Francis v. Francis, 2022 ONSC 2035

COURT FILE NO.: FS-19-009107 DATE: 2022-04-01

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Lisa Marie Francis, Applicant – and – James Albert Francis, Respondent

COUNSEL: Self-Represented (for Lisa Marie Francis) Tharmini Kuhathasan and Victoria Bell Varro, for the Respondent (James Albert Francis) – and – Director, Family Responsibility Office Maha Mashhadi, for the Director, FRO

HEARD: March 16, 2021

BEFORE: Pinto J.

REASONS FOR DECISION

Overview

[1] The respondent husband brings a motion for:

(a) An order suspending enforcement of the support arrears owing under the Final Order of Justice Faieta dated July 24, 2019 ("Faieta J. Order") pursuant to section 37 of the Family Law Act pending the disposition of the proceeding or written agreement between the parties; and

(b) An order staying the ongoing support obligation under the Faieta J. Order pursuant to section 37 of the Family Law Act pending the disposition of the proceeding or written agreement between the parties.

[2] Though properly served, the self-represented applicant did not file any motion materials.

[3] The Director, Family Responsibility Office filed material on the motion.

[4] Following the hearing of the motion, the Divisional Court released a decision, S.H. v. D.K., 2022 ONSC 1203, that I considered relevant to the within motion. In S.H. v. D.K., the Divisional Court reversed a parenting decision and cited, inter alia, the decision in Berta v. Berta, 2019 ONSC 505. The Berta test, dealing with an interim variation of a final support order, includes a requirement that the moving party establish a clear case of hardship and urgency. I requested and received written submissions which I have relied on in reaching my decision on the motion.

[5] For the reasons that follow, I find that the respondent’s motion is granted.

Facts

[6] The parties were married on May 31, 1986 and separated on June 9, 2017. They have three children who are now independent adults. Child support is not an issue in this proceeding.

[7] The applicant wife commenced legal proceedings on November 20, 2017. She sought spousal support under the Divorce Act, R.S.C. 1985, c.3 (2nd Supp) and the Family Law Act, R.S.O. 1990, c.F.3.

[8] The Faieta J. Order sets out the following:

(a) Commencing July 1, 2019, and continuing on the first of each month thereafter, the Respondent shall pay spousal support to the Applicant in the amount of $3,000 per month based on the Respondent's income of $127,200 and the Applicant's income of $35,000.

(b) All elements of spousal support will be reviewed on May 1, 2021 to assess whether the Applicant has taken steps towards becoming self-sufficient.

[9] From July 2019 to around March 2020, the respondent made payments of $3,000 monthly.

[10] On March 24, 2020, the respondent lost his full-time job where he was employed as a Digital Printing Sales Manager with White Bird. He received a severance package of around 6 weeks that covered the period March 2020 to around May 2020.

[11] From May 2020 to August 2020, the respondent received Canada Emergency Response Benefit ("CERB") benefits. From September 2020 to September 2021, he received Employment Insurance ("EI") benefits.

[12] In January and February 2021, the respondent worked a few shifts as a snow-plow driver.

[13] The respondent served a Motion to Change on July 28, 2021. The Motion to Change seeks a variation of the Faieta J. Order commencing May 1, 2020 (the date on which the respondent's severance from his last employment ended).

[14] Two Conferences before Dispute Resolution Officers (DROs) have been held on August 17 and October 12, 2021.

[15] The applicant filed her Response to the Motion to Change on October 15, 2021.

[16] In November 2021, the respondent secured a job with Rush Truck Centres. His base salary is $40,000 plus commissions paid monthly (minimum of $2,000 monthly).The respondent provided a Financial Statement dated January 12, 2022. Based on his financial statement, his annual income from all sources is $52,593.00.

[17] The Director of FRO continues to enforce the Faieta J. Order. Recently, the Director has notified the Respondent of the FRO's intention to make an application for a Federal License Denial Application on January 23, 2022.

The Law

[18] Under Section 37(2) of the Family Law Act:

(2) In the case of an order for support of a spouse or parent, if the court is satisfied that there has been a material change in the dependant's or respondent's circumstances or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and

(c) make any other order under section 34 that the court considers appropriate in the circumstances referred to in section 33.

[19] An explanation of the test for a stay of enforcement is set out in Garneau v. Director of the Family Responsibility Office et al., 2010 ONSC 2804:

[30] There is no automatic stay of enforcement pending a motion to change. The order or agreement remains in full force and effect until varied.

[31] The Director has a duty to enforce support orders filed with her office and the authority to determine by what means her duties are to be carried out. An order staying the Director's enforcement power would preclude FRO from exercising its legislative mandate.

