Ontario (Family Responsibility Office) v. Waller, 2015 ONCJ 656

COURT FILE NO. FO-14-71841 DATE: 2015-11-24 CITATION: Ontario (Family Responsibility Office) v. Waller , 2015 ONCJ 656 ONTARIO COURT OF JUSTICE B E T W E E N: ) ) THE DIRECTOR, FAMILY RESPONSIBILITY OFFICE FOR THE BENEFIT OF DORA ELIA DIANNE GILLIES, FOR THE APPLICANT ) APPLICANT ) ) - and - ) GAVASKAR GEORGE WALLER ) DANIEL ETOH, FOR THE RESPONDENT RESPONDENT ) AND ONTARIO COURT OF JUSTICE COURT FILE NO. FO-02-20934

THE DIRECTOR OF THE FAMILY RESPONSIBILITY OFFICE FOR THE BENEFIT OF NEISHA SAMUELS APPLICANT -and- GAVASKAR WALLER RESPONDENT ) DIANNE GILLIES, for the APPLICANT DANIEL ETOH, FOR THE RESPONDENT ) ) ) ) BOTH HEARD: OCTOBER 27, 2015 JUSTICE S.B.

SHERR REASONS FOR DECISION (Delivered Orally on November 24, 2015) Part One – Introduction [ 1 ] On October 27, 2015, the court conducted default hearings in these two cases (the Elia case and the Samuels case). [ 2 ] Counsel agreed that the cases should be heard together as the respondent’s (the payor) ability to pay child support arrears was the central issue in both cases. [ 3 ] The payor filed affidavits and financial statements. He also presented oral evidence.

He did not file a Dispute in either case. [ 4 ] The applicant in both cases (the Director) seeks default orders that the payor be imprisoned for 120 days concurrently, or until such time as he pays all of the outstanding child support arrears in both cases. It also seeks an order that the payor be jailed for 3 days for each payment in default for ongoing support accruals in each case. [ 5 ] The payor claims that he does not have the ability to comply with the existing court orders for child support or pay the outstanding support arrears at this time.

He asks for additional time to get his financial affairs in order. Part Two – The Elia case

[ 6 ] The payor is the father of a three-year-old child in the Elia case. [ 7 ] On November 8, 2013, Justice S. Rogers of the Superior Court of Justice, Family Court Branch, at Newmarket, Ontario, made a final order imputing the payor’s income at $70,000 per annum. She ordered the payor to pay child support to Ms. Elia of $1,517.40 per month. This consisted of the Child Support Guidelines (guidelines) table amount for one child of $639 per month, retroactive to September 1, 2011 and special expenses (daycare) of $878.40 per month, retroactive to August 15, 2012. [ 8 ] The payor did not appeal this order.

He did not bring a motion to change it. [ 9 ] The Director issued its Notice of Default Hearing in this court on October 10, 2014. [ 10 ] On January 27, 2015, the payor consented to a temporary default order. This order provided that he pay the ongoing guidelines table support of $639 per month, failing which he would be incarcerated for a period of 3 days for each and every default to a maximum of 180 days.

He agreed to commence a motion to change before the return date and provide financial disclosure. [ 11 ] The case was adjourned at the First Appearance Court, at the request of the payor, on March 24 and June 9, 2015, and before this court on August 6, 2015. The payor was given additional opportunities at these appearances to comply with the temporary default order. [ 12 ] The payor did not comply with the temporary default order. He did not provide the financial disclosure ordered, bring a motion to change or keep the ongoing child support payments in good standing.

The payor only paid $1,688.19 of the $5,751 required by the temporary default order between February 1, 2015 and October 1, 2015 (9 months). [ 13 ] The payor did not attend at court on September 21, 2015. The Director sought a warrant of committal. The court issued a warrant of committal, committing the payor to jail for 15 days, but held it in abeyance pending the return date to give the payor yet another opportunity to comply with the temporary default order. [ 14 ] The payor only paid a further $500 towards the support arrears on October 27, 2015. He paid a further $1,000 today.

