Kovalchuk v. Kovalchuk, 2023 ONCJ 355
DATE: August 9, 2023 COURT FILE NO.: D43276/22 ONTARIO COURT OF JUSTICE
B E T W E E N:
ANNA KOVALCHUK APPLICANT
- and –
SERGEI KOVALCHUK RESPONDENT
COUNSEL: Helen Kurgatnikov Miller, for the Applicant The Respondent not attending
HEARD: August 3, 2023
JUSTICE S.B. SHERR
REASONS FOR DECISION
Part One – Introduction
[1] This was the uncontested hearing of the applicant’s (the mother’s) claims for parenting and support orders regarding the parties’ daughter (the child). The child is 10 years old.
[2] At the hearing, the court gave oral reasons why it would be granting the parenting orders sought by the mother, with minor changes. The court heard oral evidence on the support issues and reserved its decision.
[3] The remaining support issues for the court to determine are:
a) When should child support start? b) What is the respondent’s (the father’s) income for each year that support is ordered, for the purpose of the support calculation? c) What amounts should the father contribute to the child’s special and extraordinary expenses (section 7 expenses) pursuant to section 7 of the Child Support Guidelines (the guidelines)? d) Should the father be required to cover the child on extended medical coverage available to him through his place of employment? e) Should the father be required to irrevocably designate the child on any life insurance policy that he presently has or has available to him through his place of employment?
Part Two – Brief background facts
[4] The mother is 42 years old. The father is 58 years old.
[5] The parties were married in April 2012 in Ukraine. They have the one child together.
[6] The parties lived together in Ukraine until the mother and the child came to Canada in February 2018. The mother and the child have remained in Canada since that time.
[7] The father remained in Ukraine until he came to the United States in January 2022. He came to Canada in May 2022 and has remained here.
[8] The mother deposed that she ended her relationship with the father in January 2022.
[9] The mother has been the child’s primary caregiver. The father has had sporadic parenting time with the child.
[10] The mother was a neurologist in Ukraine. However, she has kidney and liver disease which became worse after the child was born. She is on the waitlist for a kidney and liver transplant. She has been unable to work for a long time and is in receipt of Ontario Disability Support Plan (ODSP) benefits.
[11] The child has also been diagnosed with polycystic kidney and liver disease. The child had surgery in 2021 to have cysts removed.
[12] The father is an electrician. He owned his own company in Ukraine. He worked as an electrician when he came to the United States and is working as an electrician in Canada.
[13] The mother issued her application on November 22, 2022.
[14] The parties attended at First Appearance Court on January 25, 2023. The father was given an extension until February 28, 2023 to serve and file his Answer/Claim, Form 35.1 Parenting Affidavit and Financial Statement (responding materials).
[15] The parties attended at First Appearance Court again on March 9, 2023. The father had not filed his responding materials. The case was adjourned for a case conference and to permit the mother to file a Form 23C affidavit for an uncontested hearing prior to the return date.
[16] The parties attended at the case conference on May 12, 2023. The father had still not filed responding materials. The father was given one last extension to serve and file his responding materials, on terms. The court endorsed that if he failed to file his responding materials within 30 days, the mother could proceed on an uncontested basis with no further notice to him. The court made a modest costs order of $500 against the father.
[17] The father did not serve or file his responding materials.
[18] A few days before the scheduled return date for the uncontested hearing, the mother served and filed a Form 23C affidavit seeking final orders. On July 31, 2023, the court found the father in default. However, it set out further evidence it required from the mother to support her claims. The court endorsed that this evidence could be provided orally at the uncontested hearing.
[19] The court further endorsed that the father could make submissions on the return date regarding the extent, if any, that he be permitted to participate at the uncontested hearing.
[20] The father did not attend at the uncontested hearing and the matter proceeded. The mother gave further oral evidence. The court relied on that evidence, her Form 23C affidavit, her sworn Financial Statement and her Form 35.1 Parenting Affidavit in coming to its decision.
