C v. H
KLC v. TJH
Ontario Superior Court of Justice
D.S. Ferguson J.
Judgment: June 21, 2007
Counsel: John P. Schuman for Applicant, KLC
Barry James Carmichael, Paul Zammit for Respondent, TJH
MOTION by mother for child support.
D.S. Ferguson J.:
What this is about
1 These are my reasons with respect to two motions:
(a) The Applicant’s motion at Part II, Vol. 4, tab 26.
(b) The Respondent’s motion at Part II, Vol. 3, tab 17.
2 On April 26 the parties consented to a temporary order pending the return of the motions. Counsel have advised that they wish the provisions of the order of April 26, 2007 to continue in force as a temporary order and I so order.
3 At the hearing before me counsel specifically asked me to read voluminous materials in the record. Much of this material did not deal with child support and I was taken by surprise when the submissions started and counsel advised that the only issues they intended to pursue were the claims in each motion for child support. The Applicant is seeking child support for K, who is the natural child of the parties. The Respondent is seeking child support for C who is the natural child of the Respondent.
4 I pointed out to Mr. Carmichael that the uncontradicted evidence before the court indicated that the Applicant was unemployed, lived with her mother, had lost her means of transportation because the Respondent had taken possession of the van, and had lost an employment opportunity because she had no transportation. The Respondent’s counsel then obtained instructions to adjourn the Respondent’s motion for child support sine die to a date after questioning is concluded.
5 Consequently, the Respondent’s motion is otherwise dismissed except with respect to the issue of child support and that issue is adjourned sine die to a date after the questioning is concluded.
6 The Applicant’s motion is otherwise dismissed except for my order below regarding child support for K. The parties are both at liberty to bring another motion about access.
7 I normally try to keep my reasons brief when deciding a temporary motion of this kind. However, I shall give more detailed reasons for these reasons:
(a) The Court of Appeal has recently directed judges to give more fulsome reasons regarding support orders.
(b) It is important that I record some cautions I gave the parties and counsel as those cautions should guide them in the conduct of this proceeding and, if not obeyed, should be considered on the issue of costs at the end of the proceeding.
(c) It is important in this case that the parties recognize that there are consequences for conducting themselves in an inappropriate manner.
8 During the hearing I cautioned the parties and their counsel concerning the following:
(a) It is improper to make scurrilous and irrelevant allegations against other parties.
(b) It is improper to prepare affidavits whose main purpose it to assassinate the character of a party.
(c) It is improper to use inflammatory language either in the body of an affidavit or in headings in an affidavit.
(d) It is no excuse for counsel to say that their client instructed them to do any of these things.
(e) It is wasteful to file voluminous material when an issue can be dealt with on less material.
(f) That an issue will be perceived by the court to be of minor importance if the parties make a great fuss about it in their materials and then drop the issue without any order being asked for or agreed upon.
(g) Conducting litigation by responding to motions or allegations by launching unmeritorious counterallegations or motions has cost consequences and is a matter which will cause the court to think negatively about the character of both the party and the counsel doing so.
(h) They are wasting huge sums in this proceeding without making much progress.
(i) It is completely unacceptable not to abide by the orders of the court or to suggest to a court appointed assessor that the assessor may not need to prepare a report.
The issue of child support for Kaya
9 The only issues for the court to decide are whether or not the Respondent is able to pay support, and if so, the amount and commencement date. The parties agreed on April 26 that the commencement date would be at least the commencement date of this proceeding.
10 To establish the ability of the Respondent to pay the Applicant relies on the evidence as to their previous life-style and the documentation concerning the Applicant’s involvement in financial affairs in the recent past. The Applicant asks the court to draw inferences from the Respondent’s false statements in this proceeding and his failure to put evidence before the court to fully explain the evidence she adduced.
11 The Applicant asks the court to impute a very significant income to the Respondent and award $25,000 per month.
12 The Respondent takes the position that the state of the evidence on this motion does not permit the court to make a determination of the Respondent’s circumstances and that the issue of child support should be deferred to trial. I find that would be inappropriate. It would simply reward the Respondent for his misconduct in this proceeding.
13 The Respondent’s alternative position is that the court should determine his income to be the average annual sum shown on his last three year’s income tax returns which is about $24,300. I also find that inappropriate.
14 The material counsel asked me to read satisfies me that the Respondent is unreliable, is attempting to delay disclosure and a fair determination of the issues on their merits, has disregarded the court’s order for supervised access, and has attempted to delay the preparation of the court ordered assessment.
15 These findings incline me to make adverse inferences against the Respondent with respect to the evidence and lack of evidence concerning child support.
16 I specifically note that he falsely claimed to the Applicant that he was abiding by the ordered supervision “110%” and that he falsely swore an affidavit to the same effect: Part 2, Vol. 3, tab 18, para33 and tab 22. I find that the evidence adduced by the Applicant proves on a preponderance of the evidence that he has repeatedly and flagrantly disregarded the court’s order for supervised access. I find that the preponderance of the evidence shows that his sister’s affidavit and the affidavit of Ms. Novikova in this regard are false as well.