He did not start a motion to change. [ 15 ] The payor is $64,936.81 in arrears of the Elia support order. This includes his support payment due in November of 2015. Part Two – The Samuels case [ 16 ] The payor is the father of a 14-year-old child in the Samuels case. [ 17 ] On October 23, 2002, Justice James Nevins made a final order awarding custody of the child to Ms. Samuels and ordered the payor to pay child support of $138 per month. [ 18 ] Ms. Samuels brought a motion to change child support on December 12, 2012. [ 19 ] The court made temporary orders increasing the payor’s support payments.

It also ordered the payor to provide financial disclosure of his business affairs (the payor is self-employed). He did not comply with these orders. He did not file a response to the motion to change.

[ 20 ] On August 26, 2013, the court denied the payor’s request for another adjournment to respond to Ms. Samuels’ motion to change. He had already been granted three adjournments. The court noted that no valid reason had been given for the payor’s failure to provide financial disclosure. The court proceeded on a default basis. The court imputed the payor’s income at $58,240 per annum. He was ordered to pay child support of $637.65 per month, consisting of the guidelines table amount of $529 per month and special expenses of $108.65 per month.

The payments were to begin on June 1, 2013. [ 21 ] The payor did not appeal this order. He has never moved to change it. [ 22 ] The Director issued its Notice of Default Hearing in this court in the Samuels case on September 26, 2014. [ 23 ] The payor sought and obtained adjournments of the Default Hearing in First Appearance Court on December 9, 2014, January 27, 2015, March 24, 2015 and June 9, 2015. [ 24 ] At the January 27, 2015 appearance, the parties consented to a temporary default order.

The payor agreed to pay ongoing child support of $637.65 per month starting on February 1, 2015, failing which he would be incarcerated for a period of 3 days for each and every default to a maximum of 180 days. He also agreed to commence a motion to change before the return date and provide financial disclosure. [ 25 ] The payor was given one more chance by the court to file financial disclosure and to commence a motion to change on August 6, 2015. [ 26 ] The matter returned to court on September 21, 2015. The payor did not attend. He had not complied with the temporary default order.

He did not commence a motion to change, file updated financial disclosure or maintain his support payments. The payor only paid $729 of the $5,738.85 required pursuant to the temporary default order between February 1, 2015 until October 1, 2015 (9 months). [ 27 ] The Director sought a warrant of committal on September 21, 2015. The court issued a warrant of committal that the father be committed to jail for 15 days.

It also made an order holding the warrant in abeyance to give the payor the opportunity to bring the order into compliance before the next court date and issue a motion to change. [ 28 ] The payor only paid a further $500 towards the support arrears on October 27, 2015. He paid a further $1,000 today. He did not issue a motion to change. [ 29 ] The payor is $26,611.50 in arrears of the support orders made in the Samuels case. This includes his payment due in November of 2015.

Part Four – Default hearings [ 30 ] The parties agreed to conduct the default hearings on both cases together. [ 31 ] On consent of the payor, the Director agreed that it would not continue with the enforcement of the temporary default orders (and the resultant committal orders). Instead, the Director would seek final committal orders in both default proceedings. Part Five - The payor’s evidence [ 32 ] The payor finally filed responding material on October 21, 2015. He filed an affidavit and financial statement in both cases. He provided income tax summaries and his business financial statements for 2014.

[ 33 ] The payor deposed that he is self-employed as an insulation installer. He carries on business under the corporate name of EG General Contracting Ltd. He deposed that he operates this business with a partner. [ 34 ] The payor claimed that he is using every effort to comply with the support orders. He claims that he is having difficulty collecting receivables from customers.

He deposed that they tell him he will be paid at the end of the month. [ 35 ] The payor deposed that his ability to earn income has been greatly reduced due to the suspension of his driver’s licence by the Director. [ 36 ] The payor confirmed that he lived alone and was not assisting anyone else financially. [ 37 ] The payor filed a financial statement claiming that his income was about $35,000 per annum. His tax summaries show net income of $39,362 for 2014 and $35,500 for 2013. [ 38 ] The payor asked for an indulgence of two more months to collect outstanding receivables and make support payments in both cases.

