Court File and Parties

Court File No.: FC-23-00000420-0000

Date: 2025-07-30

Ontario Superior Court of Justice – Family Court

Between:

Oren Blau, Applicant

– and –

Michal Blau (Urson), Respondent

Counsel:

Oren Blau, Self-Represented

Annie Noa Kenet, for the Respondent

Heard: May 20, 22 and 23, 2025

Reasons for Decision

Justice R.E. Charney

Facts

[1] The Applicant Father (Mr. Blau) and the Respondent Mother (Ms. Urson) started living together in November 2019. They were married on September 3, 2020. They separated on January 13, 2023, but remained in the same rental residence until February 2023. They have one child from the marriage, a boy born on August 10, 2021. Both parties are 43 years of age.

[2] Mr. Blau has a 7 year old daughter from a previous relationship, and an 11 year old daughter from another relationship.

[3] The issues in this case are child support and equalization. The parties have already settled custody and parenting time on a final basis.

[4] Mr. Blau is currently paying $418 per month child support for the child of this marriage (based on an income of $45,000 per year).

[5] Mr. Blau also has child support obligations for his other two children from former relationships. His older daughter resides with him on a 50% basis. He pays child support for the second daughter in the amount of $350 per month based on an income of $39,200 per year.

[6] Mr. Blau has a BA Degree from the Toronto School of Business.

[7] When the parties first met in 2019, he was working as a salesperson at a car dealership. His income was approximately $38,000 per year.

[8] The parties purchased a matrimonial home in Newmarket in November 2020. The downpayment for the home was financed with funds (approximately $274,759) received from selling the condominium that Ms. Urson owned before the marriage. The new home had a mortgage of approximately $708,000.

[9] In 2022 they were having financial difficulties and sold the matrimonial home in April 2022. The net proceeds of sale (approximately $404,000) were deposited into a joint account. The funds were invested in a GIC and mutual funds and all of the transfers into and out of the joint account for these investments were handled by Mr. Blau. The funds were used to pay for most of their living expenses and to pay the rent for the property where they moved.

[10] Some of the proceeds (approximately $78,000) from the sale of the matrimonial home were used by Mr. Blau when he attempted to start a "car detailing" (car wash) business (Magic Wand Auto), which he opened in leased premises in July 2022. He charged $150 per car for detailing.

[11] Mr. Blau claims that the business was not financially successful, and he closed it down in June 2023. He was always behind on the rent, and still owes the landlord money.

[12] Mr. Blau funded Magic Wand through a shareholder loan from Mr. Blau to Magic Wand in the amount of $78,662.

[13] Ms. Urson disputes the claim that Magic Wand was not profitable. She uncovered a Facebook Ad offering to sell the Magic Wand business for $60,000. The ad states that Magic Wand earned $4,000 per month. Mr. Blau disputed the authenticity of the ad, and explained that Magic Wand was never offered for sale because it was never profitable, and no one would be interested in purchasing a car detailing business that lost money.

[14] Even if the Facebook Ad was authentic, the Facebook Ad's claim that Magic Wand earned $4,000 per month was just that – a claim in an ad, and could have been a false claim in an attempt to sell an unprofitable business to an unsuspecting purchaser. In any event, even $4,000 per month equals only $48,000 per year.

[15] At the time of separation, only $33,206 remained in the joint mutual fund account.

[16] This meant the parties had spent $370,953 between April 2022 and January 13, 2023. An analysis of the spending of the sale proceeds indicates the following:

a. $55,0802 had been transferred from the Joint TD Account to Magic Wand between April 25, 2022 and November 30, 2022;

b. $16,001.94 had been used to pay for Facebook Ads (payments directly to Facebook) from the Joint TD Account to advertise Magic Wand between July 12, 2022 and December 14, 2023;

c. $22,754 of funds are unaccounted for (i.e. they were deposited into a GIC in Mr. Blau's name and cannot be traced into the accounts produced for trial); and

d. The remainder of $277,117 was used by the parties for various purchases and payments (including rent and new furniture) between April 13, 2022 and January 13, 2023.