[32] The Director is required to enforce a support deduction order that is filed in her office until the related support order is terminated and there are no arrears owing or until the support order and support deduction orders are withdrawn.

[33] A support deduction order is not affected by an order staying the enforcement of the related support order unless the support order is also stayed. Proceedings to stay an ongoing support obligation raise issues of entitlement as the support payor is seeking to vary, albeit temporarily, support payments agreed to between the payor and the recipient. The Director is not a party to such proceedings.

[34] The Director has the jurisdiction to consent to relief regarding the amount deducted by an income source for arrears under a support deduction order. Mr. Garneau did not request this relief.

[35] Because Mr. Garneau did not plead a request for a stay of his ongoing support obligation, I find that he should not be entitled to that relief. However, I will go on to consider whether this court should grant that relief despite the fact that there was no request for it in the motion before me.

Should the ongoing support obligation be stayed?

[36] A motion to stay or suspend a support order is properly brought within a variation application pursuant to section 37 of the Family Law Act. On such an application, the court may discharge, vary or suspend a term of the order and relieve the applicant from the payment of part or all of the arrears. The basis for granting such relief would be a material change in circumstances.

[37] A stay of enforcement should only be granted where a support payor has demonstrated a prima facie case on the merits of the variation application and has come to court with "clean hands". Even if I were to assume that the motion to suspend enforcement of support included a motion to stay the ongoing support obligation, I find that Mr. Garneau has not established the substantive grounds for relief on the merits of his case.

The Husband's Position

[20] The husband's position is that:

(a) His loss of employment from March 2020 to November 2021 represents a material change in circumstances.

(b) The differential in his salary from the Faieta J. Order where he was earning $127,200 to what he earned between May 2020 to November 2021 (which was CERB and EI benefits), and then as of November 2021 when he was reemployed with Rush Truck Centres, which appears to be approximately $64,000 annually, represents a material change in circumstances: Trang v. Trang, 2013 ONSC 1980, at para. 42.

(c) His financial circumstances were due to events beyond his control: Maharaj v. Wilfred-Jacob, 2016 ONSC 7925, at para. 169.

(d) He made every effort to secure alternate employment after his job loss in March 2020 and he has only been reemployed with Rush Truck Centres in November 2021.

(e) He comes to the court with clean hands since he has: taken steps as quickly as he can to notify the applicant of his change in financial circumstances; attempted to engage in a review of spousal support with the applicant; made requests for disclosure from the applicant; commenced a Motion to Change; engaged in two DRO Conferences; regularly communicated with this FRO Caseworker; and brought the within motion. He also continued to pay support by way of garnishment and direct contributions to the applicant. Once he secured reemployment, he made a voluntary payment to FRO despite his position that, if successful on his Motion to Change, he will have overpaid.

(f) In Cronish, 2019 ONSC 2185, the court did not consider arrears as a reason not to grant the requested stay. Here, it was only after the husband lost his job in March 2020, that arrears began to gradually accumulate.

(g) The 2019 Final Order requires the parties to engage in a review of all elements of spousal support in May 2021 including an assessment of whether the applicant has taken steps toward becoming self-sufficient. The applicant has delayed producing proper disclosure about her employment status, income and/or her efforts to obtain self-sufficiency, so the review of spousal support has yet to occur.

(h) An adverse inference should be made based on the applicant's failure to produce disclosure in response to the respondent's requests for disclosure from April 8, 2020 to date.

[21] The husband accepts that the test set out in Berta, for an interim variation of a final support order, is applicable. The Berta test requires the moving party to provide:

(a) A strong prima facie case;

(b) A clear case of hardship;

(c) Urgency; and

(d) That the moving party has come to court with "clean hands".

[22] The husband argues that he satisfies this criteria. He submits that he was unemployed for a 20-month period involuntarily and his new job pays significantly less than his previous job, which fulfils a strong prima facie case for variation of the 2019 order.

[23] The husband submits that FRO recently froze his bank accounts, leaving him without access to any funds to purchase "food, gas to drive to work, etc." He considers this a clear case of hardship.

[24] With respect to urgency, the husband argues that paragraph 2 of the 2019 order provides that "All elements of spousal support will be reviewed on May 1, 2021, to assess whether the applicant has taken steps towards becoming self-sufficient." The husband argues that the review did not occur because the applicant wife did not provide disclosure, and she delayed matters further by not filing her Response to the Motion to Change within 30 days. The applicant has since provided some disclosure on August 27 and October 15, 2021 after being required to do so at DRO Conferences. The husband argues that the necessity for relief is urgent and he has acted with dispatch.

