Court File and Parties

COURT FILE NO.: FC1526/18-01 DATE: 2023/07/21

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Wanda Elizabeth Marie Mannell Barry T. Paquette, for the Applicant Applicant

- and -

James Kelly Mannell Lawrence Blokker, for the Respondent Respondent

HEARD: July 7, 2023

HENDERSON J.

Endorsement

[1] This proceeded as a focused hearing on a discrete issue. Pursuant to a motion to change, the respondent seeks an order varying his child support retroactively. In addition, he is seeking an order reimbursing him the sum of $20,748.56 from the applicant as an over payment of child support.

[2] The background facts may be stated briefly. The parties were married on September 16, 2006, and separated April 30, 2015. There are three children of the marriage, ranging in ages seven to sixteen.

[3] By order of Taylor, J. dated March 10, 2016, the applicant was granted sole custody of the children, with specified access to the respondent. The respondent was ordered to pay retroactive child support July 1, 2015 to February 1, 2016 in the amount of $720 per month. Commencing March 1, 2016, he was ordered to pay $926 per month on an income of $48,362 in accordance with the Child Support Guidelines (“CSG”).

[4] The order contained additional ancillary terms:

• The parties were to share the children’s s. 7 expenses in proportion to their incomes.
• The respondent was to maintain the applicant and the children as beneficiaries under his extended health insurance plan.
• The respondent was to pay $653.60 to the applicant as his share of daycare costs.
• The respondent was to pay an equalization payment of $1,183.34 within 30 days and costs fixed in the amount of $4,503.27.
• Spousal support for the applicant was set at $1.00 per month, commencing March 1, 2016.

[5] It is this order that the respondent seeks to vary. He says that in October 2016, he was suffering from serious back issues and went on short term disability though Employment Insurance commencing November 20, 2016. He has not worked since. He argues that his medical condition constitutes a material change in circumstances warranting a retroactive variation of child support.

[6] As subsequent developments will reveal, the applicant has received virtually all monies due pursuant to the order of Taylor, J. A retroactive variation will result in an overpayment of child support.

[7] The following chronology is based on a Statement of Agreed Facts filed by the parties:

• Respondent’s income in 2016 was $44,335.26.
• April 4, 2017, respondent filed a claim with SunLife for long term disability (“LTD”) benefits.
• Effective March 1, 2017 the respondent received LTD benefits for 18 months in the amount of $2,600 per month.
• March 7, 2018, SunLife advised the respondent to return to work by May 14, 2018.
• February 12, 2019, the respondent commenced this motion to change.
• June 20, 2019, the respondent sued SunLife for reinstatement of benefits.
• September 20, 2020, the respondent enrolled at Fanshawe College to become a computer technician.
• July 11, 2022, the respondent entered minutes of settlement with SunLife reinstating his benefits retroactive to August 2018.
• March 23, 2022, a copy of the respondent’s statement of Claim against SunLife was sent to the applicant.
• The respondent’s income was in:
  • 2016: $44,335.26
  • 2017: $5,470 – EI
  • 2018: $3,501 – EI
  • 2019: no taxable income
  • 2020: no taxable income
  • 2021: no taxable income

[8] In his affidavit sworn June 9, 2023, the respondent added the following details:

• In 2020 and 2021 he received student loans through the Ontario Student Loan Programme.
• In 2022, he collected benefits through Ontario Works until he received his settlement.
• The respondent underwent back surgery on May 24, 2023, from which he is recovering.
• The computer technician course at Fanshawe College is two years but the respondent expects to take 3 to 4 years to obtain his qualifications.
• The settlement with SunLife resulted in reinstatement of LTD benefits in the amount of $2,600 per month and a lump sum payment for retroactive benefits in the amount of $122,200. A portion of that went to his solicitors and the Family Responsibility Plan scooped $61,000 of which the applicant received $59,712.49. The respondent received net $38,900 and, according to him, he is facing numerous creditors.

[9] At the settlement conference on November 14, 2021, on the consent of the parties, Hassan, J. ordered child support to be varied on a temporary basis to $737.00 per month on an income of $35,993 (LTD benefits grossed up).

