Paul v. Dennis, 2012 NSSC 366

SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Paul v. Dennis, 2012 NSSC 366 Date: 20120926 Docket: SFSNMCA: 77088 Registry: Sydney Between: Brittney Ann Paul Applicant v. Joseph Noel Dennis Respondent Judge: The Honourable Justice Theresa Forgeron Heard: September 26, 2012, in Sydney, Nova Scotia Oral Decision: September 26, 2012 Written Decision: October 22, 2012 Counsel: Jill Perry, for Brittney Ann Paul Joseph Dennis, Self-represented By the Court: [ 1 ] Introduction [ 2 ] Brittney Ann Paul and Joseph Noel Dennis are the parents of two young children: So ’ sep Noel and Kaplie ’ l Albert. Ms.

Paul seeks child support for the children based upon an income imputed at $53,076. Mr. Dennis disputes this claim. Mr. Dennis states he has no income source at present because of health difficulties.

[3] Although originally scheduled as a final hearing, the court determined that it would proceed on an interim, and not final basis,for the following reasons: a. Ms. Paul did not provide her complete position to Mr. Dennis until he appeared in court the morning of the hearing. Mr. Dennis didnot have sufficient time to prepare his case in response. b. Neither party complied with the time lines set in the Date Assignment Conference Memorandum. c. Mr. Dennis did not disclose any financial information. d.

It was inappropriate to delay the granting of a child support order given that the application had been filed on August 25, 2011.Retroactive support issues were, however, deferred until the final hearing. [4] The interim hearing proceeded on September 26, 2012. The parenting agreement was placed on the record. The partiestestified on matters relating to the child support issues. The court rendered its oral decision after the parties provided their submissions. [5] Issues [6] The following issues will be determined in this decision: a. What are the ramifications for failing to file financial information? b.

Should income be imputed to Mr. Dennis? c. What amount of income should be imputed to Mr. Dennis? [7] Analysis [8] What are the ramifications for failing to file financial information? [9] Ms. Paul submits that a negative inference must flow from Mr. Dennis’ failure to provide income information. Mr. Dennisdid not provide much detail on his position on this issue. I agree with Ms. Paul.

Negative inferences, arising from nondisclosure, havecase law and legislative support. [10] In Leskun v Leskun, 2006 SCC 25, the Supreme Court of Canada affirmed the adverse inference drawn from the husband’sfailure to provide complete disclosure at para 33. The Supreme Court of Canada also approved the comments of Fraser J. at para 34 ofthis decision: 34. In all of these circumstances, the appellant has a poor platform from which to launch an attack against the trial judge’s conclusionregarding his assets and liabilities. As Fraser J. commented in Cunha v.

Cunha (1994), (BC SC), 99 B.C.L.R. (2d) 93(B.C.S.C.), at para. 9: Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlement which areinadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drainedwomen simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of areasonably-based suspicion that justice was not done.

If problems of calculation exist the appellant is largely the author of his own difficulties. I would not interfere on that basis. [ 11 ] Non-disclosure in the child support context is more disturbing than in the property context. [ 12 ] Further, sec. 23 of the Guidelines authorizes the court to draw an adverse inference against a parent who does not disclose income information.

Section 23 states: Where the court proceeds to a hearing on the basis of an application under paragraph 22(1)(a), the court may draw an adverse inference against the spouse who failed to comply and impute income to that spouse in such amount as it considers appropriate. [ 13 ] In this decision, the court draws an adverse inference against Mr. Dennis for the following reasons: a. Mr.

Dennis had a legal obligation to provide income information by virtue of the disclosure order served on him on October 20, 2011; and by virtue of the date assignment conference memorandum, which contained specific disclosure requirements. Mr. Dennis did not supply income information despite these orders. b. Mr. Dennis was dismissive of his disclosure obligation as noted when he made comments, such as: “ I didn ’ t get around to it; ” “ I didn ’ t do anything; ” “ I was sitting in my house... ” c. Ms. Perry ’ s correspondence dated June 19, 2012, and sent to Mr.

