Court File and Parties

COURT FILE NO.: 1546-18 DATE: 2022-04-28 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

The Director, Family Responsibility Office for the benefit of Lisa Hennessy, Applicant – and – Jim Hennessy, Respondent

Counsel: E. Novais, for the Applicant S. Gulas, for the Respondent

HEARD: December 1, 2021 and March 25, 2022

Judgment

THE HONOURABLE MADAM JUSTICE L. BALE

Overview

[1] The sole issue for determination at this hearing is whether or not an incarceration clause should be included in a Final Default Order, prescribing that the payor be incarcerated for a period of three days for each and every default in the event default on payment by the payor. If the court determines that an incarceration clause is appropriate, the parties agree on the remaining terms of the draft Final Default Order. If the court determines that an incarceration term is not appropriate, the Family Responsibility Office seeks to have the default proceeding dismissed on a without prejudice basis for the FRO to commence new proceedings in the event of future default by the payor.

Background

[2] The background facts are not controversial:

a. The parties entered into a Separation Agreement on April 29, 2014 which made provision for the payment of child support by the support payor to the support recipient.

b. In or around August 2016 the payor became unemployed. He remained unemployed for most of 2017-2020.

c. The recipient filed the parties’ domestic contract with the court for enforcement in January 2018. The Family Responsibility Office has been assisting in the enforcement of the payor’s support obligations since that time.

d. The Family Responsibility Office commenced Default proceedings against the payor in November 2018.

e. A court Application was commenced by the payor in July 2019, wherein he sought to adjust the child support payable under the Separation Agreement.

f. On February 7, 2020, the Honourable Mme. Justice C. Lafrenière granted a Final Order which varied the support payable:

a. The payor’s monthly child support payments were reduced to $459.00 per month, based upon an estimated gross annual income of $30,000.00;

b. Arrears of support were reduced, retroactively to January 1, 2017; and

c. Arrears of support which had accrued prior to January 1, 2017 were ordered to be repaid at a rate of $100.00 per month.

g. In March 2021, the payor commenced a Motion to Change proceeding relating to the February 2020 Final Order of Lafrenière J.

h. On October 7, 2021, the Honourable Mr. Justice J. Ramsay granted a Final Order which made modification to the operative order of Lafrenière J. such that:

a. Ongoing child support remained payable at a rate of $459.00 per month;

b. Any arrears of child support which accumulated during the period of February 7, 2020 to May 31, 2021 were rescinded; and

c. The previously accumulated arrears, as per the Final Order of Justice Lafrenière were confirmed as $22,627.00, and continued to be payable at a rate of $100.00 per month commencing August 1, 2021.

[3] A review of the Director’s Statement of Arrears filed in this proceeding, the accuracy of which is not disputed by the payor, reveals:

a. No voluntary payments of child support were made by the payor to the Family Responsibility Office in the years 2018, 2019, or 2020; and

b. In 2021 and 2022, the support payor has made the following voluntary payments to the Family Responsibility office by way of telebanking:

a. July 2021 $229.50

b. August 2021 $459.00

c. September 2021 $459.00

d. October 2021 $459.00

e. November 2021 $459.00

f. December 2021 $1,059.00

g. January 2022 $559.00

h. February 2022 $559.00

i. March 2022 $459.00 as of March 14, 2022.

[4] Counsel for the payor advises the court that the payor was instructed to set aside funds relating to the arrears repayment (i.e. $100.00 per month commencing August 1, 2021) while the basket motion which resulted in the Ramsay J. Order was processed in chambers, and the Family Responsibility Office records were updated to reflect the court ordered modifications. Counsel for the Director does not dispute this representation. The FRO records were formally adjusted to reflect the terms of the Final Order of Ramsay J. on December 1, 2021, and the payor brought the arrears repayments into good standing within the same month.

Position of the Parties

[5] The FRO argues that a Default Order without a term of incarceration would be redundant: such an order would simply be a reiteration of the terms of the now operative Final Order of Ramsay J., and would offer no additional incentive for the payor to comply with the prescribed payment terms. An order with “teeth” (i.e. threat of incarceration) is necessary to compel future compliance.

