minicounsel

citation: "R.N. v. C.S., 2020 ONCJ 263" parties: "R.N. v. C.S." party_moving: "R.N. (Father)" party_responding: "C.S. (Mother)" court: "Ontario Court of Justice" court_abbreviation: "ONCJ" jurisdiction: "Ontario" case_type: "motion to change" date_judgement: "2020-05-29" date_heard:

"2020-03-02"
"2020-03-03"
"2020-03-04"
"2020-03-05" applicant:
"R.N." applicant_counsel:
"Lauren Israel" respondent:
"C.S." respondent_counsel:
"Rupa Murthi" judge: "Melanie Sager" winning_degree_applicant: 4 winning_degree_respondent: 2 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2020 decision_number: 263 file_number: "D57438/12" source: "https://www.canlii.org/en/on/oncj/doc/2020/2020oncj263/2020oncj263.html" summary: > A motion to change child and spousal support arising from a 2015 separation agreement. The father, who was earning approximately $90,000 annually at the time of separation, subsequently secured employment with a UAE-based company resulting in significantly increased income (imputed at $324,479 to $452,306 annually). The mother sought retroactive and prospective increases in child and spousal support, as well as custody and access modifications. The father sought joint custody of the youngest child and contribution toward section 7 expenses. The court found a material change in circumstances warranting variation of support, imputed income to the father based on salary, bonus, and employer-paid benefits, ordered retroactive child support from June 1, 2016, retroactive spousal support from June 1, 2016, and maintained the mother's sole custody with expanded access for the father. interesting_citations_summary: > The decision provides comprehensive analysis of income imputation where a payor earns non-taxable income from a foreign employer with significant benefits paid directly. The court addressed the appropriate treatment of employer-paid personal expenses (housing, vehicles, clothing, vacations) in calculating income for support purposes, declining to gross up these benefits for income tax while grossing up base salary and bonus. The judgment also addresses retroactive support claims under D.B.S. v. S.R.G., material change in circumstances for custody variation, shared parenting arrangements under section 9 of the Child Support Guidelines, and the application of section 4 of the Child Support Guidelines for high-income payors. The court drew adverse inferences from the payor's failure to provide financial disclosure and non-compliance with court-ordered income analysis. final_judgement: > The mother's motion to change is substantially granted. The father is ordered to pay retroactive child support from June 1, 2016, retroactive spousal support from June 1, 2016, and prospective child and spousal support as varied. The father's custody claim is dismissed and access is ordered on an alternate weekend and mid-week basis. The mother retains sole custody of the youngest child. The father receives credits for amounts previously paid and must contribute to agreed section 7 expenses in proportion to income (85% father, 15% mother). keywords:
Motion to change
Child support
Spousal support
Income imputation
Non-taxable income
Employer-paid benefits
Retroactive support
Material change in circumstances
Custody and access
Section 7 expenses
Financial disclosure
Adverse inference
Shared parenting
High-income payor
Compensatory spousal support areas_of_law:
Family Law
Child Support
Spousal Support
Custody and Access
Income Imputation
Child Support Guidelines
Family Law Act
Children's Law Reform Act legislation:
title: "Child Support Guidelines, O. Reg. 391/97" url: "https://www.ontario.ca/laws/regulation/970391"
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R.N. v. C.S.

Court File No.: D57438/12

Date: May 29, 2020

Ontario Court of Justice

Before: Justice Melanie Sager

Heard: March 2, 3, 4, and 5, 2020

Reasons for Judgment Released: May 29, 2020

Counsel

Lauren Israel — counsel for the applicant(s)

Rupa Murthi — counsel for the respondent(s)

SAGER J.:

Introduction

1R.N. (father) and C.S. (mother) were married on December 27, 1996 and separated on May 11, 2011. They have four children, twins L.N. and O.N. are 21 years old; D.N. who is 19 years old; and, N.N. who is 13 years old.

2The parties were involved in litigation between 2013 and 2015. On April 15, 2013, Justice Debra Paulseth made a final order on consent granting the mother sole custody of the parties' four children. On September 18, 2015, Justice Paulseth made an order on consent consolidating orders she had previously made in relation to custody and incidents of custody into one final order and the balance of the parties' claims were dismissed.

3The issues of child support, spousal support and access were resolved by way of a Separation Agreement executed by the parties on September 18, 2015.

4The parties Separation Agreement provides that the father shall have access to the children as requested which shall not be unreasonably withheld by the mother.

5The Separation Agreement obliges the father to pay the mother child support of $2000.00 per month plus $500.00 per month towards "special or extraordinary expenses" for the children; and, spousal support of $300.00 per month to be increased by $100.00 per month as each child becomes ineligible for child support. Spousal support shall terminate when the mother marries or cohabits with another man in a relationship resembling marriage or on September 30, 2023.

6While the parties' Separation Agreement does not set out what the father's income is for the purpose of child and spousal support, it does state that that the words "table", "income" and "special or extraordinary expenses" in the agreement are terms "defined in s. 2(1) of the " Child Support Guidelines ". The Separation Agreement requires the father to pay "table" child support for four children in the amount of $2000.00 per month, which corresponds with a payor earning $90,000.00 per year in Ontario.

7The parties were divorced in 2017.

8The Separation Agreement was filed with the court on October 25, 2019 for enforcement of the support provisions by the Family Responsibility Office. It is this order that is the subject of this litigation.

The Current Litigation

a. The Mother's Claims

i. Variation of Child and Spousal Support

9On May 3, 2018, the mother commenced a Motion to Change child and spousal support based on the father experiencing a significant increase in his annual income since executing the Separation Agreement. Her assessment of the father's finances was accurate as shortly after the parties executed the Separation Agreement the father signed a contract to work as a project manager for a company called CCG UAE based in the United Arab Emirates (UAE). He is paid a base salary of $106,000.00 and is eligible to receive a performance/profit sharing bonus.

10In addition to the base salary and bonus, the father's employer pays for several of his expenses in both the UAE and Canada including his housing, car, vacation and clothing expenses, and, legal fees.

11The effect of the benefits of the father's employment on his income for the purpose of child and spousal support is a significant issue.

12The mother is seeking an increase in child support retroactive to January 1, 2016. She claims that when the parties were negotiating the terms of their Separation Agreement, unbeknownst to her the father was in negotiations to secure new employment which resulted in a lucrative contract executed by him less than two weeks after the parties finalized the Separation Agreement. She says had she known about the provisions of the employment contract, she would not have agreed to the support terms set out in the Separation Agreement.

13The mother also relies on the father's failure to advise her of the increase in his income, blameworthy conduct that she claims justifies an increase in child support retroactive to 2016 for all four children.

14The parties agree that at the present time both L.N. and O.N. have completed their education, live on their own and are not entitled to child support from either parent. O.N. completed her post-secondary education in April 2017 and L.N. completed hers in April 2018. The father says that between 2016 and the summer of 2018 L.N. and O.N. spent at least 40% of the time in his care while the mother claims this is inaccurate and that they lived primarily with her until the summer of 2018. Both L.N. and O.N. moved into the father's home in the summer of 2018 where they lived for approximately one year.

15The parties also agree that currently D.N. and N.N. are living primarily with the mother but that was not the case between the summer of 2018 and July 2019. During this period the parties agree that D.N. spent equal time with each parent and N.N. lived with the father Monday to Friday and with the mother from Friday to Monday.

16The mother seeks an order imputing income to the father of $730,794.00 for 2016, $666,237.00 for 2017, $623,141.00 for 2018 and $612,553.00 as of 2019. Based on this level of imputed income, the mother asks for an order fixing arrears of child support owing by the father for the period of 2016 to 2019 at $400,609.00.

17Commencing January 1, 2020, the mother seeks child support of $7,628.00 per month from the father for D.N. and N.N. based on an annual imputed income of $612,553.00.

18The father, acknowledging that his income has increased, does not dispute that there has been a change in circumstances since the parties executed the Separation Agreement. He is prepared to pay an increased amount of child support as of the date of the mother's Motion to Change.

19In calculating any increased amount of support payable by him since the date of the Motion to Change, the father argues that child support should not be paid on any income attributed to him over $150,000.00 pursuant to section 4 of the Child Support Guidelines. He argues that the table amount of child support on his total income far exceeds the children's needs and will result in a windfall to the mother.

20The father claims that the variation of child support should reflect the parenting regime in place on the date the mother commenced this Motion to Change; specifically, that N.N. was living primarily with him and D.N. spent equal time with each parent.

21The father opposes any order for a retroactive increase in child support for any of the children as he claims the mother has not provided a good reason for the delay in bringing her Motion to Change. The father further argues that as the children were all in his care at least 40% of the time since 2016 an order for a retroactive increase in his child support payments would be unreasonable.

22With respect to ongoing child support for N.N. and D.N. who currently reside with the mother, the father says that after being sober for many years, in July 2019, he began drinking and using drugs to excess. As a result, he has been on unpaid leave from work since August 1, 2019. He says no child support should be payable until he returns to work. He says he is currently slowly returning to his duties at CCG UAE.

23The mother also seeks to vary the spousal support payable by the father as set out in the Separation Agreement, on the basis of the imputed income set out above. She asks the court to order the father to pay $8000.00 per month in spousal support retroactive to January 1, 2016, resulting in arrears of spousal support as of December 31, 2019 of $369,000.00. She is not seeking to vary the date spousal support is to be terminated pursuant to the parties' Separation Agreement.

24The father's position on spousal support is that there should be no change to the terms negotiated and agreed upon in the parties' Separation Agreement. The father argues that the spousal support is non compensatory and that the mother should not share in any increase in his income post separation. He said the mother did nothing that can be seen as contributing to his ability to increase his income post separation.

b. The Father's Claims

25The father's Response to the Motion to Change includes a request for an order for sole custody and primary residence of N.N., child support from the mother and a fixed schedule of access by the mother to N.N.

i. Variation of Custody and Primary Residence of N.N.

26Prior to trial, the father had abandoned his claim for sole custody and primary residence of N.N. At trial he requested an order for joint custody of N.N. He claims that the parties were able to cooperate to make decisions regarding N.N. together, including the decision for him to live primarily with the father from the summer of 2018 to July 2019.

27The mother opposes any change to the custody order of N.N. She says that the parties are unable to communicate effectively or collaborate when it comes to N.N. Any historic cooperation was due entirely to the involvement of the father's former girlfriend with whom the mother got along. As she is no longer involved with the father, the parties have been unable to communicate at the level they once did.

ii. Access to N.N.

28Since the father's relapse in July 2019, the mother has insisted on the father's access to N.N. being supervised by a person of her choosing. The father's access, as set out in the parties Separation Agreement, is as requested by the father and not to be unreasonably withheld by the mother. There is no court order addressing access by the father to the children. The father seeks an order for unsupervised access to N.N. claiming he does not pose a threat to his son. The mother has been insisting on access being supervised due to the father's abuse of drugs and alcohol and she says his contact with N.N. should be supervised until she receives information directly from the father's physicians and therapists confirming that unsupervised access would not put N.N. at risk of harm.

iii. Contribution Towards Section 7 Expenses Incurred by the Father

29After N.N. began living primarily with the father in the summer 2018, he incurred expenses for tutoring, summer camp, hockey camp, and, a psychological assessment. In addition to these expenses, the father seeks an order requiring the mother to contribute towards therapy expenses for D.N., dental expenses for all the children and the cost of D.N.'s post-secondary education.

30The mother opposes an order requiring her to contribute towards any of these expenses as she claims the expenses were either not paid for by the father or they were incurred by him without her consent and she cannot afford to contribute.

c. The Issues

31The trial proceeded for four days on March 2, 3, 4 and 5, 2020 to address the following issues:

Has there been a material change in circumstances such that the order granting the mother sole custody of N.N. is no longer meeting his needs? If so, what custody order should be made?
What order for access by the father to N.N. is in N.N.'s best interests?
What income should be imputed to the father for the purpose of determining child and spousal support given that he earns income from a company based in the UAE, does not file income tax returns or pay income tax in Canada or the UAE and has the bulk of his personal expenses paid by his employer?
What amount of ongoing child support should be paid by the father to the mother, including contribution towards special or extraordinary expenses, from the date of the Motion to Change?
As part of the analysis of issues 4 and 5, if the father's income for the purpose of child support exceeds $150,000.00, what amount of child support should he be required to pay, if any, in excess of the table amount for $150,000.00 pursuant to section 4 of the Child Support Guidelines?
Should the father be required to pay a retroactive increase in child support and if he should, the court must determine if any of the children lived with the father for 40% of the time or more during the periods in question and whether that effects the amount of child support payable?
Did the father incur special or extraordinary expenses for the children towards which the mother should contribute?
Has there been a material change in either party's circumstances warranting a change to the amount of spousal support payable by the father to the mother and if yes, what variation to the order is appropriate and when should the change take effect?

32The parties provided their evidence in chief in sworn affidavits and were subject to cross examination.

33The mother did not call any additional witnesses. The father called a tax lawyer to give evidence on how his income would be treated by Revenue Canada if he filed Income Tax Returns in Canada.

34The father's claims in relation to custody of and access to N.N. are made pursuant to the Children's Law Reform Act and the mother's claims for child and spousal support are made pursuant to the Family Law Act.

Issue #1 – Has There Been a Material Change in Circumstances Such That the Order Granting the Mother Sole Custody of N.N. Is No Longer Meeting His Needs? If So, What Custody Order Should Be Made?

a. Legal Considerations

35The Motion to Change custody is brought pursuant to section 29 of the Children's Law Reform Act. Section 29 provides as follows:

Order Varying an Order

29 A court shall not make an order under this Part that varies an order in respect of custody or access made by a court in Ontario unless there has been a material change in circumstances that affects or is likely to affect the best interests of the child. R.S.O. 1990, c. C.12, s. 29.

36The test for a variation was enumerated by the Supreme Court of Canada in Gordon v. Goertz, 1996 CanLII 191 (SCC), [1996] 2 S.C.R. 27. As stated by Justice Stevenson in Brown v. Lloyd, 2014 ONSC 300, although the test in Gordon was the result of a mobility case and variation under the Divorce Act, "the test has been held to be applicable to a variation under the Children's Law Reform Act."

37At paragraphs 15-17, Justice Stevenson sets out the test for variation resulting from the decision in Gordon v. Goertz, as follows:

[14] Both parties agree that the test for a variation is set out in the Supreme Court of Canada decision of Gordon v. Goertz, 1996 CanLII 191 (SCC), [1996] 2 S.C.R. 27, [1996] S.C.J. No. 52. The decision dealt with a mobility case and a variation under the Divorce Act, R.S.C. 1985, c. 3; however,

[15] As outlined in Gordon v. Goertz at paragraph 10, before the court can consider the merits of an application for variation, it must be satisfied that there has been a material change in circumstances of the child since the last order was made. The Court further stated at paragraphs 12 and 13:

12 What suffices to establish a material change in the circumstances of the child? Change alone is not enough; the change must have altered the child's needs or the ability of the parents to meet those needs in a fundamental way: Watson v. Watson (1991), 1991 CanLII 839 (BC SC), 35 R.F.L. (3d) 169 (B.C.S.C.). The question is whether the previous order might have been different had the circumstances now existing prevailed earlier: MacCallum v. MacCallum (1976), 30 R.F.L. 32 (P.E.I.S.C.). Moreover, the change should represent a distinct departure from what the court could reasonably have anticipated in making the previous order. "What the court is seeking to isolate are those factors which were not likely to occur at the time the proceedings took place": J. G. McLeod, Child Custody Law and Practice (1992), at p. 11-5.

13 It follows that before entering on the merits of an application to vary a custody order the judge must be satisfied of: (1) a change in the condition, means, needs or circumstances of the child and/or the ability of the parents to meet the needs of the child; (2) which materially affects the child; and (3) which was either not foreseen or could not have been reasonably contemplated by the judge who made the initial order.

[16] Jurisdiction to vary a custody and access order is dependent upon an explicit finding of a material change in circumstances since the previous order was made. If an applicant fails to meet this threshold requirement, the inquiry can go no further. See Persaud v. Garcia-Persaud, [2009] O.J. No. 5940, 2009 ONCA 782; and Litman v. Sherman (2008), 2008 ONCA 485 (CanLII), 52 R.F.L. (6th) 239 (Ont. C.A.).

[17] If the threshold requirement of a material change in circumstances is met, the judge must then enter into a consideration of the merits and make the order that best reflects the interests of the child (Gordon v. Goertz, para. 9). The judge on the variation application must consider the findings of fact made by the trial judge as well as the evidence of changed circumstances (Gordon v. Goertz, para. 17).

38If the court finds that the threshold requirement of a material change in circumstances has been established, the court must then proceed to review the issues of custody afresh and make determinations based on what is in the child's best interest having regard to all of the circumstances in section 24 of the Children's Law Reform Act. In this fresh inquiry, both parties bear the evidentiary burden of demonstrating where the best interests of the child lie. The court should consider the matter afresh without defaulting to the existing arrangement. See Gordon v. Goertz, and Allen v. Allen, (1998) 1998 CanLII 14873 (ON SC), 38 R.F.L (4th) 96 (Ont. Gen. Div.).

39In order to determine if the conditions for a variation exist, the change of circumstances must be material as opposed to trivial or insignificant. See Hickey v. Hickey, 1999 CanLII 691 (S.C.C.), [1999] 2 S.C.R. 518.

40With respect to custody, it is the father's onus on the Motion to Change the final order to establish that there has been a material change affecting the needs of N.N. and the parents' ability to meet those needs such that the final order must be reviewed.

41In L.M.L.P. v. L.S., [2011] SCC 64, the Supreme Court of Canada stated that the change must be substantial, continuing and that "if known at the time, would likely have resulted in a different order." The Supreme Court stated that it must limit itself to whatever variation is justified by the material change of circumstances.

42On a Motion to Change, the court has the option of restricting changing the existing order to address a specific issue, while maintaining its integrity. See: Elaziz v. Wahba, [2017] ONCA 58.

43Once the court determines that there has been a material change in circumstances, the court should then look at all the evidence, including the evidence predating the order from which change is being sought. See: Segal v. Segal (2002), 2002 CanLII 41960 (ON CA), 26 R.F.L. (5th) 433 (Ont. C.A.).

b. Relevant Evidence in Relation to the Issue of Custody of N.N.

44N.N. is 13 years of age and will be 14 in August 2020. The evidence is that N.N. has some special needs but that he is doing well in school. The parties recently cooperated to obtain a psychological assessment of N.N. to assist them in meeting his needs.

45In the summer of 2018, after living primarily with the mother since the parties separated in 2011, N.N. began to live primarily with the father from Monday to Friday and with the mother from Friday to Monday. This arrangement continued until July 2019 when N.N. returned to live with the mother.

46The father's evidence does not directly address the material change that has affected the mother's ability to continue to meet N.N.'s needs. The father argues that the change in N.N.'s primary residence between the summer of 2018 and July of 2019 amounts to a material change in N.N.'s circumstances but he has not presented any specific evidence of N.N.'s needs not being adequately met by the current order.

47The father's position is that after having the day to day care of N.N. for approximately one year during which he was actively involved in N.N.'s life including his education, he should be granted joint custody in order to be able to continue to be equally involved in making any decision affecting N.N.

i. Communication and Cooperation Between the Parties

48In support of his claim for joint custody, the father relies on the fact that the parties cooperated to change the parenting schedule for N.N. in the summer of 2018. He says this demonstrates an ability on behalf of the parties to cooperate effectively at a high level and justifies an order for joint custody.

49The mother argues that there has not been a material change that affects her ability to continue to meet N.N.' needs. She does not agree that the parties are able to communicate effectively.

50The mother's evidence is that she has only ever been able to communicate effectively with the father through a former partner, S.I. She explains that when the father was involved with S.I., all discussions regarding the children occurred between the mother and her. Now that S.I. is no longer involved with the father, the mother's evidence is that they cannot communicate effectively.

51To support her evidence that she was only able to communicate with the father through S.I., the mother references a document entitled 'Parenting Plan Recommendations' of Marcie Goldhar, MSW, prepared during the course of this litigation pursuant to an order for a section 30 parenting assessment and delivered to the parties in June 2019. This document (not the report pursuant to the order for a section 30 assessment) was jointly entered as evidence at the trial by the parties. Ms. Goldhar's recommendations regarding the parenting schedule and decision making for N.N. are "based on the assumption that the father and [S.I] are living together". Ms. Goldhar recommends a formal review of the parenting schedule and decision making scheme if the father and S.I. are no longer living together.

52To further demonstrate the poor level of communication between the parties, the mother emphasizes the father's failure to advise her of his relapse and hospitalization due to alcohol abuse, something she learned of from the parties' daughter O.N., not the father. This evidence is not contested by the father who acknowledges addiction issues that led to his hospitalization.

53The father's evidence is that while their communication is frustrating and confrontational at times, there were also periods where their communication was "excellent". When asked whether his communication was sometimes disparaging the father said that he begins communication with the mother in a cordial and respectful manner but receives responses from her that require him to lecture the mother about her responsibilities which may come across as disparaging.

ii. Considerations Pursuant to Subsection 24(4) of the Children's Law Reform Act

54Pursuant to subsection 24(4) of the Children's Law Reform Act, the court is required to consider allegations of domestic violence in the context of a claim for custody of or access to a child. Subsection 24(4) provides as follows:

Violence and Abuse

24(4) In assessing a person's ability to act as a parent, the court shall consider whether the person has at any time committed violence or abuse against,

(a) his or her spouse;

(b) a parent of the child to whom the application relates;

(c) a member of the person's household; or

(d) any child. 2006, c. 1, s. 3 (1) ; 2016, c. 23, s. 7 (2, 3).

55The court heard evidence of a tumultuous relationship between the parties that included physical violence directed at the mother by the father during the marriage for which he was charged and pleaded guilty. The father also admitted to seriously assaulting his brother for coming to the defense of the mother.

56The father was charged with assaulting his former girlfriend, S.I., but the charges were dropped. He is currently awaiting trial on domestic violence charges in relation to his most recent girlfriend. The charges against the father are very serious and include assault, choking and forcible confinement.

57The mother's evidence is that she continues to see a social worker once per month to assist her in recovering "from being in an abusive relationship" and that the father's continued pattern of domestic violence is extremely concerning.

iii. Mother's Claims of Father's Poor Parenting Skills and Questionable Judgment

58The mother also claims that the father's poor parenting skills and judgment make an order for joint custody contrary to N.N.'s best interests. The mother relies on a series of text messages the father secretly exchanged with N.N. to highlight his poor parenting skills. These messages were exchanged between the father and N.N. after his relapse and were initiated by the father in an attempt to scheme with N.N. to arrange to have unsupervised access, contrary to the mother's wishes. The father tells N.N. in the text messages what to say to his mother when negotiating with her and shows N.N. copies of messages he sent to the mother on the topic of his access.

59In the text messages exchanged between the father and N.N. the father forwards N.N. copies of messages he sent the mother about access to N.N. The following are samples of the concerning messages/comments the father sent N.N.:

a. Father: It is ok baby boy. She is determined to keep you from seeing me.

b. Father: Ok. There is something wrong with her [referencing the mother].

c. Father: Your loyalty is to me. Not your mom. Not anyone.

d. Father: All you have to say is one sentence. Trust me. "Are you keeping me from my dad?" That will shut her down. I am sorry you have to go through this.

N.N. I know but she already thinks that I think that. It's okay.

Father: I see.

N.N.: I am gonna ask her why and I bet I will be able to change her mind.

Father: Ok. Stand up for yourself because if you ask that question it will freeze her.

e. N.N.: Lol um it's not going so well because she is just really fixed about her needing a little for trust in all of this and I need to see you more.

Father: Ok. No problems. What does she think I am going to do to my own baby? There is going to be 8 guys and 4 sons there. So what is going to happen. This is about her getting back at me using you and that is not good for kids.

N.N.: I know and I am still trying to tell her that.

Father: Just tell her the truth. Bottom line I have been all over the world with my dad. You are keeping him from me. I am going for the day??? You think he is going to hurt me??? That is BULLSHIT.

60The mother says that the text messages demonstrate extremely poor parenting by the father who cannot be entrusted with the responsibilities that come with joint custody.

61The father's evidence included an explanation for each and every text he exchanged with N.N. He sees nothing wrong with any of the messages he sent N.N. and is quite confident that the text messages are indicative of nothing but a loving, caring parent.

c. Conclusion Regarding Custody

62The change in N.N.'s residential schedule in the summer of 2018 constituted a material change in his circumstances. After living primarily with his mother, N.N. began living with his father from Monday to Friday and with his mother on weekends. This constitutes a material change in his life and to his needs that existed at the time the father filed his Response to Motion to Change.

63N.N. is now back in the mother's primary care. This fact raises the question of whether there has been a material change in circumstances contemplated by the legislation given the change back to the pre-existing residential arrangement.

64Common sense dictates that the material change in circumstances being relied upon by a party seeking to vary a custody order must still exist or at least the effects of the change must still be felt at the time of trial. It would make little sense to contemplate what order is in a child's best interests based on a historical change in his life that at the date of trial is no longer relevant to that child.

65While there was a material change in N.N.'s life in October 2018 when the father requested an order for sole custody and primary care of N.N., that change has been nullified by the parents' decision in July 2019 for N.N. to return to live primarily with the mother. Absent any other factors, such as a change to N.N.'s school or extracurricular activities as a result of the move to the father's home, there is no material change in circumstances at the date of trial warranting a review of the custody order. Therefore, as of the date of trial, I find there has not been a material change in N.N.'s life that affects his best interests.

66If I am incorrect assuming that the material change in circumstances being relied on by the father must still exist at the date of trial and there has in fact been a material change in circumstances justifying a review of the custody order, there is ample evidence, detailed below, to support a conclusion that a change to the custody order is not in N.N.'s best interest.

67The parties do not communicate well with one another and the mother no longer has the father's former girlfriend with whom she got along to communicate through. There is no evidence before the court that suggests the parties have historically communicated effectively to make joint decisions regarding N.N. or that they will be able to do so effectively in the future.

68The mother is also still attempting to cope with the impact of the domestic violence she endured during the marriage even though the parties separated 9 years ago.

69The evidence, particularly the text messages the father exchanged with N.N., demonstrate that there is a real question as to whether the father is able to meet N.N.'s needs. The father shows no insight at all into the emotional harm he potentially subjected his son to by involving him in the adult conflict and coaching him through conversations with his mother.

70The father's lack of insight and highly questionable judgment do not make him a suitable candidate for joint custody. When this lack of insight and poor judgment is considered in conjunction with the parties' inability to cooperate and communicate effectively, the court must conclude that an order granting the parents joint custody is not in N.N's best interests.

71While N.N.'s parents may not be faced with any major decisions between now and when he begins to make them for himself, should they arise, the court finds that if there was a material change in circumstances, it is N.N.'s best interest that the mother have sole custody as she has demonstrated an ability to meet N.N's needs whereas the father has not.

Issue #2 – What Order for Access by the Father to N.N. Is in N.N.'s Best Interests?

a. Legal Considerations

72The parties' Separation Agreement dated September 18, 2015 provides that "[R.N] shall continue to have access to the children as requested and access will not be unreasonably withheld." The access provision of the parties' Separation Agreement was not incorporated into a court order. The court does not have jurisdiction to vary the terms of a Separation Agreement. Therefore, the father's claim is treated as a fresh Application and not a Motion to Change.

73While the father did not issue an Application seeking an order for access to N.N., the mother did not object to the manner in which the father is seeking to change the terms of access as set out in the Separation Agreement.

74Subsection 24(1) of the Children's Law Reform Act sets out the test to be applied on an Application for access as follows:

24 (1) The merits of an application under this Part in respect of custody of or access to a child shall be determined on the basis of the best interests of the child, in accordance with subsections (2), (3) and (4). 2006, c. 1, s. 3 (1).

75Subsection 24(2) sets out a non exhaustive list of factors for the court to consider when determining access to a child as follows:

Best Interests of Child

(2) The court shall consider all the child's needs and circumstances, including,

(a) the love, affection and emotional ties between the child and,

(i) each person, including a parent or grandparent, entitled to or claiming custody of or access to the child,

(ii) other members of the child's family who reside with the child, and

(iii) persons involved in the child's care and upbringing;

(b) the child's views and preferences, if they can reasonably be ascertained;

(c) the length of time the child has lived in a stable home environment;

(d) the ability and willingness of each person applying for custody of the child to provide the child with guidance and education, the necessaries of life and any special needs of the child;

(e) the plan proposed by each person applying for custody of or access to the child for the child's care and upbringing;

(f) the permanence and stability of the family unit with which it is proposed that the child will live;

(g) the ability of each person applying for custody of or access to the child to act as a parent; and

(h) any familial relationship between the child and each person who is a party to the application. 2006, c. 1, s. 3 (1) ; 2009, c. 11, s. 10 ; 2016, c. 23, s. 7 (1, 2); 2016, c. 28, s. 2.

76The test with respect to the father's access to N.N. is not whether there has been a material change in circumstances but rather one of best interests. The court is required to decide this issue based on the evidence of what is best for N.N. now with some consideration given to the terms of the parties' Separation Agreement. See: Askalan v. Taleb, ONSC 2012 4746 CanLII; Van Heighten v. Catarino, 2017 ONCJ 103.

b. Relevant Evidence in Relation to the Issue of Access

77After the father admitted himself to hospital in the summer of 2019, the mother has insisted on his access to N.N. being supervised. The father argues there is no reason for his access to N.N. to be supervised. He recognized that he was abusing drugs and alcohol and sought treatment. When he realized he was not well, he instructed D.N. and N.N. to leave his home to live with the mother and removed himself from his children's lives recognizing that they should not witness his self-destruction. He says the steps he took exemplifies good parenting skills.

78The mother insists that the father's contact with N.N. should be supervised until she has received sufficient information about his treatment and progress.

79The mother is also worried about the father's insistence on involving N.N. in their conflict. She claims he shares his anger towards her and belief that she is responsible for their limited contact with N.N. She is concerned about the effect of the father's behaviour on N.N.