Dennis, confirmed that an imputation request would be made in the absence of financial disclosure. Mr. Dennis still made no attempts to supply proof of income. [ 14 ] Should income be imputed to Mr. Dennis? [ 15 ] Position of the Parties [ 16 ] Ms. Paul seeks child support based upon an imputed income of $53,076. This figure combines the average total income for six months, of fishers, between 20 and 39 years of age, from New Brunswick, with six months EI income. A gross-up rate was then applied because Mr. Dennis ’ income is non-taxable. [ 17 ] In contrast, Mr.

Dennis states that he collects social assistance and should not be required to pay child support. Mr. Dennis states that he was not employed this past fishing season for health reasons. [ 18 ] Decision [ 19 ]

Section 19 of the Provincial Child Support Guidelines provides the court with the discretion to impute income in specified circumstances, three of which are applicable to this case: secs. 19 (1) (a), (

b) and (f). [ 20 ] In my decision to impute income to Mr. Dennis, I have applied the following principles which are distilled from case law: a. The discretionary authority found in sec. 19 must be exercised judicially, in accordance with rules of reasons and justice, and not arbitrarily. A rational and solid evidentiary foundation, grounded in fairness and reasonableness, must be shown before a court can

impute income: Coadic v. Coadic, 2005 NSSC 291. b. The goal of imputation is to arrive at a fair estimate of income, not to arbitrarily punish the payor: Staples v. Callender, 2010NSCA 49. c. The burden of establishing that income should be imputed rests upon the party making the claim, however, the evidentiary burdenshifts if the payor asserts that his/her income has been reduced or his/her income earning capacity is compromised by ill health:MacDonald v. MacDonald, 2010 NSCA 34; MacGillivary v. Ross, 2008 NSSC 339. d.

The court is not restricted to actual income earned, but rather, may look to income earning capacity, having regard to subjectivefactors such as the payor's age, health, education, skills, employment history, and other relevant factors. The court must also look toobjective factors in determining what is reasonable and fair in the circumstances: Smith v. Helppi, 2011 NSCA 65; Van Gool v. VanGool, (BC CA), 113 B.C.A.C. 200; Hanson v. Hanson, (BC SC), 1999 B.C.J. No. 2532;Saunders-Roberts v. Roberts, 2002 NWTSC 11; and Duffy v. Duffy, 2009 NLCA 48; Pink v. MacDonald, 2011 NSSC 421. e.

A party's decision to remain in an unremunerative employment situation, may entitle a court to impute income where the party has agreater income earning capacity. A party cannot avoid support obligations by a self-induced reduction in income: Duffy v. Duffy, supra;and Marshall v. Marshall, 2008 NSSC 11. [21] In Smith v. Helppi, supra, Oland J.A. confirmed the factors to be balanced when assessing income earning capacity at para. 16,wherein she quotes from the decision of Wilson J. in Gould v. Julian, 2010 NSSC 123. Oland J.A. states as follows: 16 Mr.

Smith argues that the judge erred in imputing income as he did. What a judge is to consider in doing so wassummarized in Gould v. Julian, 2010 NSSC 123 (N.S. S.C.), where Justice Darryl W. Wilson stated: Factors which should be considered when assessing a parent's capacity to earn an income were succinctlystated by Madam Justice Martinson of the British Columbia Supreme Court, in Hanson v. Hanson, (BC SC), [1999]B.C.J. No. 2532, as follows: 1. There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parentcannot work.

It is "no answer for a person liable to support a child to say he is unemployed and does not intend to seek work or that hispotential to earn income is an irrelevant factor". ...2. When imputing income on the basis of intentional under-employment, a court mustconsider what is reasonable under the circumstances. The age, education, experience, skills and health of the parent are factors to beconsidered in addition to such matters as availability to work, freedom to relocate and other obligations.3.

A parent's limited workexperience and job skills do not justify a failure to pursue employment that does not require significant skills, or employment in whichthe necessary skills can be learned on the job. While this may mean that job availability will be at a lower end of the wage scale, courtshave never sanctioned the refusal of a parent to take reasonable steps to support his or her children simply because the parent cannotobtain interesting or highly paid employment.4. Persistence in unremunerative employment may entitle the court to impute income.5.

