Court File and Parties

COURT FILE NO.: FC-13-1519 DATE: 2016/07/14 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sandra Gordon, Applicant AND Alain Guimont, Respondent

BEFORE: Justice A. Doyle

COUNSEL: Self-represented Marc J. Coderre, Counsel for the Father

HEARD: June 28, 2016 at Ottawa

Endorsement

1The Applicant mother has brought a motion to change requesting retroactive child support, ongoing child support and a sharing of ongoing special and extraordinary expenses. She submits that since the Respondent father failed to provide his annual financial disclosure in accordance with the Order of Justice Jean-Jude Chabot dated April 3, 2006, support is payable from 2007 to present.

2The father consents to retroactive support from 2010, i.e. three years before this current motion was filed, and ongoing child support based on an annual income of $100,000, using the Quebec tables as he resides in that province. He is prepared to share in s. 7 expenses provided that he provides prior consent.

3The original motion to change included a request for change in parenting for their 15 year old daughter, Laura. The parties, with the involvement of the Office of Children’s Lawyer, consented to a final order of Justice Mackinnon dated May 21, 2015 whereby the mother obtained sole custody of the child and primary residence. Visits by the father to the child would be in accordance with Laura’s wishes.

4The issues are as follows:

i) What is the father’s income for the purposes of determining child support? ii) What is the date for commencement of retroactive child support? iii) What is the ongoing amount of child support? iv) How should ongoing section 7 expenses be shared?

5For the reasons that follow the Court finds the father’s income as set out below in para. 7. These figures include incomes set out in the expert report of Mr. Desnoyers, plus depreciation of real property in accordance with para. 11 of Schedule III, plus expenses incurred and unreasonably deducted in 2013.

6The court orders retroactive support from 2009 when formal notice was first provided to the father. The court has no personal income tax information regarding 2009 income, but has the 2009 financial statements of the company. The gross sales are approximately the same as in 2010, but the expenses differ and net income was $57,863 in 2009 and $72,506 in 2010. The court’s best evidence on 2009 income is derived from 2010 figures.

7Therefore, the calculations are as follows:

Year	Income	Child support payable per month	Child support paid per month	Amount of Child support outstanding for 12 month period
2009	$56,000 plus capital cost allowance (CCA) of $7,882 = $63,882	$526.94	$300	$2,723.28
2010	$56,000 plus CCA $10,194 = $66,194	$547.75	$310.52	$2,846.76
2011	$91,000 plus CCA $10,330 = $101,330	$815.48	$326.99	$5,861.88
2012	$135,000 plus CCA $9899 = $144,899	$1186.47	$336.15	$10,203.84
2013	$92,000 plus CCA $9503 plus add deduction for use of home $4,248 as per Mr. Savage’s report = $105,751	$897.41	$342.20	$6,662.52
2014	$117,000 plus CCA $9,122 = $126,122	$1,051.19	$345.28	$8,470.92
2015	$93,000	$801	$351.50	$5,394

(i) Therefore, the amount of retroactive support owed by the father to the mother from 2009 to 2015 inclusive is $42,163.20. (ii) Pre-judgment interest will accrue on this amount in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43, s. 127. (iii) Commencing January 1, 2016, the father will pay child support in the amount of $854 per month based on an imputed annual income of $100,000. (iv) The parties shall share s. 7 special and extraordinary expenses in proportion to their respective incomes. At this time, the father is responsible for 59% of the expenses and the mother is responsible for 41% of the expenses. The mother will first obtain consent from the father before incurring an expense to which she is seeking reimbursement. The consent will not be unreasonably withheld. (v) The post-secondary expenses will be shared in proportion to the parties’ respective incomes after consideration of the budget, the child’s contributions and any scholarships, bursaries, grants or student loans that are available. (vi) Commencing June 1, 2017, the parties will exchange their personal tax returns and notices of assessment. In addition, the father will provide recent corporate tax returns and assessments and financial statements of any company he has an interest in. At this time, he has an interest in his company Info Longueuil Inc. (ILI). If a party fails to comply with this request, the other party may proceed to court to obtain the same and make a claim for costs on a full indemnity basis.

