COURT FILE NO.: 1379-17 DATE: 2024-06-20
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Family Responsibility Office Applicant – and – Du-Won Kim Respondent
Counsel: Emily Novais, for the Applicant Self-Represented, for the Respondent
HEARD: May 29, 2024
JUDGMENT
The Honourable Madam Justice L. Bale
Background
[1] The relevant starting point for this court’s analysis is the Final Order of the Honourable Mme. Justice L. Snowie dated September 3, 2010. [1] On that date the court delivered written reasons wherein the Respondent husband, Mr. Kim, was ordered, to pay lump sum, non-taxable, spousal support to the Applicant wife, Mrs. Kim, fixed in the sum of $480,000.00, in addition to other relief amongst other things. The court’s decision was released after a 25-day family court trial. In the 70-page written judgment, the court made many negative references to Mr. Kim’s credibility. In particular, the court found that:
- Mr. Kim failed to comply with numerous court orders for complete financial disclosure;
- Mr. Kim was knowingly “evasive, misleading and manipulative” in his financial evidence to the Applicant and to the court;
- Mr. Kim chose to stop working in an effort to reduce or avoid his support obligations; and
- Mr. Kim had a history of failing to comply with his court-ordered spousal support obligations, and “on the basis of the Respondent’s failure to pay spousal support in the past, he is unlikely to comply with a spousal support order in the future”.
[2] Mr. Kim did not appeal the September 3, 2010 Final Order of Justice Snowie, and Mr. Kim did not pay the lump sum spousal support ordered payable to Mrs. Kim.
[3] A Motion to Change other aspects of Final Order was heard by the Honourable Mme. Justice H. McGee on March 21, 2022. On April 1, 2022, Justice McGee made a Final Order which, amongst other things, granted a Support Deduction Order for the lump sum payment of spousal support of $480,000.00 nunc pro tunc, effective as of September 3, 2010, with a post-judgment interest rate of 2% per annum, compounded annually.
[4] Mr. Kim did not appeal the April 1, 2022 Final Order of Justice McGee, and Mr. Kim did not pay the lump sum spousal support amount.
[5] On May 24, 2023, the Director, Family Responsibility Office, commenced a Notice of Default Hearing. The Respondent payor, Mr. Kim, appropriately served and filed a Default Dispute, and sworn Financial Statement.
[6] On December 8, 2023, Mr. Kim’s motion to reduce the garnishment amounts being collected by the Family Responsibility Office on behalf of the recipient, was dismissed by the Honourable Mme. Justice. M. Kril.
[7] On February 28, 2024, Mr. Kim’s motion to set aside the Final Order of Justice McGee was heard by the Honourable Mme. Justice K. Bingham. On March 5, 2023, Justice Bingham released written reasons wherein (i) Mr. Kim’s motion was dismissed, (ii) Mr. Kim was prohibited from bringing any further motions against the recipient until an outstanding costs award was paid in full, and (iii) the court required Mr. Kim to pay security costs in advance of bringing any further motions involving the recipient.
[8] Mr. Kim did not appeal the Orders of Justice Kril or Justice Bingham.
[9] The Default Hearing was heard by this court on May 29, 2024. Mr. Kim’s evidence at this hearing was presented by Affidavit evidence and sworn Financial Statements. Counsel for the Family Responsibility Office declined to cross-examine the payor on his materials.
Law and Analysis
[10] This default hearing is governed by the Family Responsibility and Support Arrears Enforcement Act, the “FRSAEA”, 1996, S.O. 1996, c. 31. Unless an order for support is terminated or withdrawn, under the FRSAEA, the Director is required to enforce support payments that are subject to a Support Deduction Order until no arrears are owing: s. 20.
[11] Section 41 of the FRSAEA prescribes that process of a default hearing. There are two statutory presumptions at a default hearing:
- The payor is presumed to have the ability to pay the arrears and to make subsequent payments under the order; and
- The statement of arrears prepared and served by the director is presumed to be correct: s. 41(9).