[17] Since he closed Magic Wand in 2023, Mr. Blau has held a number of auto-sales related jobs – the first briefly at Advantage Auto Leasing in Mississauga, which he left in September 2023 because the hours were not compatible with his parenting time schedule. His anticipated income at that job was $45,000 per year. He has had difficulty maintaining employment because his employers were not willing to accommodate his parenting pick-up schedule, which required him to leave work early on Thursday and every other Friday. His income fluctuated because it was commission based.

[18] Mr. Blau has, at various points, been unemployed and asks that his child support payments be reduced to reflect his lack of income.

[19] On May 8, 2025, Mr. Blau was offered a job with a Newmarket Car Dealership as a "Detailer" in the service department to commence June 2, 2025. He will be paid $21.50 per hour, which works out to approximately $45,000 per year based on a 40 hour work-week.

[20] Mr. Blau has remarried, and his current wife earns approximately $70,000 per year and helps him with his finances. While he was unemployed, she paid the rent and other bills.

[21] Ms. Urson has always been a T4 employee working in early childhood education. When working, she earns approximately $48,000 per year.

Mr. Blau's Income/Child Support

[22] The starting point for determining income under the Child Support Guidelines must always be income tax returns, as set out in section 16 of the Guidelines: Cibuku v. Cibuku, 2024 ONSC 1283, at para. 10. Mr. Blau's Notices of Assessment indicate the following line 150 (now line 15000) income:

a. 2020 – ($40,575).

b. 2021 – $30,000.

c. 2022 (the year he opened the car detailing business) – $17,225.

d. 2023 – $35,742.

e. 2024 – $34,809.

[23] Ms. Urson seeks to have Mr. Blau's income imputed at $136,748, based on evidence that he spent $245,000 over a two year period from 2023 to 2034 following their separation.

[24] There is no question that there were serious credibility issues with Mr. Blau's evidence.

[25] Between February 2023 and September 2024 Mr. Blau opened six different bank accounts. Over the same period of time, he closed twelve different bank accounts. He explained that he had to keep closing accounts as they went into overdraft and he opened other accounts at different banks. Ms. Urson was only able to discover many of these accounts after receiving a Court Order permitting her to obtain a list of Mr. Blau's accounts directly from the 5 major Canadian financial institutions.

[26] Mr. Blau's Financial Statements (5 in total) were invariable deficient, and failed to list significant information, including numerous bank accounts and the shareholder loan owing to him from Magic Wand. It is fair to say that forcing Mr. Blau to comply with various Court orders to provide fuller disclosure was like pulling teeth. Mr. Blau was consistently uncooperative and failed to disclose information if he deemed it to be irrelevant, even after being ordered to do so by the Court. He claimed that he had "forgotten" about certain accounts, even though he had recently opened or closed them.

[27] There is some question regarding the status of Magic Wand Auto. While Mr. Blau claimed that Magic Wand Auto was closed down because it was not profitable, the company does continue to operate under the name "Magic Touch". Mr. Blau claims that it is now operated by a former employee as a mobile car detailing service. He occasionally works there during the summer months, and is paid $189 for each car he details. He reported no income from his employment with Magic Touch.

[28] Mr. Blau received significant funds from his mother, and at various points claimed that these were gifts and at other points claimed that they were loans.

[29] In his 2024 Financial Statement, Mr. Blau stated that he borrowed $20,000 from his mother.

[30] Other positions taken by Mr. Blau regarding the amount of the alleged loan from his mother include:

a. Stating that the loan is $30,000 in his financial statement sworn April 15, 2025.

b. Stating that the loan is $26,000 in an affidavit sworn May 5, 2025.

c. Stating the loan was likely "up to $40,000" during his cross examination on May 20, 2025.

[31] Mr. Blau explained that his mother was not available to give evidence at the trial because she had suffered a stroke. The account statements provided by Mr. Blau indicated that his mother had e-transferred approximately $8,000 to him between September 2024 and March 2025.

[32] Ms. Urson's "lifestyle analysis" was performed by adding all of the withdrawals from Mr. Blau's personal accounts and then removing funds that could be traced as being transferred to himself in other accounts such that it only included payments to third parties. During the trial, Mr. Blau was repeatedly questioned about where the money came from to fund his spending $245,293 in 2023 and 2024. He could not explain the source of these funds. He denied that the lifestyle was funded in part by cash income from Magic Wand and/or other undisclosed income.

