Court File and Parties
Court File No.: D80453/15 Date: 2015-04-29
Ontario Court of Justice
Between:
I.K.
Applicant
- and -
A.K.
Respondent
Counsel:
- Jaret Moldaver, for the Applicant
- Lauren Israel, for the Respondent
Heard: April 27, 2015
Justice: S.B. Sherr
Endorsement
Part One – Introduction
1The applicant (the mother) has brought a motion seeking temporary spousal support from the respondent (the father). She seeks an order that the father pay her $1,698 per month, starting on January 1, 2015.
2The father submits that he has no ability to pay temporary spousal support and asks that no support order be made.
Part Two – Background Facts
3The mother is 37 years old. The father is 42 years old.
4The parties were married on January 30, 1996.
5The parties have four children. S.K. (age 17) lives with her paternal grandparents. M.K. (age 16) attends school in the United States. L.K. (age 13) and St. K. (age 10) are in the care of the Jewish Family and Child Service of Greater Toronto (the society).
6The parties had a traditional marriage. The mother stayed at home. She was the primary caregiver for the children and managed the household. The father was the primary income-earner for the family.
7The family struggled financially. The father went into significant debt and the family was supported, in part, by its religious community.
8The parties separated in May of 2013. They lived under the same roof until December of 2013.
9The father declared bankruptcy on June 4, 2013.
10The mother commenced a court application for custody and support in the Ontario Superior Court of Justice. On January 30, 2014, Justice Emile R. Kruzick made a temporary without prejudice order that the children reside with the mother. The father was granted alternate weekend access plus Wednesday overnights. On February 11, 2014, Justice J. Patrick Moore continued the temporary parenting order and ordered an assessment to be conducted pursuant to section 30 of the Children's Law Reform Act.
11The parties subsequently retained a social worker to conduct the assessment. The assessment was underway when the society issued a protection application in this court on April 7, 2014 with respect to L.K. and St. K. The society sought an order placing these children in its care and custody due to the risk of emotional harm to them arising out of their exposure to intense parental conflict. Pursuant to subsection 57.2 of the Child and Family Services Act, the custody application in the Superior Court of Justice was stayed.
12On May 1, 2014, in the child protection case, this court ordered that L.K. and St. K. be placed in the temporary care of the society, with access to the parents to be in the society's discretion, including the frequency of the access, the level of supervision, or whether access should take place at all.
13This court made findings that: the behaviour of L.K. and St. K. was out of control in the mother's home and it wasn't emotionally safe for them to live with her; the father had undermined the relationship between the mother and L.K. and St. K., stripping the mother's authority as a parent; the father had acted in a controlling and abusive manner to the mother; and the children were at risk of severe emotional harm.
14The court also made a payment order under section 60 of the Child and Family Services Act. The mother was ordered to pay the society $144 per month. The father was ordered to pay the society $656 per month.
15The parents, L.K. and St. K. have been involved in an intensive therapeutic process for the past year. This is costing each parent up to $5,000 in some months.
16The child protection case is returnable on May 7, 2015.
17The mother brought this motion for temporary spousal support in the Superior Court of Justice on December 4, 2014.
18The parties subsequently agreed to transfer the parenting and support issues from the Superior Court of Justice to this court.
19The father has not paid the mother any spousal support since she brought her motion.
Part Three – Legal Principles
20Section 30 of the Family Law Act (the Act) states that every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so. Subsection 33(8) of the Act sets out the purposes of spousal support and subsection 33(9) of the Act sets out how to determine the amount of spousal support. The court has considered these provisions in making this order.
21Spousal support is not merely a consideration of needs and means. In determining the appropriate amount of spousal support, compensatory and non-compensatory considerations should be taken into account in an effort to equitably alleviate the economic consequences of the breakdown of the relationship. See: Rioux v. Rioux, 2009 ONCA 569, [2009] 97 O.R. (3d) 102 (OCA). Entitlement can be based on compensatory, non-compensatory or contractual grounds. See: Bracklow v. Bracklow.
22In Kowalski v. Grant, 2007 MBQB 235, 2007 CarswellMan 422 (ManQB), the court set out the following principles in dealing with temporary spousal support motions:
Interim support is to provide income for dependent spouses from the time the proceedings are instituted until trial.
