Beaudoin v. Stevens, 2023 ONSC 4401

COURT FILE NO.: FC-21-1273-01 DATE: 2023-07-28

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Patricia Beaudoin K. Ketsetzis, for the Applicant Applicant

- and -

Paul John Stevens Self-represented Respondent

HEARD: May 23, 24, 25 and 29, 2023 The Honourable Justice Piccoli

REASONS FOR DECISION

[1] This court heard a Motion to Change of the Applicant dated October 26, 2021, and a Response to Motion to Change of the Respondent dated March 31, 2022. Both parties seek various relief in relation to parenting, as well as in relation to retroactive and ongoing child support. The Applicant seeks to change various provisions of a Separation Agreement dated September 17, 2012, and Amending Agreement dated March 20, 2014 as they relate to incomes and support. The Respondent seeks to uphold those Agreements.

[2] On the first day of the hearing, the parties were able to resolve all parenting issues. An order was made on that day in relation to those issues.

[3] As a result of the resolution of the parenting issues, the Applicant advised she was not pursuing her motion to strike the Respondent’s pleadings, but sought costs on a full indemnity basis in light of the late provision of the Respondent’s material. She also advised that she was no longer advancing her claim to set aside the 2014 Amending Agreement. However, in closing submissions, she asserted that the court may need to consider the claim.

[4] The Applicant confirmed there was no longer an issue as it relates to the enforcement of child support from September 17, 2012, to March 31, 2014. In response, the Respondent asserted that he overpaid child support during that period. He did not seek any relief in relation to this alleged overpayment in his Response to the Motion to Change.

[5] At the end of the hearing, the following issues remained for determination by the court:

(a) Should the Amending Agreement dated March 20, 2014 be set aside on the basis of duress? (b) When did the children begin living primarily with the Applicant? (c) Should an income be imputed to the Respondent and, if so, what income should be imputed to him and for how far back? (d) Does the Respondent owe retroactive child support and, if so, for how far back? (e) Does either party owe to the other retroactive s. 7 expenses and, if so, how much? (f) If retroactive child support were found to be owing by the Respondent, should a lien be registered against the Respondent’s cottage property to secure his retroactive child support? And, (g) Costs.

Material relied upon by the parties

From the Applicant:

1. The Applicant’s Motion to Change dated October 26, 2021
2. The Applicant’s Affidavits dated April 29, 2022; March 10, 2023; * [1] April 27, 2023; and *May 18, 2023
3. The Applicant’s Financial Statements dated October 25, 2021 and March 10, 2023
4. The Applicant’s Form 35.1 affidavit dated October 26, 2021
5. The Applicant’s Factum dated May 1, 2023
6. The Applicant’s Book of Authorities dated May 1, 2023

From the Respondent:

1. Affidavit of Jason Grier dated May 1, 2022, sworn May 1, 2023
2. Affidavit of Respondent dated May 2, 2022, sworn May 2, 2023
3. Affidavit of the Respondent dated *April 27, 2023 and *May 22, 2023
4. The Respondent’s 35.1 Affidavit dated March 31, 2022
5. Financial Statements of the Respondent sworn March 31, 2022 and April 27, 2023

[6] After argument, the parties agreed that the court could rely upon the Respondent’s affidavit dated May 22, 2023, and the Applicant’s affidavits dated April 27, 2023, and May 18, 2023, despite being served outside the timelines of Justice Brown’s order of January 23, 2023.

[7] In addition to the written material, both parties testified, as did the Respondent’s former employee and friend, Jason Grier.

Brief Background

[8] The parties met in April or May 2006. They started living together in and around September 2006, and separated on, in or around June 17, 2012, according to the Applicant, and in 2009 according to the Respondent. They were never married.

[9] The parties have two children: Skylar, born September 12, 2007 (age 15), and Brooklyn, born November 11, 2008 (age 14).

[10] The Applicant started living with her current husband in 2012 based on her oral evidence and in 2013 based on her affidavit evidence. She has two other children with her current husband: Jackson, born December 1, 2014, and Carter, born December 22, 2016.

[11] The parties entered into a comprehensive Separation Agreement dated September 17, 2012, and an Amending Agreement dated March 20, 2014. For the 2012 Agreement, both parties had legal counsel who signed certificates of independent legal advice (ILA). For the 2014 Amending Agreement, the Applicant’s signature was witnessed by a lawyer, “Timothy O’Driscoll,” and the Respondent’s signature was witnessed by “J. Christmas.” The court was not advised whether J. Christmas was a lawyer. Neither of the witnesses to the 2014 Amending Agreement provided evidence in this proceeding.

[12] The parties agree that from March 2015 to June 2018, the children Skylar and Brooklyn resided with them on a fairly equal basis.

[13] The Applicant’s position is that the children commenced residing with her full time near the end of June 2018. The Respondent’s position in his pleadings and initial oral evidence is that the children moved in primarily with the Applicant at the commencement of COVID in March 2020. Later in his oral evidence, it was his position that the children started residing with the Applicant primarily in September or October 2021.

[14] The 2012 and 2014 Agreements were filed with the court on October 26, 2021.

