COURT FILE NO.: FS-12-378002 DATE: 20220823

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Michelle Lyttleton Applicant

– and –

Vincent Lyttleton Respondent

-and-

Jody Lyttleton Respondent

COUNSEL:

Dilani Gunarajah, for the Applicant

Self-Represented (appearing as Applicant’s witness only) B. Barrow (appearing as Applicant’s witness only)

HEARD: May 9 and 10, 2022

NAKONECHNY, J.

REASONS FOR uncontested trial

Overview

[1] The Applicant mother, Michelle Lyttleton, seeks an order for the following:

a. that the Respondent father, Vincent Lyttleton, pay child support retroactive from the date of separation and prospective for the four children of the marriage, J. born August 1989, Sy. born January 1994, V. born July 2002, and Sa. born November 2006 based on an imputed income of $100,000 or $75,000 with credit for amounts paid. Michelle has calculated the arrears based on each child’s eligibility for child support. Only the youngest child, Sa, age 15, is eligible for ongoing child support;

b. an equalization of the parties’ net family properties;

c. that the Respondent, Jody Lyttleton, holds his 50% interest in the property known municipally as 36 Norman Ross Drive, Markham, ON, (“Norman Ross”) as a bare trustee for Michelle;

d. that Norman Ross be sold and the proceeds divided;

e. that the father pay spousal support based on the Spousal Support Advisory Guidelines for his income; and,

f. a divorce.

Background

[2] The parties were married in 1990 and separated in 2010. They have four children now aged 32, 23, almost 20, and 15. Each party has a child from a prior relationship. The Respondent, Jody Lyttleton, is Vincent’s son from a prior relationship.

[3] At the time of separation, Michelle left the home with the four children and went to reside with her mother.

[4] Vincent and Jody continued to reside in Norman Ross. Vincent paid the mortgage and other carrying costs. Jody paid different amounts to his father as contribution to the house expenses.

[5] Michelle has made no contribution to the carrying costs of Norman Ross since 2010.

[6] Norman Ross was purchased in 1996. At that time, neither party qualified for a mortgage. To obtain financing, title to the home was taken in the names of Vincent and his sister, Jennifer Lyttleton. Jennifer contributed $2,000 from her RRSP toward the purchase.

[7] In 2000, Michelle’s name was added on title to Norman Ross. Jennifer’s name was left on title for mortgage purposes.

[8] In 2006, title was transferred from Vincent, Jennifer, and Michelle to Vincent and Jody. The parties agree that Jennifer’s name was taken off title because she wanted to have credit available to help her own children. Jennifer was not paid any money at the time of the transfer of her interest.

[9] At the time of the marriage, Michelle was working as a data entry clerk. She then went to hairdressing school. The parties opened a hair salon business in their joint names during the marriage, which Michelle operated.

[10] The salon did not do well financially. It was closed in about 2005 or 2006 after Sa. was born. Michelle now works as a cleaner.

[11] When the parties met, Vincent couldn’t work in Canada because he was not a landed immigrant. Michelle sponsored him to obtain permanent resident status. Vincent first worked for his brother’s trucking company. In 1993 he started his own trucking company. Vincent employed Jody in his company. Vincent says he transferred his truck leases and the trucking company to Jody in about 2008.

[12] Vincent worked for Jody’s trucking company until about 2018. He is now employed by a trucking company owned by his girlfriend. He also works seasonally doing snow removal.

The History of the Litigation

[13] Vincent had a relationship with another woman, O.M., prior to the parties’ separation. In 2007, O.M. brought a claim against Vincent for child support for the child, E. born July 2006. Vincent is the child’s biological father. By order dated May 2007, Waldman, J. ordered Vincent to pay support of $680 per month effective December 14, 2006 based on an income of $75,000.

[14] Michelle commenced this application in 2010 claiming decision-making and parenting-time for the children, child and spousal support, equalization, and relief relating to Norman Ross.

[15] In November 2012, Perkins, J. ordered that Jody be joined as a Respondent. His Honour also made a without prejudice consent order that Vincent pay child support of $500 per month for Sy., V., and Sa. commencing June 1, 2011 based on an income of $24,000. Perkins, J. also ordered Vincent to produce disclosure including tax returns, bank statements, and a valuation of his properties in Jamaica and Florida.