[6] The payor argues that:

a. his behaviour in this proceeding does not rise to the type of blameworthy conduct requisite for the inclusion of an incarceration term, as contemplated by appellate caselaw; and

b. threat of incarceration is not necessary to compel the payor’s ongoing compliance with the operative support order on the facts of this case.

The Law and Application

[7] It is the duty of the Director enforce support orders that are filed with the Family Responsibility Office and to pay to the recipient any amounts collected from the payor: s. 5, s. 20, Family Responsibility & Support Arrears Enforcement Act, 1996 S.O. 1996, c. 31 (“FRSAEA”). The Director must carry out this duty in a practical manner, including commencement of default hearings where appropriate: s. 6, s. 41, FRSAEA.

[8] The prescribed process for default hearings is found in s. 41 of the FRESAE. In this case, the Director served proper notice of the default hearing on the payor, together with the applicable statement of arrears. In response, the payor filed the requisite Financial Statement and proof of income required by the regulations. In this proceeding the payor also took additional legal steps to:

a. Vary the support provisions contained within the parties Separation Agreement: these changes were incorporated into the Final Order of the Honourable Mme. Justice C. Lafrenière dated February 7, 2020; and

b. Vary the support terms contained within the Final Order of Justice Lafrenière: these changes were incorporated into the Final Order of the Honourable Mr. Justice J. Ramsay dated October 7, 2021.

[9] The impact of these variation orders did not require the Director of the FRO to commence a new hearing – the default hearing simply continued pursuant to s. 41(22) of the FRSAEA and the payment terms ordered by Justice Ramsay, (i.e. ongoing child support of $459.00 per month and repayment of arrears at a rate of $100.00 per month), must be incorporated into any default order made in this proceeding.

[10] As per the presumptions at a default hearing, the payor has the ability to pay the ongoing support and arrears: s. 41(9) FRSAEA. The payor agrees that he has the ability to pay the ongoing support of $459.00 per month, and monthly contribution of $100.00 per month towards arrears, as prescribed by the Final Order of Justice Ramsay. Likewise, the statement of arrears is presumptively correct under s. 41(9) of the FRSAEA. Again, the payor agrees.

[11] Where the controversy arises is in relation to the Director’s request for a term of incarceration in the event of default. Pursuant to the powers of the court available under rule 41(10)(i) of the FRSAEA the court may order that the payor:

(i) on default in any payment ordered under this subsection, be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the payment is made, whichever is sooner.

[12] The use of the word may clearly signifies that the inclusion of an incarceration clause in a Default Order is an exercise in judicial discretion.

[13] Enforcement legislation is remedial in nature. The court must remain focused on crafting an order that attempts to compel future compliance rather than on punishing past non-compliance with the support order: see Fisher v. Ontario (Director, Family Responsibility Office), 2008 ONCA 825 at para. 25, Allen v. Morrison (1986), 56 O.R. (2d) 671 (Ont. Dist. Ct.) at p. 698, Saunders v. Saunders at p. 288, Ontario (Director, Family Responsibility Office) v. Masoud, 2021 ONCJ 265 at para. 44.

[14] It is well-established law that imprisonment for non-payment of support orders must be viewed as an enforcement mechanism of last resort: “Something more than non-payment is required. The payor’s conduct must demonstrate a wilful and deliberate disregard for the obligation to comply with court orders”: Fisher, at para. 23 [references omitted].

[15] The fundamental importance of the role of the Family Responsibility Office in enforcing support obligations on behalf of vulnerable dependant persons cannot be overstated. Nothing contained within this judgment should be construed as criticism of the efforts of the Director in the collection efforts made on behalf of the recipient.