Part Three – When should child support start?
[21] The mother asks that the child support order start on January 1, 2022.
[22] The mother issued her application on November 22, 2022. Support since that date is prospective support and is presumptively payable. See: Park v. Thompson. The support claimed by the mother before that date requires a retroactive support analysis.
[23] In Colucci v. Colucci, 2021 SCC 24, the court set out the framework that should be applied for applications to retroactively increase support in paragraph 114 as follows:
a. The recipient must meet the threshold of establishing a past material change in circumstances. While the onus is on the recipient to show a material increase in income, any failure by the payor to disclose relevant financial information allows the court to impute income, strike pleadings, draw adverse inferences, and award costs. There is no need for the recipient to make multiple court applications for disclosure before a court has these powers. b. Once a material change in circumstances is established, a presumption arises in favour of retroactively increasing child support to the date the recipient gave the payor effective notice of the request for an increase, up to three years before formal notice of the application to vary. In the increase context, because of informational asymmetry, effective notice requires only that the recipient broached the subject of an increase with the payor. c. Where no effective notice is given by the recipient parent, child support should generally be increased back to the date of formal notice. d. The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors continue to guide this exercise of discretion, as described in Michel. If the payor has failed to disclose a material increase in income, that failure qualifies as blameworthy conduct and the date of retroactivity will generally be the date of the increase in income. e. Once the court has determined that support should be retroactively increased to a particular date, the increase must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines.
[24] This framework in Colucci addressed a request to retroactively increase the support contained in an order or an agreement. Courts have found that this framework should also be applied, with necessary modifications, for an original request for retroactive support.
[25] In an original application for retroactive support, there will be no need to meet the threshold requirement of establishing a material change in circumstances, as required in Colucci. The first step will be to determine the presumptive date of retroactivity as described in Colucci. The second step will be to determine if the court should depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors [^1] will guide the exercise of that discretion, as described in Michel v. Graydon, 2020 SCC 25. The third step will be to quantify the proper amount of support for each year since the date of retroactivity, calculated in accordance with the guidelines. See: L.S. v. M.A.F., 2021 ONCJ 554; M.A. v. M.E., 2021 ONCJ 555; A.E. v. A.E., 2021 ONSC 8189; M.K. v. K.M., 2022 ONCJ 424; T.B. v. O.T., 2023 ONCJ 35; V.S.B. v. B.L.O., 2022 ONCJ 506; Mohamoud v. Farah, 2023 ONCJ 103.
[26] Retroactive child support simply holds payors to their existing (and unfulfilled) support obligations. (Michel - par. 25).
[27] Retroactive child support is a debt; by default, there is no reason why it should not be awarded unless there are strong reasons not to do so (Michel – par. 132).
[28] Retroactive awards are not exceptional. They can always be avoided by proper payment. (D.B.S. - par. 97).
[29] The first step in the retroactive support analysis is to determine the presumptive start date of support. This will be the date when the mother gave effective notice to the father, provided that this date is not more than three years before the date of formal notice – in this case, as in most cases, the date of the application.
[30] Effective notice is defined as any indication by the recipient parent that child support should be paid, or if it already is, that the current amount needs to be renegotiated. All that is required is for the subject to be broached. Once that has been done, the payor can no longer assume that the status quo is fair. (D.B.S. - par. 121).
[31] The court accepts the mother’s evidence that she gave effective notice to the father on or about January 1, 2022 when she asked him for child support. The mother testified that she frequently followed up with the father with support requests after that date. He paid some support to her. The amounts that he paid will be set out below.
[32] The court finds that January 1, 2022 is the presumptive start date for support.