[16] The parties appeared at a conference before Chapnik, J. in July 2015. Chapnik, J. ordered that Vincent produce disclosure including tax returns, a valuation of Norman Ross, documents evidencing the value of the properties in Jamaica, and his personal and business bank statements.

[17] There was a conference before Wilson, J on October 31, 2016. Jody did not attend. Vincent attended but his counsel did not. Wilson, J. granted Michelle leave to bring a motion to strike pleadings.

[18] On December 23, 2016, the parties appeared on a conference before Harvison-Young, J. (as she then was). The parties consented to an order for mutual disclosure and questioning. Michelle’s motion to strike was adjourned to March 9, 2017.

[19] On February 13, 2018, Faieta, J. heard Michelle’s motion to strike Vincent’s pleadings. Jody had never served and filed an Answer or produced any financial disclosure ordered. Neither Vincent nor Jody appeared on the motion.

[20] By order dated March 9, 2018, Faieta, J. struck Vincent’s Answer and pleadings on all claims except for decision-making and parenting-time and directed the matter to proceed to an uncontested trial.

[21] The matter did not return to court until August 2021. Monahan, J. adjourned the Trial Management Conference and made a further order for disclosure from both parties. By endorsement dated February 2022, Lococo, J. confirmed that decision-making and parenting-time were no longer at issue. His Honour set the matter down for the uncontested trial on the financial issues.

Issue 1: Equalization and Michelle’s interest in Norman Ross

[22] Michelle claims an equalization payment from Vincent pursuant to s. 5 of the Family Law Act, R.S.O. 1990, c F.3 (“the FLA”). To calculate the equalization, I must determine the value of each party’s net family property pursuant to s. 4(1) of the FLA. To calculate Michelle’s net family property, I must first determine whether she has an interest in Norman Ross.

[23] Michelle argues that Jody holds his one-half interest in Norman Ross as a bare trustee for her. She states that she is entitled to one half of the current value of the property in addition to equalization. She asks that the property be sold, and the proceeds divided equally between her and Vincent. She also asks that the equalization payment and any retroactive child support owing by Vincent be paid from his share of the net proceeds of sale.

[24] In the alternative, Michelle argues that if Jody does not hold one half of the property as a bare trustee for her, the net proceeds should be divided one third each to Michelle, Vincent, and Jody.

Does Jody hold one half of Norman Ross as a bare trustee for Michelle?

[25] The definition of a bare trust is set out by Waters in Law of Trusts in Canada[^1] as follows:

The usually accepted meaning of the term “bare”, “naked” or simple trust is a trust where the trustee or trustees hold property without any further duty to perform except to convey it to the beneficiary or beneficiaries upon demand. It is of course true that so long as a trustee holds property on trust he always retains his legal duties, namely, to exercise reasonable care over the property, either by maintaining it or by investing it; he cannot divest himself of these duties.

[26] In Trident Holdings Ltd. v. Danand Investments Ltd. (1988), 64 O.R. (2d) 65 (C.A.), at para. 75, the Ontario Court of Appeal described a bare trust, and the role of its trustee as follows, quoting from Maurice C. Cullity, “Liability of Beneficiaries — A Rejoinder” (1985-86), 7 E. & T.Q. 35 at p. 36. The distinguishing characteristic of the bare trust is that the trustee has no independent powers, discretions or responsibilities. His only responsibility is to carry out the instructions of his principals — the beneficiaries. If he does not have to accept instructions, if he has any significant independent powers or responsibilities, he is not a bare trustee.

[27] A bare trust is a form of an express trust. In Rubner v. Bistricer, 2019 ONCA 733, 50 E.T.R. (4th) 17 at para. 49, the Court of Appeal confirmed the four requirements for establishing a valid express trust: the relevant parties to the trust must have capacity; there must be certainty of intention to create a trust, certainty of subject-matter, and certainty of objects; the trust must be constituted, meaning the trustees must hold legal title to the trust property; and the required formalities must be met: A.H. Oosterhoff, Robert Chambers & Mitchell McInnes, Oosterhoff on Trusts: Text, Commentary and Materials, 8th ed., (Toronto: Carswell, 2014), at p. 189. The three certainties are reflexive in the sense that, although they are considered one at a time, “consideration of the certainty of subject matter and certainty of objects may inform (reflect back on) the matter of certainty of intention.”