17 His pattern of behaviour in this proceeding has been to deny a fact, then when faced with contradictory evidence to counter-attack with evidence on another issue rather than to clarify or make full disclosure of the truth on the first issue.
18 His evidence concerning his financial dealings and his involvement with the S.E.C. demonstrates this forcefully.
19 In his Answer he stated that he “had not been in any civil or criminal lawsuit concerning Allixon International Inc.”: Part I, Vol. 2, tab 2, para.29. The Applicant has filed a consent judgment which recites that the Respondent entered an appearance in a lawsuit in which Allixon was a defendant and consented to judgment against himself: Part II, Vol. 4, tab 28A.
20 The letters filed from his U.S. attorney, Mr. Offill, are problematic to say the least. First of all they are inadmissible hearsay. Further, his letter dated March 16, 2007 said that the Respondent was not named in the civil suit or charged with any violations: Part 3, Vol. 3, tab 18U. His letter of May 3, 2007 said that the S.E.C. did not “charge” the Respondent in the civil action and that the S.E.C. could only trace $20,000 to the Respondent: Part 2, Vol. 4, tab 32.
21 In contrast, the judgment indicates he entered an appearance and therefore he was a party. Further, the judgment on consent ordered him to “disgorge” $35,000 and pay a civil penalty of $25,000. The contents of the judgment contradict the evidence of the Respondent and the letters from Mr. Offill.
22 In his affidavit sworn April 16, 2007 the Respondent said he never financially benefited from the transaction involving the issue of shares of Allixon. The S.E.C. judgment ordered him to disgorge money which indicates the opposite. In his affidavit at Part 2, Vol. 4 he admits that he received a $20,000 consulting fee.
23 The Respondent provided no reasonable explanation of the S.E.C. judgment or the conflicting evidence. On the evidence before me I find that the Respondent has misrepresented his involvement.
24 The next question is the amount of child support. I conclude the Respondent’s conduct in this proceeding forces the court to impute income.
25 I shall consider some of the evidence relating to his ability to pay:
(a) There is a report in the file showing the Respondent had a net worth of $1,361,738 as of April 23, 2004. There is no evidence from the Respondent as to where this money went.
(b) The Respondent swore an affidavit dated August 14, 2006 stating that he purchased a 26 foot Hughes sailboat with money provided by his father as a gift.
(c) Numerous materials indicate that the Respondent is involved in off shore business and deals with off shore investment dealers. It would be easy for the Respondent to keep income and money offshore.
(d) The Respondent’s tax returns for 2004, 2005 and 2006 show income from investments in 2004 and 2005 but none for 2006.
(e) The returns show what appear to be excessive deductions of business expenses.
(f) The return for 2006 shows a net income after business expenses of $11,162.
(g) The return shows a deduction of child care costs for C of $5155 which is less than $500 per month. His financial statement claims he spends $1200 a month on that item.
(h) The affidavit of the Respondent at Part 2, Vol. 4 claims he still spends $600 to $700 per month on such expenses which would leave him with about $6,000 per year or $500 per month to live on. That is inconsistent with his living in a house with a pool, owning one car and renting another. It is also inconsistent with his budget in his financial statement which shows he spends more than that a month on groceries.
(i) The return for 2005 shows a net income of $39,947. The return for 2006 shows a net income of $11,162. The Respondent’s financial statement sworn August 14, 2006 shows a net monthly income of $5,100 which would be an annual income of $60,000 which is not consistent with his income tax returns.
(j) His financial statement claims he is running a deficit of $3,627 per month. The statement of debts on valuation date and as of the date of the statement does not reflect any corresponding debt.
(k) A number of the expense items in his financial statement do not jive with the costs reflected in his statement of business expenses in his tax returns.
26 Because of the Respondent’s conduct and misleading documentation it is necessary to impute income without a specific evidentiary base other than adverse inference, his financial resources in the recent past and his living expenses.
27 I find that it is reasonable to impute an annual income of $ 100,000.
28 If it turns out at trial that his income was less then since the Applicant will have spent any money received and because the difficulty in discerning his income is his fault, I would suggest it would not be appropriate to give him any credit if he has overpaid.
29 The guideline support for one child based on an income of $100,000 is $877 per month.
30 I order the Respondent to pay child support to the Applicant in the amount of $877 per month commencing on the date of issuance of the Application. This order is without prejudice to the Applicant making a claim at trial for support for an earlier period.
31 I am considering awarding costs of this motion against the Respondent on a substantial indemnity basis.
32 Counsel shall send me written submissions on costs in accordance with the following timetable:
(a) From the Applicant by July 3.
(b) From the Respondent by July 16.
(c) Any reply from the Applicant by July 30.
33 Counsel may change this schedule by filing a written consent but all submissions must be filed by August 2 in any event.
34 The submissions shall not exceed 4 double spaced pages including a cost outline. The submissions may be sent by fax or mail to the Whitby courthouse.