80Conversely, the father sees no harm in relation to his actions involving N.N. He justifies the conversations he has had with N.N. explaining that he cannot let his son think that he does not want to see him. He readily admits to coaching his son on how to talk to his mother and what to say to her to get what he wants.

c. Conclusion Regarding Access

81N.N. will be 14 years old in August 2020. His contact with his father need not be supervised. Such a restriction is rarely imposed on contact with a 13 or 14 year old. That being said, the mother should have some understanding of the father's treatment and progress especially since he claims he was not well enough to work.

82The mother's concern about the father involving N.N. in the adult conflict is a legitimate concern. The remedy is not to limit the father to supervised access as this may only serve to upset N.N. and place blame on his mother for being unable to spend more time with his father.

83The parties should cooperate to arrange for meaningful contact between N.N. and his father, on alternate weekends from Friday to Monday and one mid-week overnight with pick up and drop off at school provided such extended access is consistent with N.N.'s wishes. N.N. should also enjoy holiday access with his father.

Issue #3 - What Income Should Be Imputed to the Father for the Purpose of Determining Child and Spousal Support Given That He Earns Income From a Company Based in the UAE, Does Not File Income Tax Returns or Pay Income Tax in Canada or the UAE and Has the Bulk of His Personal Expenses Paid by His Employer?

a. Legal Considerations

84Section 19 of the Child Support Guidelines provides that the court may impute to a parent or spouse "such amount of income … as it considers appropriate" and provides a non-exhaustive list of such circumstances. The relevant portions of s. 19 read as follows:

19.(1) Imputing Income – The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include the following:

(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the spouse;

(b) the parent or spouse is exempt from paying federal or provincial income tax;

(c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;

85The above is a non exhaustive list and as such, the court has discretion to impute income based on other circumstances.

86Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. Clause 19(1)(a) of the Child Support Guidelines is perceived as being a test of reasonableness. See Drygala v. Pauli 2002 CanLII 41868 (ON CA), [2002] O.J. No. 3731(Ont. CA).

87The determination to impute income is discretionary as the Court considers appropriate in the circumstances of the case. In exercising discretion, a court will bear in mind the objectives of the Child Support Guidelines to establish fair support based on the means of the parents in an objective manner that reduces conflict, ensures consistency and encourages resolution. See: Bak v. Dobell, 2007 ONCA 304.

88Lifestyle can provide the criteria for imputing income. See: Aitken v. Aitken [2003] O.J. No. 2780 (SCJ); Jonas v. Jonas [2002] O.J. No. 2117 (SCJ); Price v. Reid, 2013 ONCJ 373. Where there are no other accurate indicators of income, the court has looked at the cost of the payor's lifestyle and imputed income based on that assessment. See: Reyes v. Rollo, 2001 CanLII 28260 (ON SC), [2001] O.J. 5110 (SCJ) at para 62.

89Where a party fails to comply with his disclosure obligations as provided for in s. 21 of the Child Support Guidelines and provide full financial disclosure relating to their income, the court is entitled to draw an adverse inference and to impute income to them. See: Gray v. Rizzi, 2016 ONCA 494, Szitas v. Szitas, 2012 ONSC 1548; Woofenden v. Woofenden, 2018 ONSC 4583.

90In Graham v. Bruto, 2008 ONCA 260, the court inferred that the failure to disclose would mitigate the obligation of the recipient to provide an evidentiary basis to impute income.

b. The Relevant Evidence With Respect to the Issue of the Father's Income

91Since commencing employment with CCG UAE, the father has not filed income tax returns in Canada not having lived here the requisite number of days triggering his obligation to do so. He is also not required to file income tax returns in the UAE.

92The father accepts that his income will have to be grossed up for income tax to account for the fact that his income is not subject to income tax in Canada or the UAE.

93The father's evidence is that his income for the purpose of child support is as follows:

	2016	2017	2018	2019
	$233,715.00	$466,276.00	$578,215.00	$207,800.00

94The mother's position is that the father's income for child support purposes is much higher. Her calculations are based on her interpretation of the father's employment contract. The mother argues that as the father has failed to provide any financial disclosure to demonstrate what expenses were paid for him by the company and in what amount, 100% of each benefit as defined in the employment contract should be attributed to the father and grossed up for income tax.

95The father's employment contract provides for a base salary of $106,000.00; an annual bonus that is guaranteed at 50% of the base salary for the first two years; and, "non taxable and recoupable" benefits including the following:

a) Vacations – three all expenses paid vacations per annum;

b) Housing allowance – reasonable costs and expenses of temporary housing;

c) Car Allowance – not to exceed $5000.00 per month

d) Clothing allowance - $50,000.00 the first year and $20,000.00 each additional year plus a one time allowance of $20,000.00 to be used in the first 36 months of the contract;

e) Personal legal fees – all legal fees and expenses toward any potential litigation not to exceed $100,000.00.

96The mother claims the following incomes should be imputed to the father:

	2016	2017	2018	2019
Non taxable income	$377,127.00	$347,127.00	$327,100.00	$322,180
Gross Up amount for child support	$730,794.00	$666,237.00	$623,141.00	$612,553.00

97The father says the mother's calculations are faulty as he did not incur expenses to the maximum amount allowed by his employment contract, and he is potentially liable to repay the "recoupable benefits". He relies on a letter from his employer that sets out the actual amount of personal expenses the company claims to have paid on his behalf. They are as follows:

	2016	2017	2018	2019
Salary	$106,000.00	$116,000.00	$116,000.00	$77,635.03
Bonus	Nil	$31,000.00	$66,900.00	Nil
Housing in Canada	$4,750.00	$38,000.00	$45,000.00	$26,000.00
Car allowance in Canada	$18,200.00	$18,200.00	$42,000.00	$23,000.00
Clothing allowance	$13,330.00	$25,050.90	$21,030.00	$3840.00
Three paid vacations	Nil	$22,100.00	$11,440.00	Nil

98The mother argues that the letter from the father's employer is not reliable as it is not signed (there is only a corporate seal on the letter) and the father's evidence at trial differs from the information contained in the letter.

99An example of the father's oral evidence that differs from the information contained in the letter from his employer is that the company has paid legal fees for him in the approximate amount of $20,000.00. The father could not explain why this information was not included in the letter from CCG UAE.

100A further example of the unreliability of the letter from CCG UAE is that it did not disclose the payment of a bonus in full owing to the father for 2016 and 2017. When he was asked why the letter from CCG UAE did not include a bonus of $50,000.00 for his first two years, the amount guaranteed under the terms of his employment contract, the father explained that CCG UAE had paid his bonus to third parties for his benefit. He could not explain why this information was not contained in the letter or in his affidavit evidence in chief.

101The father failed to produce any supporting documents such as bank records, to corroborate the information contained in the letter from CCG UAE. In fact, when asked if he would agree that his financial disclosure is lacking, he said, "Yes, it is horrific and makes me look like an income dodger."

c. Disclosure Issues

102The father had ample opportunity to produce the financial disclosure that would have assisted the parties and the court in better understanding his income. The following is only a partial list of the father's failings with respect to financial disclosure:

a) He failed to produce bank statements showing deposits of his base salary and bonus.

b) He failed to provide any evidence corroborating what bonus was paid to him or third parties on his behalf.

c) He failed to provide any corroborating evidence of the exact amounts his employer paid towards his personal expenses.

d) He failed to provide any income tax returns for himself or his corporation prior to commencing employment with CCG UAE.

e) He failed to provide copies of any bank account or credit card statements.

f) He failed to provide any evidence of his debts.

103On October 18, 2018, the father consented to a court order requiring him to produce an income analysis. He retained a valuator and was expected to produce the income analysis within 90 days. A report was never provided to the mother or the court.

104The father explains that he agreed to provide an income analysis but "had no idea" what it would cost. He said he could not afford to pay the $19,000.00 requested from the valuator while paying Ms. Goldhar to prepare parenting recommendations for N.N. He explains that his son's needs come first and that he knows his failure to provide the court ordered income analysis "is burying me before the court".

105The evidence detailing the father's failure to provide adequate financial disclosure in this proceeding in described as a pattern by the mother as she says he behaved the same way throughout the previous litigation. Between April 15, 2013 and October 22, 2013, various orders were made requiring the father to provide the mother with extensive financial disclosure. On October 22, 2013, Justice Harvey Brownstone granted the mother leave to bring a motion to strike the father's pleadings if he did not comply with outstanding disclosure orders. The father never complied with the disclosure orders.

d. Analysis of the Evidence

106The father is paid $106,000.00 base salary or $8833.33 per month tax free. If an annual bonus of $50,000.00 or $4167.00 per month is included as income to the father, he would have disposable income of $13,000.00 per month. The mother is seeking a monthly child support payment (not including spousal support) that in one year exceeds the father's monthly disposable income and in other years makes up anywhere from approximately 60% to 95% of it.

107The father's patchwork of information regarding his income makes it very difficult for the court to determine his true income for child support purposes. While it is tempting to prefer the mother's position and simply impute the maximum income available to the father under his employment contract and grossing it up for income tax, I decline to take that approach as it will result in a calculation that triggers a child support payment that the father cannot pay.

108Instead of relying on either party's approach to calculating the father's income, the letter from the father's employer will form the basis for the first step in calculating the father's income for child support purposes. The second step will involve adding in other amounts paid to the father or to third parties on his behalf as disclosed in his evidence but not included in the letter from his employer. The final step will be to determine what amount of non taxable income is to be grossed up for income tax not paid by the father.

109I find that this three step process to determining the father's income is the most reasonable approach and results in a quantum of child support that promotes the objectives of the Child Support Guidelines including "to establish a fair standard of support for children that ensures that they benefit from the financial means of their parents" and "to ensure consistent treatment of parents or spouses and their children who are in similar circumstances."

Step 1 - Information Regarding Father's Income Contained in Letter From CCG UAE

110Paragraph 97 above sets out the amounts the father claims his employer paid him in salary and bonus as well as the amounts paid towards his personal expenses. I will recreate the chart here for ease of reference.

	2016	2017	2018	2019
Salary	$106,000.00	$116,000.00	$116,000.00	$77,635.03
Bonus	Nil	$31,000.00	$66,900.00	Nil
Housing in Canada	$4,750.00	$38,000.00	$45,000.00	$26,000.00
Car in Canada	$18,200.00	$18,200.00	$42,000.00	$23,000.00
Clothing allowance	$13,330.00	$25,050.90	$21,030.00	$3840.00
Three paid vacations	Nil	$22,100.00	$11,440.00	Nil

111The letter from the father's employer advises that in 2016 it paid $4,750.00 towards the father's living expenses in Canada. The father's evidence is that he moved back to Canada from the United States at the end of 2016, beginning of 2017. The letter from the father's employer fails to advise of what, if any, amount it paid towards the father's living expenses in the United States. It is difficult to accept that despite being employed by CCG UAE for all of 2016, the father only incurred living expenses of $4,750.00 especially since his employer paid $38,000.00 in 2017 and $45,000.00 in 2018 for this expense.

112Once again despite his obligation to do so, the father has not provided any evidence to substantiate the amounts paid by his employer for his personal expenses. He has also failed to explain the discrepancy in the amounts paid towards housing in 2016, 2017 and 2018. Given the father's overall failure to comply with his disclosure obligations and the findings regarding his credibility, I am fixing housing expenses paid by the employer in 2016 at $38,000.00 which is consistent with 2017 and 2018. Based on the all the evidence, the amount the company reports it paid for the father's housing in 2016 appears to be an error.

Step 2 – Additional Information Regarding Father's Income Provided by Father and Not Contained in Letter From CCG UAE

113According to the letter from the father's employer, in 2016 and 2017 he was not paid the bonus the company was contractually bound to pay him. The contract guarantees the father in his first two years of employment a bonus equal to 50% of his base salary yet the letter provided by the company states that no bonus was paid in 2016 and $33,000.00 was paid in 2017.

114In an attempt to explain this discrepancy, the father gave evidence that some of his bonus was paid to third parties on his behalf and might not have been included in the letter from CCG UAE. As the father provided no financial disclosure on this issue and could not adequately explain why he was not paid the full bonus due to him as per the terms of his employment contract, he will be imputed a bonus of $50,000.00 for 2016 and 2017 as opposed to the lower amounts set out in the letter from the employer.

115The father also gave evidence that his employer has paid legal fees for him in the approximate amount of $20,000.00. This was not disclosed on the letter from CCG UAE and will be added in as income to the father for 2019.

Step 3 – Should Non Taxable Income Paid to the Father Be Grossed Up for Income Tax?

116According to the letter from the father's employer, in addition to his base salary and potential bonus, the company pays for his housing, three annual vacations, car and clothing expenses. Only the clothing and car allowance have limits, albeit very high limits. The father, therefore has broad discretion over the amounts he spends on these personal expenses. The father also has legal expenses paid by his employer that was not disclosed in the letter.

117The amount paid by the employer for the father's personal expenses is so significant that if grossed up for income tax it would create a scenario where the father would have to pay child support that in some years exceeds or comes close to his actual disposable income.

118The purpose of grossing up non taxable income for income tax is to achieve consistency between payors who pay less income taxes and therefore have more funds available with which to pay support. See: Riel v. Holland, 2003 CanLII 3433 (ON CA), [2003] O.J. No. 3901 (CA); Orser v. Grant, [2003] O.J. No. 1669 (SCJ); Sarafinchin v. Sarafinchin, 2000 CanLII 22639 (ON SC), [2000] O.J. No. 2855 (SCJ).

119Courts routinely gross up non taxable income for income tax for the purpose of determining a payor's true income for child support. Courts also routinely gross up benefits of employment enjoyed by a payor, as having your car or residential expenses paid by your employer frees up more funds with which to pay child support. While the amounts paid to the father as base salary and bonus will be grossed up for income tax, grossing up the amounts paid to him or third parties on his behalf for personal expenses in this case would create an inaccurate assessment of the father's income that is available to pay child support.

120The father resides in a large house in Toronto for which he pays $6500.00 per month in rent; he leases luxury cars such as a Ferrari, Land Rover and Mercedes; he purchases designer clothing and handbags for the parties' daughters and enjoys high end travel all at the expense of his employer. While these benefits would normally be grossed up for income tax, doing so in this case would be unreasonable as it would result in an income that would generate an amount of child support that the father would not have the cash flow to pay.

121If either party had suggested that a more reasonable budget be attributed to the father for his housing, car, clothing, travel and other expenses paid for him by his employer, one that was arguably more commensurate with his income and then grossed up for income tax, I would have given that argument consideration. Neither party made such an argument. As a result, I have chosen to add to the father's income the amounts paid by his employer for his personal expenses, but I will not gross up these amounts for income tax.

122I find that in order to achieve a fair and reasonable result and one that promotes the objectives of the Child Support Guidelines, the base salary and bonus received by the father will be grossed up for income tax while the other amounts paid to the father or third parties for his personal expenses will be included as income but will not be grossed up for income tax.

e. Conclusion Regarding Father's Income for 2016, 2017 and 2018

123For the purpose of child support, I find the father's income from 2016 to 2018 to be based on the following findings regarding income and personal expenses paid for him or on his behalf by his employer:

	2016	2017	2018
Salary – to be grossed up	$106,000.00	$116,000.00	$116,000.00
Bonus - to be grossed up	$50,000.00	$50,000.00	$66,900.00
Housing in Canada – no gross up	$38,000.00	$38,000.00	$45,000.00
Car allowance in Canada – no gross up	$18,200.00	$18,200.00	$42,000.00
Clothing allowance – no gross up	$13,330.00	$25,050.90	$21,030.00
Three paid vacations – no gross up	Nil	$22,100.00	$11,440.00
Legal Fees – no gross up	Nil	Nil	$20,000.00
Total Income	$324,479.00	$385,538.00	$452,306.00

f. Father's Income for 2019 and 2020

124The father's evidence is that he has not worked after relapsing in July 2019. The father produced a letter from his employer dated February 20, 2020 that states he has been on unpaid leave since August 5, 2019. The letter dated February 24, 2020 from CCG EAU setting out the amounts paid to or on behalf of the father in 2019 provides that he was paid $77,635.03 in salary; no bonus; $26,000.00 in housing expenses; $23,000.00 in car expenses; $3840.00 in clothing allowance; and, nothing towards vacations. The father therefore argues that his income for the purpose of child support in 2019 should be $207,800.00.

g. Father's Credibility

125Much like the father's evidence on his pre-2019 income, the court has very little to rely upon for 2019 and 2020. The father's evidence is that he started abusing drugs and alcohol in the summer of 2019 and went on unpaid leave from work. He produces an unsigned letter with a corporate seal from CCG UAE to corroborate his evidence. As a result of his unpaid leave, the father claims that he no longer has his housing and other expenses paid for by the company.

126When asked how he is supporting himself, the father gave evidence that he is selling items on line. He said he is arrears of rent and subject to eviction. He said he is in significant debt.

127The father's evidence on this issue is not believable. The evidence does not support his claim that he has been unable to work since August 2019 or that he is in fact not working. The following are some examples of the father's evidence that paved the way to this conclusion:

a) The father swore a financial statement on February 24, 2020 in which he states that his rent and utilities, vehicle and health insurance premiums are being paid for by his employer despite claiming to be on unpaid leave since August 5, 2019.

b) The father produced a letter from a psychologist dated February 14, 2020 that states he met with the father on two occasions and that the father intends on pursuing counselling with him. The writer states in the letter, "My understanding is that he is currently on house arrest. One concern is that his inability to move freely to have client meetings would handicap his business, causing him subjective distress, and making it harder for him to recover." One can only conclude from this letter that the father was working in February 2020 and disclosed this fact to his psychologist.

c) The father gave evidence that even though he was not working, on January 13, 2020 he purchased a flight to Las Vegas to send a manager as there was an opportunity to re-establish himself with the company and generate new business.

d) When asked why the letter from his employer did not set out the amount of legal fees paid for him, the father said that the figure was not included because it has not yet been calculated and is "a moving target". Why would CCG UAE be paying the father's current legal fees if he is on unpaid leave?

e) After giving evidence that he had lost his passport, the father was asked when he last left Canada. In his answer he revealed that he had just found his passport and went to Mexico the previous week on business for 4 days. He said he went to meet with a "senior director" to "mend some bridges".

h. Conclusion Regarding the Father's Credibility

128Income must be imputed to the father in 2019 and each year thereafter based on the findings made with respect to his 2018 income of $452,306.00 as this is the most reliable information before the court due to the father's failure to:

a) Provide any financial disclosure to substantiate his income;

b) Provide any meaningful evidence to support his position that he could not work between August 2019 and March 2020;

c) Explain the inconsistencies between his oral evidence and the documentary evidence he submitted to explain his income; and,

d) Explain the inconsistencies in his evidence with respect to his evidence that he could not work between August 2019 and March 2020.

Issue #4 - What Amount of Ongoing Child Support Should Be Paid by the Father to the Mother, Including Contribution Towards Special or Extraordinary Expenses, From the Date of the Motion to Change?

a. The Evidence

129The mother issued her Motion to Change on May 3, 2018. The evidence regarding which children were entitled to child support as of May 3, 2018 to date is not in dispute.

130The following evidence is not disputed:

a) As of May 2018, L.N. and O.N., had both completed their education and were no longer entitled to child support from either parent;

b) Between the summer of 2018 and July 2019 D.N. spent equal time in each parent's care and N.N. spent Monday to Friday with the father and Friday to Monday with the mother; and,

c) As of August 2019, D.N. and N.N. have lived primarily with the mother.

131Therefore, child support from the date of the Motion to Change is only payable for D.N. and N.N.

132The mother works full time as a dental hygienist and her income in 2018 was $71,323.00. As set out above, the father's income in 2018 for the purpose of child support is imputed at $452,306.00. Pursuant to section 9 of the Child Support Guidelines, the shared parenting arrangement for D.N. triggers a different approach to determining child support for D.N. N.N. residing primarily with the father triggers child support payable by the mother to the father.

133Section 9 of the Child Support Guidelines requires the court in a shared parenting arrangement to determine child support by considering,

a) The amounts set out in the applicable tables for each of the parents or spouses;

b) The increased costs of shared custody arrangements; and,

c) The condition means, needs and other circumstances of each parent or spouse and of any child for whom support is sought.

134As neither party called evidence of the increased cost of having D.N. in their care 50% of the time between the summer of 2018 and July 2019, I am going to order child support for that period in the amount equal to the set off of each party's child support obligation for D.N. This will result in the father paying the mother child support for D.N. which will be reduced by the mother's obligation to pay the father child support for N.N. The mother will have roughly $7378.00 in net disposable income while the father will have $10,638.00. This results in a fair distribution of the parties' incomes given that N. N. was residing primarily with the father and D.N. was living with him 50% of the time. In addition, during the period in question, the father paid significant section 7 expenses for N.N. without contribution by the mother.

135Accordingly, from July 1, 2018 until July 1, 2019, the father shall pay the mother child support of $2394.00 per month. This is based on a set off of the father's child support obligation of $3476.00 against the mother's support payment of $1082.00. It is not disputed that the father paid the mother $2000.00 per month in child support during this period and he shall receive credit for that payment.

136As of August 2019, the father is obliged to pay full table child support for D.N. and N.N. of $5705.00 subject to his argument that it would be inappropriate for him to pay child support on any income over $150,000.00 pursuant to section 4 of the Child Support Guidelines.

Issue #5 - Application of Section 4 of the Child Support Guidelines

137Section 3 of the Child Support Guidelines provides that child support for children under the age of majority is the amount set out in the applicable provincial tables based on the support payor's income. Subsection 4(a) of the Child Support Guidelines provides that where a payor's income is over $150,000.00 the amount of child support payable for a child is the amount determined under section 3, otherwise known as the presumptive rule. Subsection 4(b) of the Child Support Guidelines provides that if the court considers the presumptive amount to be "inappropriate", child support shall be calculated as follows:

a) The table amount for the first $150,000.00 of the payor's income;

b) With respect to the balance of the payor's income, the amount the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each parent to contribute to the support of the children; and,

c) Any amount determined under section 7.

138The father argues that it would be inappropriate for him to pay table child support on his entire income. He says application of the presumptive rule would result in a quantum of child support that far exceeds the children's needs and results in a windfall to the mother. He says it would be appropriate for him to pay table child support on his first $150,000.00 of income and zero on the balance.

139The Supreme Court of Canada in Francis v. Baker, 1999 CanLII 659 (SCC), [1999] 3 SCR 250, considered the meaning of the word "inappropriate" in subsection 4(b) of the Child Support Guidelines and concluded at paragraph 40 that the court "must take into account the ordinary meaning of the word" and it "must be broadly defined to mean "unsuitable" rather than merely "inadequate". Courts thus have the discretion to both increase and reduce the amount of child support prescribed by the strict application of the Guidelines in cases where the paying parent has an annual income exceeding $150,000."

140In R. v. R. 2000 CanLII 41875 (QC TAQ), 2000 CanLII 41875 (ON CA), the Court found that the family's lifestyle and pattern of expenditures were relevant in determining appropriateness under section 4 of the Child Support Guidelines.

141The father acknowledges living a lavish lifestyle and showering his children with expensive travel and gifts and fine dining. Conversely, the mother is unable to meet her basic expenses on her income and relies on her mother to pay her car lease and insurance as well as her home insurance.

142While the father was reimbursed $22,100.00 by his employer in 2017 and $11,400.00 in 2018 for vacations, on her financial statement sworn February 11, 2020, the mother discloses an annual budget of $2400.00 for vacations. While the father acknowledges that he has purchased thousands of dollars in designer clothing and hand bags for his children, the mother discloses an annual clothing budget of $1800.00.

a. Conclusion Regarding Applicability of Section 4 of the Child Support Guidelines

143While the father submits that application of the presumptive approach towards calculating child support on his entire income would be inappropriate, he called no evidence to support his claim. He did not provide the court with evidence that establishes that the table amount of child support would far exceed the children's needs.

144The evidence does not support a finding that requiring the father to pay the mother child support of $5705.00 per month for D.N. and N.N. would be inappropriate in all of the facts of this case.

Issue #6 - Should the Father Be Required to Pay a Retroactive Increase in Child Support and If He Should, the Court Must Determine If Any of the Children Lived With the Father for 40% of the Time or More During the Periods in Question and Whether That Effects the Amount of Child Support Payable?

a. Legal Considerations

145The principles set out by the Supreme Court of Canada in D.B.S. and S.R.G. v. T.A.R. and L.J.W., (2006) 2006 SCC 37 (CanLII), 2 S.C.R. 231, (D.B.S.) structure the court's jurisdiction to order retroactive child support payments. In that decision the Court articulated two overarching principles governing claims for retroactive child support and retroactive increases in support: 1) Each parent has an obligation to ensure that his/her child receives proper support in a timely manner; and 2) courts considering these claims must balance the payor's interest in the certainty of the status quo with the need for fairness and flexibility. At paragraph 133, the Court set out four factors to be considered in such claims:

Reason for the delay in bringing the claim;

Conduct of the payor parent;

Circumstances of the child; and,

Hardship that may be caused by a retroactive award.

146None of the above factors are decisive or take priority and all should be considered in a global analysis. In determining whether to make a retroactive award, a court will need to look at all of the relevant circumstances in front of it.

147The Court in D.B.S. held that if a retroactive award is appropriate, it should usually commence on the date of effective notice, being the date when the recipient advised the payor that support should be paid or renegotiated. An earlier date may be appropriate if there is blameworthy conduct by the payor, but generally a retroactive award should not commence earlier than three years before formal notice (notice of a court proceeding) was given. However, in cases of blameworthy conduct by the payor, an even earlier commencement date may be in order. The retroactive support analysis in D.B.S. equally applies to claims for retroactive section 7 expenses.

148At paragraph 106 of D.B.S., the Court defines blameworthy conduct as any conduct that privileges the payor parent's own interests over his or her children's right to an appropriate amount of support.

149The mother seeks an increase in child support retroactive to January 1, 2016 on the basis that the father was not forthcoming about his income at the time the parties negotiated their Separation Agreement. The father opposes a retroactive increase in child support in part because he says that between 2016 and 2018 all four children spent at least 40% of the time in his care while the mother claims this is inaccurate and that they all lived primarily with her until September 2018.

b. The Evidence Relevant to the Mother's Claim for Retroactive Child Support

1. Reason for Delay in Bringing the Claim

150The mother gave extensive evidence of her observations of the father's lifestyle between 2017 and 2018 that suggests he enjoyed a significant increase in his income since the parties executed the Separation Agreement in 2015. She referenced the expensive homes he lived in and the luxury cars he drove. She detailed the exotic locales he vacationed with the children and the expensive gifts he bought them.

151The mother's evidence is that in 2017 she asked the father to provide her with $400.00 per month in additional child support for the children. She said he paid the increase in 2017 in one lump sum. The father admits making a lump sum payment to the mother in May 2017 but claims in his evidence that this payment was required of him in order to obtain permission from the mother to travel with N.N. to Dubai.

152The mother says that when the father did not continue to pay the increased amount of child support in 2018, she hired a lawyer and wanted to bring the Motion to Change earlier but that the delay was due to her attempts to reach an agreement through direct discussions with the father.

153The father says the mother's delay in moving before the court was unreasonable and should disentitle her to a retroactive award. I disagree.

154The father lived outside of Canada following execution of the Separation Agreement until the end of 2016. Therefore, the mother could only begin to observe the changes to father's lifestyle in 2017. The father did not volunteer information about the change to his income. She had to form her own conclusions based on her observations.

155The mother's evidence she asked the father to increase his child support payments in 2017 is uncontested. The father was asked to acknowledge that the mother requested an increase in child support from him after observing the changes to his standard of living and his response was, "I refuse to speak badly of [ C.S. ] in court".

156The mother's delay in bringing this Motion to Change in May 2018 is not unreasonable in all of the facts of this case. The mother only began to witness the changes to the father's lifestyle in 2017. I accept the mother's evidence that she asked the father to increase his child support payments in 2017 and he gave her a lump sum payment in 2017 but failed to continue to pay the increase in 2018. After he failed to pay an increased amount in 2018 the mother hired a lawyer, gathered the necessary information, prepared court documents and issued her Motion to Change the beginning of May 2018.

2. Conduct of the Father

157While the father paid child support in accordance with the terms of the Separation Agreement, he admits that he failed to advise the mother that within weeks of executing the Separation Agreement he secured employment that significantly increased his income. In fact, he was in the midst of negotiating the terms of his employment simultaneously with negotiating the Separation Agreement.

158The father's evidence is that he understood that the child support set out in the Separation Agreement was based on the Child Support Guidelines and an annual income of $90,000.00. He said that he would never have agreed to pay child support of $2000.00 per month if he did not believe he would be able to make the payments. As he was negotiating a base salary around $100,000.00 with CCG UAE, he concluded he would be able to make the payments and agreed to the $2000.00 figure for child support.

159Knowing that the child support agreed upon was based on a gross taxable income of $90,000.00, the father ought to have known that the terms of his employment contract generated a much larger child support obligation. He negotiated handsome terms of employment that equate to gross income of at least $320,000.00 to $450,000.00 Canadian.

160The terms of the father's employment results in him enjoying expensive housing and travel, a generous clothing budget, and leasing high performance sports cars including a Ferrari, all at the expense of his employer. While enjoying the benefit of having most of his personal expenses paid for by his employer, he continued to pay the mother only $2000.00 per month in child support for his four children.

161The father should have taken the necessary steps to adjust his child support payments immediately upon executing the employment contract with CCG UAE. By failing to do so, he made the choice to take the risk that in the future he may be saddled with a retroactive increase that would result in significant arrears of child support owed to the mother.

162The father's conduct is without a doubt blameworthy. While he enjoyed a lifestyle that would require a Canadian income in excess of $400,000.00 per year to fund, he was content to pay the mother child support for their four children of only $2000.00 per month, a figure he knew is based on an annual income of $90,000.00. Therefore, the father preferred his interests to his children's right to an appropriate amount of support.

3. Circumstances of the Children

163D.N. and N.N. both live with their mother and are in full time attendance at school. They will clearly benefit from a retroactive increase in child support.

164O.N. and L.N. have both completed their post-secondary education and the uncontested evidence is that the father contributed towards the cost of their education. From the summer of 2018 until July 2019 they lived primarily with their father. As of August 2019, or around that time, they have lived on their own. As they do not live with their mother, they would not directly benefit from a retroactive increase in child support for them.