[28] To meet the requirement of certainty of intention, the Court must find that the settlor intended that the trustee hold the property in trust for the benefit of the beneficiary. To find a bare trust, the Court must also find that the trustee holds the property with no duties other than to convey the property back to the beneficiary on demand. The trustee must not have active duties in respect of the trust property.

[29] To meet the requirement of certainty of subject matter, the property must be identifiable.

[30] To meet the requirement of certainty of objects, the beneficiaries of the trust must be sufficiently described so that the trust can be performed.

[31] A written document is not required to create a bare trust. However, if there is no trust document, the Court must have cogent evidence of the intention to create a trust from the context of the relevant words or circumstances: Royal Bank v. Eastern Trust Co., [1951] 3 D.L.R. 828 (PEI S.C. (TD)).

[32] In this case, there is no dispute that both Michelle and Jody had capacity at the time the transfer took place on July 31, 2006. The subject matter, Norman Ross, is also not in dispute. Jody holds legal title to the trust property.

[33] Because there is no document creating the trust, I must find that, at the time she transferred her interest in Norman Ross, Michelle intended that Jody would hold one half of Norman Ross for her benefit, that he would have no duties relating to the property and that he would transfer the property back to her on demand.

[34] The transfer of the property was prepared by counsel at Cargill Kert LLP. Ms. MacDonald acted for the transferors and the transferees and signed the transfer on their behalf in accordance with an Authorization. The consideration for the transfer is shown as $98,354.83. This is puzzling since Jennifer testified that she received no money when she transferred her interest to Vincent and Jody.

[35] Jennifer also testified that she was in the lawyer’s office with Michelle, Vincent, and Jody when the transfer documents were signed. She says there were others in the room she did not know.

[36] I found Jennifer to be a straightforward, credible witness. I accept her evidence with regard to the transfer of her interest in Norman Ross and her knowledge of Vincent’s property in Jamaica.

[37] Michelle’s evidence is that she did not find out until after separation that her name was removed from title to Norman Ross. She did not deny that she signed documents to authorize the transfer to Vincent and Jody in 2006. Nor does she argue that her signature was forged or obtained by misrepresentation. It appears that she signed documents without understanding what they were.

[38] Jody testified that he agreed to go on title to Norman Ross because his father needed help to get the mortgage. He did not know that his stepmother and his aunt were transferring their interests to him and Vincent.

[39] Jody says he paid a few thousand dollars toward the cost of Norman Ross at the time of the transfer. He says he also made payments toward the mortgage and for utilities and other housing expenses when he resided in the home.

[40] Based on the evidence, Michelle clearly did not intend at the time of the transfer that Jody would hold half of Norman Ross for her benefit, that he would have no duties relating to the property, and that he would transfer the property back to her on demand. Michelle’s evidence is that she believed she was still on title. I cannot find from the evidence and the context of the circumstances that Michelle intended that Jody would hold her interest in a bare trust. The requirement of certainty of intention has not been met so the trust is not established.

[41] I find that Jody does not hold his interest in Norman Ross as a bare trustee for Michelle. Michelle has no beneficial interest in Norman Ross. Michelle’s claim that Norman Ross be sold and the proceeds divided is dismissed.

Does Vincent owe Michelle an equalization payment?

[42] One of the problems in determining the financial issues in this case is Vincent’s failure to produce financial disclosure as ordered. This is why Faieta, J. struck his pleadings.

[43] In argument, Michelle’s counsel referred me to a Net Family Property Statement (“NFP statement”) dated February 29, 2016, which she argued is her client’s position on equalization. The NFP statement shows Michelle’s net family property as zero (and in fact shows no valuation day assets or liabilities or date of marriage assets or liabilities) and Vincent’s net family property as $1,217,992. Michelle claims an equalization payment of $608,996.

[44] Michelle’s Financial Statement sworn April 5, 2022, shows her net family property as $15,000. This consists only of furniture in the matrimonial home which she claims is not in her possession.

[45] Vincent’s Financial Statement sworn November 10, 2021, shows his net family property as zero. It shows that at the date of separation he owned real estate in Ontario and Jamaica valued at $424,000 and owed debts of $382,136. Mathematically, this results in a net family property of $41,864. It is not clear why the document shows a zero net family property.

[46] Michelle states that the value of Vincent’s interest in Norman Ross at the date of separation is $500,000. Vincent’s evidence is that his interest is worth $375,000. Neither party provided appraisals of the home.