Part Six – Legal considerations [ 39 ] The current statutory scheme governing default hearings is found in

section 41 of the Family Responsibility and Support Arrears Enforcement Act (the Act) and rule 30 of the Family Law Rules . The Director may initiate the default proceeding. The Director prepares a statement of arrears. The payor files a financial statement and, if so inclined, a default dispute. The court may hear oral testimony, direct the production of other relevant documentation and add parties to the default proceedings. See: Fischer v.

Ontario (Family Responsibility Office) , 2008 ONCA 825 , paragraph 17 . [ 40 ] At the hearing, the amount of arrears owed and the payor's ability to pay are the central issues. Subsection 41 (9) of the Act puts the onus on the payor, as follows: Presumptions at hearing

(9) At the default hearing, unless the contrary is shown, the payor shall be 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 shall be presumed to be correct as to arrears accruing while the order is filed in the Director’s office. [ 41 ] Subsection 41 (10) of the Act sets out the powers of the court on a default hearing as follows: 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 soonas they occur; (

h) be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, hasexpired, 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 theorder, which shall not be more than 180 days, has expired, or until the payment is made, whichever is sooner. [42] Subsection 41 (11) of the Act states: No effect on accruing of arrears or other means of enforcement

(11) An order under subsection (10) does not affect the accruing of arrears, nor does it limit or otherwise affect any other means ofenforcing the support order. [43] Subsection 41 (17) of the Act reads: Imprisonment does not discharge arrears

(17) Imprisonment of a payor under clause (10) (

h) or (

i) does not discharge arrears under an order. [44] At a default hearing, the payor must show an inability to pay due to valid reasons. A valid reason is an event over which thepayor has no control which renders the payor totally without assets or income with which to meet his or her obligations, such as disablingillness or involuntary unemployment. See: Ontario (Director, Family Responsibility Office v. Carney 2004 ONCJ 11. The payor mustalso show that he or she has accepted their responsibilities and placed the child’s interests over their own and has provided frankdisclosure to the court.

See: Ontario: (Director, Family Responsibility Office v. Labrash, (ON CJ), 2002 CarswellOnt90 (OCJ). [45] In Ontario (Director, Family Responsibility Office) v. De Francesco, O.J. [2012] 6338, Justice Carolyn Jones further exploresthe meaning of “valid reason” under section 41 (10) as follows at paragraph 21 of her decision: “ 21 Valid reasons, within the meaning of s. 41(10) of the Act, imply reasons for which the payor cannot be faulted or for which thepayor does not bear responsibility in the culpable sense.

The court would expect some evidence of circumstances where, despitereasonable, diligent and legitimate efforts by the support payor to comply with the support order, the support payor has been unable to doso for reasons that are not connected with an unwillingness to pay, a lack of effort, a failure to prioritize the support obligation or adeliberate neglect, failure or avoidance on the part of the payor.

Evidence relating to the past and present circumstances of the payor,including his financial circumstances since the time of the first default under the order, the manner in which he has applied his availableincome and assets, and his efforts to secure employment or income during the time that the arrears have arisen will have some bearingupon the determination of the legitimacy of the reasons the payor puts forward for his default under the support order. Circumstancesthat are beyond the control of the payor, resulting in the payor's inability to pay, would be valid reasons.

An illness on the part of thepayor, including a mental disorder, rendering the payor completely unable to work on either a full or part-time basis, as in the case beforethe court, would amount to a valid reason for the payor's failure to pay.” [46] Clause 41 (10) (

i) of the Act contemplates an order of imprisonment for failure to pay an amount owing at the time the order ismade or a failure to make future payments required under the order: See: Saunders v. Saunders, (ON SC), [1987]O.J. No. 1578, 10 R.F.L. (3d) 284 (Dist. Ct.), at para. 11; Fischer, supra. [47] Enforcement legislation should be viewed as remedial rather than punitive. See: Saunders, supra. [48] Imprisonment is a last resort. Something more than non-payment is required. The payor’s conduct must demonstrate a willful anddeliberate disregard for the obligation to comply with court orders.