[10] On the basis of this variation, the respondent states he has been overpaying child support in the amount of $190 per month under the original order. Basing his calculations on monies received by the Family Responsibility Office (“FRO”), the respondent states that he has over paid support by $20,748.56.

[11] At the beginning of the hearing, counsel agreed as follows:

1. That there has been a material change in the respondent’s circumstances.
2. That, on that basis, moving forward the order of Taylor, J. shall be varied such that the respondent shall pay support for the subject children in the amount of $737.00 per month based on an annual disability income of $31,200, grossed up to $35,993.
3. That the calculation of the overpayment in the amount of $20,748.56 is correct.
4. That the following amounts are owed by the respondent and could be set off against any repayments, if deemed appropriate: a. Daycare costs of $653.60; b. Equalization payment of $1,183.34; c. Costs of $4,503.27; and d. Section 7 expenses of $1,405.80. These set offs total $7,746.01.

[12] Agreement on these points reduced the issues to whether the respondent is entitled to any repayment of the overpayment, and if so, to what extent.

Analysis

[13] Counsel agreed that the facts fall to be determined in accordance with the Supreme Court of Canada decision in Colucci v. Colucci, 2021 SCC 24. I also agree, subject to the following comment. There is no evidence before me that the parties are divorced. As such, the order of Taylor, J. was made pursuant to the Family Law Act. That said, I find the analysis in Colucci to be applicable to a variation application under s. 37 of the Family Law Act in this case, though it was decided under s. 17 of the Divorce Act. The underpinnings of both Acts, as they apply to child support, are the same.

[14] At para. 113 of Colucci, Martin, J. laid out the legal framework for applications in which the payor seeks a retroactive reduction of child support as follows:

(1) The payor must meet the threshold of establishing a past material change in circumstances. The onus is on the payor to show a material decrease in income that has some degree of continuity, and that is real and not one of choice.

(2) Once a material change in circumstances is established, a presumption arises in favour of retroactively decreasing child support to the date the payor gave the recipient effective notice, up to three years before formal notice of the application to vary. In the decrease context, effective notice requires clear communication of the change in circumstances accompanied by the disclosure of any available documentation necessary to substantiate the change and allow the recipient parent to meaningfully assess the situation.

(3) Where no effective notice is given by the payor parent, child support should generally be varied back to the date of formal notice, or a later date where the payor has delayed making complete disclosure in the course of the proceedings.

(4) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. (S.(D.B.) v G.(S.R.) 2006 SCC 37, [2006] S.C.J. No. 37 (S.C.C.)) factors (adapted to the decrease context) guide this exercise of discretion. Those factors are: (i) whether the payor had an understandable reason for the delay in seeking a decrease; (ii) the payor’s conduct; (iii) the child’s circumstances; and (iv) hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased). The payor’s efforts to pay what they can and to communicate and disclose income information on an ongoing basis will often be a key consideration under the factor of payor conduct.

(5) Finally, once the court has determined that support should be retroactively decreased to a particular date, the decrease must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines.

[15] The applicant opposes the respondent’s claim, arguing that the request to reimburse the respondent for an overpayment of child support would lead to an unfair result taking into account the principles set out in Colucci.

[16] In view of the above admissions, the starting point of analysis is to determine whether there was effective notice of the respondent’s intention to seek a decrease in his child support obligations, and if so, when.

[17] I find there was no effective notice prior to the formal notice with the commencement of the motion to change on February 12, 2016. There was no evidence that the respondent advised the applicant that his employment was terminated because of back issues. In cross-examination, the applicant did admit that sometime in 2016 or 2017 she became aware that the respondent has been terminated because of problems with his back. This was after child support ceased after enforcement by FRO. In my view, however, this basic knowledge is insufficient to constitute effective notice. There was no evidence of “clear communication of the change in circumstances accompanied by the disclosure of any available documentation necessary to substantiate the change and allow the recipient parent to meaningfully assess the situation” (Colucci, para. 113) (emphasis added).

[18] In recent years, courts have repeatedly stressed the importance of timely and complete disclosure. At para. 48 in Colucci, Martin, J. observed that “… disclosure is the linchpin on which fair child support depends and the relevant legal tests must encourage the timely provision of necessary information.” The importance of disclosure is a function of what Martin, J. identified as the “informational asymmetry” between the parties arising from the structure of the CSG. At paragraph 49, she writes:

[49] … In a system that ties support to payor income, it is the payor who knows and controls the information needed to calculate the appropriate amount of support. The recipient does not have access to this information, except to the extent that the payor chooses or is made to share it.