[33] Section 19 of the Child Support Guidelines addresses imputing income to a spouse and sets out a non-exhaustive list of circumstances in which income may be imputed. These circumstances include intentional under-employment or failure to report income from sources such as cash payments.

[34] Section 19(1) of the Child Support Guidelines provides in part as follows:

The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:

a. the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;

c. it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;

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

[35] In making this assessment, the court must consider a person's capacity to earn income in light of the payor's age, education, health, work history and the availability of work that is within the scope of his capabilities: Drygala v. Pauli; Crowe v. McIntyre, 2014 ONSC 7106, at para. 31.

[36] The onus is on the party seeking to impute income to establish a prima facie case. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made: Homsi v. Zaya, 2009 ONCA 322, at para. 28. However the onus on the recipient does not relieve the payor from the obligation to provide full and complete disclosure, to ensure that a court has full information. Gafanha v. Gafanha, 2022 ONSC 1613, at para. 42. Once the party requesting an imputation of income raises an evidentiary foundation to impute income, the onus shifts to the party responding to the imputation claim to provide evidence to satisfy the court as to his income level: Iacobelli v. Iacobelli, 2020 ONSC 3625, at para. 42; Phillips v. Phillips, 2024 ONSC 6339, at paras. 32-24

[37] "A person's lifestyle can provide the basis for imputing income. But lifestyle is not income. It is evidence from which an inference may be drawn that a person has undisclosed income that may be imputed for the purpose of determining child support": Gafanha, at para. 43, and cases cited therein; Bak v. Dobell, 2007 ONCA 304, at para. 43 (Ont. C.A.).

[38] In the present case, Ms. Urson argues that Mr. Blau must have made more than the income indicated on his Notices of Assessment because he has historically spent much more than that amount, and has failed to provide an adequate explanation as to the source of those funds. The court may draw an adverse inference and impute income where a payor fails to comply with disclosure obligations.

[39] There are many unanswered questions regarding how Mr. Blau spent more than $200,000 in the two years following their separation. I agree with the Respondent that Mr. Blau was not forthcoming in his testimony and was not, in many respects, a credible witness. There are many gaps and unanswered questions relating to his expenditures in 2023 and 2024. That said, I am unable to conclude that Mr. Blau has ever earned more than the $45,000 per year income upon which his current child support payments are based.

[40] I am also unable to conclude that Mr. Blau is intentionally under-employed, or that he is capable of earning a higher income than his previous years of employment have provided. There is no evidence that Mr. Blau has ever earned more than $45,000 per year in any of his various jobs in automobile sales or detailing, or that someone employed in that field can realistically expect to earn more than that amount. Even if he were sometimes taking car detailing jobs on the side for cash at $189 per car, there is no evidence to support the contention that he could earn anywhere near as much as Ms. Urson proposes.

[41] There is evidence that when they were together, the parties were deeply in debt. Mr. Blau claims that the funds spent in 2023 and 2024 were borrowed funds, although he did not provide disclosure of any loans.

[42] While it is tempting to impute additional income to Mr. Blau based on Ms. Urson's lifestyle analysis, the Court must be cautious in imputing an unrealistic or unobtainable income to the payor, since that will only lead to inevitable default and unnecessary litigation. While Ms. Urson's counsel's itemized bank entries suggest that the math just doesn't add up for the years 2023 and 2024, there is no evidence that Mr. Blau had a lavish or unexplainable lifestyle to coincide with money spent.

[43] Accordingly, I find that Mr. Blau's income is $45,000 per year, and he shall continue to pay $418 per month child support. This Order is retroactive to March 2023, the date that Mr. Blau moved out of the rental unit shared by the parties.

[44] There will be no retroactive or prospective reductions as requested by Mr. Blau.

[45] Given their almost equal income, section 7 expenses (daycare and extra-curricular activities) shall be divided on a 50/50 basis. Ms. Urson requests that extra-curricular activities should be paid by Mr. Blau on a flat-rate basis of $100 per month. I reject this proposal. Extra-curricular activities shall be agreed to by the parties and paid by Mr. Blau on the basis of receipts rendered.