[25] With respect to clean hands, the husband argues that, it was only after the loss of his job in March 2020 that arrears began to gradually accumulate. He notified his wife of his job loss immediately and has acted responsibly throughout.

The Wife's Position

[26] The self-represented applicant claims that she was under the impression that the within motion was a dispute as between the respondent and the FRO. She did not file any responding materials but made submissions based on the evidence as filed by the respondent and FRO Director.

[27] The applicant submitted that the respondent has the ability to earn a high standard of living. She suggested that the respondent has always been in sales and it is not clear why he has chosen a "truck driving" job. She also suggested that the respondent is in possession of undisclosed property.

[28] She submitted that she cannot afford a lawyer any longer, and relies on FRO to enforce the support deduction order.

[29] The applicant reminded the court of the high legal standard set out in Berta and the requirement that the moving party establish a clear case of "hardship and urgency."

[30] Ultimately, the applicant suggested that the respondent has not come to court with clean hands and cited, for example, the fact that the respondent did not notify FRO when he began new employment at a significantly lower income than he is capable of making and that he had sold a truck without disclosing the amount on his financial statement.

FRO's position

[31] The Director submits that the issue of a stay of the ongoing support obligation should be determined first as between the respondent payor and the applicant recipient, after which the issue of stay of the enforcement of arrears against the Director can be addressed accordingly. The Director also made written submission concerning the applicability of the Berta test.

[32] According to the Director's records, as of January 14, 2022, the respondent is in arrears of $43,433 with respect to unpaid periodic payments of support. The respondent also owes an enforcement fee of $800. Since the case was registered with FRO in December 2019, the Director has credited direct payments acknowledged by the recipient applicant and has garnished federal monies between the period of June 2020 and September 2021.

[33] The Director submits that, pursuant to section 20(6) of the Family Responsibility and Support Arrears Enforcement Act, 1996, the operation or enforcement of a Support Deduction Order is not affected by an order staying the enforcement of the related Support Order unless the Support Order is also stayed. In other words, if the respondent seeks to avoid FRO's enforcement of the Support Deduction Order, the respondent must obtain a stay of the underlying Support Order: Soengkono v. Legal Services - Family Responsibility Office, 2013 ONSC 3105, at para. 30.

[34] Within the "stay of enforcement" test, the Director also relies on Garneau which holds that a motion to stay enforcement pending a variation hearing requires the support payor to:

(a) Make out a prima facie case for variation; and

(b) Come before the court with "clean hands".

[35] On the "clean hands" issue, the Director submits that:

(a) FRO had not received any payments from the respondent since September 2021, despite the payor having started his current job in November 2021 (except for $600 that the respondent paid on January 13, 2022 that was registered in the FRO system effective January 20, 2022).

(b) The respondent's financial statement sworn January 12, 2022 indicates modest monthly expenses of $1,390 whereas the payor's income was $4,382.75 per month, demonstrating an ability to pay towards his ongoing support obligations.

(c) The payor lists as an asset a 2014 truck that he sold in June 2021 but no amount was indicated on his financial statement.

(d) The respondent has not filed his 2020 tax return or Notice of Assessment.

[36] The respondent's arrears were approximately $25,000, as of May 2021, when the review period under the Faieta J. Order opened up.

[37] The Director submits that, in light of the foregoing, the respondent should be making payments pending the outcome of his Motion to Change.

[38] In the alternative, if the court is inclined to stay the enforcement of support payments, any stay should be time limited and/or some payment terms should be attached with a court return date scheduled as the timing of events in the Motion to Change is unclear.

Respondent's Reply

[39] The respondent clarified that the next step in the Notice of Change proceeding, assuming that matters do not settle, would be for the respondent to bring a motion for disclosure, or to obtain leave for questioning. I take from this, given the typical timelines involved, that it may well be several months before the Motion to Change is dealt with finally.

[40] The respondent also submits that, while he considers as accurate the amounts that FRO has indicated as having been garnished from him, FRO has underrepresented the support payments received by the applicant by around $1,500 since FRO has relied on the self-reporting of the applicant, which is inaccurate.

[41] Finally, in response to the submission that he was not forthcoming with respect to the alleged misstatement in his financial statement concerning a truck that he had in June 2021, the respondent deposed that he sold his truck for $18,000 and used the sale proceeds to buy a smaller and older vehicle (a 2008 Nissan) and spent the rest on of the proceeds on his basic living expenses including for his groceries and Enbridge bill.