[19] The obligation to disclose is even greater where there is a possibility of repayment. At para. 105, Martin, J. stresses

[105] … where repayment is a possibility, it is even more important for the payor to give the recipient prompt notice of the decrease in their income — complete with disclosure enabling the recipient to meaningfully assess the extent of any potential future repayment — and move with reasonable diligence to seek a formal variation

[20] The uncontested evidence at the hearing disclosed that the applicant has been operating in an informational vacuum created by the respondent, that even preceded the current order:

• After the parties separated April 30, 2015, the applicant retained counsel. Counsel wrote several letters to the respondent seeking financial disclosure starting in May 2015. In or about September 2015, counsel acknowledged receiving the respondent’s Notices of Assessment for 2012, 2013 and 2014. The respondent provided an unsworn financial statement but with no attachments. The respondent served no Answer and the matter was heard as an contested trial.
• The applicant was aware in 2016 or 2017 that the respondent’s employment as a tool and die maker had been terminated but the respondent provided no documentation including medical records or income information justifying the termination or laying out a plan to meet his child support obligations.
• No information regarding the respondent’s disability claim was provided until May 15, 2019, when the applicant received a copy of the SunLife file. From that file it was evident that:
  • On April 4, 2017, the respondent had filed a claim for LTD benefits;
  • On March 7, 2018, SunLife had sent a letter to the respondent, anticipating a return to fulltime regular duties by May 14, 2018 with the file to be closed;
  • By letter dated April 30, 2018, from SunLife to the respondent, SunLife notified the respondent that “the information we have does not confirm that your health continues to prevent you from performing your own occupation as a Tool and Die maker.” As such, the respondent no longer qualified for LTD.
• SunLife’s conclusion only supported the applicant’s skepticism of the respondent’s condition when she read posts on social media and saw photographs from the respondent’s Facebook page that he was geocaching, ziplining and taking dance lessons. She also had information from one of the children that the respondent had also renovated his home including building a basement bedroom.
• The respondent commenced a lawsuit against SunLife on June 20, 2019. According to the applicant, no information regarding that lawsuit was ever provided to the applicant or her counsel. A copy of the Statement of Claim was provided to the applicant’s counsel on March 23, 2022. Unbeknownst to the applicant, the respondent settled his lawsuit with SunLife in July 2022. In August 2022, she received approximately $59,000 through FRO from that settlement. Despite this, the respondent’s counsel advised the applicant’s counsel in a letter dated August 18, 2022 that the respondent was “in the process” of entering into a settlement with SunLife. When asked why his counsel would make such a representation, the respondent admitted that he was aware he had signed the minutes of settlement in July 2022 but said he did not know whether it had “gone to court.”
• There is no indication that the applicant received any updated medical documentation regarding the respondent’s condition throughout these proceedings at least until 2022. Indeed, when asked why he had not applied to CPP for a disability pension, the respondent replied that he was told by his personal injury counsel not to. He also said that a CPP application would likely not have been approved because it was not until he saw his “spinal doctor” that his case improved. Based on the medical reports attached to the respondent’s affidavit, this was not until November 2021. The doctor’s reports were sent to the respondent’s personal injury counsel by letter dated January 5, 2022. It is fair to assume that the information was not provided to the applicant until March 23, 2022 when she received the Statement of Claim. This was about five and a half years after the respondent stopped working.
• The respondent has also been slow to produce information regarding his general financial circumstances. When he commenced his motion to change, he did attach his Notices of Assessment for 2016, 2017, and 2018. In his financial statement sworn May 17, 2023, he attached his 2019 and 2020 income tax returns. He has not filed his 2021 or 2022 income tax returns “due to [his] disability.” It is unclear why his disability has prevented him from filing his returns when he had done so in all prior years.

[21] There has been a similar lack of candor about the respondent’s attempts to retrain. In his affidavit sworn June 9, 2023, he stated that he had enrolled at Fanshawe College in September 2020 to train as a computer technician. Later in his affidavit, at para. 37 he states:

I am still enrolled at Fanshawe College to retrain as a computer technician. This is a two year course but due to my disability, I am taking three to four years to complete the program.