[33] The second step in the retroactive support analysis is to determine if the court should deviate from the presumptive start date applying the D.B.S. factors, as modified in Michel v. Graydon. [^2]
[34] The court will not deviate from the presumptive start date for support for the following reasons:
a) The mother provided an understandable reason for her delay in applying to court for support. First, she tried to negotiate the issue out of court. When the father did not follow through with his promises to her to pay more support she moved to court within a reasonable time. b) The father exercised blameworthy conduct by failing to pay adequate support and by not providing the mother with timely financial disclosure to permit her to assess his support obligations. c) The circumstances of the child have been disadvantaged as the mother and the child have had to rely on public assistance to meet their basic needs. d) There is no evidence that a retroactive support order would cause the father hardship. Failing to order retroactive support would cause the mother and the child hardship.
[35] The retroactive support analysis equally applies to claims for retroactive section 7 expenses. See: Smith v. Selig, 2008 NSCA 54, 56 R.F.L. (6th) 8 (NSCA); Hetherington v. Tapping, 2007 BCSC 209 (BCSC); Surerus-Mills v. Mills.
[36] Child support, including the father’s contribution to the child’s section 7 expenses, shall start as of January 1, 2022.
[37] The next step in the retroactive support analysis is to quantify the amounts that should be paid. This will be done below.
Part Four – The parties’ incomes
[38] The mother’s annual ODSP income is $14,377.
[39] The mother seeks to impute annual income to the father of $75,000 for the purpose of the support calculation.
[40] Section 19 of the guidelines permits the court to impute income to a party as it considers appropriate.
[41] Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this obligation, the parties must earn what they are capable of earning. If they fail to do so, they will be found to be intentionally under-employed. See: Drygala v. Pauli.
[42] The onus is on the party seeking to impute income to the other party to establish that the other party is intentionally unemployed or under-employed. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made. See: Homsi v. Zaya, 2009 ONCA 322.
[43] The court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations as provided for in section 21 of the guidelines and impute income. See: Smith v. Pellegrini; Maimone v. Maimone.
[44] The mother deposed that the father ran his own business as an electrician in Ukraine. She said that she frequently spoke to the father when he came to the United States in early 2022. She said that the father told her that he had immediately found employment as an electrician and was being paid in cash. He sent her photos of work that he had done.
[45] The mother testified that the father told her that he obtained employment as an electrician upon arriving in Canada in May 2022. She said that he has told her that he works six days a week and regularly works overtime.
[46] The father provided his May 31, 2022 pay stub to the mother showing that he was being paid $25 per hour.
[47] The father provided his 2022 Notice of Assessment to the mother showing income of $42,291.27. This reflected his income since May 16, 2022. It did not include his income earned in the United States.
[48] The father provided his pay stub to the mother for the period ending on May 14, 2023. It showed a year-to-date income of $22,345.69.
[49] As set out by the mother in her affidavit, the father’s income for the period from May 16, 2022 until May 14, 2023 was $64,636.96.
[50] The mother believes that the father is earning additional unreported income. However, this was just speculation. There was no substantive evidence that the pay stubs provided by the father were inaccurate. The mother had no evidence that the father was working for cash for anyone other than his employer. Lastly, the mother admitted that the father had told her that he was earning cash income while working in the United States but did not tell her that he was earning cash income in Canada.
[51] The court finds that the pay stubs are the best evidence of the father’s income since he came to Canada and that he has been earning annual income of approximately $65,000 since May 2022. It will use that income to assess his support obligations.
[52] The court will also impute annual income to the father at the rate of $65,000 for the short period he was working in the United States from January to May 2022 for the following reasons:
a) He told the mother that he was working as an electrician during this period. b) He told the mother he was earning cash income. The mother’s evidence was credible. c) An adverse inference is drawn against him for failing to provide financial disclosure, despite being put on notice that the mother was seeking to impute annual income of $75,000 to him. d) This level of income is a reasonable amount to expect an experienced electrician to earn. e) Even if the father earned somewhat less income, there is no evidence that he paid any taxes on it.
[53] The guidelines table amount for one child at an annual income of $65,000 is $605 each month.