[47] Vincent owned two properties in Jamaica at date of separation. Michelle states that Vincent owned a house worth $400,000 and land worth $20,000. Michelle says she tried to obtain a valuation of the house after separation, but she did not present one at trial. Michelle’s evidence is that Vincent sent money to Jamaica to pay for the construction of the home and that he travelled there regularly to see his children and his girlfriend.

[48] Michelle agrees that Vincent inherited land from his father during the marriage and it is excluded property.

[49] Jennifer confirmed that one of Vincent’s properties in Jamaica is a family property that all of the siblings inherited from their father. She also stated that Vincent built a house on the other property he owns in Jamaica in about 2002.

[50] Vincent’s sworn Financial Statement shows the inherited property from his father valued at $40,000 and a vacant lot valued at $6,000. Vincent denies that he has built a home on his property in Jamaica. He says the money he sent to Jamaica was for his children’s expenses.

[51] Vincent owned a vacant lot in Florida on the date of separation. Vincent’s Financial Statement shows a value of $3,000. Vincent’s evidence is that he purchased the lot for $2,500 during the marriage. When he couldn’t pay the taxes, the city took over the property.

[52] Michelle states the value of the Florida property on the date of separation is $20,000.

[53] Neither party provided appraisals of any these properties on the date of separation.

[54] Michelle’s NFP statement shows a value for Vincent’s business on the date of separation of $400,000. She says the company owned 4 trucks.

[55] Vincent’s evidence is that the company owned four trucks in 2006. Two he owned and two were leased from Wells Fargo. He says he sold one truck during the marriage to pay family expenses.

[56] Vincent says that in 2008, his business was not doing well. He wanted to terminate the two truck leases, but Wells Fargo would not agree. Wells Fargo permitted Vincent to transfer the leases of the two trucks to Jody who was also operating a trucking business. Jody took over the leases and the lease payments.

[57] Vincent owned one truck at the date of separation. The purchase price of the truck in 2006 was $84,217. There would have been some depreciation in the value of the truck as of September 2010.

[58] Michelle’s NFP statement lists Vincent’s debts at the date of separation totalling $213,007. These include three liens from Canada Revenue Agency registered in 2008, the Home Trust mortgage on Norman Ross, a Royal Bank of Canada visa and an RBC line of credit (“RBC LOC”). The NFP statement does not give a breakdown of the figures used to arrive at the total amount. Unfortunately, the amount does not accord with the figures for these debts in Vincent’s Financial Statement. Michelle did not provide a breakdown of the figures in her evidence.

[59] Michelle also provided proof of executions against Vincent for judgment debts owing on the date of separation. These include a Judgment against both parties in the amount of $15,366 for rent owing to the landlords of the hair salon and a Judgment against both parties for monies owed to RBC: $14,163 jointly and $10,215 in Vincent’s name alone.

[60] Vincent’s Financial Statement lists debts on the date of separation of $382,136. These include the Home Trust Mortgage and LOC, the CRA liens, RBC and Hong Kong and Shanghai Banking Corporation credit card debt, and the RBC LOC.

[61] There are no documents which confirm the amount of Vincent’s debts in September 2010. The CRA liens were registered in 2008. Presumably interest and penalties accrued thereafter. The Judgment executions were registered in 2006 and 2009. Post-judgment interest accrued on these debts. There are no documents proving the values of Vincent’s mortgage, line of credit or credit card debts on the date of separation.

[62] Vincent’s evidence is that the debts to the CRA were the result of an audit in 2006 or 2008. He acknowledges that he did not pay his personal or business income taxes as required. He used the business income to pay expenses. Vincent says the HSBC and RBC visa debts owing on the date of separation were accumulated during the marriage and that some of the debt was incurred by Michelle to operate the salon. When that business failed, the parties could not pay the landlord who sued them for outstanding rent.

[63] The court has a broad discretion to find value, even in the absence of solid valuation evidence: McLean v. McLean, [2004] O.T.C. 904 (S.C.), at para. 49, citing Tremblay v. Tremblay, 2002 CarswellOnt 484 (S.C.J.). In Felte v. Felte (2004), 3 R.F.L. (6th) 37 (Ont. C.A.) the Court of Appeal stated that where the evidence is unsatisfactory and incomplete, a trial judge must use the evidence he or she does have, in attempting to come to a reasonable and fair result.

