Court File and Parties
Ontario Court of Justice
Between:
SAMANTHA ALICIA REID Acting in Person Applicant
- and -
OMAR KAREEM FORTUNE Acting in Person Respondent
Heard: January 3, 2020
Justice: S.B. Sherr
Reasons for Decision
Part One – Introduction
1This trial was about the respondent's (the father's) child support obligations for the parties' three-year-old son (the child).
2Both parties have brought motions to change the court's child support order dated July 19, 2018 (the existing order). The applicant (the mother) seeks an order that the father pay 50% of the child's special or extraordinary expenses pursuant to section 7 of the Child Support Guidelines (the guidelines), starting on October 1, 2018, in addition to the $450 each month that he was ordered to pay to her in the existing order. She also seeks an order that the father designate the child as a beneficiary on his life insurance policy.[1]
3The father seeks a reduction in child support and a dismissal of the mother's motion to change.
4The parties each filed affidavits and financial statements for this trial and provided oral evidence.
5The issues for this court to determine are:
a) Has there been a change in circumstances that warrants changing the existing order?
b) If so, what are the eligible special or extraordinary expenses that the mother can claim pursuant to section 7 of the guidelines?
c) Does the father have an undue hardship claim as set out in section 10 of the guidelines?
d) What amount of child support should the father pay to the mother?
e) If the father has life insurance coverage, does the court have the authority to order the father to designate the child as a beneficiary under this coverage? If so, should it make this order, and on what terms?
Part Two – Background Facts
6The father is 39 years old. The mother is 34 years old.
7The parties have never cohabited.
8The child has always lived with the mother. She has final custody of him. The father has chosen not to see the child for over one year, despite an order granting him access.
9The father has been married to another woman (the wife or father's wife) since 2010.
10The father and the wife have two children together, ages 2 and 12.
11The father has a third child – age 15 (the third child). He is required to pay child support of $450 each month for the third child pursuant to a court order. The third child has lived with him since September 2019.
12The father has brought a motion to change his support order for the third child. That case is currently being litigated in the Superior Court of Justice (Family Court) in York Region.
13The parties had their first trial regarding the child on July 18, 2018. The court made the following findings of fact:[2]
a) The father earned annual income of $72,514.
b) The father owned his home. It had equity of $170,000. He also had a locked-in RRSP of $40,000. He had other assets of $12,000 and debts of about $2,300.
c) The father's wife last worked at McDonald's in 2016 and earned annual income of about $30,000. She then received sick benefits until the end of May 2018. At the time of the first trial, she had no income.
d) The mother earned annual income of $55,000. She had assets of about $30,000 and debts of about $21,000.
e) The father met the legal test for undue hardship pursuant to subsection 10 (2) of the guidelines. He had a lower standard of living than the mother.
14The guidelines table amount for one child at the father's annual income at the first trial was $677 each month. The court ordered him to pay child support to the mother of $450 each month. This was approximately a one-third discount of the guidelines table amount due to his undue hardship claim.
15The mother contacted the father in October 2018 and asked him to contribute to the child's daycare expenses. The father told her that he couldn't afford it.
16The mother issued her motion to change the existing order on February 7, 2019. The father filed his response to motion to change seeking a reduction in child support on April 30, 2019.
17The father is approximately $1,500 in arrears of child support.
Part Three – Legal Considerations – Child Support
18The motions to change support are governed by subsection 37 (2.1) of the Family Law Act (the Act) which reads as follows:
Powers of court: child support
(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,
(a) discharge, vary or suspend a term of the order, prospectively or retroactively;
(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and
(c) make any other order for the support of a child that the court could make on an application under section 33.
19The court's discretion to change support is to be exercised judicially. See: DiFrancesco v. Couto, 2001 O.J. No 4307 (OCA); Gray v. Rizzi, 2016 ONCA 153.
20Section 1 of the guidelines sets out the objectives of the guidelines as follows:
(a) to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation;
(b) to reduce conflict and tension between spouses by making the calculation of child support orders more objective;
(c) to improve the efficiency of the legal process by giving courts and spouses guidance in setting the levels of child support orders and encouraging settlement; and
(d) to ensure consistent treatment of spouses and children who are in similar circumstances.
21Subsection 3 (1) of the guidelines sets out that the presumptive rule is that the payor shall pay support for a child under the age of majority based on the amount set out in the applicable table and the amount, if any, determined under section 7 of the guidelines.
22Undue hardship claims are governed by section 10 of the guidelines, which reads as follows:
Undue hardship
- (1) On the application of either spouse or an mother under section 33 of the Act, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the parent or spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.