Litigation History

[15] This matter has been before the court on five (5) separate occasions:

a. On February 25, 2022, Justice Kril approved the Respondent’s 14B Motion for an extension to serve and file his responding materials until March 31, 2022. b. On May 17, 2022, Justice Valente approved a second 14B Motion brought by the Respondent for an extension to serve and file his responding materials until May 27, 2022. c. On August 25, 2022, the parties attended a Dispute Resolution Officer Conference. d. On November 15, 2022, the matter was scheduled for a Settlement Conference before Justice Brown. A Temporary Order (“November Order”) was made setting out an extensive list of financial disclosure that the Respondent must produce within 45 days. Of note, the disclosure was limited to the years 2018 to 2021. The Respondent was ordered to pay $1,000 in costs for the attendance. e. On January 23, 2023, the matter was scheduled for a second Settlement Conference before Justice Brown. A Temporary Order (“January Order”) was made to extend the timeline for producing the disclosure ordered by the November Order, providing the Respondent with an additional 30 days. The parties were ordered to serve and file updated Affidavits and Financial Statements as follows: The Applicant’s materials were due March 10, 2023. The Respondent’s materials were due April 10, 2023. The Applicant’s reply was due April 24, 2023 and the parties’ Facta and Books of Authority were due May 1, 2023. Also, the parties consented to child support payable by the Respondent on a without prejudice basis based on his stated annual income of $40,000 commencing February 1, 2023 in the sum of $500 per month. The Respondent was ordered to pay costs of $1,750 for the attendance.

[16] The court was advised at the end of this trial that the Respondent had paid his costs from the two orders of Justice Brown, albeit late.

Credibility Findings

[17] I found the Applicant to overall be credible. She answered the questions posed to her in a straightforward fashion and admitted matters that were not necessarily in her favour.

[18] I found the Respondent to lack credibility. He was vague in his answers, often not answering the question posed. He did not produce court ordered disclosure. He continually indicated he had proof for statements that he was making which he would provide “later”, “after lunch” or “tomorrow morning”. In the instances where proof was provided, such as his TD bank account statements, the letter from the bank did not in fact prove what he was stating. Additionally, he admitted to lying on his 2020 tax return and financial statements for the business, and admitted in his affidavit to committing “mortgage fraud.”

[19] Where the parties’ evidence conflicts, unless indicated otherwise, the court accepts the Applicant’s evidence.

[20] From the evidence provided, it is clear that both parties acted improperly, including while they were together. For example, both parties lied about where the Applicant lived to allow her to obtain a daycare subsidy, and the Respondent claimed the Applicant’s daycare expenses from Jackson and Carter (the two children of her marriage to her current husband) on the understanding that the parties would share the benefit equally.

Should the Amending Agreement dated March 14, 2014 be set aside on the basis of duress?

[21] The court declines to set aside the 2014 Amending Agreement for the following reasons:

(a) In this case, counsel for the Applicant tried to reopen the matter in closing after indicating in his opening statement that the Applicant was abandoning this ground of relief. This is not proper, as the Respondent was not permitted to deal with questions involving the execution of the Agreement during the hearing given the abandonment of that issue. (b) Setting aside an Agreement for duress is not the proper subject matter of a motion to change: see r. 15 of the Family Law Rules, O. Reg. 114/99. While courts have applied flexibility with respect to pleadings where appropriate to do so, I would not exercise my discretion to convert this issue to an Application in these proceedings on the facts of this case: see Wright v. Conway, 2018 ONSC 133. (c) The grounds for duress were not, in any event, made out: see Toscano v. Toscano, 2015 ONSC 487, at para. 72; Lisa Ludmer v. Brian Ludmer, 2013 ONSC 784, at para. 53.

When did the children start to reside primarily with the Applicant?

[22] I find that the children started to reside primarily with the Applicant in late June 2018.

[23] I make this finding for the following reasons:

(a) I accept the evidence of the Applicant when she states that the Respondent had a significant argument with both children and kicked Skylar out of the home in June 2018. This prompted the children asserting their preference to reside with the Applicant. (b) Even though the bus schedule provided by the Respondent shows that the children were delivered to his home for the 2018-2019 school year, I accept that for the school year that started in September 2019, the Applicant herself or the Respondent’s parents (at the Applicant’s request given their long standing and good relationship) picked the children up at the bus stop and took the children to the Applicant’s home or the paternal grandparents’ home. (c) In April 2019, the Respondent sent the children an email with subject line reading, “Can my children decide who to live with”—the evidence being that he wanted them to return to the shared parenting regime. (d) The video sent by the Respondent to the children in August 2021 references that the children have lived with the Applicant since prior to August 2021 and that it was in 2018 that the parties started to discuss child care.

Should an income be imputed to the Respondent?

[24] The Respondent’s Line 150 income based on a two-page 10-year CRA income summary produced during the trial is as follows:

2014 – $76,693 2015 – $105,653 2016 – $142,240 2017 – $98,705 2018 – $94,394 2019 – $99,867 2020 – $107,015 2021 – $44,498

[25] The Respondent’s evidence is that his current income is $38,400 per year comprised solely of the income he is to receive from the private mortgages he holds. It is his evidence that he is unemployed and has no other sources of income.

[26] It is the Applicant’s position that an income of $150,000 per annum should be imputed to the Respondent for the years 2014 to current. It is the Respondent’s position that his income is as set out in his Line 150 income and there should be no imputation. Other than in the year 2020 (when he states he lied to inflate his income in order to obtain a bank loan), he states that his income is as set out in his Line 150.

[27] For the reasons that follow, the court inputs an income of $150,000 for the years 2018 to current. For the prior years, there was no order for disclosure made and there was no evidence that that information was requested of the Respondent for the years 2014 to 2017. As such, his Line 150 income will be used in those years.

[28] Although in his pleadings the Respondent indicated that the Applicant could earn more in the later years, he did not pursue this issue in his questioning or in his submissions. The court was not provided any evidence in this regard.

