Knight v. Frobel, 2018 ONSC 3651

Knight v. Frobel, 2018 ONSC 3651

CITATION: Knight v. Frobel, 2018 ONSC 3651

DIVISIONAL COURT FILE NO.: 2016-2261 DATE: 2018/07/09

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Thorburn, Gareau and LeMay JJ.

BETWEEN:

OAKLAND WINSTON KNIGHT

Appellant (Applicant)

– and –

CHRISTINE ROSE FROBEL

Respondent (Respondent)

Oakland Winston Knight, Self-Represented

Diana Aoun, for the Respondent

HEARD at Ottawa: June 13, 2018

REASONS FOR DECISION

GAREAU J.

1The Appellant appeals the final order granted on November 17, 2016 by Mr. Justice Charbonneau. In that order, the court set child support and the level of contributions to s. 7 extraordinary expenses for the child, Chloe Frobel-Knight, born July 24, 2010.

2By further endorsement dated January 5, 2017, Justice Charbonneau ordered costs payable by Mr. Knight to Ms. Frobel which he fixed in the sum of $14,500.00.

3The appellant appeals both the child support order and the order with respect to costs.

4By way of background, on May 1, 2011 the parties entered into an interim agreement for child support to be paid by the appellant with that arrangement to be reviewed in September, 2011. The appellant made these child support payments but the arrangement broke down to the point that the appellant ceased paying child support for Chloe. The appellant initiated an application for custody and access and the respondent then brought her own application for child support, including a claim for s. 7 extraordinary expenses. To their credit the parties were able to settle the issues pertaining to custody and access to Chloe on the basis that they would have joint custody of Chloe and share in her care on an alternating week basis. The remaining financial issues with respect to the support of Chloe proceeded to trial before Charbonneau J. in October 2016.

5In deciding the issue of child support, including s. 7 contributions for extraordinary expenses, Justice Charbonneau made several findings of fact. These included the determination of the gross income of each party, a reasonable allowance for the child care costs incurred by the parties and the historical income of the parties from 2011 to 2016 to determine retroactive child support.

6The parties agree that the issues in this appeal are as follows:

(a) Did Charbonneau J. err in declining to impute income to the respondent?

(b) Did Charbonneau J. err in limiting the allowable amount for the appellant’s child care costs to 75%?

(c) Did Charbonneau J. err in fixing the appellant’s proportional share of s. 7 expenses at 70%?

(d) Did Charbonneau J. err in his determination of the parties’ income for previous years and in his calculations of arrears, child support?

(e) Did Charbonneau J. err in his award of costs?

The Imputation of Income to the Respondent

7The appellant submits that the trial judge erred in finding that the respondent was justified in reducing her work hours to four days per week from six days per week and not imputing income to the respondent. The appellant submits that no medical evidence was provided to the court to establish that the respondent cannot work six days each week.

8Charbonneau J. fixed the income of the respondent for child support purposes based on her being employed four days each week and working 37 hours each week. Generally, a person working 37 hours a week is not purposely being under-employed, and no imputation of income is justified.

9The approach taken by Charbonneau J. was reasonable and there is no merit to this ground of appeal.

The Child Care Expenses Allowable to the Applicant

10The appellant submits that Charbonneau J. erred in not allowing 100% of his claim for expenses for a nanny in his home. The learned trial judge exercised his discretion to allow 75% of this expense. Charbonneau J.’s decision took into account the different financial means of the parties and provided a clear and cogent rationale for this in paragraph 36 of his reasons. His determination was reasonable.

11The approach taken by Charbonneau J. in reducing the child care costs related to the live-in nanny is also consistent with the jurisprudence. In Marsh v. Gibson, 2011 ONCJ 275, the court reflected the full amount of nanny costs claimed as being unreasonable and reduced the amount to less than 100%. Similarly, in Owens v. Owens, 2013 ONSC 1675, the court found that 95% of the child care expenses were appropriate, but reduced it further to reflect the financial circumstances of the payor spouse.

12Therefore, this ground of appeal is rejected.

The Fixing of the Appellant’s Proportionate Share of s. 7 Expenses at 70%

13The appellant submits that Charbonneau J.’s determination of 70% to be paid by the appellant and 30% to be paid by the respondent of s. 7 extraordinary expenses is unreasonable. The appellant suggests that the appropriate split is 60% to 40%. At paragraph 18 and 20 of his reasons, Charbonneau J. makes findings of fact with respect to the current income of the parties. He finds the appellant’s income to be $133,622.00 per year, and the respondent’s income to be $65,000 per year based on a four-day work week. Section 7 of the Child Support Guidelines (Ontario) outlines what is to be considered a special or extraordinary expense. Section 7(2) sets out how the special or extraordinary expense is to be shared between the parents and provides as follows:

The guiding principle in determining the amount of an expense referred to ion subsection (1) is that the expense is shared by the parents or spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.

14Based on the finding of the trial judge that the income of the appellant is $133,622.00 annually and the income of the respondent is $65,000 annually, applying s. 7(2) of the Child Support Guidelines the appellant’s share of the s. 7 expenses on an ongoing basis is 67% and the respondent’s share is 33%.

15Accordingly, the appeal on the grounds that the trial judge erred in setting the proportionate share of the ongoing child care expenses is allowed in that the appellant’s share is set at 67% and the respondent’s share is set at 33% and not on a 70/30 split as indicated in the judgment.