165The mother did not give evidence of any benefit to L.N. and O.N. if she were to receive retroactive child support for them.

4. Hardship That May Be Caused by a Retroactive Order

166The father claims to have a significant debt with CCG UAE exceeding $400,000.00. He claims that the benefits he receives pursuant to his employment contract are recoverable by CCG UAE at their insistence. He explains that he would have to repay the amounts paid by CCG UAE on his behalf towards housing, cars, clothing etc., if he does not excel at his job. He acknowledges that currently he has not been asked to repay any amount to CCG UAE.

167The father did not provide any documentary evidence to support his claim that he owes his employer over $400,000.00.

168Based on the evidence, the court has no reliable information to determine if the father owes a legitimate debt to his employer. It was his onus to provide that evidence.

169The court rejects the father's claim that he is not working. His evidence is that he is slowly repairing relationships and beginning to build his business. He did not give evidence that his employment with CCG UAE has been terminated. That being the case, he has the potential to make a significant amount of tax free income as a result of the terms of his employment contract.

170As the father has not provided any financial disclosure that the court can rely upon to determine whether a retroactive order will cause him hardship, the court chooses to exercise its discretion to draw a negative inference against him and assume little to no hardship will be experienced by the father as a result of a retroactive increase in his child support payment.

c. Conclusion With Respect to a Retroactive Increase in Child Support

i. O.N. and L.N.

171The court finds that a retroactive increase in child support with respect to L.N. and O.N. should not be granted based on the following facts:

a) O.N. and L.N. are no longer entitled to child support and it is likely they will not benefit from a retroactive increase in child support;

b) O.N. and L.N.'s post-secondary education was paid for in part by the father;

c) There is no evidence before the court that O.N. and L.N. incurred any debt to fund their post-secondary education;

d) There is no evidence before the court that the mother has accumulated debt providing for L.N. and O.N.;

e) There is no evidence before the court that O.N. and L.N. were deprived of any opportunities or disadvantaged as a result of the order for child support that the mother is seeking to increase retroactively.

ii. D.N. and N.N.

172The mother seeks an increase in child support for N.N. and D.N. back January 1, 2016. The court has the discretion to award retroactive child support back to an appropriate date taking all of the above factors into consideration. Child support payable for any period after the date the Motion to Change was issued is prospective and not retroactive child support. Therefore, any change to the child support order prior to May 2018 would be considered a retroactive increase in child support. I find that an increase in child support retroactive to June 1, 2016 for N.N. and D.N. is appropriate based on the following findings:

a) The mother did not delay in bringing this matter to court;

b) The father has engaged in blameworthy conduct that prioritized his interests above those of the children;

c) The mother first broached the topic of an increase in child support with the father in 2016 or 2017 and he admits to providing her with a lump sum in May 2017; and,

d) N.N. and D.N. will benefit from a retroactive order

iii. Were D.N. and/or N.N. in the Father's Care 40% of the Time or More as of June 1, 2016?

173The father claims that D.N. and N.N. were in his care at least 40% of the time as of December 2016. The father's evidence is that N.N. and D.N. spent "approximately 195 days" in his care including 150 overnights in 2017; and, 126 days in his care including 111 overnights between January and September 2018. The father includes periods in his calculations for 2017 where he claims the children travelled with him.

174Based on his calculations, the father claims to have had shared parenting of the children since 2017 and argues that the calculation of any retroactive child support order should reflect this arrangement.

175The mother's evidence is that it was simply impossible for the children to be in the father's care as much as he claims as he was resident in the UAE for the majority of 2017 and 2018.

176Despite the mother's repeated requests, the father failed to provide her with a copy of his passport to corroborate his evidence. This becomes a glaring problem as a result of the father's oral evidence acknowledging that some of the dates he indicated the children were in his care in his affidavit evidence in chief may have been an error as he was out of the country. For example, the father claims the children spent 15 overnights in his care in September 2017 and 22 overnights in October 2017, but he was out of the country during this period for six weeks. When asked to explain how the children could have spent 37 overnights in his care over 61 days when he was not in the country for 42 of the days, he suggested that the children were with him on vacation for part of the time.

177The father's oral evidence was contradicted by a letter authored by his former lawyer on October 26, 2017, that said the father was returning home to see the children after being away for six weeks. The letter also contradicts the father's claim that the children were with him on vacation during that same period. The father acknowledged that he may be wrong about the number of days the children were in his care between September and October 2017.

178In addition, the mother's evidence includes a comprehensive list of all of the travel the children did with the father since 2017. She sets out the dates of travel, the destination and which children travelled with the father. She includes copies of pages from D.N.'s and N.N.'s passports. Her evidence discloses no travel with the father in September or October 2017.

179Unlike the mother's evidence, the father's evidence provides no details of travel with the children. He simply provided a list by month of the number of overnights he claims the children spent in his care since January 2017.

iv. Credibility Findings With Respect to the Issue of Parenting Time Since January 2017

180Where the parties evidence differs on this issue, I accept the mother's evidence over that of the father as the mother's evidence is detailed and precise while the father's evidence is vague and inconsistent. The father has also included periods of vacation in his calculations which is not appropriate.

181The father acknowledges that since 2017 he has not lived in Canada for more than 50% of each year. It is very difficult to accept on the totality of his evidence that he had care of the children for what would amount to almost 100% of the time he was in Canada. His failure to provide his passport, which would assist to substantiate his position, on the basis that it was lost is unbelievable especially given that it reappeared a week before the trial.

182I find that D.N. and N.N. were in the primary care of their mother between January 2017 and June 2018 and the calculation of retroactive child support will reflect this fact.

183There will be an order requiring the father to pay retroactive child support for D.N. and N.N. commencing January 1, 2017 based on an imputed income in 2017 of $385,538.00 and as of January 1, 2018 based on an imputed income of 2018 of $452,306.00. The father shall receive credit of $2000.00 per month which he paid to the mother for each month between January 1, 2017 and April 2019.

v. Prospective Child Support for D.N. and N.N.

184For the purpose of ongoing child support, I find the father's annual income to be $452,306.00, the amount imputed to him above for 2018. The income information provided by the father for 2019 is unreliable and the court rejects his evidence that he has been unable to work and on unpaid leave from since August 2019. That leaves the 2018 income imputed to the father on the information provided by him as the most reliable information available to the court or, maybe better put in this case, the most current and least unreliable information upon which to base his 2019 and 2020 income.

185D.N. is 19 and living at home with the mother while she attends George Brown College. N.N. is 14 years old and resides full time with the mother.

186While D.N. is over the age of majority, I find that her circumstances closely resemble that of a minor child in that she lives with her mother and relies on her for her support while she is in full time attendance at school. Therefore, requiring the father to pay table support for D.N. pursuant to subsection 3(2)(a) of the Child Support Guidelines is not inappropriate.

d. Contribution Towards Section 7 Expenses Requested by the Mother From the Father

2019

187The mother asks the father to contribute 80% towards the cost of various expenses incurred for N.N. and D.N. since August 2019, that she claims to be special or extraordinary pursuant to section 7 of the Child Support Guidelines. The mother claims hockey school and equipment, violin rental, ski school, dental costs, psychologist fees and tutoring costs for N.N. in the amount of $4711.68.

188Section 7 expenses are defined in the Child Support Guidelines as follows:

Special or Extraordinary Expenses

(1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, 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 parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation:

(a) child care expenses incurred as a result of the custodial parent's employment, illness, disability or education or training for employment;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy, prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child's particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities. O. Reg. 391/97, s. 7 (1) ; O. Reg. 446/01, s. 2.

189The dental and psychologist costs incurred by the mother for N.N. come within subsection 7(c) of the Child Support Guidelines and therefore are proper section 7 expenses. The mother has provided proof of the cost of the dental expense of $342.00 and the psychologist fees of $425.00. As these are necessary expenses in relation to N.N. and reasonable given the incomes of the parties, the father must pay his proportionate share of these special expenses.

190The mother claims contribution by the father towards tutor costs of $1440.00 and extracurricular activities of $2504.68 for N.N. on the basis that they are extraordinary expenses pursuant to subsections 7(d) and (f) respectively of the Child Support Guidelines.

191To qualify as "extraordinary" under the Child Support Guidelines, s. 7(1.1), the extracurricular activity or educational expenses must:

(a) exceed those that the party requesting contribution can reasonably cover, taking into account that party's income and any table amount of child support (or such other amount of child support deemed appropriate by court) being received; or

(b) be expenses that the court considers extraordinary, taking into account:

(i) the amount of the expense in relation to the income of the party requesting contribution, including any table amount of child support (or such other amount of child support deemed appropriate by the court);

(ii) the nature and number of the educational programs;

(iii) any special needs and talents of the child(ren);

(iv) the overall cost of the programs and activities; and

(v) any other similar factor that the court considers relevant.

i. Extracurricular Activities Expenses

192The extracurricular activities claimed by the mother in the amount of $2504.68 for hockey school and equipment, ski school and a violin rental were incurred over a 7 month period. That translates into $357.81 per month. The mother requests 80% of the cost from the father, $2003.74 or $286.25 per month.

193The father did not argue that these expenses were not necessary in relation to N.N.'s best interests or that the cost of any of the expenses were unreasonable given the parties' incomes. I must consider whether the extracurricular expenses are extraordinary such that the mother cannot be reasonably expected to pay the entire cost herself, taking into consideration her income and the amount of child support payable by the father.

194For the period in question the mother's income was $71,000.00 per year and the father has been imputed an annual income of $452,306.00. In addition, the father's child support payment as of August 2019 is $5705.00 per month. I find that given the mother's income and the amount of child support the father is required to pay the mother per month, N.N.'s extracurricular activities at $286.25 per month is not an extraordinary expense. The mother can reasonably be expected to cover the cost of these extracurricular activities given her income and the amount of child support she receives from the father. It is reasonable to conclude that the father is, in effect, already contributing towards the cost of these activities through his table child support payments of $5705.00.

ii. Tutoring Costs - Retroactive and Ongoing

195The mother claims that tutoring expenses for N.N. are extraordinary education costs pursuant to subsection 7(d) of the Child Support Guidelines. The mother's evidence is that between September 2019 and the date of trial, she incurred $1440.00 in tutoring costs for N.N. Her financial statement sworn February 11, 2020, discloses in Schedule C – Special or Extraordinary Expenses for the Children, annual ongoing tutoring costs of $3640.00.

196The father did not argue that tutoring is not necessary in relation to N.N.'s best interests or that the cost is unreasonable given the parties' incomes. I must consider whether the tutoring is extraordinary such that the mother cannot be reasonably expected to pay the entire cost herself, taking into consideration her income and the amount of child support payable by the father, and the overall cost of N.N.'s additional expenses.

197To determine whether the mother can reasonably be expected to pay the entire cost of tutoring for N.N., a review of her income and budget is necessary. The mother's annual income of $71,000.00, child support of $5705.00 per month and spousal support of $500.00 per month results in a monthly net disposable income of $13,480.00. The mother's most recently sworn financial statement dated February 11, 2020, discloses monthly expenses of $8319.30. This includes $180.00 per month for children's activities and $100.00 per month for summer camp but does not include the cost of tutoring at $303.33 per month.

198If the mother is required to pay for the entire cost of N.N.'s tutoring, she would have a budget surplus of $4857.00 per month.

199Conversely while income was imputed to the father at $452,306.00 per year for the purpose of child support, he does not enjoy the cash flow of a person who earns that income. As will be set out below, the father's cash flow stems from non-taxable income earned in the form of base salary and bonus that equates to taxable income of at least $276,468.00.

200In reality, the father has cash flow of approximately $13,833.00 per month from his base salary and estimated bonus. After child support payments of $5705.00 he is left with $8128.00 per month. He is then obliged to pay spousal support of $500.00 per month pursuant to the terms of the parties' Separation Agreement. That leaves him with $7628.00 per month.

201The father's financial statement sworn February 24, 2020, discloses monthly expenses not paid by his employer of $2295.00. After paying child support, spousal support and the expenses not covered by his employer, the father is left with $5333.00 a month.

202Even after paying the entire cost of tutoring, the mother will have a significant monthly surplus and one that is comparable to that enjoyed by the father after paying child support, spousal support and his personal expenses not covered by his employer. In all of the circumstances of this case, I find that the mother can reasonably be expected to pay the entire cost of N.N.'s tutoring and it is therefore not an extraordinary expense.

Issue #7 – Did the Father Incur Special or Extraordinary Expenses for the Children Towards Which the Mother Should Contribute?

a. Father's Position

203In his Response to Motion to Change, the father requests contribution by the mother towards expenses he incurred for the children he claims come within section 7 of the Child Support Guidelines. The expenses are as follows:

a) Post-secondary expenses for D.N. in the amount of $4845.00 for 2018-2019 tuition;

b) Therapy/counselling for D.N. between 2017 and 2018 in the amount of $22,035.00;

c) Summer camp for N.N. for 2018 and 2019 in the amount of $2330.60;

d) Hockey camp for N.N. in the amount of $1999.00;

e) Tutoring for N.N. in the amount of $22,200.00 for the period of September 2018 to June 2019 when he lived primarily with the father;

f) Dental expenses for all four children in the amount of $15,950.00; and,

g) Therapy costs for N.N. to be determined.

204By the time this matter proceeded to trial, the father had also incurred the cost of a psychological assessment of N.N. and a parenting assessment of the parents. He seeks contribution by the mother towards the $5650.00 he paid for the psychological assessment.

205The father did not produce receipts for the counselling expense for D.N. or the psychological assessment of N.N.

206The receipts provided by the father for dental expenses disclose total payments of only $6640.00 incurred between 2016 and 2019 for D.N.

207The father has provided evidence of the cost of tutoring for N.N. as well the cost of his summer and hockey camps in the amounts set out above.

208The father has provided proof of payment of D.N.'s tuition expense for 2018-2019 of $4245.00 but it is not clear who made the payment.

b. Mother's Position

209The mother does not dispute the need for tutoring for N.N. and as noted above, is seeking contribution by the father towards the cost of ongoing tutoring. Her position is that she should not be required to contribute towards an expense that she did not consent to and that is unaffordable to her.

210The mother's evidence is that D.N.'s therapy occurred at Humber River Regional Hospital and was entirely covered by OHIP and therefore not a proper section 7 expense.

211The mother also opposes contributing towards the cost of hockey camp for N.N. on the basis that she did not consent to the expense that she describes as unreasonable and unnecessary. The mother did not give evidence opposing contribution towards the cost of summer camp for N.N. in 2018 and 2019 in the amount of $2330.00.

212With respect to the dental expenses for D.N., the mother's position is that as she paid $3215.00 and the father paid $3315.00, no further contribution should be required of her given that she has paid more than her fair share.

213The mother acknowledges that the father paid for D.N.'s 2018-2019 tuition fee but disputes the amount paid as she describes the credit card statement provided by the father as blurry.

214The mother opposes contributing towards the cost of the psychological assessment for N.N. as her evidence is that the father agreed to pay for it as he "insisted on obtaining it".

c. Father's Credibility

215The father's failure to provide financial disclosure throughout this proceeding negatively impacts his claim for contribution by the mother towards section 7 expenses. How can the court require the mother, in all of the circumstances of this case, to contribute towards section 7 expenses for which he has not provided proof of payment? In addition, the father does not address in his evidence which, if any, of these expenses his employer ought to have covered under the terms of his employment contract.

216Paragraph 3(d) of the father's employment contract provides that he "shall be entitled to participate in the benefit plans and programs including, without limitation, medical, dental that the Company provides generally to comparable senior executives".

217Paragraph 3(n) of the father's employment contract provides that he "will be provided an education allowance for two children, if their primary residence is that of the Executive. The education allowance is classified as a nontaxable benefit with a global maximum of $15,000.00 per child per annum of primary and secondary school fees."

218The father did not give evidence as to whether the therapy, dental, tutoring and psychological assessment fees were submitted to his employer for reimbursement in accordance with the terms of his employment agreement.

d. Conclusion Regarding Section 7 Expenses Claimed by Father

i. Dental and Therapy Expenses

219As the father has failed to comply with very basic financial disclosure requirements and a court order requiring him to obtain an income analysis, the court is exercising its discretion to draw a negative inference against the father when assessing his claim for contribution by the mother towards section 7 expenses incurred by him for the children.

220As the father did not provide unequivocal documentary evidence to substantiate his claims with respect to dental or therapy expenses or the cost of the psychological assessment for N.N., the mother will not be required to contribute towards these expenses as the court is not satisfied that the father actually incurred these expenses or that if he did, he was not reimbursed in part or in whole for the expense(s) by his employer.

ii. Post-Secondary Education Costs

221The parties' Separation Agreement provides that the mother is required to pay 25% of the children's post-secondary education costs, an extraordinary expense pursuant to subsection 7(e) of the Child Support Guidelines. That calculation was based on the father earning $90,000.00 annually.

222The parties proportionate share of section 7 expenses must be adjusted based on the income imputed to the father as of 2018 of $452,306.00 and the mother's current annual employment income of $71,000.00 and $500.00 per month in spousal support. The current apportioning of section 7 expenses will be adjusted to 85% payable by the father and 15% by the mother.

223Given the substantial change in the father's income, it is fair and reasonable to adjust the mother's proportionate share of section 7 expenses based on their current incomes. Therefore, she will be required to pay 15% or $636.75 towards the cost of D.N.'s 2018-2019 tuition fee. If the father paid 100% of this cost, the mother shall pay this amount to him. If D.N. paid the cost, the $636.75 shall be paid to D.N.

iii. Hockey and Summer Camp

224I find that the mother should not be required to contribute towards the cost of summer and hockey camp for N.N. Based on the discrepancy in the parties' incomes and that she is required to pay the father child support for N.N. for the period during which he incurred these expenses, these are not extraordinary expenses. In other words, the father can reasonably be expected to cover these expenses on his income and the child support received from the mother for N.N.

iv. How Should the Court Treat the Father's Payment of $500.00 to the Mother Towards Section 7 Expenses for the Children for the Period N.N. Lived With Him and D.N. Spent Equal Time in His Care?

225The court order requires the father to pay the mother $500.00 per month towards section 7 expenses incurred for the children. The court did not hear evidence that this amount was not paid at least up to July 2019. The evidence made it very clear that the father has not paid any child support at all since July 2019. If the father paid the mother $500.00 towards section 7 expenses between July 2018 and July 2019, he was paying this amount when L.N and O.N were no longer entitled to child support, D.N. was living equally with each parent and N.N. was living primarily with the father. As the mother acknowledges that the father paid for summer camp, hockey camp, tutoring etc. while N.N. was in the father's care, it is appropriate for him to receive a credit for the $500.00 he paid the mother per month during this time for section 7 expenses the mother did not incur.

226While the mother will not be required to contribute towards the cost of the expenses incurred by the father when N.N. lived with him and D.N. spent equal time with the parties, it is reasonable for the father to receive a credit towards the arrears of child support owing to the mother equal to the amount he paid her as contribution towards section 7 expenses between July 2018 and July 2019.

Issue #8 - Has There Been a Material Change in Either Party's Circumstances Warranting a Change to the Amount of Spousal Support Payable by the Father to the Mother and If Yes, What Variation to the Order Is Appropriate and When Should the Change, Take Effect?

a. Legal Considerations

227The mother's claim to a variation of the spousal support order is governed by section 37 of the Family Law Act which provides as follows:

Application for Variation

(1) An application to the court for variation of an order made or confirmed under this Part may be made by,

(a) a dependant or respondent named in the order;

(b) a parent of a dependant referred to in clause (a);

(c) the personal representative of a respondent referred to in clause (a); or

(d) an agency referred to in subsection 33 (3). 1997, c. 20, s. 6.

Powers of Court: Spouse and Parent Support

(2) In the case of an order for support of a spouse or parent, if the court is satisfied that there has been a material change in the dependant's or respondent's circumstances 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 under section 34 that the court considers appropriate in the circumstances referred to in section 33. 1997, c. 20, s. 6; 1999, c. 6, s. 25 (12); 2005, c. 5, s. 27 (16).

Limitation on Applications for Variation

(3) No application for variation shall be made within six months after the making of the order for support or the disposition of another application for variation in respect of the same order, except by leave of the court. R.S.O. 1990, c. F.3, s. 37 (3).

b. The Mother's Position Regarding Spousal Support

228The mother seeks to vary the spousal support provisions of the order retroactive to January 2016 based on the material change in the father's income. More specifically, the mother seeks a lump sum payment of $369,000.00 for the period of January 2016 to December 2019 and ongoing spousal support of $8,000.00 per month commencing January 1, 2020. She is not seeking to alter the termination date set out in the parties' Separation Agreement of September 2023.

229As reviewed above, the mother says that the father was not forthcoming about the impending change to his income during the settlement discussions that led to the parties' Separation Agreement. She said if he had been honest about his contract negotiations with CCG UAE, she would have received a much higher amount of spousal support then what is stipulated in the Separation Agreement.

230The mother's evidence is that prior to separation the parties lived a lavish lifestyle. She says she suffered economic hardship as a result of the separation and a significant decrease in her standard of living. Conversely, due to the generous terms of his employment contract, the father continues to enjoy an opulent lifestyle.

231The mother argues that as her claim to spousal support is compensatory in nature, she is entitled to share in the increase in the father's income following separation. In support of her claim to compensatory spousal support, the mother relies on the nature of their marriage being largely traditional such that she was mostly responsible for the care of the parties' four children and the maintenance of the home while the father focused on advancing his career. The mother says she was effectively out of the workforce for 8 years during the marriage.

232The mother also highlights the sacrifice she made between 1995 and 2001 when the parties lived in the United States in order to further the father's career. The mother completed her dental hygienist course in 1993 prior to moving but was not licensed to work in the United States. As a result, her career advancement was stymied during this period while the father pursued his career. Upon their return to Canada the parties had two more children following which the mother did not work other than the minimum hours required to maintain her qualifications.

233The mother argues that the father worked in construction in some form or another since they returned to Canada in 2001 and was able to secure the lucrative contract with CCG UAE because of the knowledge and experience he acquired during the marriage.

c. The Father's Position Regarding Spousal Support

234The father asks the court to dismiss the mother's claims with respect to spousal support in their entirety. He argues that the mother is self-sufficient working full time as a dental hygienist and enjoys a healthy standard of living which includes travelling, driving a luxury car and continuing to reside in the same home they rented at the date of separation. He claims that she should be earning closer to $85,000.00 and suggests she is not disclosing all of her income.

235The father highlights in his evidence the many financial struggles the parties endured during the marriage to counter the mother's claims that they lived a life of luxury. While they would have periods of success, they had equally low periods during which they were evicted from their home (on five occasions), had cars repossessed and incurred crippling debt. During these difficult periods, the father's parents assisted the parties financially. This evidence was not contested by the mother.

236The father denies that there is any causal connection between his current success and the work he pursued during the marriage. He says he was unemployed for almost two years following separation and relied on Employment Insurance Benefits and social assistance. He eventually pursued work through his own company in real estate development specializing in project management, architecture and design.

237In 2015, his company "amalgamated" with and is now a "subsidiary" of CCG UAE. The father describes completing several unofficial apprenticeship programs after separation in structure, concrete, framing, architecture and construction design which made him attractive to CCG UAE and eventually allowed him to grow their business. He now describes himself as a "construction design specialist".

238The father argues that the mother is not entitled to share in his post separation increase in income as his current success is due solely to his "hard work and continued education" post separation.

239The father says that he signed the contract with CCG UAE on October 1, 2015, after "a six-day marathon negotiation". He acknowledges having had some discussions with CCG UAE prior to the execution of the Separation Agreement on September 15, 2015, but only began serious negotiations on September 24, 2015.

d. Analysis of the Evidence

i. Step 1 of the Analysis: Has There Been a Material Change in Either Party's Circumstances Since the Date of the Order?

240A material change in the mother or father's circumstances since the making of the prior support order as contemplated by the Family Law Act means a change that "if known at the time, would likely have resulted in different terms". See Willick v. Willick 1994 CanLII 28 (SCC), [1994] 3 S.C.R. 670. The onus is on the party seeking the variation to establish a material change. If there has been a material change in circumstances, the court should vary the previous order to reflect the change.

241In order for the court to determine if there has been a material change, the court must examine the parties' circumstances at the time of the order. As the prior order incorporated the terms of the parties' Separation Agreement, the Court may look to the agreement in its entirety to assist it in determining if there has been a material change in circumstances. Unfortunately, the Separation Agreement is void of any pertinent information that would assist the court. In fact, the Separation Agreement does not provide basic information such as the parties' incomes at the time.

242In 2015 when the parties negotiated and executed the Separation Agreement, the father did not disclose to the mother that he was in the process of negotiating a lucrative contract with CCG UAE. In addition, the father failed to provide full and frank financial disclosure to the mother, as he was required to do, during the litigation he commenced in 2013 and throughout the period leading up to the execution of the Separation Agreement.

243I specifically reject the father's claim that he only entered into serious negotiations with CCG UEA on September 24, 2015, as he gave evidence contradicting himself. The father's oral evidence is that he began negotiations with CCG UAE in July 2015 and he believed they "were getting close to a deal in September". He went on to say that he would not have agreed to pay child support of $2000.00 per month based on an annual income of $90,000.00 "if I didn't have a verbal agreement that I would be making $100,000.00, otherwise I would not have known I would have been able to meet my obligation to [C.S.]."

244The evidence clearly demonstrates that the father withheld very important information about his income from the mother when they were negotiating the terms of their Separation Agreement.

245I find that had the mother known around the time the parties were negotiating a Separation Agreement that the father was in the final stages of negotiating an employment contract that could result in his earning an income equivalent to $350,000.00 to $450,000.00 Canadian per year, this would have likely resulted in different spousal support terms. Therefore, the mother has met the onus of demonstrating that there has been a material change in the father's circumstances since the date of the order she is seeking to vary.

ii. Step 2 in the Analysis: What Is the Appropriate Variation to the Order?

246After finding that there has been a material change in circumstances, the court must now determine what variation is appropriate considering the change. This step does not involve a fresh enquiry into whether the mother is entitled to spousal support or a review of the previous order. Simply put, the court must determine whether the change in the father's income necessitates a change to the spousal support order. The court is required at this step of the analysis to "consider the existence of the Separation Agreement and its terms as a relevant fact". See: L.M.P. v. L.S. [2011] 3 S.C.R. paragraph 50.

247The spousal support order must only be varied to the extent required by the material change in circumstances. See: L.M.P. v. L.S. [2011] 3 S.C.R., and Pustai v. Pustai, 2014 ONCA 422 (CanLII), 47 R.F.L. (7th) 56 (Ont. C.A.).

iii. Is the Mother Entitled to an Increase in Spousal Support Due to the Post Separation Increase in the Father's Income?

248The parties correctly identified as an issue, whether the mother is entitled to share in the father's post separation increase in income. They appropriately called evidence to assist the court in determining if the mother's entitlement to spousal support is based on the 'needs based' spousal support model or on the 'compensatory' model, which provides that a spouse should be compensated for the role(s) they assumed during the marriage that directly contributed to the success achieved by the other spouse after separation.

249A spouse is not automatically entitled to an increase in spousal support when there has been an increase in post separation income. A claim to an increase in support based on post separation increases in income is strengthened by evidence that the recipient contributed in a manner that can be directly linked to the payor's post separation increased income. "The nature of the contributions does not have to be explicit, such as contribution to the payor's education or training. The question of whether the contributions made by the recipient specifically influenced the payor's post-separation success will depend on the unique facts of every case." See: Thompson v. Thompson 2013 CarswellOnt 2013 ONSC 5500 (CanLII), paragraph 103.

250"A spousal support award is more likely to take into account post-separation income increases where the relationship was long-term, the parties' personal and financial affairs became completely integrated during the course of the marriage and the recipient's sacrifices and contributions for the sake of the family and resulting benefits to the payor have been longstanding and significant. When this type of long history of contribution and sacrifice by a recipient spouse exists, the court will be more likely to find a connection between the recipient spouse's role in the relationship and the payor's ability to achieve higher earnings following the separation." See: Thompson paragraph 103(e).

251"If the skills and credentials that led to the post-separation income increase were obtained and developed during the relationship while the recipient spouse was subordinating their career for the sake of the family, there is a greater likelihood of the recipient deriving the benefit of post-separation income increases. By contrast, the likelihood of sharing in such increases lessens if the evidence indicates that the payor spouse acquired and developed the skills and credentials that led to the increase in income during the post-separation period, or if the income increase is related to an event that occurred during the post separation period." See: Thompson paragraphs 103(g) and (h).

252The parties were married 16 years during which they had four children. The mother did not work after the birth of each child. She said she was largely responsible for raising the children and maintaining the household while the father pursued his career. He says they had nannies and housekeepers who did all the work.

253The mother also sacrificed her career by moving to the United States for the father to pursue business opportunities as she was not licensed to work as a dental hygienist in the United States. Upon her return to Canada and up to separation, she only worked part time. The father acknowledged that the mother did not work as a dental hygienist while they were in the United States but claims she worked full time with him.

254One only has to look to the mother's income following separation for evidence of the effect the marriage had on her earning potential. In 2018 the mother earned $71,000.00 working full time as a dental hygienist while in 2013, following separation she only earned $37,201.00 and in 2014 she earned $19,864.00. It took the mother 7 years from the date of separation to earn a comfortable income.

255The father claims that the mother in no way contributed to his post separation increase in income. His evidence is that between 2007 and 2010 he worked as a general contractor for his father's company, Omega Developments (Omega), a residential renovation business. In 2013, after separation, he began Opus One Design Build (Opus) "a building design and real estate development company". He says these two businesses are very different. His works as a "construction design specialist" for CCG UAE came as a result of what he accomplished after separation.

256In cross examination the father acknowledged that there are similarities in the work he did for Omega, his father's business, and his business Opus, more specifically, residential renovations but that Opus focused more on luxury commercial work which is more lucrative.

257The father claims that after separation he completed "five on site apprenticeships over four years, including undergoing specialized training in structure, concrete, framing, architecture and construction design". He claims that his "hard work and continued education, post-separation" allowed him to grow his business and ultimately partner with CCG UAE.

258The father's argument that his post separation increase in income is solely as a result of education and experience he acquired after separation is not believable. When asked about his post separation education, the father spoke about spending time on construction sites. He obtained no formal training at all.