[12] If the court is not satisfied that a payor has rebutted the presumption of his ability to pay, the remedies available to the court are found in s. 41(10) of the FRSAEA:
Powers of court
(10) The court may, unless it is satisfied that the payor is unable for valid reasons to pay the arrears or to make subsequent payments under the order, order that the payor:
(a) pay all or part of the arrears by such periodic or lump sum payments as the court considers just, but an order for partial payment does not rescind any unpaid arrears; (b) discharge the arrears in full by a specified date; (c) comply with the order to the extent of the payor’s ability to pay; (d) make a motion to change the support order; (e) provide security in such form as the court directs for the arrears and subsequent payment; (f) report periodically to the court, the Director or a person specified in the order; (g) provide to the court, the Director or a person specified in the order particulars of any future change of address or employment as soon as they occur; (h) be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the arrears are paid, whichever is sooner; and (i) on default in any payment ordered under this subsection, be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the payment is made, whichever is sooner: s. 41(10).
[13] Of note, no order made under this section, nor any period of imprisonment served by a payor, reduces or discharges arrears made under an order: s. 41(11) and s. 41(17). The objective any order under this section must be to attempt to compel compliance with the support award, not to punish the recalcitrant payor: see Fischer v. Ontario (Family Responsibility Office), 2008 ONCA 825. In particular, the imprisonment of payors for non-payment of support must be an order of last resort, reserved for conduct which demonstrates a wilful and deliberate disregard for the obligation to comply with court orders: Fischer, at para. 24.
[14] In this case, the Director seeks an order that:
- Arrears as of May 22, 2024, shall be fixed at $601,895.18.
- The Respondent shall pay the following lump sum payments to arrears: a. $50,000.00 on July 1, 2024; b. $50,000.00 on September 1, 2024; c. $50,000.00 on November 1, 2024; d. $75,000.00 on January 1, 2025; e. $75,000.00 on March 1, 2025; f. $100,000.00 on May 1, 2025; g. $100,000.00 on July 1, 2025; h. $100,000.00 on September 1, 2025.
- In default of each lump sum payment referred to in paragraph 2, the Respondent shall be incarcerated for a period of 15 days or until such sum is further paid.
- In the event of default of any payment due herein the Director, Family Responsibility Office shall be a liberty to bring any future motion for warrant of committal based upon paragraph 3, with further notice to the Respondent.
- Approval as to form/content is waived.
[15] At present, the Director is enforcing the maximum deductible amount (50%) of Mr. Kim’s net available income, in addition to diverting any federal source deductions that may become available: FRSAEA, s. 23. As noted above, Mr. Kim’s request to reduce the present garnishment amounts was dismissed by Justice Kril on December 8, 2023, and is not an issue that is before this court.
[16] In this case, Mr. Kim does not dispute the accuracy of the Director’s records, and there is no ongoing order for support. Accordingly, the only issues before this court are:
- Has Mr. Kim successfully rebutted the presumption that he has the ability to pay the arrears, as reflected in the Director’s Records?
- If not, (i.e. the court finds that the payor has the ability to pay some or all of the arrears) what is the appropriate order to be made by the court to compel payment?
Arrears of Support
[17] Mr. Kim has not rebutted the presumption that the arrears of support of $601,895.18, as reflected in the Director’s Statement, are correct. Accordingly, Mr. Kim’s arrears of support shall be fixed at $601,895.18 as of May 22, 2024.
Ability to Pay
[18] The statutory presumption of the payor’s ability to pay may be rebutted with a “valid reason” excusing the default. The onus of proof remains on the payor to demonstrate, on a balance of probabilities, that the payor does not have the ability to pay, and that this inability to pay is for valid reasons. Generally, the payor must establish that:
- The circumstance giving rise to failure to pay is not voluntary;
- The payor accepts his responsibility and places the interests of his dependents above his own; and
- The payor has provided fulsome disclosure to the court: FRO v. Labrash at para. 12.
[19] For purposes of this Default Hearing, Mr. Kim relied upon his Default Dispute, sworn June 7, 2023, and updated Affidavit, sworn May 6, 2024 (with attached Financial Statements).
[20] Mr. Kim advises the court that:
- He is now 77 years of age. The support recipient, Mrs. Kim, is now 76. Their only daughter is now 34.