It is meant as a mechanism to enforce support and not as a means ofpunishing the payor. See: Fischer, supra.

[49] In Fischer, supra, the court writes at paragraph 25: Further, the case law and the Act recognize that imprisonment for non-payment is meant as a means of enforcing the support order andnot as a means of punishing the payor. The payor must be released upon payment of the amount owed: see s. 41(10)(i). A committalorder, imposed as a term of either a temporary or final order in a default hearing, is intended to induce compliance with the paymentterms of the order. The prospect of imprisonment hopefully focuses the payor's mind on the importance of making the requiredpayments.

The enforcement rationale for imprisonment upon non-payment makes sense only if the payor has the ability to make thepayments required by the order: see Saunders, at paras. 11-13… [50] The maximum jail time should be reserved for the most severe cases. See: Ontario (Director, Family Responsibility Office v. Kirkpatrick (2008) (ON SC), 60 R.F.L. (6th) 435 (SCJ). Part Seven – Analysis [51] The payor was only partially able to rebut the presumption that he has the ability to pay the arrears and subsequent paymentsunder the existing court orders. [52] The payor has dug himself into a financial hole.

He owes over $91,000 in support arrears between the two cases. The only assetlisted in his financial statement is his car. The court does not believe based on the evidence presented, that he has the ability to pay theentire arrears, as requested by the Director, at this time. [53] However, the payor did not rebut the presumption that he could afford to pay some portion of the arrears immediately, thatsizeable lump sum payments could be paid periodically towards the arrears and that he could pay the ongoing support accruals. [54] The payor was not a credible witness. He has not acted in good faith.

His payment history in both cases is abysmal, even if thecourt accepted his evidence that he has only been earning $35,000 per annum. The payor has historically not complied with financialdisclosure orders. He provided limited financial disclosure for the first time on October 21, 2015. He sought several adjournments in themotion to change proceeding in the Samuels case (during 2013) arising out of his non-compliance with court orders.

A similar patternfollowed in these default proceedings. [55] The court finds that the payor’s evidence that he only earns $35,000 per annum is unlikely, based on his evidence filed. At aminimum, his income is likely closer to the $58,354 per annum imputed to him in the Samuels case. [56] The payor claims that his business has dropped off due to the suspension of his driver’s licence. The evidence does not supportthis claim. In fact, it appears that his business has grown in the past few years.

The gross sales for the business were about $336,000 in2012, increasing to about $432,000 in 2013 and went up to about $558,000 in 2014 (no information was provided for 2015). The payordid not provide any backup documentation supporting the business’ expenses. There was no way the court could determine what portionof these expenses might be personal. An adverse inference is drawn against the payor. It is incumbent upon him to provide a completefinancial picture of his business affairs. [57] The payor claims monthly expenses of about $3,800 per month, excluding support payments and income taxes.

He hasmaintained the lease payments on his Mercedes-Benz vehicle. He has no debts other than child support. This is not the income of aperson who only earns $35,000 per annum. [58] The payor claimed that he could not obtain a loan to make a lump sum payment towards his arrears. He provided nodocumentary evidence to support this evidence. His claim is dubious. He claims to have no debts and his business had gross revenues of$558,000 in 2014. The court does not believe that he is unable to obtain funds, if motivated, to make a lump sum payment towards hisarrears.

[ 59 ] The payor did not provide a justifiable reason for his terrible payment history. He has continued to lead a comfortable lifestyle at the expense of his children. He spends $1,550 per month on his car and virtually nothing on his children. While the court does not believe that he has the resources to immediately pay all of the support arrears, it does not believe that he lacks resources to make sizeable payments towards them.

He has earned a comfortable income for many years and has paid nominal support. [ 60 ] The payor has demonstrated a wilful and deliberate disregard for his obligation to comply with court orders. [ 61 ] The payor has historically strung out court proceedings in an effort to avoid his support obligations. He does not keep his promises to provide financial disclosure, make child support payments or to bring motions to change. [ 62 ] It has become clear that all enforcement options other than imprisonment have failed. The suspension of the payor’s driver’s licence did not result in support compliance.