Analysis

[42] At the hearing of the motion, the parties’ submissions revolved around the test in Garneau for a stay of enforcement. However, upon my request, the parties provided written submissions concerning the test in Berta, concerning an interim variation of a final support order. The Berta test adds the requirements of a strong prima facie case, a clear case of hardship, and urgency. Like the Garneau test, the party requesting the stay or variation must still come to the court with clean hands.

[43] I find that the husband notified the applicant of the termination of his employment on April 8, 2020, a few weeks after he was terminated, and of his intention to commence a Motion to Change once the court re-opened. The husband proposed an interim payment arrangement and inquired about the applicant's employment status. The applicant did not respond.

[44] I find that the husband satisfies the material change in circumstances aspect of the Garneau test as it is not disputed that, once his severance package ended in May 2020, he was no longer earning $127,200, the amount attributed to him in the Faieta J. Order. The evidence indicates that he regained employment in November 2021 earning $64,000, albeit that amount is based on a base salary of $40,000 and approximately $2,000 per month in commissions. At the time of the motion in January 2022, there was not an extensive record to go on as the respondent had only been employed at his new job with Rush Truck Centres since November 2021. Previously, the respondent had been unemployed, albeit in receipt of CERB and EI for several months. Overall, I find that the respondent has a strong prima facie case for variation of the Faieta J. Order.

[45] Further, I am satisfied, based on the motion material presented, that this is a clear case of hardship and urgency.

[46] In mid-May 2021, the respondent received from FRO a notice of intention to suspend his driver's license. He obtained a Refraining Order on June 22, 2021. In late-December 2021, he received a notice from FRO of intention to make a federal license denial application. Recently, FRO froze the respondent's bank accounts. The evidence suggests that it may still be months before the parties can obtain a substantive resolution with respect to the respondent's Motion to Change. The respondent anticipates bringing a motion in respect of the applicant's alleged failure to provide full disclosure.

[47] The evidence before me, even as agreed upon by the applicant, is that the respondent is working in some kind of trucking job. While the applicant speculates that the respondent is deliberately underemployed, there was no such evidence before me. It appears that the suspension or loss of the respondent's driving license would prevent him from working which would, indeed, be a hardship. Furthermore, the requirement that the respondent continue to pay $3,000 a month in spousal support to the applicant based on the parties' current incomes (applicant at $35,000, respondent at $64,000 annually) would leave him, based on support calculations (appended to these Reasons), with roughly 30% of Net Disposable Income (NDI) and the applicant with 70% of NDI. This would constitute a hardship.

[48] Based on the motion material provided to me, I am satisfied that the husband has come to court with clean hands. He sold a truck for $18,000 and states that he purchased a smaller and older vehicle (a 2008 Nissan) and used the balance of the sale proceeds to pay for his basic living expenses including groceries and Enbridge bill. On the husband's financial statement dated January 12, 2022, he has listed the value of the 2008 Nissan Versa as $2,800 and the 2014 Truck that he sold in June 2021 as zero. It may be that the respondent ought to have explained this transaction in greater detail, but I do not see this as an attempt to mislead the court. Once again, the applicant's other submissions concerning the respondent's alleged "lack of clean hands" was not based on evidence filed with the court.

Decision

[49] I find that the appropriate disposition here is to stay the underlying Support Deduction Order (SDO) arising from the Faieta J. Order and the related FRO enforcement of support arrears arising from the Faieta J. Order pending the disposition of the proceeding or written agreement between the parties. However, as the respondent was re-employed as of November 2021, effective November 1, 2021 he should pay $1,500 monthly on an interim basis based on a support calculation of the parties' incomes. This would leave the parties with roughly a 54/46% applicant/respondent allocation of NDI.

[50] Additionally, given the apparent lack of progress in the Motion to Change Proceeding, I would direct the parties to attend To Be Spoken To (TBST) Court on April 11, 2022 or so soon thereafter as practicable to address a timeline to a substantive hearing in the Motion to Change Proceeding.

[51] I request that the parties send me a draft order approved as to form and content based on the foregoing.

Costs

[52] On the issue of costs of the within motion, if the parties are unable to agree on costs of the motion before April 11, 2021, the parties shall deliver costs submissions by that date, limited to three pages, double spaced, not including the Bill of Costs, Offers to Settle and Authorities (which should be hyperlinked). The parties can assume that I am familiar with Rule 24 of the Family Law Rules and recent case law on costs.

[53] The Draft Order and Costs Submissions may be directed to the Family Law Judicial Assistant Anna Maria Tiberio's email address at annamaria.tiberio@ontario.ca.

Pinto J.

Released: April 1, 2022