[64] Even though the evidence in this case is far from complete, I will use the limited evidence available to achieve a just and fair result.

[65] Vincent says he did not build a house in Jamaica. Michelle and Jennifer say he did. Vincent chose not to provide valuations or financial disclosure as ordered. From that I draw an adverse inference and prefer the evidence of Michelle and Jennifer that he owned a house in Jamaica on the date of separation.

[66] Vincent values his interest in the inherited land at $40,000. I find it fair to place a value of $80,000 on the house he owns in Jamaica.

[67] I accept Vincent’s value for Norman Ross of $375,000 and for the Florida property of $3,000. Vincent bases these values on the purchase prices and appreciation, which is reasonable. There is no basis for Michelle’s values of $500,000 and $25,000.

[68] Michelle values the contents of the home at $15,000. Vincent says the contents were divided equally at separation. When Michelle moved from Norman Ross she lived with her mother. It is not likely she took much of the contents with her when she moved. Contents of a home are valued, not on replacement cost, but the value you would receive at a garage sale. I find $7,500 is a reasonable value for the contents retained by Vincent.

[69] In argument, counsel conceded that there was no evidence for Michelle’s position that Vincent had savings of $10,000 and RRSPs of $80,000 on the date of separation. Vincent’s evidence is that he had bank accounts totalling $1,000 on the date of separation. This is a reasonable figure. It is unlikely that Vincent would retain savings of $90,000 rather than pay his significant outstanding debts.

[70] Vincent owned one truck on the date of separation. The truck was purchased in 2006 for $84,000. Taking a conservative depreciation rate of about 10% per year, I find a value of $60,000 is appropriate for calculating net family property.

[71] I calculate the value of Vincent’s assets on the date of separation to be $375,000+$20,000+$3,000+$80,000+$7,500+$1,000+$60,000 = $546,500.

[72] I find Vincent’s debts at the date of separation to be, the CRA debt $115,272, the Home Trust mortgage $183,750, the Home Trust Line of Credit $20,436, the RBC Visa $18,432, the debt to RBC Finance $32,752, one half of the joint judgment debt to the landlords $7,673 and RBC $7,081, and the sole judgment debt to RBC $10,215. These amounts total $395,611.

[73] Vincent has an exclusion of $20,000 for the inherited land in Jamaica.

[74] Vincent’s net family property is $546,500-$395,611-$20,000 = $130,889.

[75] I accept Michelle’s evidence that she had minimal assets at the date of separation. She had joint Judgment debts of $14,754. I find Michelle’s net family property to be zero.

[76] Based on the findings above, Vincent owes an equalization payment to Michelle of $130,889 – 0/2 = $65,444.

Retroactive child support

[77] Michelle seeks child support for the four children of the marriage, retroactive to the date of separation based on an imputed income of $100,000 or $75,000 with credit for amounts Vincent has paid. Michelle has calculated the arrears based on each child’s eligibility for child support.

[78] Vincent has been paying child support in the amount of $500 per month based on an income of $24,000 since June 2011, pursuant to the order of Perkins, J (the “Perkins Order).” This is a without prejudice order. Vincent acknowledges there are arrears of support owing.

[79] Ms. Gunarajah argues that the court has jurisdiction to order retroactive child support pursuant to s. 34(1) of the FLA. Because the parties are married, Michelle’s child support claims are proceeding under s.15(1) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.).

[80] Although the term “retroactively” does not appear in s.15.1 (but appears specifically in s. 17(1)), in D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231 (“D.B.S.”), the Supreme Court of Canada confirmed that Courts have jurisdiction to enforce child support obligations retroactively in certain circumstances. Such an order does not impose an obligation that the parent did not already have, it enforces an obligation that should have been met at the time.

[81] The case law sets out certain core principles the Court must consider when determining any child support claim: child support is the right of the child independent of any statute or court order; the children should have the same standard of living they had when the parents were together; it is the responsibility of both parents to ensure that a payor parent has satisfied their actual child support obligation; and, the children should benefit from the support they are owed when they are owed it.