The Law

[29] Section 19 of the Child Support Guidelines, O. Reg. 391/97 (the “Guidelines”) is the section that governs the imputation of income. In this case, paragraphs (a), (d)-(g) and possibly (h) are relevant. They state:

Imputing income

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,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;

(e) the parent’s or spouse’s property is not reasonably utilized to generate income;

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

(g) the parent or spouse unreasonably deducts expenses from income;

(h) the parent or spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; …

[30] Imputation of income provides a means by which the courts can ensure that parents meet their joint and ongoing obligation to support their children: see Drygala v. Pauli (2002), 61 O.R. (3d) 711 (C.A.), at para. 32.

[31] The Ontario Court of Appeal in Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at para. 51, stated the following:

The courts retain discretion to impute income to a payor spouse in excess of that spouse’s presumptive income where the imputed income is supported by the evidence and is consistent with the objective of establishing “fair support based on the means of the parents in an objective manner that reduces conflict, ensures consistency and encourages resolution”. [Citations omitted.]

[32] The imputation of income to a party is a fact specific exercise that turns on the circumstances of the case before the court. Regardless of the basis upon which income is imputed, the amount of income that the court imputes to a party is a matter of discretion. However, there must be some basis in the evidence for the amount that the court has chosen to impute: see Drygala, at para. 43.

[33] The onus is on the party requesting the court to impute income to establish the grounds for this request. To meet this onus, the party must establish an evidentiary basis upon which this finding can be made: see Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17, at para. 28. However, this does not detract from the obligation of every party in a child support case to make full and frank financial disclosure of all matters that may be relevant to a proper determination of other income for support purposes. This includes disclosure of all information required to properly assess the party’s actual earnings, their income earning potential, efforts which they have made to maximize their earnings, and the appropriateness of any claimed deductions from their income: see Roloson v. Clyde, 2017 ONSC 3642, at para. 206.

Is the Respondent intentionally underemployed?

[34] When the parties met in 2006, the Respondent worked at Jake’s Boathouse as a cook. According to the Applicant, he also earned $1,000 a day selling cocaine, but does not recall for how many days a week. The Respondent was not asked about this in cross-examination, nor is it relevant to the issues before the court.

[35] The Respondent indicated that in 2009, he incorporated All Wildlife Inc., a pest control business removing wildlife (“the company” or “AWI”). He decided to start this business after overhearing conversations with someone he was living with in 2005 (Sean Thorton) who worked at Humane Wildlife. He did not advise when he started the business but simply indicated that initially he was a sole proprietor. His oral evidence is that for the years 2014 to 2017, he was in business with a partner (Garad Houliston), but that he held 51% of the interest in the company. He states that in 2017, All Wildlife Inc. was made dormant because of debt incurred. His evidence was that he resigned as a director at that time. However, based on a corporate profile search provided by the Applicant dated August 2022, AWI was active, and the Respondent remained the director in August 2022.

[36] The Respondent indicated that he subsequently started another company in 2017, 2553837 Ontario Inc., otherwise known as All Wildlife and Pest (“AWP”). He owned all the shares in AWP, but it is his evidence that by 2021, AWP was also not successful and, as such, he “shut down the company” in 2021.

[37] When asked what efforts he has made to find alternate employment since 2021, the Respondent answered that he took a breath work facilitator course for two weeks in early 2022, he has inquired with people about starting a boating taxi service in Honey Harbour, Ontario (where his cottage is located), he has explored opportunities to open, close and maintain cottages (it is his evidence that he could earn $20,000 to $30,000 per annum doing this) and he is considering renting his cottage in Honey Harbour.

[38] The Respondent describes but provides no medical evidence that he cannot run up and down ladders anymore given that he fell off a roof in 2019. He has stated that he is not trained in pest control (he was in sales) and that he cannot restart a pest control company because of outstanding warranties with AWI.

[39] The Respondent’s evidence is that he has purchased an ice bath which he can use together with his breath work training and sauna to open a spa or hold “men’s nights.” It is his intention to open a spa-like facility in both Honey Harbour and Costa Rica.

[40] The Respondent describes himself as being ambitious and wanting to make money; he is very interested in investing in something in Costa Rica, is good with sales and can do some handyman work.

[41] The Respondent is capable of working. His lack of credibility coupled with his dishonesty and then failure to produce court-ordered disclosure allow the court to draw adverse inferences.

[42] The message sent by the Respondent to the Applicant on April 4, 2022, confirms his intention to not pay support. In it, he states, among other things,

“I’m not going to make moves inside Canada and have to maintain all of this debt because it’s just going to leave me in a shitty position if my kids want to go live with their mom and I’m going to pay child support to that? I’m going to retire. I swear to God Trish. It’s like, I will never work to give you a monthly pay out.

[43] In that same message, he makes clear that his intention to move to Costa Rica is to avoid his obligations.

[44] The court finds that the Respondent is intentionally underemployed within the meaning of the Guidelines and the governing caselaw. That under-employment is not required to meet the needs of the children nor is it for reasonable education or health needs of the Respondent: see s. 19(1)(a) of the Guidelines.

Is the Respondent’s lifestyle commensurate with his reported income?

[45] The message sent by the Respondent to the Applicant on April 4, 2022 makes his lifestyle clear. He states, “I owe $300,000 total, plus maybe another $50,000 in like cash fking payouts. I’m cashing out $1.9 [million] in Burlington. What would you guys cash out for right now? Plus, I sold a lot for $300,000 and I own a cottage up north and I own fking five boats.”