259The father has worked in construction in one form or another since 2007 (the mother claims since 2001). It is disingenuous to claim that all of his current success in the construction industry can only be attributed to the work he did after separation in 2011 when he worked in construction for part of the marriage.

260I accept the mother's evidence over that of the father that she was primarily responsible for raising the children and managing the home and that she sacrificed her career as a dental hygienist to do so. I find that the roles the mother assumed during the marriage allowed the father to pursue his career objectives including in the construction industry between, at least, 2007 and 2010.

261The evidence makes it clear that the mother's claim to spousal support is, in part, compensatory due to the roles she assumed during the marriage that disadvantaged her professionally and allowed the father to pursue his professional goals. As a result, I find that she is entitled to an increase in spousal support based on the father's post separation increase in income.

iv. Is the Mother Entitled to a Retroactive Increase in Spousal Support?

262Before determining the appropriate quantum of spousal support to order in the face of the material change in the father's income, it is appropriate to first determine the start date for the variation given that the father's income for the relevant years has already been determined.

a. Legal Considerations

263A variety of factors must be considered by a court when considering a claim for retroactive spousal support. In Bremer v. Bremer, 2005 CanLII 3938 (ON C.A.), (2005), at paragraph 9, the Ontario Court of Appeal found that the court should consider the following factors,

establishing past need.

any requirement for the recipient to encroach on capital.

the underlying basis for the order.

impact on the payor, is it a redistribution of capital.

blameworthy conduct on behalf of the payor, such as lack of financial disclosure.

notice of intention to seek support and negotiations to that end.

delay in proceeding and any explanation for that delay.

the appropriateness of an order predating the application.

264In Kerr v. Baranow, 2011 SCC (CanLII) 10, at paragraph 207 (Kerr), the Supreme Court of Canada considered the applicability of the principles enumerated by the same court in the case of D.B.S. v. S.R.G., 2006 SCC 37 (CanLII), [2006] 2 S.C.R. 231, a case involving claims for a retroactive increase in child support, when considering a request for a retroactive increase in spousal support. The court found,

"While D.B.S. was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similar considerations to those set out in the context of child support are also relevant to deciding the suitability of a "retroactive" award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse. However, in spousal support cases, these factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support."

265The court went on to conclude at paragraph 208 of Kerr that as the entitlement to child support is automatic and the right of the child and determining the quantum of child support is governed by the Child Support Guidelines and more specifically, the income of the payor, "these aspects of child support reduce somewhat the strength of concerns about lack of notice and lack of diligence in seeking child support. In contrast, there is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legal obligation to look out for the separated spouse's legal interests. Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support: see, e.g., M. L. Gordon, "Blame Over: Retroactive Child and Spousal Support in the Post-Guideline Era" (2004-2005), 23 C.F.L.Q. 243, at pp. 281 and 291-92."

b. The Evidence

266I will now consider the evidence in relation to the factors I am instructed to consider pursuant to Bremer v. Bremer and Kerr v. Baranow.

1. Establishing Past Need

267Based on the mother's income between 2013 and 2017 she was clearly in need of spousal support. While the father made a feeble attempt at questioning the mother's current income, he did not dispute her reported income for 2016 or 2017. The onus was on him to do so if he felt it was not accurately reported in her income tax returns. In 2016 and 2017 respectively, she earned $25,000.00 and $31,000.00.

268In 2016 and up to April 2017, the mother was responsible for the support of all four children who lived with her and were in full time attendance at school. As of May 2017, the mother continued to be fully financially responsible for 3 of the 4 children while they continued their full time studies.

269In addition to be solely responsible for the care of the 4 children in 2016, she did so without much assistance from the father who lived full time in the United States.

270Based on the mother's income in 2016 and 2017, and her child care responsibilities, she needed spousal support.

2. Any Requirement for the Recipient to Encroach on Capital

271The court was not made aware of the mother having to encroach on capital to support herself in 2016 or 2017.

3. The Underlying Basis for the Order

272The evidence establishes that the basis for the mother's entitlement to spousal support is both needs based and compensatory support for the roles she assumed and the sacrifices she made during the marriage to support the father's career while negatively impacting her career.

4. Impact on the Payor, Is It a Redistribution of Capital

273The court has already reviewed the father's failure to provide adequate financial disclosure finding it impossible to determine what impact a retroactive child support order would have on him. As set out above, the court draws a negative inference against the father and finds that there would be no negative impact of a retroactive child support order.

274I import the same findings and reasoning to the analysis of the mother's claim for retroactive spousal support.

5. Blameworthy Conduct on Behalf of the Payor, Such as Lack of Financial Disclosure

275The blameworthy conduct on behalf of the father is extensive. He negotiated the parties' Separation Agreement in bad faith. He withheld pertinent information from the mother during negotiations that he knew or ought to have known would almost certainly lead to a higher amount of spousal support (and child support) then was ultimately agreed to.

276In the course of this litigation the father failed to obtain an income analysis ordered by the court.

277The lack of financial disclosure from the father is astonishing. It is not disputed that the mother has never received a copy of a complete income tax return or notice of assessment from the father. It is not disputed that the mother has never received any supporting financial documentation from the father, other than the letter from his employer and his employment contract, to substantiate his claims regarding his income. It is not disputed that the father has not provided any disclosure to explain or substantiate how his bonus is calculated and whether he has an interest in the company that employs him. It is not disputed that despite being the sole shareholder of Opus Design Build Inc., the mother has never received any financial statements or income tax returns for the corporation.

278The totality of the evidence offered by the father to demonstrate his income between 2016 and 2020 is an Employment Contract and two unsigned letters from his employer. The father made no effort whatsoever to provide reliable and credible evidence to demonstrate his income for child and spousal support purposes despite how easily he could have done so. For example, he could have provided bank statements that showed the deposits of his base salary and income. He could have provided credit card statements to show his pattern of spending.

279The father's willingness to conduct a trial on the issues of retroactive and prospective child and spousal support while flouting a court order requiring him to obtain an income analysis and without providing any meaningful disclosure amounts to inexplicable self-inflicted sabotage of his case, like jumping out of a plane without a parachute.

6. Notice of Intention to Seek Support and Negotiations to That End

280The mother's evidence addresses her requests for additional child support from the father in 2016 and 2017. She did not give evidence of any requests by her from the father for an increase in spousal support.

7. Delay in Proceeding and Any Explanation for That Delay

281I import the findings made in my judgment above in paragraphs 150 to 156 that the mother did not engage in an unreasonable delay in bringing the matter before the court.

8. The Appropriateness of an Order Predating the Application

282As the mother had a very modest income in 2016 and 2017 while caring for four children and she did not delay bringing this matter before the court, she makes a strong claim for a retroactive increase in spousal support. If the father were able, for example, to demonstrate that his conduct has been nothing but exemplary and a retroactive order increasing spousal support would have a significant impact on him, he might have an equally strong argument against a retroactive spousal support claim. That, of course, is not the evidence in this case. The evidence of blameworthy conduct on the part of the father provides the court with an overwhelming amount of evidence to rely upon in exercising its discretion to order a retroactive increase in spousal support.

c. Conclusion Regarding the Mother's Request for an Order for a Retroactive Increase in Spousal Support

283The parties were married for 16 years. This is not a short marriage. They had four children which resulted in the mother leaving the work force for child care responsibilities. She also agreed to leave her career behind and move to the United States, where she could not work as a dental hygienist. Her income suffered as evidenced by the number of years it has taken her to achieve a current income of $71,000.00.

284The mother is entitled to share in the father's post separation income. The mother contributed towards the father's success by assuming many of the family and childcare responsibilities during the marriage so that he could focus on his career.

285The father's failure to disclose to the mother that he was close to finalizing an employment contract with CCG UAE while they were negotiating the Separation Agreement is egregious conduct that significantly disadvantaged the mother. He did not rectify the situation at any point prior to this court proceeding by advising the mother of the significant change in his income and paying an appropriate level of child and spousal support. There is little doubt that had the mother known of the contract negotiations with CCG UAE, the final Separation Agreement would have provided for a larger amount of spousal support.

286A consideration of the relevant factors in this case supports a finding that it is appropriate for the court to exercise its jurisdiction to order an increase in spousal support to a date that predates the commencement of this proceeding. A fair and reasonable start date for the retroactive spousal support is June 1, 2016.

v. Quantum of Retroactive Spousal Support

287The manner in which income was imputed to the father for child support purposes applies equally for spousal support purposes. See: Marello v. Marello [2016] O.J. No.635, paragraph 164. Therefore, the income imputed to the father for each year since 2016 as set out above applies to the analysis in this section of my judgment.

288When contemplating what retroactive variation of the spousal support order is appropriate in all of the facts of this case, I must consider the manner in which the father is compensated. The cash flow issues described above cannot be ignored. The mother seeks an order for an increase in spousal support based on calculations that really have no application in this case. The calculations she provides are based on the following assumptions that do not apply:

a) Imputed annual income to the father between $612,553.00 and $730,794.00;

b) The father is entitled to claim a tax deduction for the spousal support payments;

c) The calculations are designed to divide the parties' net disposable income based on Canadian income tax rates and government benefits not applicable to the father;

d) The net disposable income calculated by the Divorcemate software calculations provided by the mother is not indicative of the father's actual situation given that his employer pays a significant amount for his personal expenses without placing limits on the amounts he can spend;

e) The calculations are based on all four children in her home at all the relevant times which is not accurate; and,

f) The mother's spousal support calculations are based on an imputed income that grosses up all benefits of employment for income tax. I found that to be inappropriate when determining his child support obligation and it is just as inappropriate when determining the quantum of the appropriate variation of spousal support.

289The father does not file income tax returns or pay income tax in Canada or the UAE. Therefore, it makes little sense to base the quantum of spousal support on tax deductibility that does not apply in this case.

a. The Effect of the Child Support Order on the Mother's Request to Vary Spousal Support

290In determining what variation to the spousal support order is appropriate, I have considered the actual cash flow or net disposable income available to each party. Commencing June 1, 2016, the father is ordered to pay retroactive child support for D.N. and N.N. based on an imputed income in 2016 of $324,479.00; 2017 of $385,538.00; and, 2018 of $452,306.00. That results in the following orders:

a) June 1, 2016 to December 1, 2016 - $4001.00 per month in child support for two children;

b) January 1, 2017 to November 1, 2017 - $4697.00 per month in child support for two children;

c) December 1, 2017 - $4903.00 for two children;

d) January 1, 2018 to June 1, 2018 - $5705.00 for two children;

e) From July 1, 2018 to July 1, 2019 – set off child support of $2394.00 per month; and,

f) August 1, 2019 an ongoing - $5705.0 per month for two children.

291As was set out above, the father actually receives income in cash form from a base salary and a bonus. Based on his most recent base salary of $116,000.00 and an annual bonus assumed to be at least $50,000.00 (he was guaranteed a $50,000.00 bonus in 2016 and 2017 and received a $66,900.00 bonus in 2018) he has actual net disposable income of $166,000.00 per year or $13,833.00 per month.

292A comparison of the parties' net disposable income based on the order varying child support and the continued payment of spousal support pursuant to the current order is as follows:

Year	Mother's income	Child Support payable	Spousal Support payable	Section 7's paid by father to mother	Section 7's paid by mother to father	Mother's monthly net disposable income	Father's monthly net disposable income
2016	$25,000.00	$4001.00	$300.00	$500.00	nil	$8184.00	$8199.00
2017	$31,000.00	$4697.00 from Jan. - Nov. 2017; and, $4903.00 for Dec. 2017	$300.00 up to April of $2017; $400.00 as of May 2017	$500.00	nil	$9,112.00 up to April 2017; $9159.00 from May -Nov. 2017; and, $10,876.00 as of Dec. 2017	$8336.00 from Jan. – Apr. 2017; $8236.00 from May to Nov. 2017 and $8030.00 as of Dec. 2017
Jan. to June 2018	$71,000.00	$5705.00	$400.00 Jan.-Apr. 2017; and, $500.00 May - Dec.2018	$500.00	nil	$11,412.00 from Jan - April 2018; and, $11,480.00 from May - Dec. 2018	$7228.00 Jan. to Apr. 2018; and, $7128.00 May to Dec. 2018
July 2018 to July 2019	$71,000.00	$2394.00	$500.00	Nil	$636.75 for post-secondary expenses for D.N. = $53.00 per month	$7432.00 ($7378.00 before deducting $53.00 for section 7 expense)	$10,939.00 less tuition expense for D.N. of $300.75= $10,638.00
Aug. 2019 to date	$71,000.00	$5705.00	$500.00	Nil	$13,480.00	$7628.00

293The chart set out above, which incorporates the increase in child support payable by the father retroactive to June 1, 2016 pursuant to this judgment and the actual $300.00 to $500.00 per month he is required to pay in spousal support pursuant to the order/Separation Agreement, sets out each party's net disposable income for each year. For clarity, this is each party's after tax income available to meet their expenses.

294As is noted in the chart, the parties had roughly equal net disposable incomes in 2016. In 2016 all four children were in full time attendance at school and lived with the mother. The parties having equal net disposable incomes in 2016 is hardly appropriate given that the father had one person in his home while the mother had five. In addition, the father enjoyed having almost all of his personal expenses paid for by his employer. Therefore, the division of the total monies available to the parties in 2016 in accordance with the parties' Separation Agreement/order was not appropriate.

295A determination of the appropriate level of support for 2016 and 2017 requires the court to consider the income tax ramifications of a retroactive spousal support order given that retroactive spousal support is not considered to be periodic payments that are tax deductible by the payor and taxable income to the recipient under the Income Tax Act, RSC 1985, c 1 (5th Supp). See: Thompson v. Thompson 2013 ONSC 5500, para. 75 and Gonsalves v. Scrymgeour, 2017 ONSC 1034 (CanLII), para. 167. As a result, courts have accepted that when making an order for lump sum or retroactive spousal support, the range of spousal support must be adjusted to reflect the different tax treatment. See: Samoilova v. Mehnic, 2014 ABCA 65, Hume v. Tomlinson, 2015 ONSC 843 (CanLII), Thompson v. Thompson 2013 ONSC 5500, and, Gonsalves v. Scrymgeour, 2017 ONSC 1034 (CanLII).

296As the father does not file income tax returns in any jurisdiction the Spousal Support Advisory Guidelines (SSAGs) are not overly helpful to the court when determining the appropriate variation of the spousal support order given that the SSAGs generate a range of spousal support based on the assumption that the payor will claim a tax deduction for spousal support paid while the recipient must include the spousal support as taxable income. The net effect is that the cost to the payor is lower than the amount paid in spousal support and the amount received by the recipient is reduced by the income tax attributed to the support.

297As retroactive spousal support orders do not attract this income tax treatment, courts adjust the amount to be paid by a percentage the court deems to be appropriate given the approximate marginal tax rates of the parties. Hume v. Tomlinson, 2015 ONSC 843 (CanLII), and, Gonsalves v. Scrymgeour, 2017 ONSC 1034 (CanLII).

298I find that the mother is entitled to an increase in spousal support retroactive to June 1, 2016. The amount of the order for spousal support retroactive to 2016 must be adjusted to reflect that the mother will receive these monies tax free. As the mother had five people in her home as opposed to the father only be responsible for himself, a 65%-35% division of net family income is a fair and appropriate division. In order to affect that division in 2016, the father shall pay spousal support to the mother retroactive to June 1, 2016 in the amount of $2800.00 (with credit for amounts paid). This will result in the mother having net disposable income of $10,684.00 (refer to chart on page 69) in comparison to the father's net disposable income of $5699.00.

299In 2017 all four children lived with the mother but O.N. completed her post-secondary education by April 2017. Once again, a 65%-35% division of net family income is an appropriate division in this case. In order to achieve that result, the father will be required to pay the mother spousal support in the amount of $2550.00 from January 1, 2017 to December 1, 2017. This will result in the mother having net disposable income of $11,362.00 (refer to chart on page 69) in comparison to the father's net disposable income of $6086.00.

2018, 2019 and 2020

300Between January and June 2018 when D.N. and N.N. were primarily in her care, due to the increase in her employment income, the mother has a significantly higher net disposable income then the father amounting to approximately 60% of the family's net disposable income. This figure is based on spousal support payable pursuant to the court order. As this is a fair and appropriate division of the family's net disposable income given the child care responsibilities, the spousal support order will not change for the period of January to June 2018.

301The father having a higher net disposable income between July 2018 and July 2019 is warranted given that N.N. was primarily in his care and D.N. was in his care 50% of the time. In addition, although not entitled to child support, both O.N. and L.N. were also living with the father during this period.

302As of August 2019, when D.N. and N.N. both returned to live with the mother, the father's child support obligation increases to $5705.00 per month in addition to paying $500.00 per month in spousal support. Therefore, as of August 2019 the mother's net disposable income results in her having 64% of the family's net disposable income. As this is a fair and appropriate division of the family's net disposable income given the child care responsibilities, the spousal support order will not be varied as of August 1, 2019 and the amount paid shall be in accordance with the terms of the court order dated October 25, 2019.

303Based on the above calculations, I find that there has been a material change in the father's circumstances requiring a variation of the spousal support order for the period of June 1, 2016 up to and including December 1, 2017. The mother's income rose substantially in 2018 as did the father's child support obligation. As a result, the quantum of spousal support pursuant to the order of October 25, 2019, is the appropriate order as of January 1, 2018 and will continue as of that date.

Orders

Custody and Access

304The father's claim for an order granting him joint custody of N.N. is dismissed.

305The father shall have week to week access to N.N., provided it is in accordance with his wishes, as follows:

(a) Alternate weekends from Friday after school until Monday return to school. When school is not in session, pick up and drop off shall take place at the mother's home and the parties shall agree on the time for pick up and drop off. If they cannot agree, pick up on Friday will be at 5:00 p.m. and drop off on Monday at 6:00 p.m.; and,

(b) Every Wednesday, or such other mid week evening the parties agree on, from after school until return to school on Thursday morning. If school is not in session, pick up and drop off time and location shall be as set out in subparagraph 305(a) above.

306The parties shall cooperate to ensure that the father has access to N.N. during all school and statutory holidays, including overnight access.

307The father shall keep the mother advised at all times of any obstacles he faces in relation to remaining sober. The father shall keep the mother advised at all times of any changes to his mental health and addiction issues for so long as N.N. is a minor.

308The parties shall attempt to agree upon the form of communication they will use in relation to issues affecting the children. If they cannot agree, the mother will decide how they communicate.

309The parties shall not discuss any aspect of this litigation with N.N. and will refrain from making any disparaging remarks about the other parent to or near N.N. They will not use N.N. to communicate messages to one another even in relation to arranging the father's access to N.N.

Child and Spousal Support

The order of October 25, 2019, requiring the father to pay the mother child and spousal support shall be varied as follows:

310Commencing June 1, 2016 and up to and including December 1, 2016 the father shall pay the mother child support of $4001.00 per month for N.N. and D.N., based on his annual imputed income of $324,479.00 and the Child Support Guidelines. The father shall receive credit of $12,000.00 against this order, representing the $2000.00 the father paid the mother in child support per month for this period.

311Commencing January 1, 2017 and up to and including November 1, 2017 the father shall pay the mother child support for D.N. and N.N. the amount of $4697.00 per month based on his annual imputed income of $385,538.00 and the Child Support Guidelines. The father shall receive credit of $22,000.00 against this order, representing the $2000.00 the father paid the mother in child support per month for this period.

312The father shall pay the mother child support for D.N. and N.N. the amount of $4903.00 for the month of December 2017 based on his annual imputed income of $385,538.00 and the Child Support Guidelines. The father shall receive a credit against this order of $2000.00, being the amount of child support he paid the mother for this month.

313Commencing January 1, 2018 and up to and including June 1, 2018, the father shall pay the mother child support of $5705.00 per month for D.N. and N.N. based on his annual imputed income of $452,306.00 and the Child Support Guidelines.

314Commencing July 1, 2018 and up to and including July 1, 2019, the father shall pay the mother child support of $2394.00 based on the following factors:

(a) During this period N.N. lived primarily with the father;

(b) During this period D.N. spent equal time with the mother and father;

(c) The mother's annual income in 2018 was $71,000.00 and her monthly child support obligation for D.N. and N.N. pursuant to the Child Support Guidelines was $1082.00;

(d) The father's annual imputed income for 2018 is $452,306.00 and his child support obligation for D.N. based on a shared parenting arrangement was $3476.00; and,

(e) A set off of each parent's child support obligation for D.N. and N.N. is $2394.00 paid by father to mother.

315The father shall receive a credit of $26,000.00 against this order, representing the $2000.00 the father paid the mother in child support per month for the period of July 2018 to July 2019.

316The father's obligation to pay $500.00 per month to the mother as contribution towards the children's section 7 expenses as set out in the order of October 25, 2019, is terminated effective June 30, 2018. The mother shall advise the Family Responsibility Office of the amount paid to her directly by the father towards section 7 expenses between July 1, 2018 and the date of this order for which the father shall receive a credit against arrears of child support.

317The father shall also receive a credit of $4800.00 against arrears of child support as this lump sum was paid by the father directly to the mother towards child support in 2017.

318The father shall pay the mother the sum of $651.95 being his proportionate share (85%) of the cost of dental expenses of $342.00 and psychologist fees of $425.00 for N.N. since August 2019. This calculation is based on the father's imputed annual income of $452,306.00, the mother's annual income of $77,000.00 (employment income and spousal support) and the total cost of the expenses being $767.00.

319If the father paid 100% of the cost of D.N.'s 2018-2019 tuition fee, the mother shall pay the father the sum of $636.75, being her proportionate share of this expense. The amount owing by the mother to the father shall be set off against his arrears of child support. If the father did not pay 100% of D.N.'s 2018-2019 tuition fee and D.N. paid the difference, the amount of $636.75 shall be paid by the mother to D.N.

320The parties shall share the cost of agreed upon section 7 expenses in proportion to income. Based on the father's current imputed annual income of $452,306.00 and the mother's annual income of $71,000.00 and $6000.00 in spousal support, the father shall be responsible for 85% of agreed upon section 7 expenses while the mother shall be responsible for 15%.

321Commencing June 1, 2016 and up to and including December 1, 2016, the father shall pay the mother spousal support of $2800.00 per month. The mother shall immediately notify the Family Responsibility Office if the father paid spousal support pursuant to the October 25, 2019, during this period and if so, he shall receive a credit for such payment against this order.

322Commencing January 1, 2017 and up to and including December 1, 2017, the father shall pay the mother spousal support of $2550.00. The mother shall immediately notify the Family Responsibility Office if the father paid spousal support pursuant to the order of October 25, 2019, during this period and if so, he shall receive a credit for such payment against this order.

323Commencing January 1, 2018 and on the first of each month thereafter, the father shall pay the mother spousal support of $500.00 per month. The mother shall immediately notify the Family Responsibility Office if the father paid spousal support pursuant to the order of October 25, 2019, during this period and if so, he shall receive a credit for such payment against this order.

324If either party is seeking an order for costs of the Motion to Change, they shall serve and file their cost submissions with a Bill of Costs on the other party within 20 days of the date of this endorsement. The cost submissions shall not be more than 7 pages long not including attachments. The responding party shall have 20 days to serve their response on the requesting party. The responding cost submissions shall not exceed 7 pages not including attachments.

325The parties shall file their cost submissions with the trial coordinator.