Equalization

[46] Ms. Urson presented a Net Family Property Comparison worksheet which indicated that the equalization payment owing from Mr. Blau to Ms. Urson is $37,503.77. Ms. Urson's worksheet includes the Magic Wand shareholder loan of $78,622.85 she has listed as an asset to Mr. Blau.

[47] If this loan is included as an asset for Mr. Blau, there is no dispute that, after making a post-separation adjustment of $1,452 in Mr. Blau's favour, there is an equalization payment owing of $37,503.77 from Mr. Blau to Ms. Urson.

[48] Mr. Blau takes the position that the shareholder loan to Magic Wand should not be included as an asset since Magic Wand is no longer operating and is unable to repay the loan. On this basis he argues that there should be no equalization payment made.

[49] Ms. Urson argues that there be an Order for an unequal division of net family property in her favour in the amount of $93,836 on account of the spending from the Joint TD Account post-separation. This amount is comprised of: $55,080 transferred from the joint account to fund Magic Wand Auto Spa, $16,000 from the joint account used to advertise Magic Wand Auto Spa on Facebook, and $22,754 from the joint account deposited into a GIC in Mr. Blau's name and that remains unaccounted for (see para. 16 above).

[50] The money spent by Mr. Blau on Magic Wand Auto Spa is already accounted for as the shareholder loan from Magic Wand Auto Spa to Mr. Blau. I agree with Ms. Urson that the shareholder loan qualifies as an asset on separation even if Magic Wand does not repay it.

[51] The unaccounted $22,754 should be included as an asset for Mr. Blau since he was not able to explain where that money went. It is, therefore, part of the equalization, increasing Ms. Urson's equalization amount by $11,377, for a total equalization of $48,880.77 ($37,503.77 + $11,377).

Costs

[52] Ms. Urson was the more successful party in this litigation and she is entitled to her costs. She requests costs on a full recovery basis in the amount of $69,131, or, on a partial indemnity basis in the amount of $45,768.

[53] Costs in family law proceedings are generally payable on a partial recovery basis. Costs are recoverable on a full recovery basis only in prescribed and limited circumstances: e.g., bad faith under rule 24(8), or besting an offer to settle under rule 18(14) (Beaver v. Hill, 2018 ONCA 840, at paras. 11 and 13). Proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs (Beaver, at para. 12).

[54] Rule 24(8) provides that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. This costs provision is subject to the general principle that costs claimed must be reasonable. Bad faith is not simply bad judgment or negligence. As the court stated in Biddle v. Biddle, it implies "the conscious doing of a wrong because of dishonest purpose or moral obliquity… it contemplates a state of mind affirmatively operating with furtive design or ill will."

[55] Courts have found bad faith where a party attempted to deceive the other party or the Court. A party can be found to be acting in bad faith when their conduct increased costs to such an extent "that they must be taken to know their behaviour is causing the other party major financial harm without justification": Scalia v. Scalia, 2015 ONCA 492, 126 O.R. (3d) 241, at para. 68; Benzeroual v. Issa and Farag, 2017 ONSC 6225, 97 R.F.L. (7th) 111, at para. 20.

[56] Having reviewed the conduct of the Applicant throughout these proceedings, I am satisfied that he did act with an element of bad faith. There is a history of abusive and threatening correspondence from Mr. Blau to both Ms. Urson and her lawyer. There was a concerted effort on Mr. Blau's part to refuse or delay disclosure of his finances, and the case conference judge commented (July 15, 2024) on his "poor and delayed compliance with my order for disclosure" and the costs Ms. Urson incurred to obtain additional disclosure.

[57] Accordingly, I will order costs on an elevated, near full recovery basis.

[58] In my view, the costs requested by Ms. Urson are reasonable. Costs were increased as a result of Mr. Blau's "poor and delayed compliance" with disclosure orders. Ms. Urson's counsel provided very helpful summaries of Mr. Blau's convoluted and deficient financial disclosure, and made considerable and necessary efforts in tracing funds used from the joint account and the source of Mr. Blau's various expenditures in 2023/2024. These efforts and summaries considerably shortened the time for the trial.