[82] D.B.S. sets out four factors to consider when determining whether retroactive child support should be ordered. At para. 99, the Court emphasized that none of the factors is decisive, and each case must be decided on its own facts and circumstances:

1. Was there a reasonable excuse why child support was not pursued earlier?

2. Did the payor parent behave in a blameworthy manner in relation to child support?

3. The past and present circumstances of the child and the extent to which the child may benefit from a retroactive award.

4. Will the retroactive order create hardship for the payor?

[83] A payor who pays child support as ordered by the Court is presumed to have fulfilled their obligations toward the children. However, the Court has discretion to vary an order retroactively where the quantum of support is found to be deficient. Support orders are based on the circumstances that were known at the time the order was made. The order is subject to variation if the factors upon which the order is based change and the amount ordered is no longer appropriate, D.B.S. at para. 64.

Was there a reasonable excuse why child support was not pursued earlier?

[84] The Perkins Order was made without prejudice to Michelle’s claim that Vincent’s income was higher than $24,000. Vincent was ordered to make financial disclosure of his income and assets. Michelle pursued this disclosure at a number of subsequent court appearances over many years and did not receive it. Without this information, Michelle was not able to pursue the retroactive claim. I find that she pursued the claim as best she could due to Vincent’s failure to comply with court orders.

Was there blameworthy conduct?

[85] In Colucci v. Colucci, 2021 SCC 24, [2021] S.C.J. No. 42, the Supreme Court held that where a parent fails to disclose their income or make full financial disclosure, the Court may impute income and draw inferences against the payor, at para. 110.

[86] This application was commenced in November 2012. Vincent was aware of his obligation to pay child support from that date. He was also aware of the orders for income and financial disclosure made by numerous judges over the years of the litigation. I find his conduct to be blameworthy which militates in favour of granting retroactive support.

What are the past and present circumstances of the children? Will they benefit?

[87] The Court must consider the past and present circumstances of the children in deciding whether to order retroactive support. Michelle’s evidence regarding the children’s circumstances since separation is as follows:

1. J. was 21 years old and independent at the time of separation;

2. Sy. was 15 years old at separation and attending high school. She went on to attend University of Toronto and graduated in April 2017. She lived with Michelle while attending university.

3. V. was 8 years old at the time of separation. He began attending a full-time four-year university programme in New Brunswick in September, 2021; and

4. Sa. was 4 years old at separation. She is now 15 years old and in grade 10. She resides with Michelle.

[88] Michelle states that she supported the children when they resided with her. Sy. and V. applied for and received student loans. Michelle didn’t contribute to the children’s tuition but gave them money for food, living expenses, and travel as she could.

[89] The Court must determine the extent to which the children would benefit from a retroactive award. I have no evidence that the children suffered financial hardship in the past or that they are currently suffering financial hardship due to insufficient support paid by Vincent.

[90] Sy. obtained a post secondary degree and V. is attending university now. However, both Sy. and V. have student loans. V. has three more years of university expenses. Sa. may attend post-secondary education when she completes high school. If retroactive support should be paid, I find it is appropriate to commence in September 2013 when Sy. began attending university.

Will a retroactive support order cause hardship?

[91] The onus is on the payor to provide concrete proof of hardship. I have found Vincent’s failure to make financial disclosure to be blameworthy conduct. In D.B.S., at para. 116, Bastarache, J. found that hardship for the payor parent is much less of a concern where it is the product of his/her own blameworthy conduct. In this case, Vincent did not comply with court orders and failed to provide evidence of his financial circumstances.

What is Vincent’s income for child support purposes? Should income be imputed to him?

[92] Because Vincent’s pleadings were struck, he appeared as a witness for Michelle. Ms. Gunarajah argued that Vincent and Jody were both adverse witnesses and that neither of them were credible and their evidence should not be believed. She argues that I should impute an income of either $75,000 or $100,000 to Vincent and calculate child support owing based on this income.

[93] The argument to impute income of $75,000 is based on the finding of Waldman, J. in her order dated May 2007. There is no evidence before me of how Waldman, J. determined that figure. Vincent says he filed no documents with the court for that proceeding and Waldman, J. took the figure argued by O.M.’s lawyer.

[94] The argument to impute income of $100,000 is based on Vincent’s declared income of $29,000 from Ambassador Trucking plus $36,400 (based on Jody’s evidence that he paid Vincent $20 per hour and Vincent worked 35 hours per week for Jody’s company. Counsel multiplied this amount by 52 weeks per year) plus $6,000 because Vincent’s child support payments are being made from Jody’s business bank account. Ms. Gunarajah grossed up the $42,400 ($36,400 plus $6,000) to reach a total of $92,311. Ms. Gunarajah then adds an amount for the seasonal snowplow work to total $100,000.