[46] By the end of the trial, it was undisputed that the Respondent had the following assets:

(a) A home in Costa Rica for which he paid $500,000 USD or $700,000 CDN in May 2022 and is owned by a corporation; (b) A bank account in Costa Rica which he states had $8,000 in it but he has provided no proof; (c) A bank account with Scotia Bank and First Canadian One which he failed to disclose; (d) Brokerage holdings which he states are $100,000; (e) Private mortgage of $300,000 (which increased to $400,000) for which he is to receive 10% interest on the principal; (f) Three boats; (g) A camper van; (h) Motorcycle; (i) Jet skis; (j) Two Toyota Land Cruisers (1991 and 1996);

*the amount he ascribes for cars, boats and vehicles on his financial statement sworn April 27, 2023 is $145,000.

(k) A property in Georgian Bay (Honey Harbour) which he estimates is valued at $800,000; and (l) Tools and equipment in storage which he states are worth $20,000.

[47] In his affidavit dated May 22, 2023, the Respondent states that he invested over $550,000 of his own money in AWI between 2016 and 2021.

[48] It is clear that even though the increase in the value of his cottage in Honey Harbour is related to the market, his lifestyle exceeds that which is reflected in his Line 150 income.

[49] The court finds that the Respondent’s lifestyle is not (for the period in question) commensurate with his Line 150 income.

Deduction of Expenses

[50] The Respondent admits that he received rental income in the years prior to 2017, but he did not report it, as he did not need to bolster his income during that time.

[51] When the rental income was reported, other than costs paid directly to Airbnb, many of the expenses, although a write off for Canada Revenue Agency (CRA) purposes, should be added back to income for child support purposes. For example:

• In 2017, his gross rental income of $47,554 resulted in a net income of $20,977. It is clear that even after adding back the personal use portion, there are expenses that are legitimate for CRA purposes but not child support.
• In 2020, the Respondent states that he lied about his rental income to inflate his income so he could obtain a loan. The court was not provided with his income tax return for that year, but the income summary shows he had a net rental income of $22,127 in that year.
• In 2021, his gross rental income is $93,638.90 and his net is $22,054. Other than the $18,862.29 paid to Airbnb, there is no reasonable explanation for his other expenses. The court does not accept that he had an “oral agreement” with “Raven” and “Mike” who were helping him with the Airbnb to pay them a monthly amount. Even if that were the case, there is no reason that the Respondent could not have done the work himself. For the year 2021, this court finds that his rental income was $74,954.61.

[52] In summary, the court finds that the Respondent unreasonably deducted expenses from his income: see s.19 (g) of the Guidelines. The Respondent himself admitted that he lied about his rental income in 2020, and that there were years he received rental income for which the court did not have sufficient information to determine the issue with precision.

Is the Respondent’s property reasonably utilized to generate an income?

[53] On May 4, 2022, the Respondent sold his home in Burlington, Ontario, for $2,856,000. He netted $1,693,487.97. It is his evidence that he used $300,000 of the funds to pay company debts, $400,000 to invest in the private mortgage, $700,000 to purchase a house in Costa Rica and over $100,000 was put into his bank account. He could not explain how the remaining $193,487.97 was used. Other than the monies garnished from the Family Responsibility Office (FRO) in the amount of $11,500 as a result of the Applicant filing the 2012 Agreement, he used none of it to pay child support. This occurred despite his acknowledgment that the children were living with the Applicant at the time.

[54] The Respondent chose to use the funds from the sale of his Burlington home in a manner that benefitted him personally. Had he used the net proceeds of sale to invest or put all of it in a private mortgage at 10%, his income from that alone would exceed $150,000; even if one accepts at face value that he paid $300,000 towards company debts (he did not provide any evidence of this), he could have put $1,393,487.97 less $11,500 from the FRO enforcement into private mortgages. Based on his own evidence regarding the interest rate, this would have generated an income of $138,198.79. When that is added to his stated income in that year and the years following, his income would exceed $150,000 per annum.

[55] The court finds that the Respondent’s property has not been reasonably utilized to generate income: see s. 19 (e) of the Guidelines.

Failure to provide financial disclosure

[56] There were two detailed court orders requiring the Respondent to produce disclosure. Prior to the trial, very little disclosure had been produced. Despite producing some disclosure during the trial, by the end of the trial, he remained in substantial non-compliance with Justice Brown’s orders for financial disclosure. Furthermore, he was not in compliance with his obligations under s. 21 of the Guidelines and r. 13 of the Family Law Rules.

[57] On April 27, 2023, the Respondent provided over 500 pages of documents and still he had failed to comply with the vast majority of the disclosure orders. Further, he failed to provide any information as it relates to AWP.

[58] The disclosure that remained outstanding pursuant to the order of Justice Brown dated November 15, 2022, at the end of the trial includes:

(a) The bank statements for his business; (b) The tax returns and financial statements for AWP; (c) Copies of the corporate tax returns and audited financial statements of All Wildlife Removal Inc. for the years 2018, 2019, 2020, and 2021; (d) Supporting documents used to prepare the corporate financial statements for All Wildlife Removal Inc. from 2018 to 2021; (e) Full particulars, including supporting documents of all cash receipts received by the Respondent, for All Wildlife Removal Inc. from 2018 to present; (f) Copies of bank statements for All Wildlife Removal Inc. from 2018 to present; (g) Copies of his credit card statements from 2018 to present; (h) Full particulars of all personal expenses of the Respondents paid through All Wildlife Removal Inc. from 2018 to present; (i) All documentary evidence of the sale of All Wildlife Removal Inc.; and (j) “Any and all other disclosure required to be produced by the Respondent under s. 21(1)(d)(e) and (f) of the Guidelines.”