[16] All support recipients are equally entitled in law to the support ordered payable on their behalf, and all support payors who find themselves in the midst of a default hearing are in arrears of support. Yet, the legislation does not require that all defaulting payors should face the threat of incarceration for future non-compliance. Incarceration terms in both Temporary and Final Default Orders are discretionary. Thus, this court must consider what features of the payor’s non-compliance with the operative support order might be relevant in assessing the appropriateness of a term of incarceration in the event of future default – the “something more” that might demonstrate wilful or deliberate disregard for the payment order.

[17] In this court’s view, the following non-exhaustive features may be relevant to the inquiry:

1. Pattern of accumulated arrears: it is the pattern of the payor’s non-payment that should be more compelling than the total amount of support arrears owing. At first look, larger sums of support arrears might appear to reflect more blameworthy conduct. However, one must bear in mind that support arrears are relative to the monthly support award: sustained periods of non-payment, whether $100 per month, or $10,000.00 per month can be equally devastating to the recipient. As such, the period of non-compliance is likely more probative to the nature of the payor’s non-compliance than the total quantum owing.

2. Voluntary v. involuntary payments: In reviewing the Director’s Statement of Arrears filed, the court may consider whether the payor’s historic contributions towards the support obligation were made by way of direct payment from the support payor, or by involuntary diversions. Such information might be relevant to whether the payor was making efforts to comply with the terms of the operative support order or playing a game of ‘catch me if you can’.

3. Income source disclosure: Similarly, the court might consider the payor’s history of income disclosure. In some cases, the payor will diligently and voluntarily disclose income sources to the Director or the Recipient, facilitating the prompt garnishment of income streams. In other cases, the payor will not disclose changes in employment, leaving the recipient and FRO caseworker to attempt to chase and locate income sources.

4. Previous findings: It is not inappropriate to review the historic court record, and in particular, any previous court endorsements which speak to the payor’s willingness or unwillingness to accept their obligation to support recipients. For example, if income was imputed to a payor due to a finding of intentional unemployment or underemployment, or because the payor failed to produce the financial disclosure as required, the court may be more likely to find that any non-payment of support was wilful and deliberate in nature rather than as a result of unfortunate circumstance. Likewise, where a default hearing continues after an operative support order has been changed (i.e. under s. 41(22) of the FRSAEA), the court may consider whether any of the periods of non-payment of support were mitigated, excused or forgiven for legitimate reason in the subsequent order.

5. Timeliness of actions of payor: It is not uncommon that a payor does not take steps to commence a Motion to Change proceeding until they have been brought before the court on default notice. However, once the payor indicates that they intend to seek changes to the operative support order, the court may consider whether the payor took bona fide steps to comply with court procedure and seek change on the merits, or whether the payor was simply engaging in further tactics to delay payment to the recipient.

6. Other evidence of prioritization of self over support: In some cases, there may be lifestyle or other financial information before the court which causes the court concern that the payor has prioritized other expenditures over compliance with the support order. It is not inappropriate to consider information relating to the payor’s assets or expenditures, if available, in assessing whether their non-payment is wilful and deliberate.

[18] In the circumstances of this case, the payor has clearly been in longstanding default of his child support obligations to the recipient. However, by combination of the Orders of Justice Lafrenière (February 7, 2020) and Justice Ramsay (October 7, 2021), the court has accepted that:

a. The payor experienced a reduction in his income, effective January 1, 2017, which warranted a reduction of his table child support obligation; and

b. During the period of February 7, 2020 to May 31, 2021, table child support was not payable.

[19] A review of the Director’s Statement of Arrears filed, reveals that:

a. During the period of January 1, 2017 to February 7, 2020, the payor was obligated to pay table child support of $459.00 per month. The total amount of child support payable during this time period ($459.00 x 38 months) was $17,442.00. The payor actually made payments of $5,971.14. All of the payments collected by the FRO were diversion receipts, suggesting that they were not voluntary payments.

b. During the period of February 7, 2020 to May 31, 2021 no table child support was payable. During this time period the FRO collected a total of $1,195.50 from the payor. These payments were also diversion receipts. Given that the Order of Justice Lafrenière (February 7, 2020) obliged the payor to make arrears repayments at a rate of at least $100.00 per month commencing March 1, 2020, it appears that by reason of the FRO diversion receipts the payor was almost in compliance with his minimum arrears repayment obligation (i.e. there is a shortfall of approximately $300.00).

c. Since the Final Order of Justice Ramsay dated October 7, 2021 was processed by the courts and the FRO, the payor has been compliant with his ongoing table child support obligation and arrears repayment plan. I accept the representation of his counsel that he was instructed to hold payment of the arrears until the order was processed and that he set aside funds and immediately made payment upon being advised to do so. I note that all payments made by the payor under the Ramsay J. Order have been voluntary payments made by way of telebanking receipts.