[22] I have two concerns about this information. First, there is no evidence that the applicant was ever advised of the respondent’s plan before receipt of his affidavit. Secondly, while explaining in cross-examination why he had not completed the course he started in September 2020, he said that he had changed programmes in September 2022. He is now enrolled in a construction engineering technician programme that will qualify him for a job as a site supervisor or project manager. He anticipates completing the course by the end of 2025. This was news to the applicant.

[23] The disclosure vacuum underscores the challenges created by the “informational asymmetry” underlying the CSG. What did the applicant know? Until about a year ago, she only knew she was not receiving the court ordered child support, that the respondent was not working and that his application for disability payments had been denied. Critically, she did not know that the respondent had sued SunLife, that there was medical evidence diagnosing the respondent’s disability or, that he had settled that lawsuit which resulted in a retroactive reinstatement of his disability payments. Even if the applicant were aware that the respondent had enrolled at Fanshawe College, she was unaware until the hearing that he had changed programmes and would not be graduating before December 2025.

[24] Consequently, I find that the applicant lacked the available documentation necessary to substantiate the change and to allow her to assess the situation. The need for timely and complete disclosure was critical where the applicant was facing possible repayment.

[25] On these facts, therefore, I would find that the earliest possible notice the applicant had of the respondent’s intent to vary the child support was the date of formal notice being February 12, 2019, when the respondent commenced the motion to change. However, because of the delay in disclosure of critical information, I would set the date for the retroactive adjustment of child support to April 1, 2022. This follows the receipt of the respondent’s Statement of Claim and I am assuming the supporting medical reports. Child support was decreased on consent by Hassan, J. to $737.00 per month commencing December 1, 2022. This would result in an overpayment of $1,520 (8 months x $190). This would be subject to several possible setoffs. If I am wrong and the date of formal notice is the retroactive variation date, I find the overpayment from March 1, 2019 to December 1, 2022 to be $8,550 (45 months x $190).

[26] The remaining question is to the extent that the applicant is facing possible repayment of an overpayment should she be so obliged. Martin, J. in Colucci held that the court retains a discretion to depart from the presumptive date of variation. The exercise of that discretion should be guided by the four factors in DBS:

i) Understandable Reason for Delay

[27] The respondent provided no understandable reason for a delay of over two years before he commenced the motion to change. There was no evidence that his disability prevented earlier action or that the applicant’s conduct in some way deterred him. There was no evidence, for example, that she threatened to withhold parenting time. In fact, the uncontested evidence of the applicant was that she continued to drive the children for their parenting time when the respondent’s driver’s license had been suspended by FRO.

[28] In view of the respondent’s claims in the motion to change to have his driver’s license reinstated and passport returned, it is reasonable to conclude that the respondent commenced the motion to change only in response to the FRO enforcement measures.

ii) The Payor’s Conduct

[29] Under this factor the court may consider the payor’s blameworthy conduct. I have already detailed the lack of prompt and complete disclosure by the respondent over the course of the history of this matter. As Martin, J. wrote at paragraph 102 of Colucci:

102. The payor’s efforts to disclose and communicate will often be prominent considerations in assessing the payor’s conduct in the context of an application for a retroactive decrease of support.

[30] In addition to the disclosure concern, I have also considered the respondent’s conduct since the order of Taylor, J. was made. Since that order was made, he failed to make any voluntary child support, even during the period when he was fully employed. He has not paid the daycare costs ordered or the equalization payment or costs awarded. This conduct has been consistent since the parties separated. He paid only a nominal amount in child support following separation, and only after much effort by the applicant did he provide some income disclosure but no sworn financial statement. To the extent he did not defend the original action, his current predicament is the result of his own inaction.

[31] Finally, I have also considered the respondent’s lack of effort to obtain alternate employment. His efforts were woefully inadequate. He produced a job search log dated April 30, 2019 that contained eight positions between November 2018 and March 2019 to which he had applied. In cross-examination, he admitted none of these positions were fulltime. This is the only evidence of the respondent’s efforts to obtain alternate employment which is sadly underwhelming.

iii) Circumstances of the Child

[32] Due largely to the generosity of both sets of grandparents, especially the maternal grandparents, the children have not lacked in anything significant.