These default proceedings have had little impact on his payments. He was given multiple opportunities to comply with the support orders. The court even held the warrants of committal, issued on September 21, 2015, in abeyance, to give the payor one last chance to make meaningful payments. [ 63 ] This is not a case where an unsophisticated payor is unaware of the fact that he faces imprisonment if he is in non-compliance with the court orders. The payor operates a company with annual revenue of over half a million dollars. The payor has been represented by counsel throughout these proceedings.

Counsel would have explained to him the impact of the committal orders. [ 64 ] The court was essentially asked to have sympathy for the payor’s predicament. The court’s sympathy for him is limited. It is reserved for his children who have gone without adequate support and the mothers of these children who have had to financially support the children on their own and have spent financial and emotional capital to collect support from a father who apparently has little interest in meeting his obligations. [ 65 ] The court considered making a conditional committal order for the entire amount of arrears.

However, this would only unfairly delay the collection process. When the inevitable default occurred (which is the likely result given the payor’s history and limited payments in the face of the temporary committal orders), the Director would have to serve a motion for committal and a committal hearing would need to be held. It would be unfair to the children and their mothers to further elongate this process without any meaningful support being collected. [ 66 ] The message needs to be sent to the payor that child support orders for his children matter and will be enforced.

The Default orders shall provide for an immediate committal of the payor for 90 days in both cases or until a portion of the arrears ($5,000 in each case) is paid. [ 67 ] The payor will also be required to pay $5,000 towards the support arrears in each case on both May 1 st and November 1 st of each year until they are fully repaid, failing which he will be committed to jail for 90 days, for each payment in default, or until he pays the $5,000. [ 68 ] In addition, the payor will be required to maintain the monthly child support payments in both cases.

He will be committed to jail for 3 days (or until the outstanding amount is paid in full), for each default in payment of ongoing support accruals. [ 69 ] The amounts that the payor will be required to pay to be released from jail are far less than those sought by the Director. The committal periods are also shorter than those sought by the Director, but will run consecutively – the periods of committal shall not run concurrently. [ 70 ] The maximum length of time, cumulatively, that the payor can be imprisoned under each Default order is 180 days (see: clause 41 (10) (

i) of the Act). Once that limit is reached, a new Default action would be required. Part Eight - Conclusion

[ 71 ] In the Elia case there shall be a final default order on the following terms:

a) Child support arrears are fixed in the sum of $63,436.81, as of today.

b) The payor will be committed to jail immediately for 90 days or until such time as he pays $5,000 towards the arrears.

c) The payor shall pay the sum of $5,000 towards the support arrears on both May 1 st and November 1 st of each year, until they are repaid. The payor will be committed to jail for 90 days (or until the outstanding amount is paid in full) for each default in payment.

d) The payor will also be required to pay the ongoing child support payments in the sum of $1,517.40 each month, starting on December 1, 2015. He shall be committed to jail for 3 days (or until the outstanding amount is paid in full) for each payment in default of ongoing support accruals.

e) The maximum length of time, cumulatively, that the payor can be imprisoned under this Default order is 180 days. [ 72 ] In the Samuels case there shall be a final default order on the following terms:

a) Child support arrears are fixed in the sum of $26,611.50 as of today.

b) The payor will be committed to jail immediately for 90 days or until such time as he pays $5,000 towards the arrears.

c) The payor shall pay the sum of $5,000 towards the support arrears on both May 1 st and November 1 st of each year, until they are repaid. The payor will be committed to jail for 90 days (or until the outstanding amount is paid in full) for each default in payment.

d) The payor will also be required to pay ongoing child support payments of $637.50 each month starting on December 1, 2015. He shall be committed to jail for 3 days (or until the outstanding amount is paid in full) for each payment in default of ongoing support accruals.

e) The maximum length of time, cumulatively, that the payor can be imprisoned under this Default order is 180 days. [ 73 ] The periods of incarceration set out in the Elia and Samuels cases shall run consecutively. [ 74 ] The court thanks counsel for their presentations in this matter. _____________________ Justice S.B. Sherr Released: November 24, 2015