Court File and Parties

COURT FILE NO.: FS-17-421398 DATE: 20230123 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: NATASHA LISA RAMSAHAI Applicant – and – MICHAEL ANGELO WHING Respondent

Counsel: David Tobin for the Applicant Hossein Niroomand for the Respondent

HEARD: December 8, 2022 Shore J.

Endorsement

[1] The applicant mother brought this motion to change child support. Specifically in 2019, the parties agreed that the respondent father would pay child support for the two children of the marriage based on an imputed income of $50,000. It was the respondent’s position at the time that his actual income was $36,000. The agreement was incorporated into the consent order of Justice Diamond, dated October 8, 2019.

[2] The order of Justice Diamond provides for child support payments of $775 per month based on an income of $50,000, which could be reviewed as of April 2021. There was no obligation to provide disclosure under the terms of the order until April 2021, and then only if requested by the other party.

[3] As a result of the current proceedings, the applicant discovered that the respondent’s actual income in 2019 was $94,000 (not $36,000 as “disclosed”), his income in 2020 was $127,000 and his income in 2021 was $126,000. She is seeking a retroactive adjustment to April 2019.

[4] Pursuant to the applicant’s calculations, if child support is ordered in accordance with the Federal Child Support Guidelines, SOR/97-175 retroactive to April 2019, the respondent owes retroactive child support in the sum of $30,099 as of December 31, 2021.

[5] For the purpose of this motion, the parties agree to rely on the respondent’s expert’s calculations for his income for the three relevant years, (2019, 2020 and 2021) as well as the Guideline amount that would be payable on that income.

[6] The primary issues to be determined on this motion are as follows:

a. Should the court vary the child support payable under Justice Diamonds order? b. If yes, then should it be retroactive to April 2019? c. What income should be used to determine the respondent's child support obligation for 2022 and on a go forward basis?

Background

[7] Some background information is required both to understand the context in which the motion is being decided but also to understand why the court will draw a negative inference against the respondent where there is conflicting evidence.

[8] The parties were married on May 7, 2007. They separated on June 18, 2017 and were divorced on September 27, 2018. They have two children of their marriage, aged 15 and 13. There is no dispute that the children have their primary residence with the applicant.

[9] The parties entered into minutes of settlement which were incorporated into the final order of Justice Diamond, dated October 8, 2019. As set out in that order the child support was based on the respondent’s disclosure of his income at $36,000 per year.

[10] The respondent earns his income from a number of sources. He owns and operates a company called Grip Enterprises Inc. The respondent also worked for a snow removal and maintenance company that had a contract with the City of Toronto. The respondent also earns some cash income through his own snow removal and lawn maintenance jobs.

[11] The applicant is a meteorologist, employed by Rogers Media Inc. She earns approximately $169,000 per year.

[12] The applicant commenced this motion to change in August 2021, seeking an order to permit her to move with the children to North Carolina, as well as a variation of child support. The applicant has since dropped her request to move to North Carolina but continued with her request for an increase in child support. The applicant subsequently amended her pleadings to request a retroactive adjustment of child support, back to 2019.

[13] After the commencement of the motion to change, the applicant was required to bring a motion for financial disclosure because the respondent was not forthcoming with disclosure of his income. An order for disclosure was made by Justice Kraft on April 29th, 2022.

[14] At a case conference on May 25th, 2022, Justice Papageorgiou granted the applicant leave to bring a motion requiring the respondent to obtain an income report as well as leave for questioning once full disclosure had been provided. As of May 2022, the respondent had still not provided proper disclosure on his income.

[15] In July 2022, the respondent advised that he was in the process of retaining an expert and a motion to compel a report would not be necessary. However, despite several requests, the respondent refused to provide confirmation that the expert had in fact been retained. It was only the day before the settlement conference scheduled for October 7, 2022, that the respondent finally signed a retainer agreement for the income report. He disclosed this information to the applicant at the settlement conference.

[16] The respondents delay in obtaining the income report was noted by Justice Horkins, the settlement conference judge, who ordered the respondent to provide his income report no later than October 31st, 2022. Questioning was ordered to take place on November 9th, 2022.