Part Five – Section 7 expenses
5.1 Legal considerations
[54] The mother seeks an order that the father contribute towards the child’s retroactive and prospective section 7 expenses in proportion to the parties’ incomes.
[55] The relevant provisions of the guidelines regarding section 7 expenses are as follows:
7 (1) In child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:
(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment; (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 of $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and 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.
7 (1.1) For the purposes of paragraphs (1)(d) and (f), the term “extraordinary expenses” means
(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or (b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account (i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, (ii) the nature and number of the educational programs and extracurricular activities, (iii) any special needs and talents of the child or children, (iv) the overall cost of the programs and activities, and (v) any other similar factor that the court considers relevant.
7 (2) The guiding principle in determining the amount of an expense referred to in 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.
7 (3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.
[56] Unlike section 3 of the guidelines, which presumptively provides for the table amount of child support, an order for section 7 expenses involves the exercise of judicial discretion. See: Park v. Thompson, 77 O.R. (3d) 601, (Ont. C.A.).
[57] In Titova v. Titov, 2012 ONCA 864, the court set out the following framework for determining a party’s contribution to a child’s section 7 expenses:
a) Calculate each parties’ income for child support purposes. b) Determine whether the claimed expenses fall within one of the enumerated categories of section 7 of the guidelines. c) Determine whether the claimed expenses are necessary “in relation to the child’s best interests” and are reasonable “in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation.” d) If the expenses fall under paragraphs 7 (1) (d) or (f) of the guidelines, determine whether the expenses are “extraordinary” as defined by subsection 7 (1.1) of the guidelines. e) The court considers what amount, if any, the child should reasonably contribute to the payment of these expenses and then applies any tax deductions or credits. f) The court determines the proportions that each party should contribute to the expenses, with the guiding principle being that the expenses will be shared in proportion to their incomes.
[58] The onus is on the parent seeking the special or extraordinary expenses to prove that the claimed expenses fall within one of the categories under section 7 and that the expenses are necessary and reasonable, having regard to the parental financial circumstances. See: Park v. Thompson, supra.
[59] Where the expense is not within the means of the parties, the court may limit or deny recovery of that amount. See: Ebrahim v. Ebrahim; L.H.M.K. v. B.P.K., 2012 BCSC 435; Simone v. Van Nuys, 2021 ONCJ 652.
[60] The court has the discretion to apportion the section 7 expense in a different manner than pro-rata to the parties’ incomes, depending on the circumstances of the case. See: Hamilton v. Salmon, 2023 ONCJ 343, per Justice Danielle Szandtner; Salvadori v. Salvadori, 2010 ONCJ 462; Buckley v. Blackwood, 2019 ONSC 6918.
5.2 Eligible section 7 expenses
[61] The mother set out in her Form 23C affidavit the expenses that she seeks contribution for from the father broken down between 2022 and 2023.
[62] The mother claimed some minor medical expenses for the child. They fall within paragraph 7 (1) (b) of the guidelines and were reasonable and necessary.
[63] The mother included expenses for Math and English tutors for the child. She testified that the child was struggling in these subjects as the child has dyslexia and ADHD. The mother said that the tutoring has been very beneficial for the child. The father contributed to this expense in 2022. The court draws the inference that he felt that this expense was in the child’s best interests. The court finds that this expense is reasonable and necessary for the child.
[64] The mother also included expenses for the child’s attendance at Russian school. The child has been attending this school for several years. The child has Russian heritage and the additional schooling is in her best interests to learn her heritage, language and culture. The father contributed to this expense in 2022. Again, the court draws the inference that he accepted that this expense was in the child’s best interests. The court finds that this expense is both reasonable and necessary for the child.
[65] The court finds that the tutoring and Russian school expenses are eligible extraordinary primary educational expenses pursuant to paragraph 7 (1) (d) of the guidelines. They are more than the mother can reasonably cover, taking into account the mother’s ODSP income and the amount that she will receive from the father under the applicable table.