[59] The Respondent did not provide financial statements for All Wildlife Removal Inc. from 2018 to 2021 because, he said, “[t]he company has been dormant since 2017 – there are no such documents”. He did not provide evidence to support the statement. Even if true, he provided no information as it relates to the successor corporation AWP.

[60] In this case, despite his obligations under the Family Law Act and the Guidelines and two court orders, the Respondent did not produce the disclosure required to determine his income for child support purposes in the relevant years. Of the disclosure he did produce, most if not all of it came during the trial which not only lengthened the proceeding but made it difficult for the Applicant to prepare her case. In this case, the Respondent engaged in blameworthy conduct.

[61] In Michel v. Graydon, 2020 SCC 24, the Supreme Court of Canada highlighted the concern about vulnerable support recipients and dependent children being victimized by payor parents who evade disclosure obligations and stonewall attempts to obtain financial information from them. The Court noted, at para. 33:

Failure to disclose material information is the cancer of family law litigation … And yet, payor parents are typically well aware of their obligation as a parent to support their children, and are subject to a duty of full and honest disclosure — a duty comparable to that arising in matrimonial negotiations… The payor parent's obligation to disclose changes in income protects the integrity and certainty afforded by an existing order or agreement respecting child support. Absent full and honest disclosure, the recipient parent — and the child — are vulnerable to the payor parent's non-disclosure.

[62] More recently, in Colucci v. Colucci, 2021 SCC 24, the Court emphasized, at paras. 52, 54:

… courts have increasingly recognized that the payor's duty to disclose income information is a corollary of the legal obligation to pay support commensurate with income … payor parents "are subject to a duty of full and honest disclosure — a duty comparable to that arising in matrimonial negotiations" ... Courts and legislatures have also implemented various mechanisms to incentivize and even require regular ongoing disclosure of updated income information by the payor, along with tools to move proceedings forward in the face of non-disclosure. Those mechanisms include imputing income to payors who have failed to make adequate disclosure, striking pleadings, drawing adverse inferences, and awarding costs.

[T]he exercise of judicial discretion and the setting of legal standards under s. 17 of the Divorce Act must encourage financial disclosure and in no way reward those who improperly withhold, hide or misrepresent information they ought to have shared. Proactive disclosure of changes in income is the first step to ensuring that child support obligations are tied to payor income as it fluctuates. Inadequate disclosure breeds "a backlog of [retroactive] support applications" … with full, frank and regular disclosure, long-term arrears… should be rare.

[63] Citing Colucci, the Ontario Court of Appeal reiterated in Aslezova v. Khanine, 2023 ONCA 153, at para. 12:

The obligation to provide financial disclosure in a case such as this does not simply flow from the disclosure order, but also more broadly from fundamental principles of family law. As this court reiterated in Roberts, at paras. 11 and 13: "The most basic obligation in family law is the duty to disclose financial information” and "[f]inancial disclosure is automatic. It should not require court orders . . . to obtain production." Recent jurisprudence from this court is clear that non-compliance with disclosure orders – and particularly intentional, repeated, and ongoing non-compliance – will constitute exceptional circumstances in which an order to strike pleadings may reasonably be made… willful, repeated non- compliance with disclosure orders may leave the motion judge with "no viable alternative remedy available" to balance both parties' interests fairly. [Citations omitted.]

[64] The Respondent’s income is derived from the corporations listed above. There was very little information provided in reference to All Wildlife Inc. and no financial statements provided for AWP other than a balance sheet provided during trial dated January 31, 2022. As it relates to All Wildlife Removal Inc., he provided the notice of assessment for the year ending November 30, 2017, the balance sheet and statement of loss for the year end November 30, 2017, and the balance sheet for November 30, 2017. These documents all relate to the year he states the company was wound down and at its lowest point.

[65] The court finds that the Respondent has failed to provide income information when under a legal obligation to do so: see s. 19 (f) of the Guidelines. As such, the court draws an adverse inference and finds it is appropriate to impute income to the Respondent.

[66] The court also finds that the Respondent used financial and emotional intimidation and abuse, as is clear from the videos he sent to the children, to avoid his child support responsibilities.

What amount of retroactive child support is owed?

[67] The Applicant seeks set-off child support from 2012 to June 2018 based on her Line 150 income and an imputed income to the Respondent of $150,000. Thereafter, she seeks guideline support based on an imputed income of $150,000.

[68] This court declines to order child support retroactive to September 2012 as sought by the Applicant. The parties signed a Separation Agreement which, among other things, confirmed they were satisfied with the financial information they had about the other; they were represented by counsel who each signed a certificate of ILA indicating that the parties entered into the Agreement freely and that they understood the Agreement. Neither party requested disclosure from that point to the signing of the Amending Agreement; nor did either party seek to review support.

[69] The September 2012 Agreement noted the Respondent’s income as $50,000 and the Applicant’s income as $40,000. There was an acknowledgment that the Respondent may earn commission in addition to his income. The Respondent agreed to pay $500 per month in child support (part of that payment included a $120 a month cell phone bill being paid by the Respondent).

[70] The daycare costs were to be shared equally from that point forward and the parties were each to contribute $100 per month into a RESP for the children. Paragraph 5.16 of the September 2012 Agreement required a review of support and/or disclosure “if either party asks in writing”.

[71] The 2014 Amending Agreement amended the income of the parties to $81,125 for the Applicant and $82,704.44 for the Respondent; neither was obliged to pay child support and numerous other clauses of the 2012 Agreement were removed. The Respondent was obligated to pay medical expenses not covered by existing benefits.