[20] The pattern of payments and receipts informs the court that the payor’s current default reflects support arrears of approximately $11,000.00 which accumulated prior to December 31, 2016 under the parties’ domestic contract, and support arrears of approximately $11,500.00 which accumulated between January 1, 2017 and February 7, 2020 pursuant to the terms of the Order of Justice Lafrenière. His payment record during these time periods is not impressive. However, technically the payor has not defaulted on his child support obligation to the recipient since February 7, 2020 and the court must remain focussed on crafting an order that attempts to compel future compliance rather than on punishing past non-compliance with the support order. The payor is currently in voluntary compliance with the operative support order of Justice Ramsay and the court cannot overlook this fact.

[21] The payor’s Affidavit and sworn financial statement reflect that he was unemployed from approximately August 2016 until March 2021. The payor advises that he resides with his sister, and that together she and his mother have been assisting him with his basic needs (e.g. food and shelter). He has no assets and claims extremely modest personal expenses of $220.00 per month. Since May 2021 the payor has maintained a full-time position of employment at Canadian Tire, earning minimum wage. The Director does not assert that the payor leads an extravagant lifestyle or that there is evidence that the payor has prioritized his own comfort over his child support obligation in recent years.

[22] The court record does not reflect other aggravating features or conduct on the part of the payor. There is no evidence that the payor has neglected to provide requisite financial disclosure and there has been no circumstance wherein the court has imputed an income to the payor on the basis of intentional unemployment or underemployment. The court has accepted his reduction in income and periods of unemployment as legitimate, as reflected within the two final variation orders. The payor has taken appropriate legal steps to address his support obligations where appropriate, including two formal applications to the court to vary the terms of his support obligations. He did so in a timely fashion and relief was granted under both processes. The payor’s actions do not suggest delay tactics employed to subvert his child support obligations. I am satisfied that he has demonstrated respect for the court’s process in his litigation conduct.

[23] On the specific facts of this case, I am not satisfied that an incarceration term is necessary or appropriate to compel future compliance with support payments. While he has historically defaulted on his support obligations, to the detriment of the recipient and the subject children, I accept that the payor intends to continue in his compliance with the operative order of Justice Ramsay. I do not believe that his past non-payment rises to the level of wilful and deliberate conduct which today calls for a threat of incarceration.

[24] Given that the Order of Justice Ramsay fixes support arrears and orders repayment at a rate of $100.00 per month, I agree with counsel for the FRO that a further default order without an incarceration term would simply be duplicative in nature. As requested, the default application will be dismissed on a without prejudice basis to return the matter to court in the event of future default. The payor would be well advised to make additional voluntary repayments towards his outstanding child support arrears, above the minimum repayment amount of $100.00 per month, wherever possible, to demonstrate his ongoing commitment to complying with his court-ordered support obligation.

[25] This is not an appropriate case to award costs. There has been divided success in that a Final Default Order would have been granted but for the Director’s request to withdraw the action, and the payor was successful in defending against inclusion of a condition of incarceration. There shall be no costs payable.

Conclusion

[26] On the basis of the above, there shall be a Final Order to go as follows:

1. The Director’s Notice of Default Hearing, dated November 26, 2018, is dismissed on a without prejudice basis to return the matter to court in the event of future default by the payor.

2. There shall be no costs payable.

[27] I thank counsel for their helpful submissions and materials.

The Honourable Mme. Justice L. Bale Released: April 28, 2022