- Prior to the Final Order of Justice Snowie: a. Mr. Kim was a financial advisor for approximately 25 years. He owned his own company. He was able to provide his family with an affluent lifestyle through long hours of work. b. He developed severe anxiety and major depression. He was suicidal, hospitalized multiple times, and was under the care of a psychiatrist. c. He started receiving private disability insurance benefits on account of his mental health issues.
- After the Final Order of Justice Snowie: a. Mr. Kim continued to receive private disability insurance until May 2012, when he turned 65. b. He has continued to be entitled to receive commission income (Manulife insurance) from his company, however all of his commissions are garnished at a rate of 100% in favour of the recipient, as a result of the outstanding property judgment against him. Amounts collected under this garnishment order have included: i. $24,083.81 in 2020; ii. $25,209.37 in 2021; iii. $32,952.08 in 2022. [2] c. Mr. Kim’s current sources of income are CPP, Old Age Security, and WSIB, all of which are garnished at 50% by the Director, as per the support judgment against him. d. He has tried to work “many times”, but could not because his mental health was causing him to behave in an unprofessional manner with his clientele. e. Mr. Kim filed for bankruptcy in October 2022 and was discharged in August 2023. f. He continues to be under the care of a physician and continues to take prescription medication for his mental health issues.
- The recipient has always claimed “without evidence” that he has hidden “a million dollars in cash” somewhere, which is not true.
- Mr. Kim was incarcerated for 60 days in 2010, as ordered by Justice Snowie, and for 20 days in 2011 for failure to pay.
- He has not visited his home country, Korea, for over 30 years. He would like to visit, but cannot because the Family Responsibility Office has suspended his passport. He would like it returned.
[21] Mr. Kim’s sworn Financial Statements reflect disclosed income of $1,117.00 monthly (after the support garnishment), and expenses of $1,970.00 monthly. Mr. Kim has attached personal bank statements to his materials, which I have carefully reviewed. I note that the deposits into Mr. Kim’s personal account do appear to correspond with his disclosed income, as reflected on his sworn financial statements. However, counsel for the FRO appropriately urges the court to consider Mr. Kim’s evidence with caution, given the history of this file, and the credibility findings of Justice Snowie noted above, including in particular, the court’s accurate prediction that enforcement of Mr. Kim’s support obligation would be a challenge.
[22] In this case, particularly in the context of the findings of the original trial judge, I am not convinced that the circumstances Mr. Kim presently finds himself in are completely involuntary. While I accept that Mr. Kim’s circumstances, particularly since his bankruptcy, may now limit or prohibit him from paying the entirety of the arrears either all at once or in large lump sum amounts, I am not satisfied that (a) this was always the case, nor (b) that he cannot continue to pay at all. He is the author of his present circumstances. His income streams will continue to be garnished for a very long time unless he makes other satisfactory arrangements with the Director.
[23] Mr. Kim’s request for the return of his passport so that he may travel internationally suggests that he has not accepted responsibility for his financial obligations and is prioritizing his own desire to travel above the debt that he owes to his dependent former spouse. A return flight to Korea is not inexpensive. Mr. Kim’s belief that there is a reasonable possibility that he could finance a trip to Korea to visit his homeland, must be based upon something more than the financial picture presented in his sworn Financial Statement.
[24] Due to Mr. Kim’s past conduct in the underlying family court proceeding, and in the context of past credibility findings made against him, I am not confident that Mr. Kim is not continuing to be “evasive, misleading and manipulative” in his financial disclosure. I recognize that normally credibility findings relating to a party in one civil case would not be admissible in a separate civil action. However, the circumstances of this default hearing are intimately connected to the original family trial proceeding, and are the continuation of many years’ efforts to enforce the Final Order. I accept that Justice Snowie’s early identification of Mr. Kim’s efforts to evade his support obligations to the recipient are relevant and properly considered in this hearing. In that context:
- I am skeptical that the bank statements provided by Mr. Kim are the only bank accounts he has control over, and I am concerned by the very real possibility that Mr. Kim has control over additional personal, corporate, and foreign bank accounts that he has not disclosed to the Director or the court; and
- Some of the transactions contained within the bank records that were disclosed raise unanswered questions. For example, there is some evidence of large cash withdrawals and unexplained deposits and credit memos within the statements produced which raise red flags in the context of the unique facts of this case.