[72] By 2015, the Respondent’s Line 150 income had materially increased to $105,653. The Applicant’s income in 2015 was $89,597. This in and of itself is sufficient to justify a readjustment of child support: see Gray v. Rizzi, 2016 ONSC 152, at para. 39, Colucci.

[73] As stated by the Supreme Court in Colucci, at para. 28, “… Because child support under the Divorce Act is tied to payor income and income tends to fluctuate, a child support order or agreement reflects a snapshot in time and is never final.”

[74] A determination as to the amount of child support for one year is not meant to be fixed and non-variable for all time. If a final child support award is made one year, that is generally a final order for that year. If the amount is not subsequently adjusted (without obtaining an order confirming its applicability), the award for future years can generally be adjusted to reflect changed circumstances (subject to some limitations): see Colucci; Michel. See also D.B.S. v. S.R.G., 2006 SCC 37.

[75] The court finds that the Applicant gave the Respondent verbal notice of her intention to pursue support for the children in 2018. Further, in June 2018, the children moved in with the Applicant primarily, which constitutes a further material change in circumstances.

[76] In the first of the four videos sent by the Respondent to the children on August 11, 2021, attached to the Applicant’s affidavit, the Respondent admits that in 2018, the parties were to sit down and discuss the children’s expenses. The court finds that this constitutes notice of the intention to review child support despite the Respondent’s position that the Applicant first asked him to pay for the children’s expenses in 2019, and did not ask for child support until 2021. Even if the court were limited to the three-year rule, then under this finding, the review could commence in 2015.

[77] In the video messages, he also stated that he will agree to the children staying with the Applicant, noting that he wants 50/50 custody but that they can primarily live with her. He also noted in those messages that the Agreement stands – the Agreement being that he will not pay child support but will split the expenses after considering the $9,000 he states he has saved for each child.

[78] The videos also demonstrate that the Respondent used intimidation and fear to manipulate financial matters. The videos are disturbing and resulted in police involvement. The fact that the Respondent cannot see the inappropriateness of his behaviour and the terrible amount of pressure he put on the children is concerning to the court. He admits that the Applicant has asked him to stop involving the children, and his response was to send yet another video message to the children wherein he refers to the custody battle, how “your involvement will be massive – you will have child psychologists interviewing you” and the “catastrophic cost” of having a forensic audit. He uses foul language in all four video messages to the children and makes many disparaging remarks about the Applicant. He threatens to be at their house the next day at 7:30 to reinstitute the 50/50 parenting schedule and suggests that they may have to go to a group home after the court case if both homes were found to be unfit.

[79] In this case, the court finds that the Respondent engaged in blameworthy conduct and but for my finding below in relation to when the review starts, the court could exercise its discretion to retroactively readjust to an earlier date.

How much support should be paid from January 2015 to current?

[80] In light of this court’s findings above, retroactive support calculations will commence January 2015 based on a shared parenting arrangement; based on the parties’ Line 150 income from January 2015 to June 2018; and based on the Respondent’s imputed income of $150,000 from January to June 2018. For the period of July 2018 to current, the retroactive amounts also will be calculated based on the Respondent’s imputed annual income of $150,000. FRO will have to have regard to amounts paid by virtue of the consent without prejudice order of Justice Brown of January 23, 2023.

[81] In the Supreme Court of Canada decision, Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 S.C.R. 217, the court made the following significant comments regarding the interpretation of s. 9 and the manner in which child support calculations should be approached in shared parenting scenarios:

1. In shared parenting arrangements, there is no presumption in favour of the parent who has less time with the child paying the table amount of child support; rather, the court must determine the quantum of child support in accordance with the three factors listed in s. 9 of the Guidelines.
2. A finding that shared parenting exists does not automatically dictate a deviation from the table amount of child support. In some cases, a careful review of all the factors set out in s. 9 of the Guidelines may lead the court to conclude that the table amount remains the appropriate figure.
3. In determining the appropriate quantum of support, none of the three factors listed in s. 9 of the Guidelines prevails over the others. The court must consider the overall situation of shared custody, the cost to each parent of the arrangement, and the overall needs, resources, and situation of each parent. The weight to be afforded to each of the three factors will vary according to the particular facts of each case.
4. The purpose of s. 9 of the Guidelines is to ensure a fair and reasonable amount of child support.
5. In adopting s. 9 of the Guidelines, the legislature has made a clear choice to emphasize the need for fairness, flexibility, and the actual conditions, means, needs and circumstances of each parent and the child, even if this meant sacrificing to some degree the values of predictability, consistency, and efficiency.
6. The simple set-off approach may be a useful starting point (s. 9(a)). This is particularly so in cases where parties have provided limited information and the incomes of the parties are not widely divergent. However, the court emphasizes that the simple set-off approach has no presumptive value in carrying out the support calculation. It cautioned against a rigid application of the set-off approach, noting that that may not be appropriate when a careful examination of the respective financial situations of the parties and their household standards of living raise concerns about fairness of a drastic reduction in child support to the recipient.
7. The court held that the judge has discretion to modify the simple set-off where “considering the financial realities of the parents, it would lead to a significant variation in the standard of living experienced by the children as they move from one household to another, something which Parliament did not intend.” The court should strive for a result that avoids the child experiencing a noticeable decline in their standard of living as they move between households.
8. One of the considerations in carrying out the s. 9 of the Guidelines analysis is whether one parent is actually incurring a higher standard of the child’s costs than the other, such as costs relating to clothing and activities.
9. Subsection 9(b) recognizes that the total global cost of raising the child in a shared custody arrangement may be higher than a primary residence arrangement. It requires the court to consider the total additional costs attributable to the situation of shared custody. In carrying out this analysis, evidence of necessary duplication of fixed costs arising due to shared parenting may be important.
10. Not every dollar spent by a parent who has the child more than 40% of the time is a dollar saved by the recipient parent. In absence of evidence to the contrary, it is possible to presume that the recipient parent’s fixed costs have remained the same and that their variable costs have only marginally decreased by the other parent’s increase in time with the child.
11. Financial statements and/or child expense budgets are necessary for the court to properly carry out the child support analysis pursuant to s. 9(b). The judge should not make assumptions regarding additional costs attributable to shared parenting in the absence of any evidence relating to the issue.
12. The court’s discretion under s. 9 of the Guidelines is sufficiently broad to bring a parent’s claim for s. 7 expenses into the analysis under that section, taking into consideration all the factors outlined in s. 9 of the Guidelines.