[17] The respondent missed the deadline and delivered his income report on November 7th, 2022. His questioning was rescheduled to November 16th, and then again to November 22nd because the respondent cancelled the questioning at the last minute.

[18] The respondent’s lack of cooperation and failure to be forthcoming in his disclosure leads this court to draw a negative inference against him where there is a dispute on the evidence. This is addressed in more detail below.

Retroactivity

The Effect of the “Non-Reviewable” clause of the 2019 Order

[19] The order of Justice Diamond in 2019, provides that child support be fixed and not reviewable or variable until April 2021. Does the non-reviewable clause create a problem for ordering retroactive support for the relevant years?

[20] The review clause in the order does not preclude the court from varying the order. The Supreme Court in D.B.S. v. S.R.G., 2006 SCC 37 explained that child support orders are not set in stone, at para. 64:

On the other hand, parents should not have the impression that child support orders are set in stone. Even where an order does not provide for automatic disclosure, variation or review, parents must understand that it is based upon a specific snapshot of circumstances which existed at the time the order was made. For this reason, there is always the possibility that orders may be varied when these underlying circumstances change.

[21] The inclusion of a no variation clause in an order was also addressed recently in Stoktnicki v. Cayen, 2019 ONSC 4831, where Justice Williams states, at para. 23:

A provision in an order that says that the order’s support provisions will not be subject to variation “for any reason whatsoever” contains strong and specific wording but, as previously stated, not wording that can bar variation altogether; it can only bar variation subject to the court’s power to vary under s. 17 of the Divorce Act.

[22] Accordingly, I find that the term of the 2019 order does not preclude the court today from exercising its discretion. To not do so would be contrary to the core principle that animates child support obligations: the right of the child. No child support analysis should ever lose sight of the fact that support is the right of the child: D.B.S., at para. 60. The initial order was based on faulty or misleading information. It would be contrary to public policy to let the initial order stand.

The Law on Retroactive Variations

[23] The applicant is seeking a variation of the child support set out in the order of Justice Diamond, dated October 2019, retroactive to April 2019.

[24] In D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 23, the Supreme Court of Canada held that there are three separate situations in which it may be appropriate for a court to order that a retroactive award be paid:

a) awarding retroactive support when there has already been a court order for child support to be paid; b) awarding retroactive support when there has been a previous agreement between the parties; c) awarding retroactive support where there has not already been a court order for child support to be paid;

[25] This case clearly falls into the first category.

[26] Section 17 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), permits a court to vary child support if satisfied that a change of circumstances has occurred since the order was made and, as in this case, has been used to permit a court to vary support when full and frank disclosure did not occur at the time the order was made. Retroactive child support holds payors to their existing (and unfilled) support obligations: Michael v. Graydon, 2020 SCC 24, 45 R.F.L. (8th) 1, at para. 25.

[27] In Colucci v. Colucci, 2021 SCC 24, the Supreme Court of Canada re-iterated the principles that apply to retroactively increase child support, at para. 114:

It is also helpful to summarize the principles which now apply to cases in which the recipient applies under s. 17 to retroactively increase child support:

(a) The recipient must meet the threshold of establishing a past material change in circumstances. While the onus is on the recipient to show a material increase in income, any failure by the payor to disclose relevant financial information allows the court to impute income, strike pleadings, draw adverse inferences, and award costs. There is no need for the recipient to make multiple court applications for disclosure before a court has these powers.

(b) Once a material change in circumstances is established, a presumption arises in favour of retroactively increasing child support to the date the recipient gave the payor effective notice of the request for an increase, up to three years before formal notice of the application to vary. In the increase context, because of the informational asymmetry, effective notice requires only that the recipient broached the subject of an increase with the payor.

(c) Where no effective notice is given by the recipient parent, child support should generally be increased back to the date of formal notice.

(d) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors continue to guide this exercise of discretion, as described in Michel. If the payor has failed to disclose a material increase in income, that failure qualifies as blameworthy conduct and the date of retroactivity will generally be the date of the increase in income. (emphasis added)

(e) Once the court has determined that support should be retroactively increased to a particular date, the increase must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines.