Released: May 29, 2020

Signed: Justice Melanie Sager

Case Summary

A motion to change child and spousal support arising from a 2015 separation agreement. The father, who was earning approximately $90,000 annually at the time of separation, subsequently secured employment with a UAE-based company resulting in significantly increased income (imputed at $324,479 to $452,306 annually). The mother sought retroactive and prospective increases in child and spousal support, as well as custody and access modifications. The father sought joint custody of the youngest child and contribution toward section 7 expenses. The court found a material change in circumstances warranting variation of support, imputed income to the father based on salary, bonus, and employer-paid benefits, ordered retroactive child support from June 1, 2016, retroactive spousal support from June 1, 2016, and maintained the mother's sole custody with expanded access for the father. interesting_citations_summary: > The decision provides comprehensive analysis of income imputation where a payor earns non-taxable income from a foreign employer with significant benefits paid directly. The court addressed the appropriate treatment of employer-paid personal expenses (housing, vehicles, clothing, vacations) in calculating income for support purposes, declining to gross up these benefits for income tax while grossing up base salary and bonus. The judgment also addresses retroactive support claims under D.B.S. v. S.R.G., material change in circumstances for custody variation, shared parenting arrangements under section 9 of the Child Support Guidelines, and the application of section 4 of the Child Support Guidelines for high-income payors. The court drew adverse inferences from the payor's failure to provide financial disclosure and non-compliance with court-ordered income analysis. final_judgement: > The mother's motion to change is substantially granted. The father is ordered to pay retroactive child support from June 1, 2016, retroactive spousal support from June 1, 2016, and prospective child and spousal support as varied. The father's custody claim is dismissed and access is ordered on an alternate weekend and mid-week basis. The mother retains sole custody of the youngest child. The father receives credits for amounts previously paid and must contribute to agreed section 7 expenses in proportion to income (85% father, 15% mother). keywords: - Motion to change - Child support - Spousal support - Income imputation - Non-taxable income - Employer-paid benefits - Retroactive support - Material change in circumstances - Custody and access - Section 7 expenses - Financial disclosure - Adverse inference - Shared parenting - High-income payor - Compensatory spousal support areas_of_law: - Family Law - Child Support - Spousal Support - Custody and Access - Income Imputation - Child Support Guidelines - Family Law Act - Children's Law Reform Act legislation: - title: "Child Support Guidelines, O. Reg. 391/97" url: "https://www.ontario.ca/laws/regulation/970391" - title: "Family Law Act, R.S.O. 1990, c. F.3" url: "https://www.ontario.ca/laws/statute/90f03" - title: "Children's Law Reform Act, R.S.O. 1990, c. C.12" url: "https://www.ontario.ca/laws/statute/90c12" - title: "Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.)" url: "https://laws-lois.justice.gc.ca/eng/acts/i-2.3/" case_law: - title: "Gordon v. Goertz, [1996] 2 S.C.R. 27" url: "https://www.canlii.org/en/ca/scc/doc/1996/1996canlii191/1996canlii191.html" - title: "Brown v. Lloyd, 2014 ONSC 300" url: "https://www.canlii.org/en/on/onsc/doc/2014/2014onsc300/2014onsc300.html" - title: "Watson v. Watson, 35 R.F.L. (3d) 169" url: "https://www.canlii.org/en/bc/bcsc/doc/1991/1991canlii839/1991canlii839.html" - title: "MacCallum v. MacCallum, (1976), 30 R.F.L. 32 (P.E.I.S.C.)" url: "https://www.canlii.org/en/pe/pescad/doc/1976/1976canlii1234/1976canlii1234.html" - title: "Persaud v. Garcia-Persaud, [2009] O.J. No. 5940, 2009 ONCA 782" url: "https://www.canlii.org/en/on/onca/doc/2009/2009onca782/2009onca782.html" - title: "Litman v. Sherman, 2008 ONCA 485, 52 R.F.L. (6th) 239" url: "https://www.canlii.org/en/on/onca/doc/2008/2008onca485/2008onca485.html" - title: "Allen v. Allen, 38 R.F.L (4th) 96" url: "https://www.canlii.org/en/on/onsc/doc/1998/1998canlii14873/1998canlii14873.html" - title: "Hickey v. Hickey, [1999] 2 S.C.R. 518" url: "https://www.canlii.org/en/ca/scc/doc/1999/1999canlii691/1999canlii691.html" - title: "L.M.L.P. v. L.S., [2011] SCC 64" url: "https://www.canlii.org/en/ca/scc/doc/2011/2011scc64/2011scc64.html" - title: "Elaziz v. Wahba, [2017] ONCA 58" url: "https://www.canlii.org/en/on/onca/doc/2017/2017onca58/2017onca58.html" - title: "Segal v. Segal, 26 R.F.L. (5th) 433" url: "https://www.canlii.org/en/on/onca/doc/2002/2002canlii41960/2002canlii41960.html" - title: "Drygala v. Pauli, [2002] O.J. No. 3731" url: "https://www.canlii.org/en/on/onca/doc/2002/2002canlii41868/2002canlii41868.html" - title: "Bak v. Dobell, 2007 ONCA 304" url: "https://www.canlii.org/en/on/onca/doc/2007/2007onca304/2007onca304.html" - title: "Aitken v. Aitken, [2003] O.J. No. 2780 (SCJ)" url: "https://www.canlii.org/en/on/onsc/doc/2003/2003canlii41960/2003canlii41960.html" - title: "Jonas v. Jonas, [2002] O.J. No. 2117 (SCJ)" url: "https://www.canlii.org/en/on/onsc/doc/2002/2002canlii41960/2002canlii41960.html" - title: "Price v. Reid, 2013 ONCJ 373" url: "https://www.canlii.org/en/on/oncj/doc/2013/2013oncj373/2013oncj373.html" - title: "Reyes v. Rollo, [2001] O.J. 5110" url: "https://www.canlii.org/en/on/onsc/doc/2001/2001canlii28260/2001canlii28260.html" - title: "Gray v. Rizzi, 2016 ONCA 494" url: "https://www.canlii.org/en/on/onca/doc/2016/2016onca494/2016onca494.html" - title: "Szitas v. Szitas, 2012 ONSC 1548" url: "https://www.canlii.org/en/on/onsc/doc/2012/2012onsc1548/2012onsc1548.html" - title: "Woofenden v. Woofenden, 2018 ONSC 4583" url: "https://www.canlii.org/en/on/onsc/doc/2018/2018onsc4583/2018onsc4583.html" - title: "Graham v. Bruto, 2008 ONCA 260" url: "https://www.canlii.org/en/on/onca/doc/2008/2008onca260/2008onca260.html" - title: "Francis v. Baker, [1999] 3 SCR 250" url: "https://www.canlii.org/en/ca/scc/doc/1999/1999canlii659/1999canlii659.html" - title: "R. v. R." url: "https://www.canlii.org/en/on/onca/doc/2000/2000canlii41875/2000canlii41875.html" - title: "D.B.S. v. S.R.G., 2006 SCC 37, 2 S.C.R. 231" url: "https://www.canlii.org/en/ca/scc/doc/2006/2006scc37/2006scc37.html" - title: "Riel v. Holland, [2003] O.J. No. 3901" url: "https://www.canlii.org/en/on/onca/doc/2003/2003canlii3433/2003canlii3433.html" - title: "Orser v. Grant, [2003] O.J. No. 1669 (SCJ)" url: "https://www.canlii.org/en/on/onsc/doc/2003/2003canlii41960/2003canlii41960.html" - title: "Sarafinchin v. Sarafinchin, [2000] O.J. No. 2855" url: "https://www.canlii.org/en/on/onsc/doc/2000/2000canlii22639/2000canlii22639.html" - title: "Askalan v. Taleb, 2012 ONSC 4746" url: "https://www.canlii.org/en/on/onsc/doc/2012/2012onsc4746/2012onsc4746.html" - title: "Van Heighten v. Catarino, 2017 ONCJ 103" url: "https://www.canlii.org/en/on/oncj/doc/2017/2017oncj103/2017oncj103.html" - title: "Bremer v. Bremer" url: "https://www.canlii.org/en/on/onca/doc/2005/2005canlii3938/2005canlii3938.html" - title: "Kerr v. Baranow, 2011 SCC 10" url: "https://www.canlii.org/en/ca/scc/doc/2011/2011scc10/2011scc10.html" - title: "Willick v. Willick, [1994] 3 S.C.R. 670" url: "https://www.canlii.org/en/ca/scc/doc/1994/1994canlii28/1994canlii28.html" - title: "Thompson v. Thompson, 2013 ONSC 5500" url: "https://www.canlii.org/en/on/onsc/doc/2013/2013onsc5500/2013onsc5500.html" - title: "Pustai v. Pustai, 2014 ONCA 422, 47 R.F.L. (7th) 56" url: "https://www.canlii.org/en/on/onca/doc/2014/2014onca422/2014onca422.html" - title: "Gonsalves v. Scrymgeour, 2017 ONSC 1034" url: "https://www.canlii.org/en/on/onsc/doc/2017/2017onsc1034/2017onsc1034.html" - title: "Samoilova v. Mehnic, 2014 ABCA 65" url: "https://www.canlii.org/en/ab/abca/doc/2014/2014abca65/2014abca65.html" - title: "Hume v. Tomlinson, 2015 ONSC 843" url: "https://www.canlii.org/en/on/onsc/doc/2015/2015onsc843/2015onsc843.html" - title: "Marello v. Marello, [2016] O.J. No. 635" url: "https://www.canlii.org/en/on/onsc/doc/2016/2016onsc1034/2016onsc1034.html" - title: "Le v. Tran, 2012 ONCJ 601" url: "https://www.canlii.org/en/on/oncj/doc/2012/2012oncj601/2012oncj601.html" - title: "Smith v. Selig, 2008 NSCA 54, 56 R.F.L. (6th) 8" url: "https://www.canlii.org/en/ns/nsca/doc/2008/2008nsca54/2008nsca54.html" - title: "Hetherington v. Tapping, 2007 BCSC 209" url: "https://www.canlii.org/en/bc/bcsc/doc/2007/2007bcsc209/2007bcsc209.html" - title: "Surerus-Mills v. Mills, [2006] O.J. No. 3839 (SCJ)" url: "https://www.canlii.org/en/on/onsc/doc/2006/2006canlii41960/2006canlii41960.html" --- # R.N. v. C.S. **Court File No.:** D57438/12 **Date:** May 29, 2020 **Ontario Court of Justice** **Before:** Justice Melanie Sager **Heard:** March 2, 3, 4, and 5, 2020 **Reasons for Judgment Released:** May 29, 2020 --- ## Counsel **Lauren Israel** — counsel for the applicant(s) **Rupa Murthi** — counsel for the respondent(s) --- ## SAGER J.: --- ## Introduction [1] R.N. (father) and C.S. (mother) were married on December 27, 1996 and separated on May 11, 2011. They have four children, twins L.N. and O.N. are 21 years old; D.N. who is 19 years old; and, N.N. who is 13 years old. [2] The parties were involved in litigation between 2013 and 2015. On April 15, 2013, Justice Debra Paulseth made a final order on consent granting the mother sole custody of the parties' four children. On September 18, 2015, Justice Paulseth made an order on consent consolidating orders she had previously made in relation to custody and incidents of custody into one final order and the balance of the parties' claims were dismissed. [3] The issues of child support, spousal support and access were resolved by way of a Separation Agreement executed by the parties on September 18, 2015. [4] The parties Separation Agreement provides that the father shall have access to the children as requested which shall not be unreasonably withheld by the mother. [5] The Separation Agreement obliges the father to pay the mother child support of $2000.00 per month plus $500.00 per month towards "special or extraordinary expenses" for the children; and, spousal support of $300.00 per month to be increased by $100.00 per month as each child becomes ineligible for child support. Spousal support shall terminate when the mother marries or cohabits with another man in a relationship resembling marriage or on September 30, 2023. [6] While the parties' Separation Agreement does not set out what the father's income is for the purpose of child and spousal support, it does state that that the words "table""income" and "special or extraordinary expenses" in the agreement are terms "defined in s. 2(1) of the " Child Support Guidelines ". The Separation Agreement requires the father to pay "table" child support for four children in the amount of $2000.00 per month, which corresponds with a payor earning $90,000.00 per year in Ontario. [7] The parties were divorced in 2017. [8] The Separation Agreement was filed with the court on October 25, 2019 for enforcement of the support provisions by the Family Responsibility Office. It is this order that is the subject of this litigation. --- ## The Current Litigation ### a. The Mother's Claims #### i. Variation of Child and Spousal Support [9] On May 3, 2018, the mother commenced a Motion to Change child and spousal support based on the father experiencing a significant increase in his annual income since executing the Separation Agreement. Her assessment of the father's finances was accurate as shortly after the parties executed the Separation Agreement the father signed a contract to work as a project manager for a company called CCG UAE based in the United Arab Emirates (UAE). He is paid a base salary of $106,000.00 and is eligible to receive a performance/profit sharing bonus. [10] In addition to the base salary and bonus, the father's employer pays for several of his expenses in both the UAE and Canada including his housing, car, vacation and clothing expenses, and, legal fees. [11] The effect of the benefits of the father's employment on his income for the purpose of child and spousal support is a significant issue. [12] The mother is seeking an increase in child support retroactive to January 1, 2016. She claims that when the parties were negotiating the terms of their Separation Agreement, unbeknownst to her the father was in negotiations to secure new employment which resulted in a lucrative contract executed by him less than two weeks after the parties finalized the Separation Agreement. She says had she known about the provisions of the employment contract, she would not have agreed to the support terms set out in the Separation Agreement. [13] The mother also relies on the father's failure to advise her of the increase in his income, blameworthy conduct that she claims justifies an increase in child support retroactive to 2016 for all four children. [14] The parties agree that at the present time both L.N. and O.N. have completed their education, live on their own and are not entitled to child support from either parent. O.N. completed her post-secondary education in April 2017 and L.N. completed hers in April 2018. The father says that between 2016 and the summer of 2018 L.N. and O.N. spent at least 40% of the time in his care while the mother claims this is inaccurate and that they lived primarily with her until the summer of 2018. Both L.N. and O.N. moved into the father's home in the summer of 2018 where they lived for approximately one year. [15] The parties also agree that currently D.N. and N.N. are living primarily with the mother but that was not the case between the summer of 2018 and July 2019. During this period the parties agree that D.N. spent equal time with each parent and N.N. lived with the father Monday to Friday and with the mother from Friday to Monday. [16] The mother seeks an order imputing income to the father of $730,794.00 for 2016, $666,237.00 for 2017, $623,141.00 for 2018 and $612,553.00 as of 2019. Based on this level of imputed income, the mother asks for an order fixing arrears of child support owing by the father for the period of 2016 to 2019 at $400,609.00. [17] Commencing January 1, 2020, the mother seeks child support of $7,628.00 per month from the father for D.N. and N.N. based on an annual imputed income of $612,553.00. [18] The father, acknowledging that his income has increased, does not dispute that there has been a change in circumstances since the parties executed the Separation Agreement. He is prepared to pay an increased amount of child support as of the date of the mother's Motion to Change. [19] In calculating any increased amount of support payable by him since the date of the Motion to Change, the father argues that child support should not be paid on any income attributed to him over $150,000.00 pursuant to section 4 of the Child Support Guidelines. He argues that the table amount of child support on his total income far exceeds the children's needs and will result in a windfall to the mother. [20] The father claims that the variation of child support should reflect the parenting regime in place on the date the mother commenced this Motion to Change; specifically, that N.N. was living primarily with him and D.N. spent equal time with each parent. [21] The father opposes any order for a retroactive increase in child support for any of the children as he claims the mother has not provided a good reason for the delay in bringing her Motion to Change. The father further argues that as the children were all in his care at least 40% of the time since 2016 an order for a retroactive increase in his child support payments would be unreasonable. [22] With respect to ongoing child support for N.N. and D.N. who currently reside with the mother, the father says that after being sober for many years, in July 2019, he began drinking and using drugs to excess. As a result, he has been on unpaid leave from work since August 1, 2019. He says no child support should be payable until he returns to work. He says he is currently slowly returning to his duties at CCG UAE. [23] The mother also seeks to vary the spousal support payable by the father as set out in the Separation Agreement, on the basis of the imputed income set out above. She asks the court to order the father to pay $8000.00 per month in spousal support retroactive to January 1, 2016, resulting in arrears of spousal support as of December 31, 2019 of $369,000.00. She is not seeking to vary the date spousal support is to be terminated pursuant to the parties' Separation Agreement. [24] The father's position on spousal support is that there should be no change to the terms negotiated and agreed upon in the parties' Separation Agreement. The father argues that the spousal support is non compensatory and that the mother should not share in any increase in his income post separation. He said the mother did nothing that can be seen as contributing to his ability to increase his income post separation. ### b. The Father's Claims [25] The father's Response to the Motion to Change includes a request for an order for sole custody and primary residence of N.N., child support from the mother and a fixed schedule of access by the mother to N.N. #### i. Variation of Custody and Primary Residence of N.N. [26] Prior to trial, the father had abandoned his claim for sole custody and primary residence of N.N. At trial he requested an order for joint custody of N.N. He claims that the parties were able to cooperate to make decisions regarding N.N. together, including the decision for him to live primarily with the father from the summer of 2018 to July 2019. [27] The mother opposes any change to the custody order of N.N. She says that the parties are unable to communicate effectively or collaborate when it comes to N.N. Any historic cooperation was due entirely to the involvement of the father's former girlfriend with whom the mother got along. As she is no longer involved with the father, the parties have been unable to communicate at the level they once did. #### ii. Access to N.N. [28] Since the father's relapse in July 2019, the mother has insisted on the father's access to N.N. being supervised by a person of her choosing. The father's access, as set out in the parties Separation Agreement, is as requested by the father and not to be unreasonably withheld by the mother. There is no court order addressing access by the father to the children. The father seeks an order for unsupervised access to N.N. claiming he does not pose a threat to his son. The mother has been insisting on access being supervised due to the father's abuse of drugs and alcohol and she says his contact with N.N. should be supervised until she receives information directly from the father's physicians and therapists confirming that unsupervised access would not put N.N. at risk of harm. #### iii. Contribution Towards Section 7 Expenses Incurred by the Father [29] After N.N. began living primarily with the father in the summer 2018, he incurred expenses for tutoring, summer camp, hockey camp, and, a psychological assessment. In addition to these expenses, the father seeks an order requiring the mother to contribute towards therapy expenses for D.N., dental expenses for all the children and the cost of D.N.'s post-secondary education. [30] The mother opposes an order requiring her to contribute towards any of these expenses as she claims the expenses were either not paid for by the father or they were incurred by him without her consent and she cannot afford to contribute. ### c. The Issues [31] The trial proceeded for four days on March 2, 3, 4 and 5, 2020 to address the following issues: 1. Has there been a material change in circumstances such that the order granting the mother sole custody of N.N. is no longer meeting his needs? If so, what custody order should be made? 2. What order for access by the father to N.N. is in N.N.'s best interests? 3. What income should be imputed to the father for the purpose of determining child and spousal support given that he earns income from a company based in the UAE, does not file income tax returns or pay income tax in Canada or the UAE and has the bulk of his personal expenses paid by his employer? 4. What amount of ongoing child support should be paid by the father to the mother, including contribution towards special or extraordinary expenses, from the date of the Motion to Change? 5. As part of the analysis of issues 4 and 5, if the father's income for the purpose of child support exceeds $150,000.00, what amount of child support should he be required to pay, if any, in excess of the table amount for $150,000.00 pursuant to section 4 of the Child Support Guidelines? 6. Should the father be required to pay a retroactive increase in child support and if he should, the court must determine if any of the children lived with the father for 40% of the time or more during the periods in question and whether that effects the amount of child support payable? 7. Did the father incur special or extraordinary expenses for the children towards which the mother should contribute? 8. Has there been a material change in either party's circumstances warranting a change to the amount of spousal support payable by the father to the mother and if yes, what variation to the order is appropriate and when should the change take effect? [32] The parties provided their evidence in chief in sworn affidavits and were subject to cross examination. [33] The mother did not call any additional witnesses. The father called a tax lawyer to give evidence on how his income would be treated by Revenue Canada if he filed Income Tax Returns in Canada. [34] The father's claims in relation to custody of and access to N.N. are made pursuant to the Children's Law Reform Act and the mother's claims for child and spousal support are made pursuant to the Family Law Act. --- ## Issue #1 – Has There Been a Material Change in Circumstances Such That the Order Granting the Mother Sole Custody of N.N. Is No Longer Meeting His Needs? If So, What Custody Order Should Be Made? ### a. Legal Considerations [35] The Motion to Change custody is brought pursuant to section 29 of the Children's Law Reform Act. Section 29 provides as follows: > **Order Varying an Order** > > 29 A court shall not make an order under this Part that varies an order in respect of custody or access made by a court in Ontario unless there has been a material change in circumstances that affects or is likely to affect the best interests of the child. R.S.O. 1990, c. C.12, s. 29. [36] The test for a variation was enumerated by the Supreme Court of Canada in [Gordon v. Goertz, [1996] 2 S.C.R. 27](https://www.canlii.org/en/ca/scc/doc/1996/1996canlii191/1996canlii191.html). As stated by Justice Stevenson in [Brown v. Lloyd, 2014 ONSC 300](https://www.canlii.org/en/on/onsc/doc/2014/2014onsc300/2014onsc300.html), although the test in Gordon was the result of a mobility case and variation under the Divorce Act"the test has been held to be applicable to a variation under the Children's Law Reform Act." [37] At paragraphs 15-17, Justice Stevenson sets out the test for variation resulting from the decision in Gordon v. Goertz, as follows: > [14] Both parties agree that the test for a variation is set out in the Supreme Court of Canada decision of [Gordon v. Goertz, [1996] 2 S.C.R. 27](https://www.canlii.org/en/ca/scc/doc/1996/1996canlii191/1996canlii191.html), [1996] S.C.J. No. 52. The decision dealt with a mobility case and a variation under the Divorce Act, R.S.C. 1985, c. 3; however, > > [15] As outlined in Gordon v. Goertz at paragraph 10, before the court can consider the merits of an application for variation, it must be satisfied that there has been a material change in circumstances of the child since the last order was made. The Court further stated at paragraphs 12 and 13: > > 12 What suffices to establish a material change in the circumstances of the child? Change alone is not enough; the change must have altered the child's needs or the ability of the parents to meet those needs in a fundamental way: [Watson v. Watson (1991), 35 R.F.L. (3d) 169 (B.C.S.C.)](https://www.canlii.org/en/bc/bcsc/doc/1991/1991canlii839/1991canlii839.html). The question is whether the previous order might have been different had the circumstances now existing prevailed earlier: [MacCallum v. MacCallum (1976), 30 R.F.L. 32 (P.E.I.S.C.)](https://www.canlii.org/en/pe/pescad/doc/1976/1976canlii1234/1976canlii1234.html). Moreover, the change should represent a distinct departure from what the court could reasonably have anticipated in making the previous order. "What the court is seeking to isolate are those factors which were not likely to occur at the time the proceedings took place": J. G. McLeod, Child Custody Law and Practice (1992), at p. 11-5. > > 13 It follows that before entering on the merits of an application to vary a custody order the judge must be satisfied of: (1) a change in the condition, means, needs or circumstances of the child and/or the ability of the parents to meet the needs of the child; (2) which materially affects the child; and (3) which was either not foreseen or could not have been reasonably contemplated by the judge who made the initial order. > > [16] Jurisdiction to vary a custody and access order is dependent upon an explicit finding of a material change in circumstances since the previous order was made. If an applicant fails to meet this threshold requirement, the inquiry can go no further. See [Persaud v. Garcia-Persaud, [2009] O.J. No. 5940, 2009 ONCA 782](https://www.canlii.org/en/on/onca/doc/2009/2009onca782/2009onca782.html); and [Litman v. Sherman (2008), 2008 ONCA 485, 52 R.F.L. (6th) 239 (Ont. C.A.)](https://www.canlii.org/en/on/onca/doc/2008/2008onca485/2008onca485.html). > > [17] If the threshold requirement of a material change in circumstances is met, the judge must then enter into a consideration of the merits and make the order that best reflects the interests of the child ([Gordon v. Goertz, para. 9](https://www.canlii.org/en/ca/scc/doc/1996/1996canlii191/1996canlii191.html)). The judge on the variation application must consider the findings of fact made by the trial judge as well as the evidence of changed circumstances ([Gordon v. Goertz, para. 17](https://www.canlii.org/en/ca/scc/doc/1996/1996canlii191/1996canlii191.html)). [38] If the court finds that the threshold requirement of a material change in circumstances has been established, the court must then proceed to review the issues of custody afresh and make determinations based on what is in the child's best interest having regard to all of the circumstances in section 24 of the Children's Law Reform Act. In this fresh inquiry, both parties bear the evidentiary burden of demonstrating where the best interests of the child lie. The court should consider the matter afresh without defaulting to the existing arrangement. See [Gordon v. Goertz](https://www.canlii.org/en/ca/scc/doc/1996/1996canlii191/1996canlii191.html), and [Allen v. Allen, (1998), 38 R.F.L (4th) 96 (Ont. Gen. Div.)](https://www.canlii.org/en/on/onsc/doc/1998/1998canlii14873/1998canlii14873.html). [39] In order to determine if the conditions for a variation exist, the change of circumstances must be material as opposed to trivial or insignificant. See [Hickey v. Hickey, [1999] 2 S.C.R. 518](https://www.canlii.org/en/ca/scc/doc/1999/1999canlii691/1999canlii691.html). [40] With respect to custody, it is the father's onus on the Motion to Change the final order to establish that there has been a material change affecting the needs of N.N. and the parents' ability to meet those needs such that the final order must be reviewed. [41] In [L.M.L.P. v. L.S., [2011] SCC 64](https://www.canlii.org/en/ca/scc/doc/2011/2011scc64/2011scc64.html), the Supreme Court of Canada stated that the change must be substantial, continuing and that "if known at the time, would likely have resulted in a different order." The Supreme Court stated that it must limit itself to whatever variation is justified by the material change of circumstances. [42] On a Motion to Change, the court has the option of restricting changing the existing order to address a specific issue, while maintaining its integrity. See: [Elaziz v. Wahba, [2017] ONCA 58](https://www.canlii.org/en/on/onca/doc/2017/2017onca58/2017onca58.html). [43] Once the court determines that there has been a material change in circumstances, the court should then look at all the evidence, including the evidence predating the order from which change is being sought. See: [Segal v. Segal (2002), 26 R.F.L. (5th) 433 (Ont. C.A.)](https://www.canlii.org/en/on/onca/doc/2002/2002canlii41960/2002canlii41960.html). ### b. Relevant Evidence in Relation to the Issue of Custody of N.N. [44] N.N. is 13 years of age and will be 14 in August 2020. The evidence is that N.N. has some special needs but that he is doing well in school. The parties recently cooperated to obtain a psychological assessment of N.N. to assist them in meeting his needs. [45] In the summer of 2018, after living primarily with the mother since the parties separated in 2011, N.N. began to live primarily with the father from Monday to Friday and with the mother from Friday to Monday. This arrangement continued until July 2019 when N.N. returned to live with the mother. [46] The father's evidence does not directly address the material change that has affected the mother's ability to continue to meet N.N.'s needs. The father argues that the change in N.N.'s primary residence between the summer of 2018 and July of 2019 amounts to a material change in N.N.'s circumstances but he has not presented any specific evidence of N.N.'s needs not being adequately met by the current order. [47] The father's position is that after having the day to day care of N.N. for approximately one year during which he was actively involved in N.N.'s life including his education, he should be granted joint custody in order to be able to continue to be equally involved in making any decision affecting N.N. #### i. Communication and Cooperation Between the Parties [48] In support of his claim for joint custody, the father relies on the fact that the parties cooperated to change the parenting schedule for N.N. in the summer of 2018. He says this demonstrates an ability on behalf of the parties to cooperate effectively at a high level and justifies an order for joint custody. [49] The mother argues that there has not been a material change that affects her ability to continue to meet N.N.' needs. She does not agree that the parties are able to communicate effectively. [50] The mother's evidence is that she has only ever been able to communicate effectively with the father through a former partner, S.I. She explains that when the father was involved with S.I., all discussions regarding the children occurred between the mother and her. Now that S.I. is no longer involved with the father, the mother's evidence is that they cannot communicate effectively. [51] To support her evidence that she was only able to communicate with the father through S.I., the mother references a document entitled 'Parenting Plan Recommendations' of Marcie Goldhar, MSW, prepared during the course of this litigation pursuant to an order for a section 30 parenting assessment and delivered to the parties in June 2019. This document (not the report pursuant to the order for a section 30 assessment) was jointly entered as evidence at the trial by the parties. Ms. Goldhar's recommendations regarding the parenting schedule and decision making for N.N. are "based on the assumption that the father and [S.I] are living together". Ms. Goldhar recommends a formal review of the parenting schedule and decision making scheme if the father and S.I. are no longer living together. [52] To further demonstrate the poor level of communication between the parties, the mother emphasizes the father's failure to advise her of his relapse and hospitalization due to alcohol abuse, something she learned of from the parties' daughter O.N., not the father. This evidence is not contested by the father who acknowledges addiction issues that led to his hospitalization. [53] The father's evidence is that while their communication is frustrating and confrontational at times, there were also periods where their communication was "excellent". When asked whether his communication was sometimes disparaging the father said that he begins communication with the mother in a cordial and respectful manner but receives responses from her that require him to lecture the mother about her responsibilities which may come across as disparaging. #### ii. Considerations Pursuant to Subsection 24(4) of the Children's Law Reform Act [54] Pursuant to subsection 24(4) of the Children's Law Reform Act, the court is required to consider allegations of domestic violence in the context of a claim for custody of or access to a child. Subsection 24(4) provides as follows: > **Violence and Abuse** > > 24(4) In assessing a person's ability to act as a parent, the court shall consider whether the person has at any time committed violence or abuse against, > > (a) his or her spouse; > > (b) a parent of the child to whom the application relates; > > (c) a member of the person's household; or > > (d) any child. 2006, c. 1, s. 3 (1) ; 2016, c. 23, s. 7 (2, 3). [55] The court heard evidence of a tumultuous relationship between the parties that included physical violence directed at the mother by the father during the marriage for which he was charged and pleaded guilty. The father also admitted to seriously assaulting his brother for coming to the defense of the mother. [56] The father was charged with assaulting his former girlfriend, S.I., but the charges were dropped. He is currently awaiting trial on domestic violence charges in relation to his most recent girlfriend. The charges against the father are very serious and include assault, choking and forcible confinement. [57] The mother's evidence is that she continues to see a social worker once per month to assist her in recovering "from being in an abusive relationship" and that the father's continued pattern of domestic violence is extremely concerning. #### iii. Mother's Claims of Father's Poor Parenting Skills and Questionable Judgment [58] The mother also claims that the father's poor parenting skills and judgment make an order for joint custody contrary to N.N.'s best interests. The mother relies on a series of text messages the father secretly exchanged with N.N. to highlight his poor parenting skills. These messages were exchanged between the father and N.N. after his relapse and were initiated by the father in an attempt to scheme with N.N. to arrange to have unsupervised access, contrary to the mother's wishes. The father tells N.N. in the text messages what to say to his mother when negotiating with her and shows N.N. copies of messages he sent to the mother on the topic of his access. [59] In the text messages exchanged between the father and N.N. the father forwards N.N. copies of messages he sent the mother about access to N.N. The following are samples of the concerning messages/comments the father sent N.N.: > a. Father: It is ok baby boy. She is determined to keep you from seeing me. > > b. Father: Ok. There is something wrong with her [referencing the mother]. > > c. Father: Your loyalty is to me. Not your mom. Not anyone. > > d. Father: All you have to say is one sentence. Trust me. "Are you keeping me from my dad?" That will shut her down. I am sorry you have to go through this. > > N.N. I know but she already thinks that I think that. It's okay. > > Father: I see. > > N.N.: I am gonna ask her why and I bet I will be able to change her mind. > > Father: Ok. Stand up for yourself because if you ask that question it will freeze her. > > e. N.N.: Lol um it's not going so well because she is just really fixed about her needing a little for trust in all of this and I need to see you more. > > Father: Ok. No problems. What does she think I am going to do to my own baby? There is going to be 8 guys and 4 sons there. So what is going to happen. This is about her getting back at me using you and that is not good for kids. > > N.N.: I know and I am still trying to tell her that. > > Father: Just tell her the truth. Bottom line I have been all over the world with my dad. You are keeping him from me. I am going for the day??? You think he is going to hurt me??? That is BULLSHIT. [60] The mother says that the text messages demonstrate extremely poor parenting by the father who cannot be entrusted with the responsibilities that come with joint custody. [61] The father's evidence included an explanation for each and every text he exchanged with N.N. He sees nothing wrong with any of the messages he sent N.N. and is quite confident that the text messages are indicative of nothing but a loving, caring parent. ### c. Conclusion Regarding Custody [62] The change in N.N.'s residential schedule in the summer of 2018 constituted a material change in his circumstances. After living primarily with his mother, N.N. began living with his father from Monday to Friday and with his mother on weekends. This constitutes a material change in his life and to his needs that existed at the time the father filed his Response to Motion to Change. [63] N.N. is now back in the mother's primary care. This fact raises the question of whether there has been a material change in circumstances contemplated by the legislation given the change back to the pre-existing residential arrangement. [64] Common sense dictates that the material change in circumstances being relied upon by a party seeking to vary a custody order must still exist or at least the effects of the change must still be felt at the time of trial. It would make little sense to contemplate what order is in a child's best interests based on a historical change in his life that at the date of trial is no longer relevant to that child. [65] While there was a material change in N.N.'s life in October 2018 when the father requested an order for sole custody and primary care of N.N., that change has been nullified by the parents' decision in July 2019 for N.N. to return to live primarily with the mother. Absent any other factors, such as a change to N.N.'s school or extracurricular activities as a result of the move to the father's home, there is no material change in circumstances at the date of trial warranting a review of the custody order. Therefore, as of the date of trial, I find there has not been a material change in N.N.'s life that affects his best interests. [66] If I am incorrect assuming that the material change in circumstances being relied on by the father must still exist at the date of trial and there has in fact been a material change in circumstances justifying a review of the custody order, there is ample evidence, detailed below, to support a conclusion that a change to the custody order is not in N.N.'s best interest. [67] The parties do not communicate well with one another and the mother no longer has the father's former girlfriend with whom she got along to communicate through. There is no evidence before the court that suggests the parties have historically communicated effectively to make joint decisions regarding N.N. or that they will be able to do so effectively in the future. [68] The mother is also still attempting to cope with the impact of the domestic violence she endured during the marriage even though the parties separated 9 years ago. [69] The evidence, particularly the text messages the father exchanged with N.N., demonstrate that there is a real question as to whether the father is able to meet N.N.'s needs. The father shows no insight at all into the emotional harm he potentially subjected his son to by involving him in the adult conflict and coaching him through conversations with his mother. [70] The father's lack of insight and highly questionable judgment do not make him a suitable candidate for joint custody. When this lack of insight and poor judgment is considered in conjunction with the parties' inability to cooperate and communicate effectively, the court must conclude that an order granting the parents joint custody is not in N.N's best interests. [71] While N.N.'s parents may not be faced with any major decisions between now and when he begins to make them for himself, should they arise, the court finds that if there was a material change in circumstances, it is N.N.'s best interest that the mother have sole custody as she has demonstrated an ability to meet N.N's needs whereas the father has not. --- ## Issue #2 – What Order for Access by the Father to N.N. Is in N.N.'s Best Interests? ### a. Legal Considerations [72] The parties' Separation Agreement dated September 18, 2015 provides that "[R.N] shall continue to have access to the children as requested and access will not be unreasonably withheld." The access provision of the parties' Separation Agreement was not incorporated into a court order. The court does not have jurisdiction to vary the terms of a Separation Agreement. Therefore, the father's claim is treated as a fresh Application and not a Motion to Change. [73] While the father did not issue an Application seeking an order for access to N.N., the mother did not object to the manner in which the father is seeking to change the terms of access as set out in the Separation Agreement. [74] Subsection 24(1) of the Children's Law Reform Act sets out the test to be applied on an Application for access as follows: > 24 (1) The merits of an application under this Part in respect of custody of or access to a child shall be determined on the basis of the best interests of the child, in accordance with subsections (2), (3) and (4). 