Aparent cannot be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations.6. As ageneral rule, a parent cannot avoid child support obligations by a self-induced reduction of income.. . . [33] In Nova Scotia, the test to be applied in determining whether a person is intentionally under-employed or unemployed isreasonableness, which does not require proof of a specific intention to undermine or avoid child maintenance obligations. [22] I find that Ms. Paul has proven that income should be imputed to Mr. Dennis by virtue of sec. 19 (1) (

f) of the Guidelines becauseMr. Dennis failed to disclose any income information contrary to the order to disclose dated October 20, 2011, and contrary to the dateassignment conference memorandum dated June 14, 2012. [23] I further find that Ms. Paul has proven that income should be imputed to Mr. Dennis by virtue of sec. 19 (1) (

b) of the Guidelinesbecause Mr. Dennis is ordinarily employed through a Band Council and lives on a reserve. He is thus exempt from paying income tax.

[ 24 ] In addition, I find that Ms. Paul has proven that Mr. Dennis is under-employed, and such under-employment is not required to meet the needs of another child, or Mr. Dennis ’ health needs. In drawing this conclusion, I make the following findings of fact: a. If Mr. Dennis is actually in receipt of social assistance of $350 per month, then he is under-employed. In the past, Mr. Dennis earned between $800 to $1,000 per week during the fishing season, and collected EI during the balance of the year. b. No compelling evidence was adduced to suggest that Mr.

Dennis was not able to work because of the needs of his infant child. c. No compelling evidence was adduced to suggest that Mr. Dennis was not able to work because of health problems. In fact, no independent medical evidence was presented. Mr. Dennis must prove an inability to work because of health problems. In M(L.A.) v. M. (K.G.) 2000 ABQB 80 , Smith J. stated that a claimant must show a meaningful link connecting that party ’ s health needs to an inability to work at para. 33. The absence of independent medical evidence proved fatal to claimants in the past: McKinnon v. Serroul 2011 NSSC 386 ; MacGillivary v.

Ross 2008 NSSC 339 ; Vanbeek v. Vanbeek [2008] O.J. No. 2004 ; Pamma v. Pamma , 1999 CarswellBC 2227 ; and Pink v. MacDonald , supra. d. If there were medical, or other reasonable explanations, for Mr. Dennis ’ failure to work, such should have been produced. Mr. Dennis was afforded ample opportunity to do so. [ 25 ] What amount of income should be imputed to Mr. Dennis? [ 26 ] The court must quantify income earning capacity based upon the evidence before it. Mr. Dennis ’ income earning capacity far exceeds the $350 per month he alleges. Mr.

Dennis ’ income earning capacity is based upon what a fisher would earn in similar circumstances, and given the subjective factors unique to Mr. Dennis. [ 27 ] I have reviewed the independent figures produced in the materials by Ms. Paul. These disclose a figure of $22,565 in employment income, and $12,411 in EI benefits, for a total of $34,976. The gross-up figure equals $53,076. This figure must be reduced somewhat because Ms. Paul did not consider the waiting period during which Mr.

Dennis would not be collecting EI benefits. [ 28 ] It is further noted that this adjusted figure is in keeping with the income that Mr. Dennis stated he earned before separation, although no proof was supplied. My calculations, based upon Mr. Dennis ’ evidence, produce an income of $19,485 during the fishing season, and $12,860 in EI income. A gross-up figure for this income is about $50,000. [ 29 ] In the circumstances, I find that there is a rational and solid evidentiary foundation upon which to impute income. I therefore impute income to Mr. Dennis in the annual amount of $50,000. [ 30 ] Conclusion [ 31 ] Ms.

Paul ’ s application for interim child support is granted based upon an imputed income of $50,000 to Mr. Dennis. This produces a total monthly payment of $712, which Mr. Dennis will pay in the amount of $356 on the 15th day of each month, and $356 on the 28th day of each month, commencing September 28, 2012. [ 32 ] Ms. Perry will draft the court order. The usual disclosure and maintenance enforcement provisions will be incorporated into the court order as stated in the Rules. [ 33 ] At the request of Ms. Paul, and given the circumstances, the final hearing will not be scheduled until Mr. Dennis has filed all

income information that is required and as contained in the order to disclose and in the date assignment conference memorandum. Further, if Mr. Dennis is alleging an inability to work, then he must disclose his medical file, as well as an expert opinion in that regard. [ 34 ] Costs were not requested. _______________________ Forgeron, J.