[28] A “material change in circumstances” must show a material increase or decrease in income that has some degree of continuity: ss.14 (a) and (b) of the Guidelines. As the Supreme Court directs, once this has been established, the first step will then be to determine the presumptive date of retroactivity. The next step will be to determine if the court should depart from the presumptive date of retroactivity where the result would otherwise be unfair.

[29] What is the definition of unfairness in the context of child support? The Supreme Court has explained, the child support regime is a system that creates informational asymmetry and is tied to the payor’s income, and it would be unfair and contrary to the child’s best interests to require the recipient to police the payor’s ongoing compliance with their obligations: Colucci, at para. 49.

[30] After considering the guidance provided by the three Supreme Court decisions of D.B.S., Michel, and Colucci, I find this is an appropriate case to order child support retroactive to April 2019. I will explain.

Analysis

[31] It was only once these proceedings were started, in 2021, that the respondent received formal notice that the applicant was seeking a retroactive adjustment to child support. However, the court retains its discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair to do so.

[32] The respondent failed to disclose his actual income in 2019, during negotiations of the October 2019 consent order. It was only during these proceedings, and after court orders were made for disclosure (which orders should not have been needed), that the respondent disclosed his actual income for the relevant years.

[33] Both parties relied on the recent Supreme Court of Canada decision in Colucci v. Colucci, 2021 SCC 24, 458 D.L.R. (4th) 183. I will take a moment to restate the importance of disclosure obligations in family law as summarized by the Supreme Court, at para. 50 of the Colucci decision:

This is why frank disclosure of income information by the payor lies at the foundation of the child support regime. In Roberts v. Roberts, 2015 ONCA 450, 65 R.F.L. (7th) 6, the Court of Appeal described the duty to disclose financial information as “[t]he most basic obligation in family law” (para. 11). A payor’s failure to make timely, proactive and full disclosure undermines the policies underlying the family law regime and “the processes that have been carefully designed to achieve those policy goals” (Leitch v. Novac, 2020 ONCA 257, 150 O.R. (3d) 587, at para. 44). Without proper disclosure, the system simply cannot function and the objective of establishing a fair standard of support for children that ensures they benefit from the means of both parents will be out of reach (Michel, at para. 32, per Brown J.; Brear, at para. 19, per Pentelechuk J.

[34] In 2019, at the time the order was made, the respondent misrepresented his income. He has been benefitting from this misrepresentation, and the child has not had the benefit of support based on his father’s true income. The date of retroactivity is often adjusted to align with the date of material increase in income, despite the “general rule” of varying to the date of notice: Colucci, at para. 43.

[35] I turn to the four factors in D.B.S. that guide this exercise of discretion.

1. Delay

[36] The respondent submits that the applicant does not have a reasonable explanation for the delay in bringing forth a request for retroactive adjustments to child support, dating back to 2019. I disagree. The respondent’s initial failure to provide updated disclosure and his subsequent and more recent refusal to provide disclosure resulted in the applicant’s delay in making her claim for a change to child support retroactive to 2019. I am satisfied that any delay on the part of the applicant bringing her claim was as a result of the lack of financial disclosure by the respondent.

2. Conduct of the Payor

[37] In my view, the respondent has engaged in blameworthy conduct. As Justice Bastarache explains in D.B.S., at para. 124:

Not disclosing a material change in circumstances — including an increase in income that one would expect to alter the amount of child support payable — is itself blameworthy conduct. The presence of such blameworthy conduct will move the presumptive date of retroactivity back to the time when circumstances changed materially.

3. The Child’s Circumstances

[39] As per D.B.S., at p. 235, “the past and present circumstances of the child are to be considered in determining whether to make a retroactive award.” The respondent argues that the children continue to enjoy an upper middle-class lifestyle. They continue to participate in extracurriculars and dine out and take vacations.

[40] One part of the balancing act at play is that child support should, as much as possible, provide children with the same standard of living they enjoyed when their parents were together: D.B.S., at para. 38. When a payor parent does not increase the amount of support when their income increases, it is the child who loses, D.B.S., at para. 45. The Children in this case have continued to enjoy a similar standard of living. In this case, I find this factor to be neutral.