[66] The remaining expenses claimed by the mother were for music classes and camp for the child. The court finds that these are eligible extraordinary expenses for extracurricular activities pursuant to paragraph 7 (1) (f) of the guidelines. They are more than the mother can reasonably cover, taking into account her income and the amount that she will receive from the father under the applicable table. The father has made contributions to the music expenses. The court finds that these expenses are reasonable and necessary for the child’s social development.
5.3 Calculation of father’s contribution to section 7 expenses
[67] For 2022, the following are the eligible section 7 expenses:
Russian school and tutoring - $1,526 Extracurricular activities - $680 Medical $35
[68] A software analysis shows that the father’s proportionate contribution to these expenses, after taking into consideration any tax benefit or credit, is $153 each month and this will be ordered. [^3]
[69] For 2023, the mother deposed that the child had music expenses of $480. She said that the child will no longer go to the music classes, so the court will not order payment for this expense on an ongoing basis. Rather, it will order the father to pay his proportionate share of this expense that has already paid by the mother. Based on his annual income of $65,000 and the mother’s annual income of $14,377, he shall pay the mother 82% of this expense, being $394.
[70] For 2023, the court has taken the tutoring and Russian school expenses to date and projected the total amounts for these expenses in 2023. The camp and eye exam expenses claimed by the mother will not recur this year. The total eligible section 7 expenses are as follows:
Camp $165 Medical $45 Tutoring $942 Russian school $925
[71] The software analysis shows that the father’s proportionate contribution to these expenses, after taking into consideration any tax benefit or credit is $142 each month and this will be ordered.
Part Six – Support credits and calculation of support owing
[72] The mother provided charts to the court setting out the support paid by the father since January 1, 2022. The court finds that these charts are accurate.
[73] In 2022, the father paid $4,815 for support and $1,185 towards the child’s section 7 expenses. He will be credited with $6,000.
[74] In 2023, the father has paid support of $1,916 and has not paid anything towards the child’s section 7 expenses. He will be credited with $1,916, plus any amounts that he has paid after August 3, 2023, as reflected in the records of the Family Responsibility Office.
[75] Guidelines table support of $12,100 has accrued since January 1, 2022 ($605 each month for 20 months).
[76] Section 7 expenses have accrued in the amount of $3,366 since January 1, 2022, calculated as follows:
2022 – $153 each month for 12 months = $1,836 2023 – $142 each month for 8 months = $1,136 plus father’s share of music expense of $394
[77] The support owed by the father is $7,550 ($12,100 plus $3,366 minus support credit of $7,916).
[78] The father will be permitted to pay these arrears over two years at $315 each month, starting on September 1, 2023. However, if he is more than 30 days late in making any ongoing or arrears support payments, the amount of arrears then owing shall immediately become due and payable.
Part Seven – Medical and insurance coverage
[79] The mother believes that the father has extended medical coverage and life insurance available through his employer. The father was put on notice that the mother was seeking orders requiring the father to have the child named under his extended medical coverage and irrevocably designated as a beneficiary on any life insurance policy he has or has available to him at work. He had the opportunity to deny that he had such coverage. He did not do so. The court draws an adverse inference against him and will decide this issue based on the father having extended medical coverage and life insurance available through his employer.
[80] The mother did not ask for an order requiring the father to obtain extended medical coverage or a life insurance policy if it was not available through his employment.
[81] The Ontario Court of Justice has limited jurisdiction to make the orders sought by the mother.
[82] Clauses 34 (1) (i) and (j) of the Family Law Act read as follows:
Powers of court
34 (1) In an application under section 33, the court may make an interim or final order,
(i) requiring that a spouse who has a policy of life insurance as defined under the Insurance Act designate the other spouse or a child as the beneficiary irrevocably; (j) requiring that a spouse who has an interest in a pension plan or other benefit plan designate the other spouse or a child as beneficiary under the plan and not change that designation; and
[83] Subsection 34 (2) of the Family Law Act reads as follows:
Limitation on jurisdiction of Ontario Court of Justice
(2) The Ontario Court of Justice shall not make an order under clause (1) (b), (c), (i), (j) or (k) except for the provision of necessities or to prevent the dependant from becoming or continuing to be a public charge, and shall not make an order under clause (d).