[59] Degree of success is also a relevant factor in assessing costs. While the Respondent was, overall, more successful, I note that she was not successful in persuading the Court to impute income at an amount greater than the $45,000 income on which child support was already ordered. That said, the Applicant was not successful in persuading the Court to reduce his child support below the current amount.

[60] Based on these factors, costs are fixed at $55,000, payable by the Applicant to the Respondent.

[61] In addition, the Respondent seeks an order designating any costs award in this matter as constituting a "support order" within the meaning of section 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, 1996, SO 1996, c 31 (FRSAEA). Such an order would render the costs award enforceable by the FRO by virtue of section 5 of the FRSAEA, and immune from discharge in a bankruptcy by virtue of section 178(1)(c) of the Bankruptcy Act, R.S.C. 1985, c. B-3.

[62] The law in this regard was summarized by Chappel J. in Thompson v. Drummond, 2018 ONSC 4762, at para. 46:

A judge addressing the issue of costs has a wide scope of discretion in deciding how to deal with a request that legal costs be designated as arising in relation to support. The need for discretion is particularly compelling in cases involving numerous Family Law issues in addition to support matters. In such circumstances, the judge may estimate the portion of the costs award that pertains to the support issue and designate that portion of the award as being enforceable by the FRO. Alternatively, the court may designate the entire costs order as arising in relation to support if the principal issues related to support and the court is satisfied that it is impractical and inappropriate to dissect the costs claim to determine which parts relate to the support aspects of the proceeding.

[63] In this case, the majority of the trial was focused on the issue of Mr. Blau's income, which is directly related to the issue of child support. Given the nature of the disclosure and the way the trial proceeded, it is not practical to determine which parts of the trial or what percentage of the costs award relate exclusively to support and which to equalization. Accordingly, the entire costs award should be enforceable as support.

Court Order

[64] This Court Orders:

a. Commencing March 1, 2023, and on the first day of each month thereafter, the Applicant Father shall pay table child support of $418 per month for the child of the marriage, namely, Benjamin Blau born August 10, 2021 based on an imputed income of $45,000.

b. Commencing June 1, 2025 and on the first day of each month thereafter, the Applicant Father shall pay 50% and the Respondent Mother shall pay 50% of the child's section 7 expenses.

c. Section 7 Expenses shall include:

i. Daycare (including before and after school care);

ii. Medical expenses not covered by benefits;

iii. One extra-curricular activity per quarter agreed upon by the parties in writing in advance of the expense being incurred, with such consent not to be unreasonably withheld; and

iv. Any other expense agreed upon by the parties in writing in advance of the expense being incurred, with such consent not to be unreasonably withheld.

d. The Applicant Father shall maintain life insurance with a face value of $200,000 naming the Applicant Mother as irrevocable beneficiary in trust for the child for as long as he has an obligation to pay child support. The Applicant Father shall provide the Respondent Mother with proof that the policy is in good standing by December 31 in each calendar year.

e. The Applicant Father shall pay the Respondent Mother an equalization payment of $48,880.77.

f. The Applicant Father shall pay the Respondent Mother costs of $55,000 for this trial within 60 days of the date of this Order. The entire costs award shall be enforceable as support.

g. Pre-judgment interest shall be paid in accordance with s. 128 of the Courts of Justice Act on all amounts owed by the Applicant Father to the Respondent Mother.

h. Unless this Order is withdrawn from the Office of the Director of the Family Responsibility Office, it shall be enforced by the Director, and the amounts owing under the Order shall be paid to the Director, who shall pay them to the person to whom they are owed.

i. For so long as child support is to be paid, the payor and the recipient, if applicable, must provide updated income disclosure to the other party each year, within 30 days of the anniversary of this Order, in accordance with Section 21 of the Federal Child Support Guidelines.

j. This Order bears interest at the post-judgment interest rate in accordance with s. 129 of the Courts of Justice Act on any payment in respect of which there is a default from the date of default.

Justice R.E. Charney

Released: July 30, 2025