The court need not conduct a complete inquiry into all aspects and details to determine what extent either party suffered economic advantage or disadvantage as a result of the relationship. That is to be left to the trial judge.
Interim support is a holding order to maintain the accustomed lifestyle if possible pending final disposition as long as the claimant is able to present a triable case for economic disadvantage.
Interim support is to be based on the parties' means and needs assuming that a triable case exists. The merits of the case in its entirety must await a final hearing.
23In Robles v. Kuhn, 2009 BCSC 1163, the court added the following considerations:
On interim support motions, needs and ability take on greater significance.
On interim motions, the need to achieve self-sufficiency is of less importance.
Interim support should be ordered within the Spousal Support Advisory Guideline (SSAG) range unless exceptional circumstances dictate otherwise.
Interim support should only be ordered where a prima facie case for entitlement has been set out.
24It must be kept in mind that an interim support award is a temporary order only and inevitably imperfect. See: Cardoso v. Cardoso, 2013 ONSC 5092. It is meant to provide "a reasonably acceptable solution to a difficult problem until trial". See: Chaitas v. Christopoulos, [2004] O.J. No. 907 (S.C.J.).
Part Four – Incomes of the Parties
4.1 The Mother's Income
25The mother asked the court to use her 2014 income of $11,488 for the purpose of the spousal support analysis.
26The evidence showed that the mother is earning much more income in 2015 than she did in 2014. The mother works part-time as a school secretary. Her most recent pay stub, for the pay period ending on March 20, 2015, showed gross income to date in 2015 of $5,600. This equates to gross income of $467 per week. Assuming she works 40 weeks per year (the school year), she is projected to earn $18,666 in 2015. The mother also works part-time in a clothing store, earning $220 per month. The mother deposed that these hours may be cut back, since the store has new ownership, but at this point she has maintained this income, which projects to $2,640 per annum. The mother's total income in 2015 is projected to be $21,307.
27In any support calculation the court should use current income when it is known. See: Vanos v. Vanos, 2010 ONCA 876; Wright v. Christie, 2011 ONCJ 109.
28The mother's income will be assessed at $21,307 per annum for the purpose of the spousal support analysis.
4.2 The Father's Income
29The father is employed as a property manager.
30Prior to 2013, the father worked for the same company (the company) he is presently employed by, but operated as an independent contractor through a solely-held corporation. His corporation billed the company at the rate of $75,000 per annum plus HST. He also received reimbursement for travel costs. The father wrote off expenses each year for this business.
31The father did not remit the HST he billed and collected from the company to Revenue Canada. He fell far behind on his corporation's HST remittances and his personal taxes, until he declared bankruptcy in 2013.
32The father's work with the company was not interrupted by his bankruptcy. However, once he declared bankruptcy, the company paid him as an employee, rather than as an independent contractor. Given the father's financial difficulties with Revenue Canada and failure to make required remittances, this was a reasonable decision.
33The father provided a letter from the company confirming that he is paid $75,000 per annum.
34The payment order in the child protection case was based on the father earning $75,000 per annum.
35The mother asked the court to impute a higher income to the father for the spousal support analysis.
36The onus to establish that additional income should be imputed to the father is on the mother. See: Homsi v. Zaya, 2009 ONCA 322, [2009] O.J. No. 1552 (Ont. C.A.).
37The mother did not meet this onus at this time.
38The mother argued that the father's business ledgers in 2011 and 2012 revealed more revenue than the father declared in his tax returns. The court acknowledges that there are some inconsistencies in these figures (although not to a large extent). These inconsistencies will need to be further explored as the mother is seeking retroactive support from the father. These inconsistencies are only relevant to this motion if they inform the court that the father's current income information is incorrect. That does not appear to be the case. The father's current income is supported by his documentation.
39The mother also asked the court to add $5,000 to the father's income as the father's employer advanced him this amount in 2014 and the father did not declare it as a debt in his financial statement. The court is not prepared to do this at this time. If the advance is forgiven by the employer, an argument can be made at trial that this should be included in the father's income for 2014. There is no evidence that the father will obtain another advance from his employer in 2015.