The Determination of the Parties Income for Previous Years and the Calculation of Arrears

16The appellant argues that Charbonneau J. misapprehended the evidence of the income of the parties in 2011, 2013 and 2016. In 2011 the trial judge relied on the line 150 amount in the parties’ income tax returns to fix the amount of income for the year. There is no error in this approach which is consistent with the Child Support Guidelines legislation. In 2013, included in the income of the appellant was $24,000 he received on account of severance pay. This amount is included in the line 150 total income of the appellant on his income tax return for that year. It was the appellant’s choice to invest the $24,000 in RRSPs to reduce his taxable income, but it is inappropriate to “impute down” the income of the appellant for the year 2013 because he made that decision. Regardless of what decision the appellant made, this was still income that he received. In 2016 the respondent reduced her income by quitting her second job, thereby reducing her income to 37 hours a week. This $20,000 reduction in the income of the respondent was found to be reasonable by Charbonneau J. and upheld on this appeal, as earlier indicated in these reasons. Charbonneau J. adjusted the 2016 income of the respondent to reflect the $10,000 the respondent earned in the first half of the year until she left her second job, which, in our view, was an entirely reasonable approach.

17Similarly, Charbonneau J’s means of assessing the parties for the years 2012 to 2016 is reasonable. As indicated at paragraph 18 of his reasons for judgment, the trial judge used the line 150 amount from the income tax returns to determine the income of the parties for those years which is a correct application of the law consistent with the Child Support Guidelines legislation.

18With respect to the mathematical calculation of the arrears themselves, the respondent in her factum concedes that errors were made by the trial judge in his calculation of the total child care costs for the years 2012 to 2016. The respondent concedes that the appellant’s total child care costs for 2012 to 2016 were $79,600 and not the $68,000 calculated by the trial judge. In calculating the total child care costs of the respondent the learned trial judge omitted the amount for 2012, which, if included, results in total child care costs for the years of 2012 to 2016 for the respondent of $18,480.00 and not the sum of $12,000 indicated in his judgment.

19At paragraphs 38 and 39 of his reasons for judgment, the trial judge fixes a global amount of child care expenses from 2012 to 2016 and fixes the appellant’s contribution at 70% and the respondent’s contribution at 30%. With respect to the respondent’s contribution, the trial judge states at paragraph 38 that, “I conclude 30% is a reasonable proportion given the parties’ respective earning potential.” In our view, it is an error in law to consider the earning potential of the parties in setting an appropriate amount for retroactive contributions to child care expenses. For the period of retroactivity (2012 to 2016) the earnings of the parties are known and the trial judge made findings as to those earnings at paragraph 38 of his reasons.

20In our view, the retroactive child care expenses should be fixed by looking at the total cost for the year and applying s. 7(2) of the Child Support Guideline legislation by fixing the amount to be contributed by the parties in proportion to their respective incomes for the year. The calculation of percentage contributions of each party for retroactive s. 7 expenses is not based on “the parties’ respective earning potential”, but rather what line 150 of their income tax return reflected their income for the year to be. This calculation should have been done on a year-to-year basis from 2012 to 2016 and not globally on a 70% - 30% split as indicated in paragraphs 38 and 39 of the reasons for judgment.

21Based on the finding made by the trial judge as to the income of the parties for 2012 to 2016 as set out in paragraph 18 of his reasons for judgment, the percentage share (appellant/respondent) for the child care expenses from 2012 to 2016 should be as follows:

2012 59% - 41%

2013 64% - 35%

2014 58% - 42%

2015 59% - 41%

2016 64% - 36%

22The issue of the calculation of retroactive s. 7 expenses for child care from 2012 to 2016 is to be referred back to the trial judge for recalculation based on the percentage calculation set out above. There is insufficient information in the record before us to enable this court to do this calculation.

The Award of Costs

23By endorsement dated January 5, 2017 Justice Charbonneau ordered the appellant to pay costs to the respondent in the amount of $14,500.00 all inclusive.

24It is the position of the appellant that once the corrections are made in the areas where he alleges Charbonneau J. made in his reasons then the result is more favourable to him and therefore no costs of the trial should be awarded.

25The fact is that this court sitting in appeal has dismissed the majority of the grounds of appeal advanced by the appellant. The grounds of appeal on which the appellant succeeded do not justify changing the costs awarded by Charbonneau J. at trial.

26Judges at trial have a wide discretion to fix costs. The scope of appellate review is limited to cases where the determination is plainly wrong, or the judge fixing the costs has made an error in principle. (See: Boucher v. Public Accountants Council (Ontario), (2003) 2004 14579.

27We cannot find that Justice Charbonneau’s decision on costs was plainly wrong or reflects an error in principle and accordingly there is no reason to interfere in the costs order made in this case.

28For the foregoing reasons the appeal is allowed in part in respect to the calculation of the percentage contribution by the parties in relation to ongoing s. 7 expenses for child care and retroactive child care from 2012 to 2016.

29With respect to the costs of the appeal, although the appellant succeeded on one ground of his appeal, the respondent enjoyed the preponderance of success on the appeal and is entitled to some costs. The respondent submitted a bill of costs for the appeal totaling $8,112.27 on a substantial indemnity basis. Our view is that this is not a case for substantial indemnity costs, and given the appellant was successful in part on the appeal, the appropriate amount of costs is in the amount of $2,500, all in, payable by the appellant to the respondent.

Gareau J.

Thorburn J.

LeMay J.