Circumstances that may cause undue hardship
(2) Circumstances that may cause a parent, spouse or child to suffer undue hardship include,
(a) the parent or spouse has responsibility for an unusually high level of debts reasonably incurred to support the parents or spouses and their children during cohabitation or to earn a living;
(b) the parent or spouse has unusually high expenses in relation to exercising access to a child;
(c) the parent or spouse has a legal duty under a judgment, order or written separation agreement to support any person;
(d) the spouse has a legal duty to support a child, other than a child of the marriage, who is,
(i) under the age of majority, or
(ii) the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life;
(e) the parent has a legal duty to support a child, other than the child who is the subject of this application, who is under the age of majority or who is enrolled in a full time course of education;
(f) the parent or spouse has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability.
Standards of living must be considered
(3) Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the parent or spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other parent or spouse.
Standards of living test
(4) In comparing standards of living for the purpose of subsection (3), the court may use the comparison of household standards of living test set out in Schedule II.
Reasonable time
(5) Where the court awards a different amount of child support under subsection (1), it may specify, in the order for child support, a reasonable time for the satisfaction of any obligation arising from circumstances that cause undue hardship and the amount payable at the end of that time.
Reasons
(6) Where the court makes an order for the support of a child in a different amount under this section, it must record its reasons for doing so.
23The father must prove more than hardship. He must show that the hardship is exceptional, excessive or disproportionate, not merely awkward or inconvenient. See: Hanmore v. Hanmore, 2000 ABCA 57.
24The mother is seeking a small retroactive support order (from October 1, 2018 until she issued her motion to change in February 2019). The Supreme Court in D.B.S. v. S.R.G.; Laura Jean W. v. Tracy Alfred R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, outlined the following factors that a court should take into account in dealing with retroactive applications:
Whether the recipient spouse has provided a reasonable excuse for his or her delay in applying for support.
The conduct of the payor parent.
The circumstances of the child.
The hardship that the retroactive award may entail.
25Where ordered, an award should generally be retroactive to the date when the recipient gave the payor effective notice of his or her intention to seek an increase in support payments; this date represents a fair balance between certainty and flexibility (D.B.S., par. 5).
26Effective notice is defined as any indication by the recipient parent that child support should be paid, or if it already is, that the current amount needs to be renegotiated. All that is required is for the subject to be broached. Once that has been done, the payor can no longer assume that the status quo is fair (D.B.S., par. 121).
27The D.B.S. principles also apply to claims for retroactive section 7 special expenses. See: Smith v. Selig, 2008 NSCA 54; Hetherington v. Tapping, 2007 BCSC 209; Surerus-Mills v. Mills, [2006] O.J. No. 3839 (Ont. S.C.J.).
Part Four – Changes in Circumstances
28There have been changes in circumstances since the existing order was made that warrant a reassessment of child support, being:
a) The mother is incurring significant child-care expenses that were not claimed or considered at the first trial. She is receiving no contribution for these expenses from the father.
b) The father broke his tibia on March 22, 2019. He was off work and received short-term disability payments from March 22, 2019 until the end of July 2019. The father received two-thirds of his income during this time.
c) The third child came to live with the father and the wife in September 2019.
Part Five – Section 7 Expenses
29The mother has incurred child-care expenses since October 1, 2018. These expenses are reasonable and necessary arising out of the mother's need to have child-care for her employment. They are eligible special expenses pursuant to clause 7 (1) (a) of the guidelines.[3]
30The mother had gross daycare expenses of $481.29 each month for the period from October 1, 2018 until the end of September 2019. Absent other considerations, the father would ordinarily be required to pay his pro-rata share of the net amount of the expense[4] of $166 each month.[5] Starting on October 1, 2019, the child-care expense changed to $328.47 each month. The father's pro-rata share of the net expense would ordinarily be $115 each month.[6]
31The mother also made a claim for a contribution to karate expenses for the child.[7] The court finds that this is an ordinary and not an extraordinary extracurricular expense as defined by subsection 7 (1.1) of the guidelines and not an eligible section 7 expense.[8]
Part Six – Analysis
32The father continues to have a meritorious undue hardship claim. The salaries of the mother and the father are essentially the same as they were in 2018. The father still has three other children to support. Payment of the presumptive amount of support under subsection 3 (1) of the guidelines would be excessive and disproportionate. Even if part-time income was imputed to the father's wife, he would still have a lower standard of living than the mother.