40The mother also noted that the father has large deposits in his bank statements. These will need to be explored further. However, both parties acknowledge that they have received significant monies from family and community members to assist them with therapeutic, legal and day-to-day living costs. There is no evidence at this point that these deposits constitute income.
41The father's income will be fixed at $75,000 per annum for the purpose of the spousal support analysis.
Part Five - Payments on Behalf of the Children
42The parties have complied with the child protection payment order. The father pays $656 per month to the society and the mother pays the society $144 per month.
43Both parties made claims that they have paid expenses for the children over and above the amounts required in the payment order.
44It is expected that parents exercising access will incur incidental expenses for children.
45The onus is on the party seeking credit for such payments to establish that they are actually being made.
46The mother claimed that she is paying an additional $400 per month for items for L.K. and St. K., as requested by the society. This includes payments for clothes, activities and school supplies. The mother provided no documentary evidence of these payments.
47The father claimed that he is paying for many expenses of the children. He provided some evidence of payments made in 2014. He paid tuition expenses of $1,500 for M.K. and dental (including orthodontic) expenses for S.K. of about $3,000. He also paid $150 for summer camp for M.K.
48The father claimed that he is paying tuition expenses of $200 per month for L.K. and St. K. He provided only one invoice for these payments in 2014 (for $200) and no evidence of payments for these expenses in 2015.
49The father claimed that he is paying tuition expenses of $150 per month for S.K. He provided one receipt for a payment made in 2014 (for $300). He provided no evidence of payments made for this expense in 2015.
50The father claimed that he is going to pay M.K.'s tuition expenses of $700 per month. He conceded that he hasn't made any payments towards this expense in 2015. The father provided an invoice dated January 13, 2015, indicating that M.K. has outstanding tuition of $2,800.
51The father claimed that S.K. has orthodontic expenses remaining of about $4,000, repayable at $500 per month. It does not appear that he has made any payments towards this expense since November of 2014.
52The father did provide proof of paying medical expenses of $238 for the children in 2015.
53The court accepts that the parents are making payments in addition to the payment orders – the father paying more than the mother. However, neither parent was able to satisfy the court that they are currently paying as much for these expenses as they claimed. The parties will have the opportunity of proving these amounts as the case progresses and should keep receipts.
54At this point, given the lack of documentary proof of ongoing payments, the court will take a conservative approach to the additional child expenses claimed by the parents. For the purpose of its spousal support analysis, the court will add $200 per month to the amount that the mother is paying for the children pursuant to the payment order, and $500 per month to the amount that the father is paying for the children pursuant to the payment order.
55With these adjustments, the father is paying $13,872 per annum for the children ($1,156 per month) and the mother is paying $4,128 per annum ($344 per month) for the children.
Part Six – Spousal Support Advisory Guidelines
56The parties both submitted that the Spousal Support Advisory Guidelines aren't designed to address the unique circumstances of this case. They were unable to prepare software calculations that accurately reflected this situation. The court is not prepared to embark on this process on its own, given the complexity of this case.
Part Seven – Analysis
57The mother submitted that the court should order spousal support on the basis that the parties should each get one-half of their total annual net disposable income, after taking into account the amounts they are paying pursuant to the payment order.
58The following factors support this position:
a) The mother has a strong compensatory support claim. This was a traditional 17-year marriage. The mother has been and will continue to be economically disadvantaged by the roles she assumed during the marriage (although this factor is mitigated somewhat by the fact that she no longer has children in her care).
b) The mother has a strong non-compensatory claim. There is a significant disparity in the incomes of the parties.
c) The mother has been significantly disadvantaged by the breakdown of the relationship.
d) While neither party can afford their current expenses, it is inequitable that the father should have a much larger pool of money available to him to pay for these expenses.
59The father does not deny that the mother is entitled to spousal support on both compensatory and non-compensatory grounds. His submission is that he has no ability to pay support to the mother.
60The father submits that the family was unable to meet its expenses when the family was intact – they had to rely on charity from their religious community. He deposed that the financial problems were exacerbated when the parties had to support two separate households.