[84] The court finds that it has jurisdiction to make the orders sought by the mother under subsection 34 (2) of the Family Law Act. The order is to provide for necessities for the child. It will also assist the child from continuing to be a public charge. The orders sought by the mother are appropriate to provide for the fair support of the child and will be made.
Part Eight – Conclusion
[85] Final orders shall go on the following terms:
a) The mother shall have sole decision-making responsibility for the child. b) The child’s primary residence shall be with the mother. c) The mother may obtain or renew all government documentation for the child, including passports, without the father’s consent. d) The mother may travel with the child outside of Canada, for vacation purposes, without the father’s consent. e) The father shall not remove the child from the Province of Ontario without the mother’s signed and notarized consent. f) The father shall have reasonable parenting time with the child on reasonable notice to the mother. The mother shall have the sole discretion to cancel or change a visit, such discretion to be exercised reasonably. g) Starting on January 1, 2022, the father shall pay child support to the mother of $605 each month. This is the guidelines table amount for one child, based on an imputed annual income to the father of $65,000. h) Starting on January 1, 2022, the father shall pay the mother $153 each month towards the child’s section 7 expenses. i) Starting on January 1, 2023, the father shall pay the mother $142 each month towards the child’s section 7 expenses. j) In addition, the father shall pay the mother $394 for his contribution to the child’s music expense in 2023. k) The father shall be credited with total child support paid of $7,916 since January 1, 2022, leaving a balance owing to the mother of $7,550, less any payments the father has made since August 3, 2023, as reflected in the records of the Family Responsibility Office. l) The father may pay these arrears in the amount of $315 each month, starting on September 1, 2023. However, if he is more than 30 days late in making any ongoing or arrears support payments, the amount of arrears then owing shall immediately become due and payable. m) Nothing in this order precludes the Family Responsibility Office from collecting support arrears from any government source (such as income tax or HST refunds) or lottery or prize winnings. n) The father shall maintain the child on any extended health coverage that he has available to him through his place of employment and provide proof of this designation to the mother upon request. He is to process any claims made on behalf of the child promptly. o) The father shall irrevocably name the child as a beneficiary on any existing life insurance policy he presently has or has available to him through his place of employment. He shall provide proof of coverage on a regular basis as requested by the mother. He shall maintain such insurance coverage until the child is no longer entitled to child support. p) The father shall provide the mother with complete copies of his income tax returns and notices of assessment by June 30th each year. q) A support deduction order shall issue.
[86] The mother is entitled to her costs. She is to serve and file written costs submissions by August 21, 2023. The father will then have until September 1, 2023 to serve and file any responding written costs submissions. The submissions shall not exceed three pages, not including any bill of costs or offer to settle. They should be delivered to the trial coordinator’s office on the second floor of the courthouse.
[87] The court thanks the mother’s counsel for her professional presentation of this matter.
Released: August 9, 2023 Justice Stanley B. Sherr
[^1]: See: D.B.S. v. S.R.G., 2006 SCC 37. These factors are: 1. Whether the recipient spouse has provided a reasonable excuse for his or her delay in applying for support. 2. The conduct of the payor parent. 3. The circumstances of the child. 4. The hardship that the retroactive award may entail. [^2]: For instance, in Michel v. Graydon, the court said that the support recipient only needs to provide an understandable reason for the delay in coming to court – not a reasonable excuse. Further, in assessing hardship, the court should also examine the hardship that would be caused to the support recipient and the child if retroactive support was not ordered. [^3]: The software analysis shall be attached to this decision.