2006, c. 1, s. 3 (1). [75] Subsection 24(2) sets out a non exhaustive list of factors for the court to consider when determining access to a child as follows: > **Best Interests of Child** > > (2) The court shall consider all the child's needs and circumstances, including, > > (a) the love, affection and emotional ties between the child and, > > (i) each person, including a parent or grandparent, entitled to or claiming custody of or access to the child, > > (ii) other members of the child's family who reside with the child, and > > (iii) persons involved in the child's care and upbringing; > > (b) the child's views and preferences, if they can reasonably be ascertained; > > (c) the length of time the child has lived in a stable home environment; > > (d) the ability and willingness of each person applying for custody of the child to provide the child with guidance and education, the necessaries of life and any special needs of the child; > > (e) the plan proposed by each person applying for custody of or access to the child for the child's care and upbringing; > > (f) the permanence and stability of the family unit with which it is proposed that the child will live; > > (g) the ability of each person applying for custody of or access to the child to act as a parent; and > > (h) any familial relationship between the child and each person who is a party to the application. 2006, c. 1, s. 3 (1) ; 2009, c. 11, s. 10 ; 2016, c. 23, s. 7 (1, 2); 2016, c. 28, s. 2. [76] The test with respect to the father's access to N.N. is not whether there has been a material change in circumstances but rather one of best interests. The court is required to decide this issue based on the evidence of what is best for N.N. now with some consideration given to the terms of the parties' Separation Agreement. See: [Askalan v. Taleb, ONSC 2012 4746](https://www.canlii.org/en/on/onsc/doc/2012/2012onsc4746/2012onsc4746.html); [Van Heighten v. Catarino, 2017 ONCJ 103](https://www.canlii.org/en/on/oncj/doc/2017/2017oncj103/2017oncj103.html). ### b. Relevant Evidence in Relation to the Issue of Access [77] After the father admitted himself to hospital in the summer of 2019, the mother has insisted on his access to N.N. being supervised. The father argues there is no reason for his access to N.N. to be supervised. He recognized that he was abusing drugs and alcohol and sought treatment. When he realized he was not well, he instructed D.N. and N.N. to leave his home to live with the mother and removed himself from his children's lives recognizing that they should not witness his self-destruction. He says the steps he took exemplifies good parenting skills. [78] The mother insists that the father's contact with N.N. should be supervised until she has received sufficient information about his treatment and progress. [79] The mother is also worried about the father's insistence on involving N.N. in their conflict. She claims he shares his anger towards her and belief that she is responsible for their limited contact with N.N. She is concerned about the effect of the father's behaviour on N.N. [80] Conversely, the father sees no harm in relation to his actions involving N.N. He justifies the conversations he has had with N.N. explaining that he cannot let his son think that he does not want to see him. He readily admits to coaching his son on how to talk to his mother and what to say to her to get what he wants. ### c. Conclusion Regarding Access [81] N.N. will be 14 years old in August 2020. His contact with his father need not be supervised. Such a restriction is rarely imposed on contact with a 13 or 14 year old. That being said, the mother should have some understanding of the father's treatment and progress especially since he claims he was not well enough to work. [82] The mother's concern about the father involving N.N. in the adult conflict is a legitimate concern. The remedy is not to limit the father to supervised access as this may only serve to upset N.N. and place blame on his mother for being unable to spend more time with his father. [83] The parties should cooperate to arrange for meaningful contact between N.N. and his father, on alternate weekends from Friday to Monday and one mid-week overnight with pick up and drop off at school provided such extended access is consistent with N.N.'s wishes. N.N. should also enjoy holiday access with his father. --- ## Issue #3 - What Income Should Be Imputed to the Father for the Purpose of Determining Child and Spousal Support Given That He Earns Income From a Company Based in the UAE, Does Not File Income Tax Returns or Pay Income Tax in Canada or the UAE and Has the Bulk of His Personal Expenses Paid by His Employer? ### a. Legal Considerations [84] Section 19 of the Child Support Guidelines provides that the court may impute to a parent or spouse "such amount of income … as it considers appropriate" and provides a non-exhaustive list of such circumstances. The relevant portions of s. 19 read as follows: > 19.(1) Imputing Income – The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include the following: > > (a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the spouse; > > (b) the parent or spouse is exempt from paying federal or provincial income tax; > > (c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada; > > (d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines; > > (f) the parent or spouse has failed to provide income information when under a legal obligation to do so; [85] The above is a non exhaustive list and as such, the court has discretion to impute income based on other circumstances. [86] Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. Clause 19(1)(a) of the Child Support Guidelines is perceived as being a test of reasonableness. See [Drygala v. Pauli, [2002] O.J. No. 3731(Ont. CA)](https://www.canlii.org/en/on/onca/doc/2002/2002canlii41868/2002canlii41868.html). [87] The determination to impute income is discretionary as the Court considers appropriate in the circumstances of the case. In exercising discretion, a court will bear in mind the objectives of the Child Support Guidelines to establish fair support based on the means of the parents in an objective manner that reduces conflict, ensures consistency and encourages resolution. See: [Bak v. Dobell, 2007 ONCA 304](https://www.canlii.org/en/on/onca/doc/2007/2007onca304/2007onca304.html). [88] Lifestyle can provide the criteria for imputing income. See: [Aitken v. Aitken [2003] O.J. No. 2780 (SCJ)](https://www.canlii.org/en/on/onsc/doc/2003/2003canlii41960/2003canlii41960.html); [Jonas v. Jonas [2002] O.J. No. 2117 (SCJ)](https://www.canlii.org/en/on/onsc/doc/2002/2002canlii41960/2002canlii41960.html); [Price v. Reid, 2013 ONCJ 373](https://www.canlii.org/en/on/oncj/doc/2013/2013oncj373/2013oncj373.html). Where there are no other accurate indicators of income, the court has looked at the cost of the payor's lifestyle and imputed income based on that assessment. See: [Reyes v. Rollo, [2001] O.J. 5110 (SCJ) at para 62](https://www.canlii.org/en/on/onsc/doc/2001/2001canlii28260/2001canlii28260.html). [89] Where a party fails to comply with his disclosure obligations as provided for in s. 21 of the Child Support Guidelines and provide full financial disclosure relating to their income, the court is entitled to draw an adverse inference and to impute income to them. See: [Gray v. Rizzi, 2016 ONCA 494](https://www.canlii.org/en/on/onca/doc/2016/2016onca494/2016onca494.html), [Szitas v. Szitas, 2012 ONSC 1548](https://www.canlii.org/en/on/onsc/doc/2012/2012onsc1548/2012onsc1548.html); [Woofenden v. Woofenden, 2018 ONSC 4583](https://www.canlii.org/en/on/onsc/doc/2018/2018onsc4583/2018onsc4583.html). [90] In [Graham v. Bruto, 2008 ONCA 260](https://www.canlii.org/en/on/onca/doc/2008/2008onca260/2008onca260.html), the court inferred that the failure to disclose would mitigate the obligation of the recipient to provide an evidentiary basis to impute income. ### b. The Relevant Evidence With Respect to the Issue of the Father's Income [91] Since commencing employment with CCG UAE, the father has not filed income tax returns in Canada not having lived here the requisite number of days triggering his obligation to do so. He is also not required to file income tax returns in the UAE. [92] The father accepts that his income will have to be grossed up for income tax to account for the fact that his income is not subject to income tax in Canada or the UAE. [93] The father's evidence is that his income for the purpose of child support is as follows: | | 2016 | 2017 | 2018 | 2019 | |---|---|---|---|---| | | $233,715.00 | $466,276.00 | $578,215.00 | $207,800.00 | [94] The mother's position is that the father's income for child support purposes is much higher. Her calculations are based on her interpretation of the father's employment contract. The mother argues that as the father has failed to provide any financial disclosure to demonstrate what expenses were paid for him by the company and in what amount, 100% of each benefit as defined in the employment contract should be attributed to the father and grossed up for income tax. [95] The father's employment contract provides for a base salary of $106,000.00; an annual bonus that is guaranteed at 50% of the base salary for the first two years; and"non taxable and recoupable" benefits including the following: > a) Vacations – three all expenses paid vacations per annum; > > b) Housing allowance – reasonable costs and expenses of temporary housing; > > c) Car Allowance – not to exceed $5000.00 per month > > d) Clothing allowance - $50,000.00 the first year and $20,000.00 each additional year plus a one time allowance of $20,000.00 to be used in the first 36 months of the contract; > > e) Personal legal fees – all legal fees and expenses toward any potential litigation not to exceed $100,000.00. [96] The mother claims the following incomes should be imputed to the father: | | 2016 | 2017 | 2018 | 2019 | |---|---|---|---|---| | Non taxable income | $377,127.00 | $347,127.00 | $327,100.00 | $322,180 | | Gross Up amount for child support | $730,794.00 | $666,237.00 | $623,141.00 | $612,553.00 | [97] The father says the mother's calculations are faulty as he did not incur expenses to the maximum amount allowed by his employment contract, and he is potentially liable to repay the "recoupable benefits". He relies on a letter from his employer that sets out the actual amount of personal expenses the company claims to have paid on his behalf. They are as follows: | | 2016 | 2017 | 2018 | 2019 | |---|---|---|---|---| | Salary | $106,000.00 | $116,000.00 | $116,000.00 | $77,635.03 | | Bonus | Nil | $31,000.00 | $66,900.00 | Nil | | Housing in Canada | $4,750.00 | $38,000.00 | $45,000.00 | $26,000.00 | | Car allowance in Canada | $18,200.00 | $18,200.00 | $42,000.00 | $23,000.00 | | Clothing allowance | $13,330.00 | $25,050.90 | $21,030.00 | $3840.00 | | Three paid vacations | Nil | $22,100.00 | $11,440.00 | Nil | [98] The mother argues that the letter from the father's employer is not reliable as it is not signed (there is only a corporate seal on the letter) and the father's evidence at trial differs from the information contained in the letter. [99] An example of the father's oral evidence that differs from the information contained in the letter from his employer is that the company has paid legal fees for him in the approximate amount of $20,000.00. The father could not explain why this information was not included in the letter from CCG UAE. [100] A further example of the unreliability of the letter from CCG UAE is that it did not disclose the payment of a bonus in full owing to the father for 2016 and 2017. When he was asked why the letter from CCG UAE did not include a bonus of $50,000.00 for his first two years, the amount guaranteed under the terms of his employment contract, the father explained that CCG UAE had paid his bonus to third parties for his benefit. He could not explain why this information was not contained in the letter or in his affidavit evidence in chief. [101] The father failed to produce any supporting documents such as bank records, to corroborate the information contained in the letter from CCG UAE. In fact, when asked if he would agree that his financial disclosure is lacking, he said"Yes, it is horrific and makes me look like an income dodger." ### c. Disclosure Issues [102] The father had ample opportunity to produce the financial disclosure that would have assisted the parties and the court in better understanding his income. The following is only a partial list of the father's failings with respect to financial disclosure: > a) He failed to produce bank statements showing deposits of his base salary and bonus. > > b) He failed to provide any evidence corroborating what bonus was paid to him or third parties on his behalf. > > c) He failed to provide any corroborating evidence of the exact amounts his employer paid towards his personal expenses. > > d) He failed to provide any income tax returns for himself or his corporation prior to commencing employment with CCG UAE. > > e) He failed to provide copies of any bank account or credit card statements. > > f) He failed to provide any evidence of his debts. [103] On October 18, 2018, the father consented to a court order requiring him to produce an income analysis. He retained a valuator and was expected to produce the income analysis within 90 days. A report was never provided to the mother or the court. [104] The father explains that he agreed to provide an income analysis but "had no idea" what it would cost. He said he could not afford to pay the $19,000.00 requested from the valuator while paying Ms. Goldhar to prepare parenting recommendations for N.N. He explains that his son's needs come first and that he knows his failure to provide the court ordered income analysis "is burying me before the court". [105] The evidence detailing the father's failure to provide adequate financial disclosure in this proceeding in described as a pattern by the mother as she says he behaved the same way throughout the previous litigation. Between April 15, 2013 and October 22, 2013, various orders were made requiring the father to provide the mother with extensive financial disclosure. On October 22, 2013, Justice Harvey Brownstone granted the mother leave to bring a motion to strike the father's pleadings if he did not comply with outstanding disclosure orders. The father never complied with the disclosure orders. ### d. Analysis of the Evidence [106] The father is paid $106,000.00 base salary or $8833.33 per month tax free. If an annual bonus of $50,000.00 or $4167.00 per month is included as income to the father, he would have disposable income of $13,000.00 per month. The mother is seeking a monthly child support payment (not including spousal support) that in one year exceeds the father's monthly disposable income and in other years makes up anywhere from approximately 60% to 95% of it. [107] The father's patchwork of information regarding his income makes it very difficult for the court to determine his true income for child support purposes. While it is tempting to prefer the mother's position and simply impute the maximum income available to the father under his employment contract and grossing it up for income tax, I decline to take that approach as it will result in a calculation that triggers a child support payment that the father cannot pay. [108] Instead of relying on either party's approach to calculating the father's income, the letter from the father's employer will form the basis for the first step in calculating the father's income for child support purposes. The second step will involve adding in other amounts paid to the father or to third parties on his behalf as disclosed in his evidence but not included in the letter from his employer. The final step will be to determine what amount of non taxable income is to be grossed up for income tax not paid by the father. [109] I find that this three step process to determining the father's income is the most reasonable approach and results in a quantum of child support that promotes the objectives of the Child Support Guidelines including "to establish a fair standard of support for children that ensures that they benefit from the financial means of their parents" and "to ensure consistent treatment of parents or spouses and their children who are in similar circumstances." #### Step 1 - Information Regarding Father's Income Contained in Letter From CCG UAE [110] Paragraph 97 above sets out the amounts the father claims his employer paid him in salary and bonus as well as the amounts paid towards his personal expenses. I will recreate the chart here for ease of reference. | | 2016 | 2017 | 2018 | 2019 | |---|---|---|---|---| | Salary | $106,000.00 | $116,000.00 | $116,000.00 | $77,635.03 | | Bonus | Nil | $31,000.00 | $66,900.00 | Nil | | Housing in Canada | $4,750.00 | $38,000.00 | $45,000.00 | $26,000.00 | | Car in Canada | $18,200.00 | $18,200.00 | $42,000.00 | $23,000.00 | | Clothing allowance | $13,330.00 | $25,050.90 | $21,030.00 | $3840.00 | | Three paid vacations | Nil | $22,100.00 | $11,440.00 | Nil | [111] The letter from the father's employer advises that in 2016 it paid $4,750.00 towards the father's living expenses in Canada. The father's evidence is that he moved back to Canada from the United States at the end of 2016, beginning of 2017. The letter from the father's employer fails to advise of what, if any, amount it paid towards the father's living expenses in the United States. It is difficult to accept that despite being employed by CCG UAE for all of 2016, the father only incurred living expenses of $4,750.00 especially since his employer paid $38,000.00 in 2017 and $45,000.00 in 2018 for this expense. [112] Once again despite his obligation to do so, the father has not provided any evidence to substantiate the amounts paid by his employer for his personal expenses. He has also failed to explain the discrepancy in the amounts paid towards housing in 2016, 2017 and 2018. Given the father's overall failure to comply with his disclosure obligations and the findings regarding his credibility, I am fixing housing expenses paid by the employer in 2016 at $38,000.00 which is consistent with 2017 and 2018. Based on the all the evidence, the amount the company reports it paid for the father's housing in 2016 appears to be an error. #### Step 2 – Additional Information Regarding Father's Income Provided by Father and Not Contained in Letter From CCG UAE [113] According to the letter from the father's employer, in 2016 and 2017 he was not paid the bonus the company was contractually bound to pay him. The contract guarantees the father in his first two years of employment a bonus equal to 50% of his base salary yet the letter provided by the company states that no bonus was paid in 2016 and $33,000.00 was paid in 2017. [114] In an attempt to explain this discrepancy, the father gave evidence that some of his bonus was paid to third parties on his behalf and might not have been included in the letter from CCG UAE. As the father provided no financial disclosure on this issue and could not adequately explain why he was not paid the full bonus due to him as per the terms of his employment contract, he will be imputed a bonus of $50,000.00 for 2016 and 2017 as opposed to the lower amounts set out in the letter from the employer. [115] The father also gave evidence that his employer has paid legal fees for him in the approximate amount of $20,000.00. This was not disclosed on the letter from CCG UAE and will be added in as income to the father for 2019. #### Step 3 – Should Non Taxable Income Paid to the Father Be Grossed Up for Income Tax? [116] According to the letter from the father's employer, in addition to his base salary and potential bonus, the company pays for his housing, three annual vacations, car and clothing expenses. Only the clothing and car allowance have limits, albeit very high limits. The father, therefore has broad discretion over the amounts he spends on these personal expenses. The father also has legal expenses paid by his employer that was not disclosed in the letter. [117] The amount paid by the employer for the father's personal expenses is so significant that if grossed up for income tax it would create a scenario where the father would have to pay child support that in some years exceeds or comes close to his actual disposable income. [118] The purpose of grossing up non taxable income for income tax is to achieve consistency between payors who pay less income taxes and therefore have more funds available with which to pay support. See: [Riel v. Holland, [2003] O.J. No. 3901 (CA)](https://www.canlii.org/en/on/onca/doc/2003/2003canlii3433/2003canlii3433.html); [Orser v. Grant, [2003] O.J. No. 1669 (SCJ)](https://www.canlii.org/en/on/onsc/doc/2003/2003canlii41960/2003canlii41960.html); [Sarafinchin v. Sarafinchin, [2000] O.J. No. 2855 (SCJ)](https://www.canlii.org/en/on/onsc/doc/2000/2000canlii22639/2000canlii22639.html). [119] Courts routinely gross up non taxable income for income tax for the purpose of determining a payor's true income for child support. Courts also routinely gross up benefits of employment enjoyed by a payor, as having your car or residential expenses paid by your employer frees up more funds with which to pay child support. While the amounts paid to the father as base salary and bonus will be grossed up for income tax, grossing up the amounts paid to him or third parties on his behalf for personal expenses in this case would create an inaccurate assessment of the father's income that is available to pay child support. [120] The father resides in a large house in Toronto for which he pays $6500.00 per month in rent; he leases luxury cars such as a Ferrari, Land Rover and Mercedes; he purchases designer clothing and handbags for the parties' daughters and enjoys high end travel all at the expense of his employer. While these benefits would normally be grossed up for income tax, doing so in this case would be unreasonable as it would result in an income that would generate an amount of child support that the father would not have the cash flow to pay. [121] If either party had suggested that a more reasonable budget be attributed to the father for his housing, car, clothing, travel and other expenses paid for him by his employer, one that was arguably more commensurate with his income and then grossed up for income tax, I would have given that argument consideration. Neither party made such an argument. As a result, I have chosen to add to the father's income the amounts paid by his employer for his personal expenses, but I will not gross up these amounts for income tax. [122] I find that in order to achieve a fair and reasonable result and one that promotes the objectives of the Child Support Guidelines, the base salary and bonus received by the father will be grossed up for income tax while the other amounts paid to the father or third parties for his personal expenses will be included as income but will not be grossed up for income tax. ### e. Conclusion Regarding Father's Income for 2016, 2017 and 2018 [123] For the purpose of child support, I find the father's income from 2016 to 2018 to be based on the following findings regarding income and personal expenses paid for him or on his behalf by his employer: | | 2016 | 2017 | 2018 | |---|---|---|---| | Salary – to be grossed up | $106,000.00 | $116,000.00 | $116,000.00 | | Bonus - to be grossed up | $50,000.00 | $50,000.00 | $66,900.00 | | Housing in Canada – no gross up | $38,000.00 | $38,000.00 | $45,000.00 | | Car allowance in Canada – no gross up | $18,200.00 | $18,200.00 | $42,000.00 | | Clothing allowance – no gross up | $13,330.00 | $25,050.90 | $21,030.00 | | Three paid vacations – no gross up | Nil | $22,100.00 | $11,440.00 | | Legal Fees – no gross up | Nil | Nil | $20,000.00 | | **Total Income** | **$324,479.00** | **$385,538.00** | **$452,306.00** | ### f. Father's Income for 2019 and 2020 [124] The father's evidence is that he has not worked after relapsing in July 2019. The father produced a letter from his employer dated February 20, 2020 that states he has been on unpaid leave since August 5, 2019. The letter dated February 24, 2020 from CCG EAU setting out the amounts paid to or on behalf of the father in 2019 provides that he was paid $77,635.03 in salary; no bonus; $26,000.00 in housing expenses; $23,000.00 in car expenses; $3840.00 in clothing allowance; and, nothing towards vacations. The father therefore argues that his income for the purpose of child support in 2019 should be $207,800.00. ### g. Father's Credibility [125] Much like the father's evidence on his pre-2019 income, the court has very little to rely upon for 2019 and 2020. The father's evidence is that he started abusing drugs and alcohol in the summer of 2019 and went on unpaid leave from work. He produces an unsigned letter with a corporate seal from CCG UAE to corroborate his evidence. As a result of his unpaid leave, the father claims that he no longer has his housing and other expenses paid for by the company. [126] When asked how he is supporting himself, the father gave evidence that he is selling items on line. He said he is arrears of rent and subject to eviction. He said he is in significant debt. [127] The father's evidence on this issue is not believable. The evidence does not support his claim that he has been unable to work since August 2019 or that he is in fact not working. The following are some examples of the father's evidence that paved the way to this conclusion: > a) The father swore a financial statement on February 24, 2020 in which he states that his rent and utilities, vehicle and health insurance premiums are being paid for by his employer despite claiming to be on unpaid leave since August 5, 2019. > > b) The father produced a letter from a psychologist dated February 14, 2020 that states he met with the father on two occasions and that the father intends on pursuing counselling with him. The writer states in the letter"My understanding is that he is currently on house arrest. One concern is that his inability to move freely to have client meetings would handicap his business, causing him subjective distress, and making it harder for him to recover." One can only conclude from this letter that the father was working in February 2020 and disclosed this fact to his psychologist. > > c) The father gave evidence that even though he was not working, on January 13, 2020 he purchased a flight to Las Vegas to send a manager as there was an opportunity to re-establish himself with the company and generate new business. > > d) When asked why the letter from his employer did not set out the amount of legal fees paid for him, the father said that the figure was not included because it has not yet been calculated and is "a moving target". Why would CCG UAE be paying the father's current legal fees if he is on unpaid leave? > > e) After giving evidence that he had lost his passport, the father was asked when he last left Canada. In his answer he revealed that he had just found his passport and went to Mexico the previous week on business for 4 days. He said he went to meet with a "senior director" to "mend some bridges". ### h. Conclusion Regarding the Father's Credibility [128] Income must be imputed to the father in 2019 and each year thereafter based on the findings made with respect to his 2018 income of $452,306.00 as this is the most reliable information before the court due to the father's failure to: > a) Provide any financial disclosure to substantiate his income; > > b) Provide any meaningful evidence to support his position that he could not work between August 2019 and March 2020; > > c) Explain the inconsistencies between his oral evidence and the documentary evidence he submitted to explain his income; and, > > d) Explain the inconsistencies in his evidence with respect to his evidence that he could not work between August 2019 and March 2020. --- ## Issue #4 - What Amount of Ongoing Child Support Should Be Paid by the Father to the Mother, Including Contribution Towards Special or Extraordinary Expenses, From the Date of the Motion to Change? ### a. The Evidence [129] The mother issued her Motion to Change on May 3, 2018. The evidence regarding which children were entitled to child support as of May 3, 2018 to date is not in dispute. [130] The following evidence is not disputed: > a) As of May 2018, L.N. and O.N., had both completed their education and were no longer entitled to child support from either parent; > > b) Between the summer of 2018 and July 2019 D.N. spent equal time in each parent's care and N.N. spent Monday to Friday with the father and Friday to Monday with the mother; and, > > c) As of August 2019, D.N. and N.N. have lived primarily with the mother. [131] Therefore, child support from the date of the Motion to Change is only payable for D.N. and N.N. [132] The mother works full time as a dental hygienist and her income in 2018 was $71,323.00. As set out above, the father's income in 2018 for the purpose of child support is imputed at $452,306.00. Pursuant to section 9 of the Child Support Guidelines, the shared parenting arrangement for D.N. triggers a different approach to determining child support for D.N. N.N. residing primarily with the father triggers child support payable by the mother to the father. [133] Section 9 of the Child Support Guidelines requires the court in a shared parenting arrangement to determine child support by considering, > a) The amounts set out in the applicable tables for each of the parents or spouses; > > b) The increased costs of shared custody arrangements; and, > > c) The condition means, needs and other circumstances of each parent or spouse and of any child for whom support is sought. [134] As neither party called evidence of the increased cost of having D.N. in their care 50% of the time between the summer of 2018 and July 2019, I am going to order child support for that period in the amount equal to the set off of each party's child support obligation for D.N. This will result in the father paying the mother child support for D.N. which will be reduced by the mother's obligation to pay the father child support for N.N. The mother will have roughly $7378.00 in net disposable income while the father will have $10,638.00. This results in a fair distribution of the parties' incomes given that N. N. was residing primarily with the father and D.N. was living with him 50% of the time. In addition, during the period in question, the father paid significant section 7 expenses for N.N. without contribution by the mother. [135] Accordingly, from July 1, 2018 until July 1, 2019, the father shall pay the mother child support of $2394.00 per month. This is based on a set off of the father's child support obligation of $3476.00 against the mother's support payment of $1082.00. It is not disputed that the father paid the mother $2000.00 per month in child support during this period and he shall receive credit for that payment. [136] As of August 2019, the father is obliged to pay full table child support for D.N. and N.N. of $5705.00 subject to his argument that it would be inappropriate for him to pay child support on any income over $150,000.00 pursuant to section 4 of the Child Support Guidelines. --- ## Issue #5 - Application of Section 4 of the Child Support Guidelines [137] Section 3 of the Child Support Guidelines provides that child support for children under the age of majority is the amount set out in the applicable provincial tables based on the support payor's income. Subsection 4(a) of the Child Support Guidelines provides that where a payor's income is over $150,000.00 the amount of child support payable for a child is the amount determined under section 3, otherwise known as the presumptive rule. Subsection 4(b) of the Child Support Guidelines provides that if the court considers the presumptive amount to be "inappropriate", child support shall be calculated as follows: > a) The table amount for the first $150,000.00 of the payor's income; > > b) With respect to the balance of the payor's income, the amount the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each parent to contribute to the support of the children; and, > > c) Any amount determined under section 7. [138] The father argues that it would be inappropriate for him to pay table child support on his entire income. He says application of the presumptive rule would result in a quantum of child support that far exceeds the children's needs and results in a windfall to the mother. He says it would be appropriate for him to pay table child support on his first $150,000.00 of income and zero on the balance. [139] The Supreme Court of Canada in [Francis v. Baker, [1999] 3 SCR 250](https://www.canlii.org/en/ca/scc/doc/1999/1999canlii659/1999canlii659.html), considered the meaning of the word "inappropriate" in subsection 4(b) of the Child Support Guidelines and concluded at paragraph 40 that the court "must take into account the ordinary meaning of the word" and it "must be broadly defined to mean "unsuitable" rather than merely "inadequate". Courts thus have the discretion to both increase and reduce the amount of child support prescribed by the strict application of the Guidelines in cases where the paying parent has an annual income exceeding $150,000." [140] In [R. v. R.](https://www.canlii.org/en/on/onca/doc/2000/2000canlii41875/2000canlii41875.html), the Court found that the family's lifestyle and pattern of expenditures were relevant in determining appropriateness under section 4 of the Child Support Guidelines. [141] The father acknowledges living a lavish lifestyle and showering his children with expensive travel and gifts and fine dining. Conversely, the mother is unable to meet her basic expenses on her income and relies on her mother to pay her car lease and insurance as well as her home insurance. [142] While the father was reimbursed $22,100.00 by his employer in 2017 and $11,400.00 in 2018 for vacations, on her financial statement sworn February 11, 2020, the mother discloses an annual budget of $2400.00 for vacations. While the father acknowledges that he has purchased thousands of dollars in designer clothing and hand bags for his children, the mother discloses an annual clothing budget of $1800.00. ### a. Conclusion Regarding Applicability of Section 4 of the Child Support Guidelines [143] While the father submits that application of the presumptive approach towards calculating child support on his entire income would be inappropriate, he called no evidence to support his claim. He did not provide the court with evidence that establishes that the table amount of child support would far exceed the children's needs. [144] The evidence does not support a finding that requiring the father to pay the mother child support of $5705.00 per month for D.N. and N.N. would be inappropriate in all of the facts of this case. --- ## Issue #6 - Should the Father Be Required to Pay a Retroactive Increase in Child Support and If He Should, the Court Must Determine If Any of the Children Lived With the Father for 40% of the Time or More During the Periods in Question and Whether That Effects the Amount of Child Support Payable? ### a. Legal Considerations [145] The principles set out by the Supreme Court of Canada in [D.B.S. and S.R.G. v. T.A.R. and L.J.W., (2006) 2006 SCC 37, 2 S.C.R. 231](https://www.canlii.org/en/ca/scc/doc/2006/2006scc37/2006scc37.html), (D.B.S.) structure the court's jurisdiction to order retroactive child support payments. In that decision the Court articulated two overarching principles governing claims for retroactive child support and retroactive increases in support: 1) Each parent has an obligation to ensure that his/her child receives proper support in a timely manner; and 2) courts considering these claims must balance the payor's interest in the certainty of the status quo with the need for fairness and flexibility. At paragraph 133, the Court set out four factors to be considered in such claims: > 1. Reason for the delay in bringing the claim; > > 2. Conduct of the payor parent; > > 3. Circumstances of the child; and, > > 4. Hardship that may be caused by a retroactive award. [146] None of the above factors are decisive or take priority and all should be considered in a global analysis. In determining whether to make a retroactive award, a court will need to look at all of the relevant circumstances in front of it. [147] The Court in D.B.S. held that if a retroactive award is appropriate, it should usually commence on the date of effective notice, being the date when the recipient advised the payor that support should be paid or renegotiated. An earlier date may be appropriate if there is blameworthy conduct by the payor, but generally a retroactive award should not commence earlier than three years before formal notice (notice of a court proceeding) was given. However, in cases of blameworthy conduct by the payor, an even earlier commencement