4. Hardship Occasioned by a Retroactive Award

[41] The Supreme Court in D.B.S. at para. 115, outlined that courts should be attentive to hardship considerations. Retroactive awards may disrupt the payor parent’s management of their financial affairs.

[42] Will the respondent suffer a hardship if ordered to pay retroactive child support? The respondent argues that his work is tenuous at best and paying retroactive child support would create a hardship for him. It is seasonal work and there is not much formality to the contracts. However, his story changed throughout the proceedings. When it suited him, his business was hard hit by COVID and when it turned out his income actually increased during COVID, his evidence was that business decreased following COVID because his competitors returned to work.

[43] I am attentive to the fact that the respondent holds seasonal work that may at times be precarious. This does not however, in my view, correspond with his actual income earned. Nor does it detract from his obligations to pay support. It is clear that the respondent has been enjoying a much higher income than disclosed, so while his work may be precarious, I do not believe he will be significantly impacted by a retroactive award equivalent to a level of hardship. I also recognize that it will not always be possible to avoid hardship fully. As stated in D.B.S., at para. 116:

While hardship for the payor parent is much less of a concern where it is the product of his/her own blameworthy conduct, it remains a strong one where this is not the case.

[44] Whatever hardship may flow from a retroactive award, it is in part the product of the respondent’s conduct.

[45] Taking into account all the factors set out above, I am ordering that child support shall be retroactive to April 2019. The parties agree on the income to be used in determining retroactive support.

[46] The parties do not agree on the income to be used for 2022 and on a go forward basis.

Income for 2022

[47] With respect to his income for 2022, the respondent submits that his income is $35,000. The applicant submits that the court should impute income of $126,000 to the respondent, consistent with the respondent’s income in 2020 and 2021.

[48] Under s. 19(1)(f) of the Guidelines, the court has the power to impute an income to a party that it considers appropriate:

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

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so.

[49] The leading Court of Appeal of Ontario decision on imputation of income to a support payor is Drygala v Pauli, [2002] 61 O.R. 3(d) 711 (C.A.). At para. 32 of that decision, the Court described the imputation of income as:

... one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning.

[50] The respondent’s expert report provides a calculation with respect to the respondent’s income for 2022. However, as the applicant correctly points out, there are significant omissions and errors in the expert’s report with respect to the respondent’s income for 2022. For example, the report does not include any employment income received by the respondent in the year. During his questioning, the respondent stated under oath that he did not earn any employment income in 2022. This is not accurate. The respondent’s bank statements show employment income in the sum of $5,508.94 for the three-months of January 2022 to and including March 2022.

[51] The expert report does not account for any cash income earned in 2022. During his questioning the respondent admitted that he had been earning some cash income. However, the respondent was evasive as to the actual amounts earned. Part of the respondent’s argument during the motion was that the onus is on the applicant to prove the respondent’s income that she is seeking to have imputed to the respondent. However, the respondent was asked several times during his questioning to quantify the cash income earned. His response was consistent “I don’t know”. How can the respondent expect the applicant to quantify this number when he himself has failed to disclose same? In any event, his expert failed to include any cash income for 2022. Something should be added to the respondent’s income for 2022, and grossed up for tax purposes.

[52] The respondent’s company also pays expenses related to the respondent’s vehicle, a BMW 8 series, leased for approximately $2,000 per month, part of the expenses for personal use of the vehicle. The income report includes these expenses for the first 10 months of the year, being up to the date the report was prepared, with no explanation as to why the last two months were not included in the respondent’s income. These sums need to be added to the respondent’s income and grossed up for tax purposes.

[53] Based on these errors alone it is clear that the income calculation for 2022 set out in the expert report is inaccurate and cannot be relied on for the purpose of determining the respondent’s actual 2022 income.

[54] The only person who has all of the information to determine the respondent’s income is the respondent. As seen from his evasive answers during questioning, the respondent was not willing to disclose all of the information needed to determine his true income. Given that I do not have sufficient information on to which to calculate his 2022 income, I have no choice but to rely on his income for 2021 at this time.