[95] Section 15 of the Child Support Guidelines, SOR/97-175 (“the Guidelines”), provides that a payor’s annual income is to be determined in accordance with sections 16 to 20. Section 16 provides that a payor’s annual income is their income set out under the heading “Total income” in the T1 General form on their income tax return, subject to ss. 17 to 20 and adjusted in accordance with Schedule III.

[96] Section 19(1) of the Guidelines permits the Court to impute income to a payor as it considers appropriate in the circumstances. The section sets out a list of circumstances where the Court may impute income which include a spouse being intentionally unemployed or underemployed, living in a country with different effective tax rates than Canada, and failing to provide income information when under a legal obligation to do so.

[97] While the Court has discretion under s. 19(1) to impute income, it must do so based on the evidence. The Court cannot select an arbitrary figure: Drygala v. Pauli, 61 O.R. (3d) 711 at para. 52.

[98] In my view, both $75,000 and $100,000 as calculated by Michelle are arbitrary figures. Vincent could not work 35 hours per week/52 weeks per year for Jody’s company and work for Ambassador and drive a snowplow. Vincent admitted that Jody sometimes paid his monthly child support when he was not able to. Vincent paid the mortgage on Norman Ross. Jody and his girlfriend paid other expenses. In my view, payments made by Jody on Vincent’s behalf do not meet the definition of income in ss. 15 to 19 and Schedule III of the Guidelines.

[99] Vincent’s only income tax returns in evidence are for 2007, 2008, and 2009. His total income for those years is as follows: 2007 - $61,987, 2008 - $22,199, 2009 - $23,173.

[100] Vincent’s Financial Statement sworn November 2015 states his income for 2014 was $26,156 and his income for 2015 would be the same.

[101] Vincent’s Financial Statement sworn November 2021 states his income for 2020 was $29,652 and his income for 2021 would be the same.

[102] Vincent is 57 years old. He worked in the trucking industry during the marriage and since separation. He does not have any health or other issues that prevent him from working full time. He chose to stop operating his business in about 2006 or 2008. He then worked for his son until about 2018. Jody has since stopped operating that business.

[103] Vincent now works for a company owned by his girlfriend. This is not an arm’s length business relationship. He also does some contract work in snow removal. Given Vincent’s years of experience and contacts in the industry, I am not persuaded that his girlfriend is the sole directing mind of the company, and that Vincent has no input into the running of the business. I also draw an adverse inference from Vincent’s failure to disclose his current income tax information, valuations of his properties, and bank records as ordered.

[104] Vincent still owns one truck. He could run his own trucking business if he chose to. Presumably, he would not be working for his girlfriend’s company if it puts him in a worse financial position.

[105] I am mindful that Vincent has a significant amount of consumer debt and owes money to the CRA. His only substantial assets are his truck and his one-half interest in Norman Ross. Ordering a payment of retroactive child support will add to this debt. I must balance the right of the children to appropriate child support and the hardship to Vincent of ordering a lump sum amount which will increase his already substantial debt load.

[106] Michelle claimed ongoing and retroactive child support in the application issued in 2012. Vincent was aware of his obligation to support the children and is presumptively required to pay support in accordance with his income under the Guidelines. In all of the circumstances, I consider it appropriate to impute an annual income to Vincent in the amount of $40,000 commencing in 2013. Retroactive child support shall be payable commencing September 1, 2013, for the three children as they are eligible.

[107] Vincent has paid child support since the Perkins Order. He shall be credited for the amounts paid.

[108] Monthly support for three children in accordance with the Guidelines for an annual income of $40,000 is $805, for two children is $597, and for one child is $359. I have calculated the child support owing from September 1, 2013, to August 1, 2022 using Michelle’s evidence of the children’s eligibility to total $71,872. As of May 1, 2022, Vincent has paid child support of $57,643. The shortfall of retroactive support owing is $14,229.

[109] If Vincent has paid any additional amounts since May 1, 2022, he shall be credited and the amount of $14,229 shall be reduced accordingly.