[82] It should be noted that I cautioned counsel and the Respondent that proper evidence was required to be led for me to properly consider the factors set out in s. 9 of the Guidelines.

[83] No evidence was led on the second factor in s. 9 of the Guidelines, namely the increased costs of shared custody. As the parties have enjoyed equal parenting since at least 2012, and the children were set up in each parent’s respective home for some time, it is difficult to understand what the increased costs could have been.

[84] The third factor to consider encompasses the conditions, needs, means, and other circumstances of each spouse and of any child for whom support is sought. There was no historical evidence adduced other than the evidence about the lifestyle the parties enjoyed while together, no childcare budgets were produced, and the only information about the Applicant’s spouse’s income was for the current year.

[85] I have concluded that the set off amount is fair in the circumstances and does not result in a significant deviation of the standards of living of the children moved from one household to the other and meets the objectives of the Guidelines for the period of 2015 to June 2018.

[86] In summary, I have found that:

(a) Child support should be recalculated retroactive to January 2015; (b) Set-off is appropriate for the period of time the parties shared parenting; (c) The children started living with the Applicant effective at the end of June 2018; (d) The Line 150 incomes will be used for the years 2015 to 2017; (e) An income of $150,000 should be imputed to the Respondent from 2018 to current and ongoing; (f) The Applicant’s Line 150 income will be used for all relevant years.

[87] Therefore, the retroactive amount is calculated as follows:

2015 – Based on the Applicant’s Line 150 income of $89,597 ($1,288 for 2 children) and the Respondent’s Line 150 of $105,653 ($1,485 for two children), the set off payable by the Respondent to the Applicant is $197 per month or $2,364. 2016 – Based on the Applicant’s Line 150 income of $89,728 ($1,290 for two) and the Respondent’s Line 150 income is $142,240 ($1,923 for 2 children), the set off payable by the Respondent to the Applicant is $633 per month or $7,596. 2017 – Based on the Applicant’s Line 150 income of $71,120 ($1,053 for 2 children to November and then $1,084 for December) and the Respondent’s Line 150 income of $98,705 ($1,400 for two children to November and then $1,455 for December), the set off payable by the Respondent to the Applicant is $3,817 + $371 for a total of $4,188. January to May 31, 2018 (first 6 months of 2018) – Based on the Applicant’s income of $87,667 ($1,321 for two children) and the Respondent’s imputed income of $150,000 ($2,077), the set off payable for the first 6 months is $4,536. June 2018 to December 31, 2018 (last 6 months of 2018) – Based on the Respondent’s imputed income of $150,000, the support payable for 6 months is $12,462. 2019 – Based on the Respondent’s imputed income of $150,000 ($2,077 x 12), the support payable is $24,924. 2020 – $2,077 x 12 = $24,924 2021 – $2,077 x 12 = $24,924 2022 – $2,077 x 12 = $24,924 2023 - $2,077 x 7 = $14,539 to the end of June 2023

Total is $145,381 less monies from FRO since the order of Justice Brown dated January 2023.

[88] As mentioned, the Respondent states that from 2012 to 2014, he paid to the Applicant $500 to $700 per month and, as such, FRO should not have enforced the 2014 order. He asserted that he has overpaid child support if one considers the amount he paid to the date of the trial ($13,500), the benefits the Applicant has received which include direct payments to her, and how she is receiving the entire child tax credit and section 7 expenses which he states he paid. The trial is the first time he raised this issue. He provided no proof, nor does he seek a repayment in his Motion to Change despite his reference to the parties using the same accountant for the years 2007-2015 to maximize benefits. As such, the court declines to make such a finding.

What amount of retroactive section 7 expenses is owed?

[89] The Respondent asserts that he paid more of the children’s section 7 expenses when the parties were in a shared parenting arrangement. He states he was paying for all the tutoring, skiing, gymnastics, and therapy costs to that point. He feels he is owed $14,000. He has provided no evidence of this other than an email dated February 7, 2018, when he sought that the Applicant pay him $50 bi-weekly because the children were with him after school every day and there was a cost for the snacks. He does not seek retroactive repayment of s. 7 expenses in his Response to Motion to Change.

[90] The Applicant has produced a chart at Exhibit W of her March 10, 2023 affidavit based on receipts going back to 2019. She could not locate receipts prior to 2019.

[91] The Applicant confirms that she asked the Respondent to contribute to expenses until June 2021 and then she “gave up”; the last expense for which she sought reimbursement was Brooklyn’s braces and it is her evidence that when she asked, the Respondent started discussing vaccinations (see exhibit C of March 10, 2023, affidavit). After he did not agree to reimburse her for braces, she gave up. She did not ask him to contribute to the computers for school, nor does she recall asking him to contribute to dental receipts from May 22, 2019 to July 22, 2019.