[33] The maternal grandmother has kept track of every advance made to the applicant since the parties separated. She testified that she does not believe in giving money gratuitously and that the respondent is expected to repay these advances as a loan. In August 2022, the balance of the loan was about $72,000. The applicant pays $10 per month towards the loan. When she received the $59,000 from FRO in August 2022, she repaid $50,000 towards the loan. With the balance, she bought clothes and school supplies for the children. In cross-examination, she acknowledged the amount owed to her parents exceeds the total arrears owed by the respondent. She explained that at one point she had to move with the attendant costs and increase in rent.

[34] The applicant over the years has also earned only modest income as a receptionist/assistant in a doctor’s office. In her affidavit she set out her income over the years:

2018: $23,803.49 2019: $26,623 2020: $33,524 2021: $36,774 2022: $40,035

[35] Whether the monies advanced to applicant for the children is a loan or a gift is immaterial. The fact is that but for the grandparents’ resources the children would have been in dire circumstances with no support from their father. What is apparent is that to impose any repayment on the applicant would negatively impact both the children and the applicant. In my view, this would not be in their best interests.

iv) Hardship

[36] The focus is on hardship to the payor if child support is not varied on the presumptive date. The respondent must adduce evidence to establish real facts to support a finding of hardship (Colucci, para. 107). The respondent states that he has incurred considerable debt over the years. He says he has borrowed from his parents, sister, Money Mart, Desjardin, BMO Dell Financial and OSAP. He has no income beyond his disability benefits

[37] Once again, however, the respondent’s case falters on the lack of particulars or “real facts.” In his financial statement sworn May 17, 2023, he discloses three of those debts: (1) Money Mart $5,336.44, (2) Desjardin $8,762.32 and (3) his parents $16,562.82. The debt to BMO appears to be an overdraft of $880.23. He is making payments only in respect of Desjardin. No supporting documentation was provided.

[38] When he commenced the motion to change, the respondent had a partner who was earning an income. On his last financial statement, the respondent did not complete Schedule B which is to be completed in response to claim for hardship. As a result, it is unclear whether the respondent is receiving support from a partner.

[39] The respondent’s hardship is only part of the analysis in situations where a claim for a retroactive decrease is made. The respondent’s hardship must be considered in the context of hardship to the children and recipient. It requires “a holistic and relative assessment” (Colucci, para. 108). I venture to say the circumstances of the children and recipient weigh more heavily where the payor is seeking a repayment. For the reasons I discussed above, I would find the imposition of a repayment would cause more hardship to the children and applicant than the respondent which would not be in the children’s best interests.

[40] I find therefore no basis upon which to order repayment, whether the sum of $1520.00 or $8550.00 as calculated above. As a result of this conclusion, I have not considered any possible set offs (see para. 11 above) and those amounts remain outstanding.

Order

[41] For the foregoing reasons I make the following order:

1. The order of Taylor, J. dated March 10, 2016 is varied as follows: a. Commencing August 1, 2023, the respondent shall pay support for the subject children the sum of $737.00 per month based on an annual disability income of $31,200, grossed up to $35,993 pursuant to the Child Support Guidelines. b. Commencing August 1, 2023, the parties shall share the children’s special and extraordinary expenses in proportion to their annual incomes: applicant, $40,035, respondent, $35,993. The applicant will provide the respondent with copies of any receipts for such expenses and the respondent shall pay to the applicant his share of the expenses within 14 days of receiving such receipt.

2. The balance of the order of Taylor, H. dated March 10, 2023 shall remain in full force and effect. The respondent shall provide particulars of the life insurance policy pursuant to paragraph 12 within 30 days.

3. The respondent shall pay to the applicant the sum $1,405.80 for outstanding s. 7 expenses within 60 days.

4. The balance of the claims in the motion to change are dismissed.

5. In the event the parties are unable to agree on costs, within 15 days the applicant shall make written submissions as to costs. The respondent shall have 15 days thereafter to respond. Submissions shall not exceed five pages not including Bills of Costs and Offers to Settle.

“Justice Paul J. Henderson”

Justice Paul J. Henderson

Released: July 21, 2023