[25] In the circumstances, I am not satisfied that Mr. Kim has made reasonable, diligent, efforts to honour his court-ordered support obligations. I am not satisfied that his reasons for non-payment are valid. I am not satisfied that he has successfully rebutted the presumption that he can pay the arrears.
Appropriate Enforcement Terms
[26] The Director submits that if support continues to be enforced at the current rate, it will take over 40 years to pay. As noted above, Mr. Kim is 77 years of age. Interest will continue to accrue. It is unlikely that, at this rate, the amount owing will be paid in full during Mr. Kim’s lifetime. Notwithstanding this concern, I do not believe that the payment plan proposed by the Director is reasonably grounded in the evidence before the court. The lump sum amounts are far too ambitious on the record before me.
[27] There is no ongoing support payable. This is a lump sum arrears only enforcement case. A Motion to Change will not help Mr. Kim. This is the end of the road. In his oral submissions, Mr. Kim advised that “If the court sends me to jail, I will go forever - I just don’t care”. He also explained that if his passport were returned, he would borrow the funds to finance a trip to Korea. If Mr. Kim were given access to his passport, it is quite doubtful that he would return.
[28] It is the impression of this court that Mr. Kim’s desire to return to his homeland surpasses any fear he has of a term of imprisonment. The court has no jurisdiction at this hearing to order the reinstatement or return of Mr. Kim’s passport. Nor would this court order the return of the passport if such jurisdiction were present. Payment is Mr. Kim’s only option if he wishes to set foot in Korea again. However, this motivation is insufficient standing alone.
[29] Perhaps a short, sharp visit to a detention centre will also serve to remind Mr. Kim of the need to prioritize his support obligation and compel future payment. From his submissions I am confident that Mr. Kim has access to funds, roughly equivalent to the annual cost of travel to Korea. His abysmal payment record, including the absence of any voluntary payments of support over the past decade, and outstanding costs awards owing to Mrs. Kim, satisfies this court that “something more than non-payment” is present on the facts of this case, and that Mr. Kim has shown a willful and deliberate disregard for his obligation to comply with court orders.
[30] I am satisfied that, in addition to the ongoing suspension of his ability to travel, the threat of a term of incarceration is also necessary in an effort to compel Mr. Kim’s future compliance. I will provide Mr. Kim with three months’ lead time to secure the funds to avoid this undesirable vacation. He will be obligated to budget for this amount annually moving forward.
Order to Issue
[31] On the basis of the above, a Final Default Order shall issue on the following terms:
- Arrears of support are fixed at $601,895.18 as of May 22, 2024.
- Commencing on October 1, 2024, and annually thereafter on October 1st each year, the payor, Mr. Kim, shall pay one lump sum payment of $10,000.00 towards arrears.
- In default of each lump sum payment referred to in paragraph 2, the Respondent may be incarcerated for a period of 7 days or until such sum is further paid.
- In the event of default of any payment due herein the Director, Family Responsibility Office shall be at liberty to bring any future motion for warrant of committal based upon paragraph 3, with further notice to the Respondent.
- Commencing on July 1, 2024, and annually thereafter on August 1st each year, the payor, Mr. Kim, shall forward to the Director, an updated sworn Financial Statement, including a copy of his Income Tax Return, including all schedules and attachments, and Notice of Assessment, for the preceding calendar year.
- This order shall not affect the right or obligation of the Director to enforce the support order through other available means.
- Approval as to form and content of the draft Order by the payor is dispensed with.
Bale J. Released: June 20, 2024
Footnotes
[1] The litigation history of this case is lengthy and complex and need not be repeated for purposes of this default hearing. For a general summary of some of the past substantive court attendances in the jurisdiction of Brampton, see Kim v. Kim, 2019 ONSC 5018 at para. 22.
[2] These commission amounts correspond with T4A statements issued by the insurance company to New Soul Insurance (Mr. Kim’s company), which were attached to Mr. Kim’s materials.