[55] In doing so I have given consideration to the fact that the respondent has not adjusted his lifestyle in any way, which one would expect if his income decreased from $126,000 to $35,000. The respondent continues to drive his vehicle, leased at $2,000 per month and pays an additional $700 per month in insurance. He owns two properties. He traveled to the Bahamas for three weeks in November and travelled with the children to Jamaica in December.

[56] In reviewing the transcript of his questioning, the respondent was evasive in answering questions that would assist in determining his actual income. He failed to provide disclosure that would have helped in proving or disproving the allegations raised by both parties. His evidence is often inconsistent.

[57] In his financial statements dated December 9th, 2021, the respondent stated that his income for 2021 was $25,507. He has now accepted his expert’s position that his income was actually $126,000 that year. The respondent swore three financial statements in 2022 and in each one of them his evidence was that his income from all sources in 2021 was $25,506.

[58] It was also recently disclosed that starting at least as of 2018, until and including 2021, the respondent paid his new spouse, anywhere between $20,000 to $49,000 each year from his business. This includes 2018, when he gave his new partner $24,000 and then claimed to only earn $36,000 that year.

[59] For the purpose of determining his 2022 and 2023 child support obligation, I am imputing the respondent with an income of $126,000. If and when the respondent is able to provide proper disclosure to the applicant, he may be able to seek a change in his support obligation for 2023 and on.

Costs Thrown Away

[60] The respondent is seeking costs, for costs thrown away as a result of the applicant withdrawing her motion to change, permitting her to move to the U.S. with the children. The respondent is seeking costs in the sum of $7,500.

[61] However, the respondent incurred legal fees of $7,300 total for this motion. These fees include work done with respect to the child support issues and disclosure. Further, the applicant made an offer to settle prior to the first case conference, to withdraw her mobility claim. The only real expense incurred is drafting and preparing the pleadings as it relates to the mobility issue.

[62] I find that costs shall be paid by the applicant to the respondent in the sum of $3,500. However, the costs for the motion to change argued before me have not been determined. The applicant was successful on her motion and therefore there is a presumption that she is entitled to her costs.

[63] The costs of $3,500 shall be payable once the costs owing for the motion to change have been determined in the timeline set out below.

[64] Order to go as follows:

a. Commencing April 1, 2019, and on the first day of each month thereafter, the respondent shall pay the applicant child support for the two children of the marriage, having regard to the Child Support Guidelines table support and the respondent’s income in each year, as follows:

Year	Income	Child Support Guideline
2019	$94,000	$1,398
2020	$127,000	$1,802
2021	$126,000	$1,789

The respondent shall receive credit for the child support he paid each month of $775 per month.

b. Commencing April 1, 2022, and on the first day of each month thereafter until varied by court order or agreement, the respondent shall pay ongoing child support to the applicant for the two children in the sum of $1,789, based on an imputed income of $126,000 for 2022.

c. SDO to issue.

d. The parties shall exchange the disclosure as required under r. 13(3.1) of the Family Law Rules each year by June 1st.

e. The applicant shall pay the respondent costs of $3,500 for cost thrown away by the withdrawal of her mobility claims. The costs shall only be payable when costs of this motion have been determined.

f. If the parties are unable to resolve the issue of costs of this motion, the applicant shall serve and file her cost submissions on or before January 31, 2023. The respondent shall serve and file his responding cost submissions on or before February 14, 2023. The cost submissions shall be no longer than three pages, plus any offers to settle and the parties’ bills of cost. The applicant shall serve and file brief reply submissions, if any, on or before February 17, 2023 to be no more than two pages.

g. Unless the Support Deduction Order is withdrawn from the Office of the Director of the Family Responsibility Office (FRO), it shall be enforced by the Director and amounts owing under the Order shall be paid to the Director, who shall then pay them to the person to whom they are owed.

Justice Shore Released: January 23, 2023

COURT FILE NO.: FS-17-421398 DATE: 20230123 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: NATASHA LISA RAMSAHAI Applicant – and – MICHAEL ANGELO WHING Respondent REASONS FOR JUDGMENT Shore J. Released: January 23, 2023

Ramsahai v. Whing, 2023 ONSC 259

Case Summary