61The father submits that his ability to pay spousal support is reduced due to his child support obligations. This argument has merit. The mother's analysis did not take into account the additional child support payments made by the parents. The father's payment order and the additional $500 per month he pays for the children (as set out in paragraph 55 above) will be taken into consideration in the spousal support analysis.
62The father also argues that he is solely responsible for the remaining family debt. The father received a conditional discharge from bankruptcy on December 14, 2014. One of the terms of his bankruptcy is that he must make an additional payment of $5,286. The father submits that this liability further reduces his ability to pay support. This argument would have had more merit if the father was actually making payments towards this debt. However, this is not the case. The father provided no evidence that he is paying anything towards this.
63The father's main argument is that the therapeutic expenses of up to $5,000 some months preclude him from being able to afford paying any spousal support. He argues that these expenses are essential for the emotional welfare of L.K. and St. K. and the relationship of these children with both parents. He argues that these expenses should be prioritized to any spousal support obligations.
64Both parties have received help from their community, friends and family in paying the therapeutic expenses. The parties also each received non-recurring lump sums in 2014 that they were able to apply to these expenses. The mother received child tax benefits of $36,000 (when family income tax returns that had not been filed for many years were filed). The father received about $20,900 in December of 2014, arising out of a motor vehicle accident he had in 2010.
65The court finds that there is some merit to the father's argument about the importance of the therapy and its impact on his ability to pay spousal support. The children are benefitting from the therapy – it is important. However, this is only one factor for the court to consider in its spousal support analysis. The court does not accept that the therapeutic expenses eliminate the father's obligations to the mother, particularly since:
a) The mother is required to pay the same amount as the father for the therapeutic expenses.
b) Neither party comes close to being able to afford these expenses. They are well beyond their means.
c) It is not just that the father should have a much larger pool of money than the mother to meet these and other living expenses. The financial pain of this family needs to be shared more equitably.
d) The less that the father pays for spousal support means the more that the mother must seek from charitable sources to pay for her expenses.
e) The therapy is necessary, to a large extent, due to the father's bad behaviour.
66Taking into account all of these factors, the court finds, at this stage, that the mother should receive about 40% of the parties' net disposable income (NDI), after taking into consideration the payment order and the additional support payments that each party is making, as set out in paragraph 55 above. A spousal support payment of $900 per month will leave the father with about 60% of the NDI and the mother with 40%.
67The father shall pay the mother temporary spousal support of $900 per month, starting on January 1, 2015.
Part Eight – Conclusion
68The court recognizes that the trial judge will be in a much better position to assess the appropriate amount of spousal support on a final basis and adjust this order, if necessary. The court will need to assess if the mother is entitled to retroactive spousal support. It will need to determine the father's historic annual income, since he was self-employed, and determine if additional income should be imputed to him. The parties will need to obtain better evidence to prove what additional child support expenses (over and above the payment order) they have incurred. It also remains to be seen where L.K. and St. K. will reside on a long-term basis.
69The parties are strongly encouraged to meet with their counsel and try to resolve the financial issues. They cannot afford, emotionally or financially, this level of litigation.
70An order will go on the following terms:
a) The father shall pay the mother temporary spousal support of $900 per month, starting on January 1, 2015. This amount will be subject to adjustment, both as to quantum and start date, by the trial judge.
b) The father shall pay the arrears created by this order to date ($3,600) in 90 days.
c) A support deduction order shall issue.
d) The father shall provide the mother with his complete 2014 income tax return within 30 days and his 2014 notice of assessment within 60 days (the mother has already produced this documentation).
e) The parties shall exchange, every 60 days, any receipts for expenses paid on behalf of the children.
f) The case is adjourned until May 7, 2015, to be heard at the same time as the child protection case.
71If either party seeks costs, they are to serve and file written submissions by May 11, 2015. The other party will then have until May 25, 2015 to make written response. The submissions should not exceed three pages, not including any bill of costs or offer to settle. The submissions (if any) should be delivered to the trial coordinator's office on the second floor of the courthouse.
72The court thanks counsel for their professional presentation of this motion.
Justice S.B. Sherr
Released: April 29, 2015