date may be in order. The retroactive support analysis in D.B.S. equally applies to claims for retroactive section 7 expenses. [148] At paragraph 106 of D.B.S., the Court defines blameworthy conduct as any conduct that privileges the payor parent's own interests over his or her children's right to an appropriate amount of support. [149] The mother seeks an increase in child support retroactive to January 1, 2016 on the basis that the father was not forthcoming about his income at the time the parties negotiated their Separation Agreement. The father opposes a retroactive increase in child support in part because he says that between 2016 and 2018 all four children spent at least 40% of the time in his care while the mother claims this is inaccurate and that they all lived primarily with her until September 2018. ### b. The Evidence Relevant to the Mother's Claim for Retroactive Child Support #### 1. Reason for Delay in Bringing the Claim [150] The mother gave extensive evidence of her observations of the father's lifestyle between 2017 and 2018 that suggests he enjoyed a significant increase in his income since the parties executed the Separation Agreement in 2015. She referenced the expensive homes he lived in and the luxury cars he drove. She detailed the exotic locales he vacationed with the children and the expensive gifts he bought them. [151] The mother's evidence is that in 2017 she asked the father to provide her with $400.00 per month in additional child support for the children. She said he paid the increase in 2017 in one lump sum. The father admits making a lump sum payment to the mother in May 2017 but claims in his evidence that this payment was required of him in order to obtain permission from the mother to travel with N.N. to Dubai. [152] The mother says that when the father did not continue to pay the increased amount of child support in 2018, she hired a lawyer and wanted to bring the Motion to Change earlier but that the delay was due to her attempts to reach an agreement through direct discussions with the father. [153] The father says the mother's delay in moving before the court was unreasonable and should disentitle her to a retroactive award. I disagree. [154] The father lived outside of Canada following execution of the Separation Agreement until the end of 2016. Therefore, the mother could only begin to observe the changes to father's lifestyle in 2017. The father did not volunteer information about the change to his income. She had to form her own conclusions based on her observations. [155] The mother's evidence she asked the father to increase his child support payments in 2017 is uncontested. The father was asked to acknowledge that the mother requested an increase in child support from him after observing the changes to his standard of living and his response was"I refuse to speak badly of [ C.S. ] in court". [156] The mother's delay in bringing this Motion to Change in May 2018 is not unreasonable in all of the facts of this case. The mother only began to witness the changes to the father's lifestyle in 2017. I accept the mother's evidence that she asked the father to increase his child support payments in 2017 and he gave her a lump sum payment in 2017 but failed to continue to pay the increase in 2018. After he failed to pay an increased amount in 2018 the mother hired a lawyer, gathered the necessary information, prepared court documents and issued her Motion to Change the beginning of May 2018. #### 2. Conduct of the Father [157] While the father paid child support in accordance with the terms of the Separation Agreement, he admits that he failed to advise the mother that within weeks of executing the Separation Agreement he secured employment that significantly increased his income. In fact, he was in the midst of negotiating the terms of his employment simultaneously with negotiating the Separation Agreement. [158] The father's evidence is that he understood that the child support set out in the Separation Agreement was based on the Child Support Guidelines and an annual income of $90,000.00. He said that he would never have agreed to pay child support of $2000.00 per month if he did not believe he would be able to make the payments. As he was negotiating a base salary around $100,000.00 with CCG UAE, he concluded he would be able to make the payments and agreed to the $2000.00 figure for child support. [159] Knowing that the child support agreed upon was based on a gross taxable income of $90,000.00, the father ought to have known that the terms of his employment contract generated a much larger child support obligation. He negotiated handsome terms of employment that equate to gross income of at least $320,000.00 to $450,000.00 Canadian. [160] The terms of the father's employment results in him enjoying expensive housing and travel, a generous clothing budget, and leasing high performance sports cars including a Ferrari, all at the expense of his employer. While enjoying the benefit of having most of his personal expenses paid for by his employer, he continued to pay the mother only $2000.00 per month in child support for his four children. [161] The father should have taken the necessary steps to adjust his child support payments immediately upon executing the employment contract with CCG UAE. By failing to do so, he made the choice to take the risk that in the future he may be saddled with a retroactive increase that would result in significant arrears of child support owed to the mother. [162] The father's conduct is without a doubt blameworthy. While he enjoyed a lifestyle that would require a Canadian income in excess of $400,000.00 per year to fund, he was content to pay the mother child support for their four children of only $2000.00 per month, a figure he knew is based on an annual income of $90,000.00. Therefore, the father preferred his interests to his children's right to an appropriate amount of support. #### 3. Circumstances of the Children [163] D.N. and N.N. both live with their mother and are in full time attendance at school. They will clearly benefit from a retroactive increase in child support. [164] O.N. and L.N. have both completed their post-secondary education and the uncontested evidence is that the father contributed towards the cost of their education. From the summer of 2018 until July 2019 they lived primarily with their father. As of August 2019, or around that time, they have lived on their own. As they do not live with their mother, they would not directly benefit from a retroactive increase in child support for them. [165] The mother did not give evidence of any benefit to L.N. and O.N. if she were to receive retroactive child support for them. #### 4. Hardship That May Be Caused by a Retroactive Order [166] The father claims to have a significant debt with CCG UAE exceeding $400,000.00. He claims that the benefits he receives pursuant to his employment contract are recoverable by CCG UAE at their insistence. He explains that he would have to repay the amounts paid by CCG UAE on his behalf towards housing, cars, clothing etc., if he does not excel at his job. He acknowledges that currently he has not been asked to repay any amount to CCG UAE. [167] The father did not provide any documentary evidence to support his claim that he owes his employer over $400,000.00. [168] Based on the evidence, the court has no reliable information to determine if the father owes a legitimate debt to his employer. It was his onus to provide that evidence. [169] The court rejects the father's claim that he is not working. His evidence is that he is slowly repairing relationships and beginning to build his business. He did not give evidence that his employment with CCG UAE has been terminated. That being the case, he has the potential to make a significant amount of tax free income as a result of the terms of his employment contract. [170] As the father has not provided any financial disclosure that the court can rely upon to determine whether a retroactive order will cause him hardship, the court chooses to exercise its discretion to draw a negative inference against him and assume little to no hardship will be experienced by the father as a result of a retroactive increase in his child support payment. ### c. Conclusion With Respect to a Retroactive Increase in Child Support #### i. O.N. and L.N. [171] The court finds that a retroactive increase in child support with respect to L.N. and O.N. should not be granted based on the following facts: > a) O.N. and L.N. are no longer entitled to child support and it is likely they will not benefit from a retroactive increase in child support; > > b) O.N. and L.N.'s post-secondary education was paid for in part by the father; > > c) There is no evidence before the court that O.N. and L.N. incurred any debt to fund their post-secondary education; > > d) There is no evidence before the court that the mother has accumulated debt providing for L.N. and O.N.; > > e) There is no evidence before the court that O.N. and L.N. were deprived of any opportunities or disadvantaged as a result of the order for child support that the mother is seeking to increase retroactively. #### ii. D.N. and N.N. [172] The mother seeks an increase in child support for N.N. and D.N. back January 1, 2016. The court has the discretion to award retroactive child support back to an appropriate date taking all of the above factors into consideration. Child support payable for any period after the date the Motion to Change was issued is prospective and not retroactive child support. Therefore, any change to the child support order prior to May 2018 would be considered a retroactive increase in child support. I find that an increase in child support retroactive to June 1, 2016 for N.N. and D.N. is appropriate based on the following findings: > a) The mother did not delay in bringing this matter to court; > > b) The father has engaged in blameworthy conduct that prioritized his interests above those of the children; > > c) The mother first broached the topic of an increase in child support with the father in 2016 or 2017 and he admits to providing her with a lump sum in May 2017; and, > > d) N.N. and D.N. will benefit from a retroactive order #### iii. Were D.N. and/or N.N. in the Father's Care 40% of the Time or More as of June 1, 2016? [173] The father claims that D.N. and N.N. were in his care at least 40% of the time as of December 2016. The father's evidence is that N.N. and D.N. spent "approximately 195 days" in his care including 150 overnights in 2017; and, 126 days in his care including 111 overnights between January and September 2018. The father includes periods in his calculations for 2017 where he claims the children travelled with him. [174] Based on his calculations, the father claims to have had shared parenting of the children since 2017 and argues that the calculation of any retroactive child support order should reflect this arrangement. [175] The mother's evidence is that it was simply impossible for the children to be in the father's care as much as he claims as he was resident in the UAE for the majority of 2017 and 2018. [176] Despite the mother's repeated requests, the father failed to provide her with a copy of his passport to corroborate his evidence. This becomes a glaring problem as a result of the father's oral evidence acknowledging that some of the dates he indicated the children were in his care in his affidavit evidence in chief may have been an error as he was out of the country. For example, the father claims the children spent 15 overnights in his care in September 2017 and 22 overnights in October 2017, but he was out of the country during this period for six weeks. When asked to explain how the children could have spent 37 overnights in his care over 61 days when he was not in the country for 42 of the days, he suggested that the children were with him on vacation for part of the time. [177] The father's oral evidence was contradicted by a letter authored by his former lawyer on October 26, 2017, that said the father was returning home to see the children after being away for six weeks. The letter also contradicts the father's claim that the children were with him on vacation during that same period. The father acknowledged that he may be wrong about the number of days the children were in his care between September and October 2017. [178] In addition, the mother's evidence includes a comprehensive list of all of the travel the children did with the father since 2017. She sets out the dates of travel, the destination and which children travelled with the father. She includes copies of pages from D.N.'s and N.N.'s passports. Her evidence discloses no travel with the father in September or October 2017. [179] Unlike the mother's evidence, the father's evidence provides no details of travel with the children. He simply provided a list by month of the number of overnights he claims the children spent in his care since January 2017. #### iv. Credibility Findings With Respect to the Issue of Parenting Time Since January 2017 [180] Where the parties evidence differs on this issue, I accept the mother's evidence over that of the father as the mother's evidence is detailed and precise while the father's evidence is vague and inconsistent. The father has also included periods of vacation in his calculations which is not appropriate. [181] The father acknowledges that since 2017 he has not lived in Canada for more than 50% of each year. It is very difficult to accept on the totality of his evidence that he had care of the children for what would amount to almost 100% of the time he was in Canada. His failure to provide his passport, which would assist to substantiate his position, on the basis that it was lost is unbelievable especially given that it reappeared a week before the trial. [182] I find that D.N. and N.N. were in the primary care of their mother between January 2017 and June 2018 and the calculation of retroactive child support will reflect this fact. [183] There will be an order requiring the father to pay retroactive child support for D.N. and N.N. commencing January 1, 2017 based on an imputed income in 2017 of $385,538.00 and as of January 1, 2018 based on an imputed income of 2018 of $452,306.00. The father shall receive credit of $2000.00 per month which he paid to the mother for each month between January 1, 2017 and April 2019. #### v. Prospective Child Support for D.N. and N.N. [184] For the purpose of ongoing child support, I find the father's annual income to be $452,306.00, the amount imputed to him above for 2018. The income information provided by the father for 2019 is unreliable and the court rejects his evidence that he has been unable to work and on unpaid leave from since August 2019. That leaves the 2018 income imputed to the father on the information provided by him as the most reliable information available to the court or, maybe better put in this case, the most current and least unreliable information upon which to base his 2019 and 2020 income. [185] D.N. is 19 and living at home with the mother while she attends George Brown College. N.N. is 14 years old and resides full time with the mother. [186] While D.N. is over the age of majority, I find that her circumstances closely resemble that of a minor child in that she lives with her mother and relies on her for her support while she is in full time attendance at school. Therefore, requiring the father to pay table support for D.N. pursuant to subsection 3(2)(a) of the Child Support Guidelines is not inappropriate. ### d. Contribution Towards Section 7 Expenses Requested by the Mother From the Father #### 2019 [187] The mother asks the father to contribute 80% towards the cost of various expenses incurred for N.N. and D.N. since August 2019, that she claims to be special or extraordinary pursuant to section 7 of the Child Support Guidelines. The mother claims hockey school and equipment, violin rental, ski school, dental costs, psychologist fees and tutoring costs for N.N. in the amount of $4711.68. [188] Section 7 expenses are defined in the Child Support Guidelines as follows: > **Special or Extraordinary Expenses** > > 7. (1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, 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 parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation: > > (a) child care expenses incurred as a result of the custodial parent's employment, illness, disability or education or training for employment; > > (b) that portion of the medical and dental insurance premiums attributable to the child; > > (c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy, prescription drugs, hearing aids, glasses and contact lenses; > > (d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child's particular needs; > > (e) expenses for post-secondary education; and > > (f) extraordinary expenses for extracurricular activities. O. Reg. 391/97, s. 7 (1) ; O. Reg. 446/01, s. 2. [189] The dental and psychologist costs incurred by the mother for N.N. come within subsection 7(c) of the Child Support Guidelines and therefore are proper section 7 expenses. The mother has provided proof of the cost of the dental expense of $342.00 and the psychologist fees of $425.00. As these are necessary expenses in relation to N.N. and reasonable given the incomes of the parties, the father must pay his proportionate share of these special expenses. [190] The mother claims contribution by the father towards tutor costs of $1440.00 and extracurricular activities of $2504.68 for N.N. on the basis that they are extraordinary expenses pursuant to subsections 7(d) and (f) respectively of the Child Support Guidelines. [191] To qualify as "extraordinary" under the Child Support Guidelines, s. 7(1.1), the extracurricular activity or educational expenses must: > (a) exceed those that the party requesting contribution can reasonably cover, taking into account that party's income and any table amount of child support (or such other amount of child support deemed appropriate by court) being received; or > > (b) be expenses that the court considers extraordinary, taking into account: > > (i) the amount of the expense in relation to the income of the party requesting contribution, including any table amount of child support (or such other amount of child support deemed appropriate by the court); > > (ii) the nature and number of the educational programs; > > (iii) any special needs and talents of the child(ren); > > (iv) the overall cost of the programs and activities; and > > (v) any other similar factor that the court considers relevant. #### i. Extracurricular Activities Expenses [192] The extracurricular activities claimed by the mother in the amount of $2504.68 for hockey school and equipment, ski school and a violin rental were incurred over a 7 month period. That translates into $357.81 per month. The mother requests 80% of the cost from the father, $2003.74 or $286.25 per month. [193] The father did not argue that these expenses were not necessary in relation to N.N.'s best interests or that the cost of any of the expenses were unreasonable given the parties' incomes. I must consider whether the extracurricular expenses are extraordinary such that the mother cannot be reasonably expected to pay the entire cost herself, taking into consideration her income and the amount of child support payable by the father. [194] For the period in question the mother's income was $71,000.00 per year and the father has been imputed an annual income of $452,306.00. In addition, the father's child support payment as of August 2019 is $5705.00 per month. I find that given the mother's income and the amount of child support the father is required to pay the mother per month, N.N.'s extracurricular activities at $286.25 per month is not an extraordinary expense. The mother can reasonably be expected to cover the cost of these extracurricular activities given her income and the amount of child support she receives from the father. It is reasonable to conclude that the father is, in effect, already contributing towards the cost of these activities through his table child support payments of $5705.00. #### ii. Tutoring Costs - Retroactive and Ongoing [195] The mother claims that tutoring expenses for N.N. are extraordinary education costs pursuant to subsection 7(d) of the Child Support Guidelines. The mother's evidence is that between September 2019 and the date of trial, she incurred $1440.00 in tutoring costs for N.N. Her financial statement sworn February 11, 2020, discloses in Schedule C – Special or Extraordinary Expenses for the Children, annual ongoing tutoring costs of $3640.00. [196] The father did not argue that tutoring is not necessary in relation to N.N.'s best interests or that the cost is unreasonable given the parties' incomes. I must consider whether the tutoring is extraordinary such that the mother cannot be reasonably expected to pay the entire cost herself, taking into consideration her income and the amount of child support payable by the father, and the overall cost of N.N.'s additional expenses. [197] To determine whether the mother can reasonably be expected to pay the entire cost of tutoring for N.N., a review of her income and budget is necessary. The mother's annual income of $71,000.00, child support of $5705.00 per month and spousal support of $500.00 per month results in a monthly net disposable income of $13,480.00. The mother's most recently sworn financial statement dated February 11, 2020, discloses monthly expenses of $8319.30. This includes $180.00 per month for children's activities and $100.00 per month for summer camp but does not include the cost of tutoring at $303.33 per month. [198] If the mother is required to pay for the entire cost of N.N.'s tutoring, she would have a budget surplus of $4857.00 per month. [199] Conversely while income was imputed to the father at $452,306.00 per year for the purpose of child support, he does not enjoy the cash flow of a person who earns that income. As will be set out below, the father's cash flow stems from non-taxable income earned in the form of base salary and bonus that equates to taxable income of at least $276,468.00. [200] In reality, the father has cash flow of approximately $13,833.00 per month from his base salary and estimated bonus. After child support payments of $5705.00 he is left with $8128.00 per month. He is then obliged to pay spousal support of $500.00 per month pursuant to the terms of the parties' Separation Agreement. That leaves him with $7628.00 per month. [201] The father's financial statement sworn February 24, 2020, discloses monthly expenses not paid by his employer of $2295.00. After paying child support, spousal support and the expenses not covered by his employer, the father is left with $5333.00 a month. [202] Even after paying the entire cost of tutoring, the mother will have a significant monthly surplus and one that is comparable to that enjoyed by the father after paying child support, spousal support and his personal expenses not covered by his employer. In all of the circumstances of this case, I find that the mother can reasonably be expected to pay the entire cost of N.N.'s tutoring and it is therefore not an extraordinary expense. --- ## Issue #7 – Did the Father Incur Special or Extraordinary Expenses for the Children Towards Which the Mother Should Contribute? ### a. Father's Position [203] In his Response to Motion to Change, the father requests contribution by the mother towards expenses he incurred for the children he claims come within section 7 of the Child Support Guidelines. The expenses are as follows: > a) Post-secondary expenses for D.N. in the amount of $4845.00 for 2018-2019 tuition; > > b) Therapy/counselling for D.N. between 2017 and 2018 in the amount of $22,035.00; > > c) Summer camp for N.N. for 2018 and 2019 in the amount of $2330.60; > > d) Hockey camp for N.N. in the amount of $1999.00; > > e) Tutoring for N.N. in the amount of $22,200.00 for the period of September 2018 to June 2019 when he lived primarily with the father; > > f) Dental expenses for all four children in the amount of $15,950.00; and, > > g) Therapy costs for N.N. to be determined. [204] By the time this matter proceeded to trial, the father had also incurred the cost of a psychological assessment of N.N. and a parenting assessment of the parents. He seeks contribution by the mother towards the $5650.00 he paid for the psychological assessment. [205] The father did not produce receipts for the counselling expense for D.N. or the psychological assessment of N.N. [206] The receipts provided by the father for dental expenses disclose total payments of only $6640.00 incurred between 2016 and 2019 for D.N. [207] The father has provided evidence of the cost of tutoring for N.N. as well the cost of his summer and hockey camps in the amounts set out above. [208] The father has provided proof of payment of D.N.'s tuition expense for 2018-2019 of $4245.00 but it is not clear who made the payment. ### b. Mother's Position [209] The mother does not dispute the need for tutoring for N.N. and as noted above, is seeking contribution by the father towards the cost of ongoing tutoring. Her position is that she should not be required to contribute towards an expense that she did not consent to and that is unaffordable to her. [210] The mother's evidence is that D.N.'s therapy occurred at Humber River Regional Hospital and was entirely covered by OHIP and therefore not a proper section 7 expense. [211] The mother also opposes contributing towards the cost of hockey camp for N.N. on the basis that she did not consent to the expense that she describes as unreasonable and unnecessary. The mother did not give evidence opposing contribution towards the cost of summer camp for N.N. in 2018 and 2019 in the amount of $2330.00. [212] With respect to the dental expenses for D.N., the mother's position is that as she paid $3215.00 and the father paid $3315.00, no further contribution should be required of her given that she has paid more than her fair share. [213] The mother acknowledges that the father paid for D.N.'s 2018-2019 tuition fee but disputes the amount paid as she describes the credit card statement provided by the father as blurry. [214] The mother opposes contributing towards the cost of the psychological assessment for N.N. as her evidence is that the father agreed to pay for it as he "insisted on obtaining it". ### c. Father's Credibility [215] The father's failure to provide financial disclosure throughout this proceeding negatively impacts his claim for contribution by the mother towards section 7 expenses. How can the court require the mother, in all of the circumstances of this case, to contribute towards section 7 expenses for which he has not provided proof of payment? In addition, the father does not address in his evidence which, if any, of these expenses his employer ought to have covered under the terms of his employment contract. [216] Paragraph 3(d) of the father's employment contract provides that he "shall be entitled to participate in the benefit plans and programs including, without limitation, medical, dental that the Company provides generally to comparable senior executives". [217] Paragraph 3(n) of the father's employment contract provides that he "will be provided an education allowance for two children, if their primary residence is that of the Executive. The education allowance is classified as a nontaxable benefit with a global maximum of $15,000.00 per child per annum of primary and secondary school fees." [218] The father did not give evidence as to whether the therapy, dental, tutoring and psychological assessment fees were submitted to his employer for reimbursement in accordance with the terms of his employment agreement. ### d. Conclusion Regarding Section 7 Expenses Claimed by Father #### i. Dental and Therapy Expenses [219] As the father has failed to comply with very basic financial disclosure requirements and a court order requiring him to obtain an income analysis, the court is exercising its discretion to draw a negative inference against the father when assessing his claim for contribution by the mother towards section 7 expenses incurred by him for the children. [220] As the father did not provide unequivocal documentary evidence to substantiate his claims with respect to dental or therapy expenses or the cost of the psychological assessment for N.N., the mother will not be required to contribute towards these expenses as the court is not satisfied that the father actually incurred these expenses or that if he did, he was not reimbursed in part or in whole for the expense(s) by his employer. #### ii. Post-Secondary Education Costs [221] The parties' Separation Agreement provides that the mother is required to pay 25% of the children's post-secondary education costs, an extraordinary expense pursuant to subsection 7(e) of the Child Support Guidelines. That calculation was based on the father earning $90,000.00 annually. [222] The parties proportionate share of section 7 expenses must be adjusted based on the income imputed to the father as of 2018 of $452,306.00 and the mother's current annual employment income of $71,000.00 and $500.00 per month in spousal support. The current apportioning of section 7 expenses will be adjusted to 85% payable by the father and 15% by the mother. [223] Given the substantial change in the father's income, it is fair and reasonable to adjust the mother's proportionate share of section 7 expenses based on their current incomes. Therefore, she will be required to pay 15% or $636.75 towards the cost of D.N.'s 2018-2019 tuition fee. If the father paid 100% of this cost, the mother shall pay this amount to him. If D.N. paid the cost, the $636.75 shall be paid to D.N. #### iii. Hockey and Summer Camp [224] I find that the mother should not be required to contribute towards the cost of summer and hockey camp for N.N. Based on the discrepancy in the parties' incomes and that she is required to pay the father child support for N.N. for the period during which he incurred these expenses, these are not extraordinary expenses. In other words, the father can reasonably be expected to cover these expenses on his income and the child support received from the mother for N.N. #### iv. How Should the Court Treat the Father's Payment of $500.00 to the Mother Towards Section 7 Expenses for the Children for the Period N.N. Lived With Him and D.N. Spent Equal Time in His Care? [225] The court order requires the father to pay the mother $500.00 per month towards section 7 expenses incurred for the children. The court did not hear evidence that this amount was not paid at least up to July 2019. The evidence made it very clear that the father has not paid any child support at all since July 2019. If the father paid the mother $500.00 towards section 7 expenses between July 2018 and July 2019, he was paying this amount when L.N and O.N were no longer entitled to child support, D.N. was living equally with each parent and N.N. was living primarily with the father. As the mother acknowledges that the father paid for summer camp, hockey camp, tutoring etc. while N.N. was in the father's care, it is appropriate for him to receive a credit for the $500.00 he paid the mother per month during this time for section 7 expenses the mother did not incur. [226] While the mother will not be required to contribute towards the cost of the expenses incurred by the father when N.N. lived with him and D.N. spent equal time with the parties, it is reasonable for the father to receive a credit towards the arrears of child support owing to the mother equal to the amount he paid her as contribution towards section 7 expenses between July 2018 and July 2019. --- ## Issue #8 - Has There Been a Material Change in Either Party's Circumstances Warranting a Change to the Amount of Spousal Support Payable by the Father to the Mother and If Yes, What Variation to the Order Is Appropriate and When Should the Change, Take Effect? ### a. Legal Considerations [227] The mother's claim to a variation of the spousal support order is governed by section 37 of the Family Law Act which provides as follows: > **Application for Variation** > > 37. (1) An application to the court for variation of an order made or confirmed under this Part may be made by, > > (a) a dependant or respondent named in the order; > > (b) a parent of a dependant referred to in clause (a); > > (c) the personal representative of a respondent referred to in clause (a); or > > (d) an agency referred to in subsection 33 (3). 1997, c. 20, s. 6. > > **Powers of Court: Spouse and Parent Support** > > (2) In the case of an order for support of a spouse or parent, if the court is satisfied that there has been a material change in the dependant's or respondent's circumstances 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 under section 34 that the court considers appropriate in the circumstances referred to in section 33. 1997, c. 20, s. 6; 1999, c. 6, s. 25 (12); 2005, c. 5, s. 27 (16). > > **Limitation on Applications for Variation** > > (3) No application for variation shall be made within six months after the making of the order for support or the disposition of another application for variation in respect of the same order, except by leave of the court. R.S.O. 1990, c. F.3, s. 37 (3). ### b. The Mother's Position Regarding Spousal Support [228] The mother seeks to vary the spousal support provisions of the order retroactive to January 2016 based on the material change in the father's income. More specifically, the mother seeks a lump sum payment of $369,000.00 for the period of January 2016 to December 2019 and ongoing spousal support of $8,000.00 per month commencing January 1, 2020. She is not seeking to alter the termination date set out in the parties' Separation Agreement of September 2023. [229] As reviewed above, the mother says that the father was not forthcoming about the impending change to his income during the settlement discussions that led to the parties' Separation Agreement. She said if he had been honest about his contract negotiations with CCG UAE, she would have received a much higher amount of spousal support then what is stipulated in the Separation Agreement. [230] The mother's evidence is that prior to separation the parties lived a lavish lifestyle. She says she suffered economic hardship as a result of the separation and a significant decrease in her standard of living. Conversely, due to the generous terms of his employment contract, the father continues to enjoy an opulent lifestyle. [231] The mother argues that as her claim to spousal support is compensatory in nature, she is entitled to share in the increase in the father's income following separation. In support of her claim to compensatory spousal support, the mother relies on the nature of their marriage being largely traditional such that she was mostly responsible for the care of the parties' four children and the maintenance of the home while the father focused on advancing his career. The mother says she was effectively out of the workforce for 8 years during the marriage. [232] The mother also highlights the sacrifice she made between 1995 and 2001 when the parties lived in the United States in order to further the father's career. The mother completed her dental hygienist course in 1993 prior to moving but was not licensed to work in the United States. As a result, her career advancement was stymied during this period while the father pursued his career. Upon their return to Canada the parties had two more children following which the mother did not work other than the minimum hours required to maintain her qualifications. [233] The mother argues that the father worked in construction in some form or another since they returned to Canada in 2001 and was able to secure the lucrative contract with CCG UAE because of the knowledge and experience he acquired during the marriage. ### c. The Father's Position Regarding Spousal Support [234] The father asks the court to dismiss the mother's claims with respect to spousal support in their entirety. He argues that the mother is self-sufficient working full time as a dental hygienist and enjoys a healthy standard of living which includes travelling, driving a luxury car and continuing to reside in the same home they rented at the date of separation. He claims that she should be earning closer to $85,000.00 and suggests she is not disclosing all of her income. [235] The father highlights in his evidence the many financial struggles the parties endured during the marriage to counter the mother's claims that they lived a life of luxury. While they would have periods of success, they had equally low periods during which they were evicted from their home (on five occasions), had cars repossessed and incurred crippling debt. During these difficult periods, the father's parents assisted the parties financially. This evidence was not contested by the mother. [236] The father denies that there is any causal connection between his current success and the work he pursued during the marriage. He says he was unemployed for almost two years following separation and relied on Employment Insurance Benefits and social assistance. He eventually pursued work through his own company in real estate development specializing in project management, architecture and design. [237] In 2015, his company "amalgamated" with and is now a "subsidiary" of CCG UAE. The father describes completing several unofficial apprenticeship programs after separation in structure, concrete, framing, architecture and construction design which made him attractive to CCG UAE and eventually allowed him to grow their business. He now describes himself as a "construction design specialist". [238] The father argues that the mother is not entitled to share in his post separation increase in income as his current success is due solely to his "hard work and continued education" post separation. [239] The father says that he signed the contract with CCG UAE on October 1, 2015, after "a six-day marathon negotiation". He acknowledges having had some discussions with CCG UAE prior to the execution of the Separation Agreement on September 15, 2015, but only began serious negotiations on September 24, 2015. ### d. Analysis of the Evidence #### i. Step 1 of the Analysis: Has There Been a Material Change in Either Party's Circumstances Since the Date of the Order? [240] A material change in the mother or father's circumstances since the making of the prior support order as contemplated by the Family Law Act means a change that "if known at the time, would likely have resulted in different terms". See [Willick v. Willick, [1994] 3 S.C.R. 670](https://www.canlii.org/en/ca/scc/doc/1994/1994canlii28/1994canlii28.html). The onus is on the party seeking the variation to establish a material change. If there has been a material change in circumstances, the court should vary the previous order to reflect the change. [241] In order for the court to determine if there has been a material change, the court must examine the parties' circumstances at the time of the order. As the prior order incorporated the terms of the parties' Separation Agreement, the Court may look to the agreement in its entirety to assist it in determining if there has been a material change in circumstances. Unfortunately, the Separation Agreement is void of any pertinent information that would assist the court. In fact, the Separation Agreement does not provide basic information such as the parties' incomes at the time. [242] In 2015 when the parties negotiated and executed the Separation Agreement, the father did not disclose to the mother that he was in the process of negotiating a lucrative contract with CCG UAE. In addition, the father failed to provide full and frank financial disclosure to the mother, as he was required to do, during the litigation he commenced in 2013 and throughout the period leading up to the execution of the Separation Agreement. [243] I specifically reject the father's claim that he only entered into serious negotiations with CCG UEA on September 24, 2015, as he gave evidence contradicting himself. The father's oral evidence is that he began negotiations with CCG UAE in July 2015 and he believed they "were getting close to a deal in September". He went on to say that he would not have agreed to pay child support of $2000.00 per month based on an annual income of $90,000.00 "if I didn't have a verbal agreement that I would be making $100,000.00, otherwise I would not have known I would have been able to meet my obligation to [C.S.]