek an adjustment of this imputed income and the consequent child support award when disclosure is complete as part of the final determination of the case.
[14] Income is not imputed for 2021 at this time. The respondent is employed on a salary commensurate with his professional skills and experience and is paying child support accordingly. The expectation of the law that he take immediate steps to utilize his rental property to generate reasonable rental income is clear. Whether he meets that expectation in 2021 is appropriately considered when the case reaches final determination.
Section 7 Expenses
[15] The parties consent to contribute in proportion to their incomes to routine uninsured health, medical and dental expenses of the children, to childcare and summer day camps in lieu of childcare, and to counselling and therapy expenses. Non routine health, medical and dental expenses of the children, and extracurricular activities shall be paid in proportion to the parents’ incomes provided they have been consented to in advance, consent not to be unreasonably withheld.
[16] Both parents shall maintain the children’s coverage under their health and medical plans. The applicant shall make the first submission for coverage of the children’s insured expenses to her plan. The respondent shall enable the applicant to directly submit the remaining portion of insured expenses to his plan for direct reimbursement to herself.
Life Insurance
[17] The respondent shall designate the applicant as irrevocable beneficiary of his London Life insurance policy and of the term insurance available to him though his employment as security for child support payments. He shall provide her with proof that these designations are in effect within ten days of the date of this order.
[18] The respondent would like the applicant to designate him as irrevocable beneficiary of her available life insurance as security for child support in the event she were to predecease him. Had he requested this order by way of a notice of motion I would have granted it even though the applicant does not consent and would prefer to name her mother as her beneficiary in trust for the children.
Disclosure Order
[19] Counsel submitted an approved draft order at the conclusion of the hearing which provided for all but one of the disclosure requests of both parties. That order has already been made. The remaining issue is whether the respondent should detail his efforts since separation to obtain employment. This remains relevant to the final determination of what level of income may be imputed to him for 2020. The respondent shall provide particulars of his efforts to obtain employment since separation. If he takes the position that he was also looking for work prior to separation he shall use his best efforts to provide particulars of that search as well.
Costs
[20] The applicant has been successful on this short motion even though she has not received as much child support as she had asked for. Presumptively she is entitled to some amount of costs. If the amount cannot be agreed to between counsel, I will receive written submissions from the applicant by May 21 restricted to two pages plus attached Bill of Costs and any offers to settle the motion, and from the respondent, the same materials by June 4. Costs submissions should be submitted to my attention at scj.assistants@ontario.ca
Case Management
[21] This case is one of significant conflict between the parents. When the OCL report is released counsel shall schedule a settlement conference and prepare a Trial Scheduling Endorsement Form. This will enable the presiding judge to place the case on the next available trial list. Currently there is space in the trial sittings for November 2021. The next trial sitting is in January 2022. If the respondent’s motion for increased parenting time has not been heard before the settlement conference, that judge may authorize the motion to be heard before trial and/or manage the case until trial; but in my view it is important that a trial date is scheduled to bring finality to this parenting dispute.
Mackinnon J.
Date: April 26, 2021
COURT FILE NO.: FC-20-136
DATE: 2021/04/26
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Holly Borutskie, Applicant
AND
Gordon Hanes, Respondent
BEFORE: Mackinnon J.
COUNSEL: Mimi Marrello, for the Applicant
Allison Lendor, for the Respondent
ENDORSEMENT
Mackinnon J.
Released: April 26, 2021