Troisi v. Gillen, 2013 ONCJ 677

COURT FILE No.: Toronto DFO 13 10531 A2 DATE: 2013·December 4 Citation: Troisi v. Gillen , 2013 ONCJ 677 ONTARIO COURT OF JUSTICE BETWEEN: LUCY CARMAN TROISI (STERN) Applicant — AND — JOSEPH GILLEN Respondent Before Justice E. B. Murray Heard on November 27, 2013 Reasons for Judgment released on December 4, 2013. Mr. Simon Schneiderman ....................................................................................... for the applicant Mr. Young H. Lee ............................................................................................... for the respondent MURRAY, E.

B., J.: [ 1 ] This motion raises the issue of whether this court has the jurisdiction to make a stand-alone order for financial disclosure from a parent who is obligated to pay child support under a domestic contract, and in particular a contract in which the parties have agreed that future disputes concerning child support will be dealt with by arbitration. [ 2 ] The applicant mother, Lucy Troisi (“Lucy”) and Joseph Gillen (“Joe”) are parents of one child, Vincent, who is 4 ½ years old.

They separated in 2010, commenced litigation in Superior Court, and on November 11, 2010 entered into an agreement (“arbitral agreement”) to mediate and if necessary arbitrate the issues in that litigation, including child support, with Mr. Philip Epstein. [ 3 ] As a result of mediation with Mr. Epstein, the parties signed minutes of settlement on December 8, 2010 which provide that Joe pay Lucy child support of $4300 monthly, indexed to the cost of living, and allocates their respective responsibility for

section 7 expenses. The minutes do not set out either party’s income. The minutes were not incorporated into an arbitral award or a court order, and the parties agree that the minutes constitute a domestic contract or agreement (“support agreement”). [ 4 ] The support agreement provides for a review of child support in January 2016 by Mr. Epstein, and provides that prior to that time “child support is fixed and non-variable save and except if there is a catastrophic change in circumstances to either of the parties”. The support agreement further provides that Mr. Epstein can decide any disagreement between the parties as to new proposed

section 7 expenses. [ 5 ] After the support agreement was signed, Lucy lost her job. She and Joe disagreed about certain issues related to child support. In May 2013 her lawyer wrote to Mr. Epstein, asking him to arbitrate three issues: 1. Whether Vincent should attend a private school, Montcrest, with the parties being required to contribute to this expense; 2. What constitutes sufficient evidence of the nanny expenses to which Joe is required to contribute; 3. Whether the proportions in which the parties are required to contribute to

section 7 expenses should be re-allocated. [ 6 ] Joe disputed Mr. Epstein’s jurisdiction to decide these issues. [ 7 ] On June 25, 2013, Mr. Epstein delivered a procedural award in which he ruled that he did have jurisdiction to arbitrate issue #1, provided that it was established that Joe objected to Lucy’s proposal --at least in part-- because of the cost of private school education. Correspondence between solicitors confirms that the cost is an issue for Joe. Mr. Epstein also determined that he could decide issue #2. Mr. Epstein ruled that the third issue (the re-allocation of the proportionate payment by the parties towards

section 7 expenses) was not, as framed, within his jurisdiction. However, he specified that he did have jurisdiction to consider a change in the agreement if a material change was established, and that continuing unemployment by Lucy might constitute such a change. He held that Lucy might

renew her claim with respect to a change in the parties’ contributions towards

section 7 expenses if a material change was alleged. [ 8 ] Mr. Epstein left it to the parties to go forward with the arbitration process. Lucy has not done so, as she wishes to obtain financial disclosure from Joe first, disclosure she says will assist her in in deciding whether to claim a change in child support because of a material change in circumstances. Lucy’s lawyer asked Joe to provide his tax returns and notices of assessment for the past three years and financial statements from his company, CanAm Ingredients Inc. [ 9 ] Joe’s lawyer refused to provide the disclosure.

He said that it is irrelevant, because the amount of child support in the agreement was not “determined by reference” to Joe’s income, and because the parties agreed that support would not be varied before January 2016. [ 10 ] Lucy then filed the agreement with this court pursuant to

section 35 of the Family Law Act, and brought this motion pursuant to Rule 14 requesting an order for the same financial disclosure. The motion is brought as a stand-alone request, and not in the context of a motion to change the agreement. Lucy acknowledges that, pursuant to the parties’ arbitration agreement, a motion to change must be brought before Mr. Epstein. [ 11 ] Lucy’s lawyer argues that this court has jurisdiction to make the order sought for the following reasons. 1. Although Mr. Epstein has sole authority to arbitrate a change in the child support agreement, no arbitration has commenced. Therefore, Lucy can avail herself of a right to obtain income disclosure from Joe under

section 25 of the Guidelines. 2. Section 25(1) of the Guidelines provides that every person against whom a child support order has been made shall, if requested by the other party, provide certain basic financial documentation—the documentation which Lucy has requested of Joe. 3. If the documentation is not delivered, the court may order that it be provided. (Guidelines Section 25 (7) ). 4. Pursuant to

Section 35 of the Family Law Act, a party to a domestic contract for child support may register that agreement with this court, and the agreement will be treated as a court order. That party may then move pursuant to section 25(7) of the Guidelines for an order for income disclosure. [ 12 ] Joe opposes the motion for a number of reasons. He repeats the arguments he made above, saying that Joe’s income and the Child Support Guidelines are “irrelevant”. He also says that if disclosure is to be ordered, Mr. Epstein has sole jurisdiction to make the order.