33The court considered that the father's income was reduced by 33% for four months in 2019. This has added to his financial hardship.[9]
34The parties both continue to struggle financially. The father's struggles are primarily the result of having children he can't afford and his financial mismanagement. In the first trial decision, the court commented that he might have to sell his home to meet his financial commitments. He should also have a serious conversation with his wife about her working part-time and contributing to their expenses.[10]
35The mother's financial struggles are more attributable to a lack of financial support from the father. The father is no longer seeing the child, leaving all child-care responsibilities to her.
36The mother should not be required to absorb the entire amount of the child's section 7 expenses, which is the outcome sought by the father. A fair division of child support requires that he make a meaningful contribution towards these expenses.
37The court has no difficulty ordering retroactive section 7 expenses, as requested by the mother. It is a modest claim. The parties agreed that the mother gave the father effective notice of her claim for these expenses in October 2018. She did not delay in coming to court. The father has made no contribution to these expenses. The father's hardship will be factored into determining his contribution to these expenses.
38Balancing all of these factors, the court will exercise its discretion by ordering the father to contribute $600 towards the child's section 7 expenses for the period up until September 30, 2019. This order takes into account the father's reduction in income for four months in 2019 – otherwise he would have been required to contribute much more. However, the court will not reduce the $450 monthly payment the father is required to pay the mother in the existing order. That would not be just to the mother or the child and would be an excessive reduction in the father's child support obligations.
39Starting on October 1, 2019, the father will be required to contribute $80 each month towards the section 7 child-care expense. This will be in addition to the $450 each month previously ordered. This will maintain the one-third reduction in the father's child support obligations that the court ordered in the existing order.[11]
Part Seven – Security for Support
40The mother seeks an order that the father designate the child as a beneficiary on life insurance coverage he has through his employer as security for his support obligations.
41The father deposed that he does not have life insurance coverage. He seemed less sure of this after cross-examination by the mother.
42If the father does not have life insurance coverage through his employer, the court will not require him to obtain a life insurance policy, due to his financial challenges.
43However, it appears likely that the father has life insurance coverage through his employer, as he has a deduction for TXB Life on his pay stubs.[12] The terms of the life insurance coverage, if it exists, are unknown, including the amount of the coverage and existing beneficiaries. The father shall obtain his benefits package and details of any insurance coverage from his employer and provide the mother with this information within 30 days.
44This leads to the question of whether the Ontario Court of Justice has the authority to order the father to designate the child as beneficiary on his life insurance coverage.
45Clause 34 (1) (i) of the Act provides that the court can make an order requiring that a spouse who has a policy of life insurance as defined under the Insurance Act designate the other spouse or a child as the beneficiary irrevocably.
46However, the parties, who never resided together, are not spouses as defined under section 29 of the Act, which reads as follows:[13]
"spouse" means a spouse as defined in subsection 1 (1), and in addition includes either of two persons who are not married to each other and have cohabited,
(a) continuously for a period of not less than three years, or
(b) in a relationship of some permanence, if they are the parents of a child as set out in section 4 of the Children's Law Reform Act.
47Accordingly, the court cannot make the requested order under clause 34 (1) (i) of the Act.
48But the analysis does not end there. Clause 34 (1) (k) of the Act permits the court to make an order requiring the securing of payment under the order, by a charge on property or otherwise. In Katz v. Katz, 2014 ONCA 606, the Ontario Court of Appeal commented that clause 34 (1) (k) of the Act provides the court with broad scope for securing the payment of a support order, including ordering a payor to obtain and maintain life insurance for a child. The court wrote at paragraphs 69 and 70:
69Given that a support order under the Family Law Act is binding on a payor spouse's estate unless the order provides otherwise, on its face, s. 34(1) (k) is broad enough to permit a court to order a spouse to obtain an insurance policy to secure payment of the order following the payor spouse's death. The concluding words "or otherwise" in s. 34(1) (k) afford the court broad scope for securing the payment of a support order.
70Because a support payor's estate is bound by a support order following the payor's death, the court making a support order is entitled to secure the payments to be made in the event of the payor's death by requiring the payor to obtain and maintain life insurance for a specified beneficiary while the support order is in force and to give directions concerning the extent to which the payout of the insurance proceeds will discharge the support obligation: See Laczko v. Laczko, (1999), 176 D.L.R. (4th) 507 (Ont. S.C.), at pp. 511-12.
49The court finds that an order should be made pursuant to clause 34 (1) (k) of the Act to secure payment of child support. The father is in arrears of support and has struggled in managing his financial affairs. It is very important for the child to receive the support that is ordered.