Costs

[110] Modern costs rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants and; (4) to ensure that cases are dealt with justly under Rule 2(2) of the Family Law Rules: Mattina v. Mattina, 2018 ONCA 867 at para. 10.

[111] Rule 24(1) of the Family Law Rules, O. Reg. 114/99 (“FLR”) creates a presumption of costs in favour of the successful party.

[112] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality: Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519 at para. 12. An award of costs is subject to the factors listed in Rule 24(12), Rule 24(4) (unreasonable conduct of a successful party), Rule 24(8) (bad faith), Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730 at para. 94.

[113] I have considered the factors set out in Rule 24(12) of the FLR. Rule 24(5) provides the criteria for determining the reasonableness of a party's behaviour in a case (a factor in clause 24(12)(a)(i)).

[114] I have considered Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] 71 O.R. (3d) 291 at para. 26, where the court held that "the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant." The costs determination must reflect proportionality to the issues argued. There should be a correlation between legal fees incurred (for which reimbursement is sought) and the importance or monetary value of the issues at stake. See also Oduwole v. Moses, 2016 ONCJ 653.

[115] This case was not factually complicated, but it was of the utmost importance to Michelle. She has been primarily responsible for the emotional and financial care of the children since separation with limited assistance from Vincent.

[116] Vincent chose not to comply with orders for disclosure or negotiate a resolution outside of court. Michelle was put to the expense of proceeding to an uncontested trial and incurred legal fees to do so.

[117] I find Vincent’s behaviour to be unreasonable and not in the children’s best interests.

[118] Michelle was partially successful on her claims. She is presumptively entitled to some costs.

[119] Michelle seeks full indemnity costs of $22,805. I have reviewed Ms. Gunarajah’s Bill of Costs. This action was commenced in 2012. Ms. Gunarajah was not counsel of record until 2021. Trial preparation is more lengthy and complicated because of the amount of materials to review to get up to speed. I find the hourly rates and time spent by counsel to be reasonable.

[120] While Vincent’s behaviour was unreasonable, I do not find that he acted in bad faith. Full recovery costs are not warranted.

[121] Based on the factors in Rule 24 and the case law, I order Vincent to pay Michelle costs of $10,000.

[122] Order

1. The Respondent, Vincent Lyttleton, shall pay a lump sum of retroactive child support to the Applicant for the period from September 1, 2013, to August 1, 2022, in the amount of $14,229. If the Respondent has made any payments for child support between June 1, 2022, and August 1, 2022, this amount shall be reduced by the amount of those payments.

2. Commencing September 1, 2022, the Respondent, Vincent Lyttleton, shall pay child support to the Applicant for the child, S. born November 2006, in the amount of $359 per month based on an imputed income of $40,000.

3. A Support Deduction Order shall issue.

4. Beginning in 2023, for as long as child support is payable, the Respondent, Vincent Lyttleton, shall, by July 1 of each year, provide the Applicant with a copy his income tax return and notices of assessment and reassessment for the previous year.

5. The divorce is severed from the corollary issues. The Applicant may obtain the divorce on an uncontested basis.

6. The Respondent, Vincent Lyttleton, shall pay the Applicant the amount of $65,444 in final satisfaction of her claims to equalization.

7. The Applicant’s claim that the Respondent, Jody Lyttleton, holds an interest in the property known municipally as 36 Norman Ross Drive, Markham, as a bare trustee for her is dismissed. The Applicant has no beneficial interest in this property. The Applicant’s claim that the property be sold and the proceeds divided is dismissed.

8. All other claims in the Amended Application except the divorce are dismissed.

9. The Respondent, Vincent Lyttleton, shall pay the Applicant her costs in the amount of $10,000.

10. The Applicant’s counsel shall send a copy of these Reasons to the Respondent, Vincent Lyttleton, by regular mail to 36 Norman Ross Drive, Markham and by email to lyttleton12@hotmail.com

Nakonechny J

Released: August 23, 2022

Copy and Paste Citation/Court File No/Date DELETE EXTRA LINE SPACE IF APPLICABLE

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Copy and Paste from Table Style of Cause DELETE EXTRA LINE SPACE IF APPLICABLE

REASONS FOR JUDGMENT

Judge

Released: [Click and Type Date]

[^1]: Donovan Waters, Water’s Law of Trusts in Canada, 5th ed. (Toronto: Ont.: Thomson Reuters Canada, 2021) at 2.VIII.