[92] Section 7 of the Child Support Guidelines, O. Reg. 391/97 states:

Special or extraordinary expenses

7. (1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation:

(a) child care expenses incurred as a result of the employment, illness, disability or education or training for employment of the parent or spouse who has the majority of parenting time;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy, prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

Definition, “extraordinary expenses”

(1.1) For the purposes of clauses (1) (d) and (f),

“extraordinary expenses” means

(a) expenses that exceed those that the parent or spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that parent’s or spouse’s income and the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, or

(b) where clause (a) is not applicable, expenses that the court considers are extraordinary taking into account,

(i) the amount of the expense in relation to the income of the parent or spouse requesting the amount, including the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child,

(iv) the overall cost of the programs and activities, and

(v) any other similar factors that the court considers relevant.

Sharing of expense

(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the parents or spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.

Subsidies, tax deductions, etc.

(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.

Universal child care benefit

(4) In determining the amount of an expense referred to in subsection (1), the court shall not take into account any universal child care benefit or any eligibility to claim that benefit.

[93] Although she found it frustrating, the Applicant is obliged (pursuant to paragraph 5.7 of the 2012 Agreement which was not changed by the 2014 agreement) to seek consent for contribution of section 7 expenses from the Respondent. If he unreasonably withholds consent then the court will make a determination. For those expenses where there was no request made for contribution, the court declines to make an order.

[94] I find that the following qualify as section 7 expenses that the Respondent was asked to contribute but did not:

• Orthodontic expense on December 30, 2020 of $4,686.70 for Skylar. The Respondent owes 75% of this expense or $3,515.25 based on my findings in relation to the parties’ incomes.
• Orthodontic expense after June 2021 for Brooklyn, but neither the amount nor the receipt was provided to the court. The Respondent owes 84% of this expense based on my findings in relation to the parties’ incomes.

Should the court put a lien on the Respondent’s property?

[95] Section 12 of the Guidelines provides that “the court may require in the order for the support of a child that the amount payable under the order be paid or secured, or paid and secured, in the manner specified in the order” (emphasis added).

[96] Section 34(1)(k) of the Family Law Act states that this Court has the jurisdiction and power to order a charge against real property to secure support by “requiring the securing of payment under the order, by a charge on property or otherwise”. The Court of Appeal has confirmed the courts’ ability to make a charging order in Mwanri v. Mwanri, 2015 ONCA 843.

62. In the circumstances of this case where the Respondent has made it abundantly clear that he has no intention of paying child support and where he is taking action to move his assets and his life to Costa Rica, it is proper to order a lien against the Respondent’s property in Honey Harbour to secure the payment of the retroactive child support.

This Court orders as follows:

1. Commencing August 1, 2023, and on the first of each and every month thereafter, the Respondent, Paul John Stevens, shall pay child support for the children of the marriage, namely Skylar Love Stevens, born September 12, 2007, and Brooklyn Kai Stevens, born November 11, 2008, in the amount of $2,077 per month, based on his imputed income of $150,000 and in accordance with the Child Support Guidelines.
2. Child support arrears owing by the Respondent to the Applicant, pursuant to the Child Support Guidelines for the period of January 1, 2015, to July 31, 2023, shall be fixed in the amount of $145,381, less monies paid pursuant to the order of Justice Brown of January 23, 2023.
3. The Respondent shall forthwith make a payment of $3,515.25 plus 85% of the cost of Brooklyn’s braces upon being provided with a receipt and proof of payment by the Applicant for Brooklyn’s braces for the children’s section 7 expenses for the period up to and including May 30, 2023.
4. The retroactive child support owing of $145,381 shall be registered (and not discharged until retroactive child support has been paid) as a lien against the Respondent’s property; PT LT A OF ISLAND 146 OR LITTLE BEAUSOLEIL ISLAND BAXTER PT 1 35R6336; GEORGIAN BAY, municipally known as 4028 IS 1040 Baxter, Georgian Bay, Ontario, L0K 1S0.
5. The Respondent shall pay his proportionate share of the children’s ongoing special or extraordinary expenses pursuant to s. 7 of the Child Support Guidelines. The Respondent’s proportionate share is 77%. The Respondent shall submit payment of his proportionate share of all expenses to the Applicant within 5 days of receiving proof of the expense.
6. I strongly encourage the parties to resolve the issue of costs. If the parties are unable to do so, the Applicant may file written submissions on costs within 14 days. The Respondent may file responding written submissions within 10 days thereafter. The Applicant may provide brief reply 4 days thereafter. Submissions are not to exceed 4 pages, plus a detailed bill of costs which must be submitted and copies of any offers to settle. If a party does not serve and file submissions respecting costs in accordance with these deadlines, there shall be no costs payable to that party, although costs may still be awarded against that party. Cost submissions shall be sent to Kitchener.SCJJA@ontario.ca and Beth.Anderson@Ontario.ca.

Piccoli, J. Released: July 28, 2023

COURT FILE NO.: FC-21-1273-01 DATE: 2023-07-28 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Patricia Beaudoin Applicant and – Paul John Stevens Respondent REASONS FOR DECISION D.P. Released: July 28, 2023

[1] *served outside the timelines set out in the order of Justice Brown dated January 23, 2023. **The Respondent uploaded into CaseLines (but did not serve) until the hearing an affidavit dated May 22, 2023, with a number of attachments. I allowed the Applicant’s counsel time to review those documents with his client.