Further, he says that if a right to a stand-alone disclosure order exists, that it applies only to the parties to a child support order, and not parties to an agreement, even if it is registered with the court [1] . Analysis [ 13 ] I agree that

section 25 of the Guidelines provides that a payor under a child support order shall provide certain financial disclosure if requested by the recipient, and that the recipient may request a court order if that disclosure is not provided. The relevant subsections are set out below. Continuing obligation to provide income information 25.

(1) Every spouse against whom a child support order has been made must, on the written request of the other spouse or the order assignee, not more than once a year after the making of the order and as long as the child is a child within the meaning of these Guidelines, provide that other spouse or the order assignee with (

a) the documents referred to in subsection 21(1) for any of the three most recent taxation years for which the spouse has not previously provided the documents; (

b) as applicable, any current information, in writing, about the status of any expenses included in the order pursuant to subsection 7(1); and (

c) as applicable, any current information, in writing, about the circumstances relied on by the court in a determination of undue hardship. Information requests

(4) Where a spouse or an order assignee requests information from the other spouse under any of subsections (1) to (3) and the income information of the requesting spouse is used to determine the amount of the child support order, the requesting spouse or order assignee must include the documents and information referred to in subsection (1) with the request. Time limit

(5) A spouse who receives a request made under any of subsections (1) to (3) must provide the required documents within 30 days after the request's receipt if the spouse resides in Canada or the United States and within 60 days after the request's receipt if the spouse resides elsewhere. Deemed receipt

(6) A request made under any of subsections (1) to (3) is deemed to have been received 10 days after it is sent. Failure to comply

(7) A court may, on application by either spouse or an order assignee, where the other spouse has failed to comply with any of

subsections (1) to (3) (

a) consider the other spouse to be in contempt of court and award costs in favour of the applicant up to an amount that fully compensates the applicant for all costs incurred in the proceedings; or (

b) make an order requiring the other spouse to provide the required documents to the court, as well as to the spouse or order assignee, as the case may be. Unenforceable provision

(8) A provision in a judgment, order or agreement purporting to limit a spouse's obligation to provide documents under this

section is unenforceable. [ 14 ] There are only a few reported cases in which a court has been asked to make a stand-alone disclosure order under this provision, but the existence of the authority to make such an order has not been questioned, even in cases in which the existing support order provides that it is non-variable [2] . [ 15 ] I note two points concerning

section 25: • Section 25(8) does not allow a party to contract out of the continuing disclosure obligation. There is no exemption, for example, for a party to an agreement that purports to be non-variable. • There is no requirement that a request for an order for financial disclosure in these circumstances be made in the context of an application to change child support. The drafters apparently wanted to insure that a party would have ready access to information that would help him or her assess whether it was worthwhile to bring a motion to change. [ 16 ] I find, however, that Lucy is not entitled to obtain an order for disclosure from Joe under

section 25. The provisions of section 25 (1)-(7) of the Guidelines apply to situations in which there is a court order for child support, not simply an agreement which has not been incorporated into a court order. In my view, the registration of the support agreement with the court under

section 35 of the Family Law Act does not assist Lucy. [ 17 ]

Section 35 does not provide that a support provision in a registered domestic contract is to be treated as if it were a court order for all purposes. The

section provides as follows: Domestic contract, etc., may be filed with court 35.

(1) A person who is a party to a domestic contract agreement may file the contract with the clerk of the Ontario Court of Justice or of the Family Court of the Superior Court of Justice together with the person's affidavit stating that the contract is in effect and has not been set aside or varied by a court or agreement.

Interpretation

(1.1) For the purposes of subsection (1), a party to a domestic contract includes a party's guardian of property or attorney for property, if the guardian or attorney entered into the domestic contract on behalf of the party under the authority of subsection 55 (3). Effect of filing

(2) A provision for support or maintenance contained in a contract that is filed in this manner, (

a) may be enforced; (

b) may be varied under

section 37; and (

c) except in the case of a provision for the support of a child, may be increased under

section 38, as if it were an order of the court where it is filed. Setting aside available (3) Subsection 33 (4) (setting aside in unconscionable circumstances, etc.) applies to a contract that is filed in this manner. Enforcement available despite waiver (4) Subsection (1) and clause (2) (

a) apply despite an agreement to the contrary. [ 18 ] A request for a stand-alone disclosure order is distinct from an enforcement proceeding or a motion to change a support order.

Section 35(2) does not provide that registration of an agreement containing provisions for child support permits a party to request an order for disclosure pursuant to section 25(7) of the Guidelines. [ 19 ] Given my decision that an order under section 25(7) is not available to a recipient of support pursuant to an agreement (as opposed to a court order), it is unnecessary for me to deal with the other issues which arise when a support agreement provides that future disputes with respect to child support must be dealt with by way of arbitration [3] .

However, I add that that although I am unable to make the order sought by Lucy, it appears to me that she may be able to obtain the disclosure she seeks in the arbitration process. There is a case for arbitration pending, if Lucy wishes to proceed. Lucy requested in May 2013 that Mr. Epstein arbitrate three issues related to child support, and he agreed to arbitrate two of those issues, including the issue of whether private school education for

Vincent is a “reasonable” expense. The arbitration agreement gives Mr. Epstein ample authority to order relevant financial disclosure from both parties in the mediation and arbitration phases of the process. He may find that the parties’ respective incomes are a relevant in arbitrating this issue. [ 20 ] Lucy may also wish to ask Mr. Epstein to convene a pre-arbitration conference pursuant to

Section 10 of the arbitration agreement and make her request for income disclosure then, as a prelude to finally determining all the issues for arbitration. [ 21 ] Given the novel issue raised by this motion, each party shall bear his or her own costs. Released on: December 4, 2013 Justice E. B. Murray