." [244] The evidence clearly demonstrates that the father withheld very important information about his income from the mother when they were negotiating the terms of their Separation Agreement. [245] I find that had the mother known around the time the parties were negotiating a Separation Agreement that the father was in the final stages of negotiating an employment contract that could result in his earning an income equivalent to $350,000.00 to $450,000.00 Canadian per year, this would have likely resulted in different spousal support terms. Therefore, the mother has met the onus of demonstrating that there has been a material change in the father's circumstances since the date of the order she is seeking to vary. #### ii. Step 2 in the Analysis: What Is the Appropriate Variation to the Order? [246] After finding that there has been a material change in circumstances, the court must now determine what variation is appropriate considering the change. This step does not involve a fresh enquiry into whether the mother is entitled to spousal support or a review of the previous order. Simply put, the court must determine whether the change in the father's income necessitates a change to the spousal support order. The court is required at this step of the analysis to "consider the existence of the Separation Agreement and its terms as a relevant fact". See: [L.M.P. v. L.S. [2011] 3 S.C.R. paragraph 50](https://www.canlii.org/en/ca/scc/doc/2011/2011scc64/2011scc64.html). [247] The spousal support order must only be varied to the extent required by the material change in circumstances. See: [L.M.P. v. L.S. [2011] 3 S.C.R.](https://www.canlii.org/en/ca/scc/doc/2011/2011scc64/2011scc64.html), and [Pustai v. Pustai, 2014 ONCA 422, 47 R.F.L. (7th) 56 (Ont. C.A.)](https://www.canlii.org/en/on/onca/doc/2014/2014onca422/2014onca422.html). #### iii. Is the Mother Entitled to an Increase in Spousal Support Due to the Post Separation Increase in the Father's Income? [248] The parties correctly identified as an issue, whether the mother is entitled to share in the father's post separation increase in income. They appropriately called evidence to assist the court in determining if the mother's entitlement to spousal support is based on the 'needs based' spousal support model or on the 'compensatory' model, which provides that a spouse should be compensated for the role(s) they assumed during the marriage that directly contributed to the success achieved by the other spouse after separation. [249] A spouse is not automatically entitled to an increase in spousal support when there has been an increase in post separation income. A claim to an increase in support based on post separation increases in income is strengthened by evidence that the recipient contributed in a manner that can be directly linked to the payor's post separation increased income. "The nature of the contributions does not have to be explicit, such as contribution to the payor's education or training. The question of whether the contributions made by the recipient specifically influenced the payor's post-separation success will depend on the unique facts of every case." See: [Thompson v. Thompson 2013 CarswellOnt 2013 ONSC 5500, paragraph 103](https://www.canlii.org/en/on/onsc/doc/2013/2013onsc5500/2013onsc5500.html). [250] "A spousal support award is more likely to take into account post-separation income increases where the relationship was long-term, the parties' personal and financial affairs became completely integrated during the course of the marriage and the recipient's sacrifices and contributions for the sake of the family and resulting benefits to the payor have been longstanding and significant. When this type of long history of contribution and sacrifice by a recipient spouse exists, the court will be more likely to find a connection between the recipient spouse's role in the relationship and the payor's ability to achieve higher earnings following the separation." See: Thompson paragraph 103(e). [251] "If the skills and credentials that led to the post-separation income increase were obtained and developed during the relationship while the recipient spouse was subordinating their career for the sake of the family, there is a greater likelihood of the recipient deriving the benefit of post-separation income increases. By contrast, the likelihood of sharing in such increases lessens if the evidence indicates that the payor spouse acquired and developed the skills and credentials that led to the increase in income during the post-separation period, or if the income increase is related to an event that occurred during the post separation period." See: Thompson paragraphs 103(g) and (h). [252] The parties were married 16 years during which they had four children. The mother did not work after the birth of each child. She said she was largely responsible for raising the children and maintaining the household while the father pursued his career. He says they had nannies and housekeepers who did all the work. [253] The mother also sacrificed her career by moving to the United States for the father to pursue business opportunities as she was not licensed to work as a dental hygienist in the United States. Upon her return to Canada and up to separation, she only worked part time. The father acknowledged that the mother did not work as a dental hygienist while they were in the United States but claims she worked full time with him. [254] One only has to look to the mother's income following separation for evidence of the effect the marriage had on her earning potential. In 2018 the mother earned $71,000.00 working full time as a dental hygienist while in 2013, following separation she only earned $37,201.00 and in 2014 she earned $19,864.00. It took the mother 7 years from the date of separation to earn a comfortable income. [255] The father claims that the mother in no way contributed to his post separation increase in income. His evidence is that between 2007 and 2010 he worked as a general contractor for his father's company, Omega Developments (Omega), a residential renovation business. In 2013, after separation, he began Opus One Design Build (Opus) "a building design and real estate development company". He says these two businesses are very different. His works as a "construction design specialist" for CCG UAE came as a result of what he accomplished after separation. [256] In cross examination the father acknowledged that there are similarities in the work he did for Omega, his father's business, and his business Opus, more specifically, residential renovations but that Opus focused more on luxury commercial work which is more lucrative. [257] The father claims that after separation he completed "five on site apprenticeships over four years, including undergoing specialized training in structure, concrete, framing, architecture and construction design". He claims that his "hard work and continued education, post-separation" allowed him to grow his business and ultimately partner with CCG UAE. [258] The father's argument that his post separation increase in income is solely as a result of education and experience he acquired after separation is not believable. When asked about his post separation education, the father spoke about spending time on construction sites. He obtained no formal training at all. [259] The father has worked in construction in one form or another since 2007 (the mother claims since 2001). It is disingenuous to claim that all of his current success in the construction industry can only be attributed to the work he did after separation in 2011 when he worked in construction for part of the marriage. [260] I accept the mother's evidence over that of the father that she was primarily responsible for raising the children and managing the home and that she sacrificed her career as a dental hygienist to do so. I find that the roles the mother assumed during the marriage allowed the father to pursue his career objectives including in the construction industry between, at least, 2007 and 2010. [261] The evidence makes it clear that the mother's claim to spousal support is, in part, compensatory due to the roles she assumed during the marriage that disadvantaged her professionally and allowed the father to pursue his professional goals. As a result, I find that she is entitled to an increase in spousal support based on the father's post separation increase in income. #### iv. Is the Mother Entitled to a Retroactive Increase in Spousal Support? [262] Before determining the appropriate quantum of spousal support to order in the face of the material change in the father's income, it is appropriate to first determine the start date for the variation given that the father's income for the relevant years has already been determined. ##### a. Legal Considerations [263] A variety of factors must be considered by a court when considering a claim for retroactive spousal support. In [Bremer v. Bremer, (2005), at paragraph 9](https://www.canlii.org/en/on/onca/doc/2005/2005canlii3938/2005canlii3938.html), the Ontario Court of Appeal found that the court should consider the following factors, > 1. establishing past need. > > 2. any requirement for the recipient to encroach on capital. > > 3. the underlying basis for the order. > > 4. impact on the payor, is it a redistribution of capital. > > 5. blameworthy conduct on behalf of the payor, such as lack of financial disclosure. > > 6. notice of intention to seek support and negotiations to that end. > > 7. delay in proceeding and any explanation for that delay. > > 8. the appropriateness of an order predating the application. [264] In [Kerr v. Baranow, 2011 SCC 10, at paragraph 207](https://www.canlii.org/en/ca/scc/doc/2011/2011scc10/2011scc10.html) (Kerr), the Supreme Court of Canada considered the applicability of the principles enumerated by the same court in the case of [D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231](https://www.canlii.org/en/ca/scc/doc/2006/2006scc37/2006scc37.html), a case involving claims for a retroactive increase in child support, when considering a request for a retroactive increase in spousal support. The court found, > "While D.B.S. was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similar considerations to those set out in the context of child support are also relevant to deciding the suitability of a "retroactive" award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse. However, in spousal support cases, these factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support." [265] The court went on to conclude at paragraph 208 of Kerr that as the entitlement to child support is automatic and the right of the child and determining the quantum of child support is governed by the Child Support Guidelines and more specifically, the income of the payor"these aspects of child support reduce somewhat the strength of concerns about lack of notice and lack of diligence in seeking child support. In contrast, there is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legal obligation to look out for the separated spouse's legal interests. Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support: see, e.g., M. L. Gordon"Blame Over: Retroactive Child and Spousal Support in the Post-Guideline Era" (2004-2005), 23 C.F.L.Q. 243, at pp. 281 and 291-92." ##### b. The Evidence [266] I will now consider the evidence in relation to the factors I am instructed to consider pursuant to Bremer v. Bremer and Kerr v. Baranow. ##### 1. Establishing Past Need [267] Based on the mother's income between 2013 and 2017 she was clearly in need of spousal support. While the father made a feeble attempt at questioning the mother's current income, he did not dispute her reported income for 2016 or 2017. The onus was on him to do so if he felt it was not accurately reported in her income tax returns. In 2016 and 2017 respectively, she earned $25,000.00 and $31,000.00. [268] In 2016 and up to April 2017, the mother was responsible for the support of all four children who lived with her and were in full time attendance at school. As of May 2017, the mother continued to be fully financially responsible for 3 of the 4 children while they continued their full time studies. [269] In addition to be solely responsible for the care of the 4 children in 2016, she did so without much assistance from the father who lived full time in the United States. [270] Based on the mother's income in 2016 and 2017, and her child care responsibilities, she needed spousal support. ##### 2. Any Requirement for the Recipient to Encroach on Capital [271] The court was not made aware of the mother having to encroach on capital to support herself in 2016 or 2017. ##### 3. The Underlying Basis for the Order [272] The evidence establishes that the basis for the mother's entitlement to spousal support is both needs based and compensatory support for the roles she assumed and the sacrifices she made during the marriage to support the father's career while negatively impacting her career. ##### 4. Impact on the Payor, Is It a Redistribution of Capital [273] The court has already reviewed the father's failure to provide adequate financial disclosure finding it impossible to determine what impact a retroactive child support order would have on him. As set out above, the court draws a negative inference against the father and finds that there would be no negative impact of a retroactive child support order. [274] I import the same findings and reasoning to the analysis of the mother's claim for retroactive spousal support. ##### 5. Blameworthy Conduct on Behalf of the Payor, Such as Lack of Financial Disclosure [275] The blameworthy conduct on behalf of the father is extensive. He negotiated the parties' Separation Agreement in bad faith. He withheld pertinent information from the mother during negotiations that he knew or ought to have known would almost certainly lead to a higher amount of spousal support (and child support) then was ultimately agreed to. [276] In the course of this litigation the father failed to obtain an income analysis ordered by the court. [277] The lack of financial disclosure from the father is astonishing. It is not disputed that the mother has never received a copy of a complete income tax return or notice of assessment from the father. It is not disputed that the mother has never received any supporting financial documentation from the father, other than the letter from his employer and his employment contract, to substantiate his claims regarding his income. It is not disputed that the father has not provided any disclosure to explain or substantiate how his bonus is calculated and whether he has an interest in the company that employs him. It is not disputed that despite being the sole shareholder of Opus Design Build Inc., the mother has never received any financial statements or income tax returns for the corporation. [278] The totality of the evidence offered by the father to demonstrate his income between 2016 and 2020 is an Employment Contract and two unsigned letters from his employer. The father made no effort whatsoever to provide reliable and credible evidence to demonstrate his income for child and spousal support purposes despite how easily he could have done so. For example, he could have provided bank statements that showed the deposits of his base salary and income. He could have provided credit card statements to show his pattern of spending. [279] The father's willingness to conduct a trial on the issues of retroactive and prospective child and spousal support while flouting a court order requiring him to obtain an income analysis and without providing any meaningful disclosure amounts to inexplicable self-inflicted sabotage of his case, like jumping out of a plane without a parachute. ##### 6. Notice of Intention to Seek Support and Negotiations to That End [280] The mother's evidence addresses her requests for additional child support from the father in 2016 and 2017. She did not give evidence of any requests by her from the father for an increase in spousal support. ##### 7. Delay in Proceeding and Any Explanation for That Delay [281] I import the findings made in my judgment above in paragraphs 150 to 156 that the mother did not engage in an unreasonable delay in bringing the matter before the court. ##### 8. The Appropriateness of an Order Predating the Application [282] As the mother had a very modest income in 2016 and 2017 while caring for four children and she did not delay bringing this matter before the court, she makes a strong claim for a retroactive increase in spousal support. If the father were able, for example, to demonstrate that his conduct has been nothing but exemplary and a retroactive order increasing spousal support would have a significant impact on him, he might have an equally strong argument against a retroactive spousal support claim. That, of course, is not the evidence in this case. The evidence of blameworthy conduct on the part of the father provides the court with an overwhelming amount of evidence to rely upon in exercising its discretion to order a retroactive increase in spousal support. ### c. Conclusion Regarding the Mother's Request for an Order for a Retroactive Increase in Spousal Support [283] The parties were married for 16 years. This is not a short marriage. They had four children which resulted in the mother leaving the work force for child care responsibilities. She also agreed to leave her career behind and move to the United States, where she could not work as a dental hygienist. Her income suffered as evidenced by the number of years it has taken her to achieve a current income of $71,000.00. [284] The mother is entitled to share in the father's post separation income. The mother contributed towards the father's success by assuming many of the family and childcare responsibilities during the marriage so that he could focus on his career. [285] The father's failure to disclose to the mother that he was close to finalizing an employment contract with CCG UAE while they were negotiating the Separation Agreement is egregious conduct that significantly disadvantaged the mother. He did not rectify the situation at any point prior to this court proceeding by advising the mother of the significant change in his income and paying an appropriate level of child and spousal support. There is little doubt that had the mother known of the contract negotiations with CCG UAE, the final Separation Agreement would have provided for a larger amount of spousal support. [286] A consideration of the relevant factors in this case supports a finding that it is appropriate for the court to exercise its jurisdiction to order an increase in spousal support to a date that predates the commencement of this proceeding. A fair and reasonable start date for the retroactive spousal support is June 1, 2016. #### v. Quantum of Retroactive Spousal Support [287] The manner in which income was imputed to the father for child support purposes applies equally for spousal support purposes. See: [Marello v. Marello [2016] O.J. No.635, paragraph 164](https://www.canlii.org/en/on/onsc/doc/2016/2016onsc1034/2016onsc1034.html). Therefore, the income imputed to the father for each year since 2016 as set out above applies to the analysis in this section of my judgment. [288] When contemplating what retroactive variation of the spousal support order is appropriate in all of the facts of this case, I must consider the manner in which the father is compensated. The cash flow issues described above cannot be ignored. The mother seeks an order for an increase in spousal support based on calculations that really have no application in this case. The calculations she provides are based on the following assumptions that do not apply: > a) Imputed annual income to the father between $612,553.00 and $730,794.00; > > b) The father is entitled to claim a tax deduction for the spousal support payments; > > c) The calculations are designed to divide the parties' net disposable income based on Canadian income tax rates and government benefits not applicable to the father; > > d) The net disposable income calculated by the Divorcemate software calculations provided by the mother is not indicative of the father's actual situation given that his employer pays a significant amount for his personal expenses without placing limits on the amounts he can spend; > > e) The calculations are based on all four children in her home at all the relevant times which is not accurate; and, > > f) The mother's spousal support calculations are based on an imputed income that grosses up all benefits of employment for income tax. I found that to be inappropriate when determining his child support obligation and it is just as inappropriate when determining the quantum of the appropriate variation of spousal support. [289] The father does not file income tax returns or pay income tax in Canada or the UAE. Therefore, it makes little sense to base the quantum of spousal support on tax deductibility that does not apply in this case. ##### a. The Effect of the Child Support Order on the Mother's Request to Vary Spousal Support [290] In determining what variation to the spousal support order is appropriate, I have considered the actual cash flow or net disposable income available to each party. Commencing June 1, 2016, the father is ordered to pay retroactive child support for D.N. and N.N. based on an imputed income in 2016 of $324,479.00; 2017 of $385,538.00; and, 2018 of $452,306.00. That results in the following orders: > a) June 1, 2016 to December 1, 2016 - $4001.00 per month in child support for two children; > > b) January 1, 2017 to November 1, 2017 - $4697.00 per month in child support for two children; > > c) December 1, 2017 - $4903.00 for two children; > > d) January 1, 2018 to June 1, 2018 - $5705.00 for two children; > > e) From July 1, 2018 to July 1, 2019 – set off child support of $2394.00 per month; and, > > f) August 1, 2019 an ongoing - $5705.0 per month for two children. [291] As was set out above, the father actually receives income in cash form from a base salary and a bonus. Based on his most recent base salary of $116,000.00 and an annual bonus assumed to be at least $50,000.00 (he was guaranteed a $50,000.00 bonus in 2016 and 2017 and received a $66,900.00 bonus in 2018) he has actual net disposable income of $166,000.00 per year or $13,833.00 per month. [292] A comparison of the parties' net disposable income based on the order varying child support and the continued payment of spousal support pursuant to the current order is as follows: | Year | Mother's income | Child Support payable | Spousal Support payable | Section 7's paid by father to mother | Section 7's paid by mother to father | Mother's monthly net disposable income | Father's monthly net disposable income | |---|---|---|---|---|---|---|---| | 2016 | $25,000.00 | $4001.00 | $300.00 | $500.00 | nil | $8184.00 | $8199.00 | | 2017 | $31,000.00 | $4697.00 from Jan. - Nov. 2017; and, $4903.00 for Dec. 2017 | $300.00 up to April of $2017; $400.00 as of May 2017 | $500.00 | nil | $9,112.00 up to April 2017; $9159.00 from May -Nov. 2017; and, $10,876.00 as of Dec. 2017 | $8336.00 from Jan. – Apr. 2017; $8236.00 from May to Nov. 2017 and $8030.00 as of Dec. 2017 | | Jan. to June 2018 | $71,000.00 | $5705.00 | $400.00 Jan.-Apr. 2017; and, $500.00 May - Dec.2018 | $500.00 | nil | $11,412.00 from Jan - April 2018; and, $11,480.00 from May - Dec. 2018 | $7228.00 Jan. to Apr. 2018; and, $7128.00 May to Dec. 2018 | | July 2018 to July 2019 | $71,000.00 | $2394.00 | $500.00 | Nil | $636.75 for post-secondary expenses for D.N. = $53.00 per month | $7432.00 ($7378.00 before deducting $53.00 for section 7 expense) | $10,939.00 less tuition expense for D.N. of $300.75= $10,638.00 | | Aug. 2019 to date | $71,000.00 | $5705.00 | $500.00 | Nil | $13,480.00 | $7628.00 | [293] The chart set out above, which incorporates the increase in child support payable by the father retroactive to June 1, 2016 pursuant to this judgment and the actual $300.00 to $500.00 per month he is required to pay in spousal support pursuant to the order/Separation Agreement, sets out each party's net disposable income for each year. For clarity, this is each party's after tax income available to meet their expenses. [294] As is noted in the chart, the parties had roughly equal net disposable incomes in 2016. In 2016 all four children were in full time attendance at school and lived with the mother. The parties having equal net disposable incomes in 2016 is hardly appropriate given that the father had one person in his home while the mother had five. In addition, the father enjoyed having almost all of his personal expenses paid for by his employer. Therefore, the division of the total monies available to the parties in 2016 in accordance with the parties' Separation Agreement/order was not appropriate. [295] A determination of the appropriate level of support for 2016 and 2017 requires the court to consider the income tax ramifications of a retroactive spousal support order given that retroactive spousal support is not considered to be periodic payments that are tax deductible by the payor and taxable income to the recipient under the Income Tax Act, RSC 1985, c 1 (5th Supp). See: [Thompson v. Thompson 2013 ONSC 5500, para. 75](https://www.canlii.org/en/on/onsc/doc/2013/2013onsc5500/2013onsc5500.html) and [Gonsalves v. Scrymgeour, 2017 ONSC 1034, para. 167](https://www.canlii.org/en/on/onsc/doc/2017/2017onsc1034/2017onsc1034.html). As a result, courts have accepted that when making an order for lump sum or retroactive spousal support, the range of spousal support must be adjusted to reflect the different tax treatment. See: [Samoilova v. Mehnic, 2014 ABCA 65](https://www.canlii.org/en/ab/abca/doc/2014/2014abca65/2014abca65.html), [Hume v. Tomlinson, 2015 ONSC 843](https://www.canlii.org/en/on/onsc/doc/2015/2015onsc843/2015onsc843.html), [Thompson v. Thompson 2013 ONSC 5500](https://www.canlii.org/en/on/onsc/doc/2013/2013onsc5500/2013onsc5500.html), and, [Gonsalves v. Scrymgeour, 2017 ONSC 1034](https://www.canlii.org/en/on/onsc/doc/2017/2017onsc1034/2017onsc1034.html). [296] As the father does not file income tax returns in any jurisdiction the Spousal Support Advisory Guidelines (SSAGs) are not overly helpful to the court when determining the appropriate variation of the spousal support order given that the SSAGs generate a range of spousal support based on the assumption that the payor will claim a tax deduction for spousal support paid while the recipient must include the spousal support as taxable income. The net effect is that the cost to the payor is lower than the amount paid in spousal support and the amount received by the recipient is reduced by the income tax attributed to the support. [297] As retroactive spousal support orders do not attract this income tax treatment, courts adjust the amount to be paid by a percentage the court deems to be appropriate given the approximate marginal tax rates of the parties. [Hume v. Tomlinson, 2015 ONSC 843](https://www.canlii.org/en/on/onsc/doc/2015/2015onsc843/2015onsc843.html), and, [Gonsalves v. Scrymgeour, 2017 ONSC 1034](https://www.canlii.org/en/on/onsc/doc/2017/2017onsc1034/2017onsc1034.html). [298] I find that the mother is entitled to an increase in spousal support retroactive to June 1, 2016. The amount of the order for spousal support retroactive to 2016 must be adjusted to reflect that the mother will receive these monies tax free. As the mother had five people in her home as opposed to the father only be responsible for himself, a 65%-35% division of net family income is a fair and appropriate division. In order to affect that division in 2016, the father shall pay spousal support to the mother retroactive to June 1, 2016 in the amount of $2800.00 (with credit for amounts paid). This will result in the mother having net disposable income of $10,684.00 (refer to chart on page 69) in comparison to the father's net disposable income of $5699.00. [299] In 2017 all four children lived with the mother but O.N. completed her post-secondary education by April 2017. Once again, a 65%-35% division of net family income is an appropriate division in this case. In order to achieve that result, the father will be required to pay the mother spousal support in the amount of $2550.00 from January 1, 2017 to December 1, 2017. This will result in the mother having net disposable income of $11,362.00 (refer to chart on page 69) in comparison to the father's net disposable income of $6086.00. #### 2018, 2019 and 2020 [300] Between January and June 2018 when D.N. and N.N. were primarily in her care, due to the increase in her employment income, the mother has a significantly higher net disposable income then the father amounting to approximately 60% of the family's net disposable income. This figure is based on spousal support payable pursuant to the court order. As this is a fair and appropriate division of the family's net disposable income given the child care responsibilities, the spousal support order will not change for the period of January to June 2018. [301] The father having a higher net disposable income between July 2018 and July 2019 is warranted given that N.N. was primarily in his care and D.N. was in his care 50% of the time. In addition, although not entitled to child support, both O.N. and L.N. were also living with the father during this period. [302] As of August 2019, when D.N. and N.N. both returned to live with the mother, the father's child support obligation increases to $5705.00 per month in addition to paying $500.00 per month in spousal support. Therefore, as of August 2019 the mother's net disposable income results in her having 64% of the family's net disposable income. As this is a fair and appropriate division of the family's net disposable income given the child care responsibilities, the spousal support order will not be varied as of August 1, 2019 and the amount paid shall be in accordance with the terms of the court order dated October 25, 2019. [303] Based on the above calculations, I find that there has been a material change in the father's circumstances requiring a variation of the spousal support order for the period of June 1, 2016 up to and including December 1, 2017. The mother's income rose substantially in 2018 as did the father's child support obligation. As a result, the quantum of spousal support pursuant to the order of October 25, 2019, is the appropriate order as of January 1, 2018 and will continue as of that date. --- ## Orders ### Custody and Access [304] The father's claim for an order granting him joint custody of N.N. is dismissed. [305] The father shall have week to week access to N.N., provided it is in accordance with his wishes, as follows: > (a) Alternate weekends from Friday after school until Monday return to school. When school is not in session, pick up and drop off shall take place at the mother's home and the parties shall agree on the time for pick up and drop off. If they cannot agree, pick up on Friday will be at 5:00 p.m. and drop off on Monday at 6:00 p.m.; and, > > (b) Every Wednesday, or such other mid week evening the parties agree on, from after school until return to school on Thursday morning. If school is not in session, pick up and drop off time and location shall be as set out in subparagraph 305(a) above. [306] The parties shall cooperate to ensure that the father has access to N.N. during all school and statutory holidays, including overnight access. [307] The father shall keep the mother advised at all times of any obstacles he faces in relation to remaining sober. The father shall keep the mother advised at all times of any changes to his mental health and addiction issues for so long as N.N. is a minor. [308] The parties shall attempt to agree upon the form of communication they will use in relation to issues affecting the children. If they cannot agree, the mother will decide how they communicate. [309] The parties shall not discuss any aspect of this litigation with N.N. and will refrain from making any disparaging remarks about the other parent to or near N.N. They will not use N.N. to communicate messages to one another even in relation to arranging the father's access to N.N. ### Child and Spousal Support The order of October 25, 2019, requiring the father to pay the mother child and spousal support shall be varied as follows: [310] Commencing June 1, 2016 and up to and including December 1, 2016 the father shall pay the mother child support of $4001.00 per month for N.N. and D.N., based on his annual imputed income of $324,479.00 and the Child Support Guidelines. The father shall receive credit of $12,000.00 against this order, representing the $2000.00 the father paid the mother in child support per month for this period. [311] Commencing January 1, 2017 and up to and including November 1, 2017 the father shall pay the mother child support for D.N. and N.N. the amount of $4697.00 per month based on his annual imputed income of $385,538.00 and the Child Support Guidelines. The father shall receive credit of $22,000.00 against this order, representing the $2000.00 the father paid the mother in child support per month for this period. [312] The father shall pay the mother child support for D.N. and N.N. the amount of $4903.00 for the month of December 2017 based on his annual imputed income of $385,538.00 and the Child Support Guidelines. The father shall receive a credit against this order of $2000.00, being the amount of child support he paid the mother for this month. [313] Commencing January 1, 2018 and up to and including June 1, 2018, the father shall pay the mother child support of $5705.00 per month for D.N. and N.N. based on his annual imputed income of $452,306.00 and the Child Support Guidelines. [314] Commencing July 1, 2018 and up to and including July 1, 2019, the father shall pay the mother child support of $2394.00 based on the following factors: > (a) During this period N.N. lived primarily with the father; > > (b) During this period D.N. spent equal time with the mother and father; > > (c) The mother's annual income in 2018 was $71,000.00 and her monthly child support obligation for D.N. and N.N. pursuant to the Child Support Guidelines was $1082.00; > > (d) The father's annual imputed income for 2018 is $452,306.00 and his child support obligation for D.N. based on a shared parenting arrangement was $3476.00; and, > > (e) A set off of each parent's child support obligation for D.N. and N.N. is $2394.00 paid by father to mother. [315] The father shall receive a credit of $26,000.00 against this order, representing the $2000.00 the father paid the mother in child support per month for the period of July 2018 to July 2019. [316] The father's obligation to pay $500.00 per month to the mother as contribution towards the children's section 7 expenses as set out in the order of October 25, 2019, is terminated effective June 30, 2018. The mother shall advise the Family Responsibility Office of the amount paid to her directly by the father towards section 7 expenses between July 1, 2018 and the date of this order for which the father shall receive a credit against arrears of child support. [317] The father shall also receive a credit of $4800.00 against arrears of child support as this lump sum was paid by the father directly to the mother towards child support in 2017. [318] The father shall pay the mother the sum of $651.95 being his proportionate share (85%) of the cost of dental expenses of $342.00 and psychologist fees of $425.00 for N.N. since August 2019. This calculation is based on the father's imputed annual income of $452,306.00, the mother's annual income of $77,000.00 (employment income and spousal support) and the total cost of the expenses being $767.00. [319] If the father paid 100% of the cost of D.N.'s 2018-2019 tuition fee, the mother shall pay the father the sum of $636.75, being her proportionate share of this expense. The amount owing by the mother to the father shall be set off against his arrears of child support. If the father did not pay 100% of D.N.'s 2018-2019 tuition fee and D.N. paid the difference, the amount of $636.75 shall be paid by the mother to D.N. [320] The parties shall share the cost of agreed upon section 7 expenses in proportion to income. Based on the father's current imputed annual income of $452,306.00 and the mother's annual income of $71,000.00 and $6000.00 in spousal support, the father shall be responsible for 85% of agreed upon section 7 expenses while the mother shall be responsible for 15%. [321] Commencing June 1, 2016 and up to and including December 1, 2016, the father shall pay the mother spousal support of $2800.00 per month. The mother shall immediately notify the Family Responsibility Office if the father paid spousal support pursuant to the October 25, 2019, during this period and if so, he shall receive a credit for such payment against this order. [322] Commencing January 1, 2017 and up to and including December 1, 2017, the father shall pay the mother spousal support of $2550.00. The mother shall immediately notify the Family Responsibility Office if the father paid spousal support pursuant to the order of October 25, 2019, during this period and if so, he shall receive a credit for such payment against this order. [323] Commencing January 1, 2018 and on the first of each month thereafter, the father shall pay the mother spousal support of $500.00 per month. The mother shall immediately notify the Family Responsibility Office if the father paid spousal support pursuant to the order of October 25, 2019, during this period and if so, he shall receive a credit for such payment against this order. [324] If either party is seeking an order for costs of the Motion to Change, they shall serve and file their cost submissions with a Bill of Costs on the other party within 20 days of the date of this endorsement. The cost submissions shall not be more than 7 pages long not including attachments. The responding party shall have 20 days to serve their response on the requesting party. The responding cost submissions shall not exceed 7 pages not including attachments. [325] The parties shall file their cost submissions with the trial coordinator. --- Released: May 29, 2020 Signed: Justice Melanie Sager