50There is one more jurisdictional hurdle for the mother to pass. Subsection 34 (2) of the Act provides that the Ontario Court of Justice shall not make an order pursuant to clause 34 (1) (k) of the Act except for the provision of necessities or to prevent the dependant from becoming or continuing to be a public charge.
51The court finds that an order requiring the security of payment of child support under the order by designating the child as a beneficiary of the father's insurance coverage would be for the provision of necessities, given the mother's financial challenges and the child's needs.
52If the father has life insurance coverage available through his current or any future employer, he is to designate the child as a beneficiary for no less than 20% of the value of the coverage, as security for his support obligations, for so long as the child is a dependant as defined in the Act. This figure is based on the father having three other children and his wife to support – the father has five dependants and they should be treated equally. The father shall designate the mother as trustee of the child's interest in the insurance coverage.
53If he has existing life insurance coverage, the father shall deliver such beneficiary designation to his insurer and provide proof to the mother that he has done so within 30 days. In the event that he obtains employment in the future which provides life insurance coverage, the father is to deliver such beneficiary designation to his insurer and provide proof to the mother that he has done so within 14 days of obtaining employment.
54This order for support shall bind the father's estate pursuant to subsection 34 (4) of the Act.
Part Eight – Conclusion
55The mother's motion to change is granted in part. A final order shall go changing the existing order on the following terms:
a) The father shall pay the mother an additional $600 towards the child's special expenses for the period up until September 30, 2019.
b) Starting on October 1, 2019, the father shall pay the mother child support of $530 each month, as calculated in this decision.
c) The parties shall exchange their income tax returns and notices of assessment and the mother shall provide the father with proof of the child's child-care expenses by June 30th each year.
d) A support deduction order shall issue.
e) The Director of the Family Responsibility Office is requested to amend its records in accordance with the terms of this order.
f) The father is to obtain his benefits package and details of any insurance coverage from his employer and provide the mother with this information within 30 days.
g) If the father has life insurance coverage available through his current or any future employer, he is to designate the child as a beneficiary for no less than 20% of the value of the coverage, as security for his support obligations, for so long as the child is a dependant as defined in the Act. The father is to designate the mother as the trustee of the child's interest in the insurance coverage.
h) If he has existing life insurance coverage, the father shall deliver such beneficiary designation to his insurer and provide proof to the mother that he has done so within 30 days.
i) In the event that the father obtains employment in the future which provides life insurance coverage, he is to deliver such beneficiary designation to his insurer and provide proof to the mother that he has done so within 14 days of obtaining employment.
j) This order for support shall bind the father's estate pursuant to subsection 34 (4) of the Act.
56The father's motion to reduce his support obligation in the existing order is dismissed.
Released: January 7, 2020
Justice S.B. Sherr
Footnotes
1The mother also moved to change the existing access order. This issue was resolved on consent on July 9, 2019.
2See: Reid v. Fortune, 2018 ONCJ 486.
3Clause 7 (1) (a) of the guidelines reads as follows: Special or extraordinary expenses
7 (1) In a child support order the court may, on either spouse's request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child's best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family's spending pattern prior to the separation:
(a) child-care expenses incurred as a result of the custodial parent's employment, illness, disability or education or training for employment;
4This is the amount of the expense after taking into account any tax deductions or credits that the mother receives related to the expense.
5See subsections 7 (2) and (3) of the guidelines.
6Copies of the software calculations setting out these amounts are attached to the decision.
7This was not claimed in her motion to change – only at trial.
8This subsection reads as follows:
Definition of "extraordinary expenses"
(1.1) For the purposes of paragraphs (1)(d) and (f), the term extraordinary expenses means
(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse's income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or
(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account
(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,
(ii) the nature and number of the educational programs and extracurricular activities,
(iii) any special needs and talents of the child or children,
(iv) the overall cost of the programs and activities, and
(v) any other similar factor that the court considers relevant.
9The father has been working full-time since the end of July 2019.
10The father testified that his marriage is under stress, in large part due to the breakdown in trust with his wife because he deceived her and had a relationship and child with the mother. He said that his focus is on repairing that relationship – otherwise everything will break down for all his children.
11The presumptive guidelines amount is $793 monthly, comprised of $677 monthly for table support plus $116 monthly for special expenses. A monthly payment of $530 is approximately two-thirds of this amount.
12This is a common acronym for taxable life insurance premium.
13The definition of spouse in subsection 1 (1) of the Act reads as follows:
"spouse" means either of two persons who,
(a) are married to each other, or
(b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.