Background

8The parties commenced cohabitation in October 1995. The parties were married on May 16, 1998 and separated in 2001. They have one child of the relationship, Laura Gordon-Guimont, born January 22, 2001.

9The mother is 52 years old and resides with Laura in Ottawa. The father is 53 years old and resides with his wife in Montréal.

10Upon separation the parties undertook extensive litigation with respect to the custody of Laura. After a full custody assessment was completed, a trial took place in the Québec Superior Court. On June 18, 2003, the court ordered joint custody with shared parenting. An appeal by the mother was dismissed. The mother moved to Ottawa and the shared parenting continued until 2006 when Laura commenced school.

11At that time, the parties entered into a final agreement whereby the joint custody would continue but the child would have her primary residence with the mother.

12The final divorce judgment of Justice Jean-Jude Chabot dated April 3, 2006 provides for child support to be paid by the father to the mother in the amount of $300 per month. Each January 1, child support would increase by the cost of living. At the time of the Divorce Order, the father was a 25% owner of Coprodev Plus. The company was having financial difficulties and was eventually sold in 2007. The husband received no profit from the sale.

13Paragraph 14 of the Divorce Order stipulates that the parties would advise each other of any major changes in their financial situation within 10 days of that change. That change would be retroactive to January 1 of the year of the change.

14Paragraph 15 of the Divorce Order directed that the parties exchange their income tax returns by May 1 of each year. There was no spousal support ordered.

15The parties had very little communication after separation and there were a number of conflicts resulting in the father’s visits to the child decreasing. The father continued paying child support in accordance with the Divorce Order.

16Justice Kane’s order dated April 15, 2014 dealt with financial disclosure. He ordered questioning and ordered that two weeks before questioning the father would provide documentation set out in the mother’s lawyer’s letter of December 10, 2013, which included, but was not limited to, production of documents from 2008 for all benefits received by the father from his company, 2008 to 2012 financial statements and corporate tax returns and assessment, T4 summaries for the company from 2008 to 2012 and from 2008 to 2012 any benefit provided his wife.

17The father owns two vehicles, a house with his wife that is worth $330,000 and an investment of $280,000. He went to Mexico to visit his in-laws three times and his wife travels there every year to visit with family.

18The mother did not file a financial statement even though she is claiming ongoing s. 7 expenses. Justice Kane dispensed with this requirement. Her Notices of Assessment have been filed. The court cannot assess the mother’s current financial status other than through her affidavit evidence where she states that she has financially struggled due to the father’s underpayment of child support.

What is the father’s income for the purposes of determining child support?

Mother’s position

19The mother submits that the father’s income should be imputed to include income that he receives from other sources including:

– rental income from Coprodev Plus; – dividends from family companies including Groupe Atomic Courrier, Nettoyeur Mont St. Bruno PG traders Inc. and possible Briogestion; – income from his mother’s estate; – personal expenses the father derives from ILI; – gross up of any personal expenses derived from ILI; – monies paid by ILI to the father’s wife; – purchase of and use of a Mercedes vehicle bought by his company, and – adding back amortization expenses of the company.

20She conceded that ILI’s rental income was not to be added back to the father’s income even though that was what she indicated in her pleadings.

21She requests that the court find the following incomes for the father:

2009: $122,580.43 2010: $122,580.43 2011: $154,819.18 2012: $258,452.86 2013: $213,408.48 2014: $240,937.94 2015: $240,937.94

22She also relies on Mr. Savage’s critique of Mr. Desnoyers’ expert report filed by the father.

Father’s position

23The father relies on Mr. Desnoyers’ report setting out the incomes from 2010 to 2015 inclusive.

2010: $ 56,000 2011: $ 91,000 2012: $135,000 2013: $ 92,000 2014: $117,000 2015: projected between 43,090 and $93,000

24The father states that the mother’s submissions contradict her own expert’s report and they are not supported by the evidence before the court.

25For the year 2015, he estimates his income to be $80,000.00.

26For 2016, he is prepared to use an annual income of $100,000, which results in child support of $854 per month commencing January 1, 2016.

Legal principles

2717. A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,

(a) a support order or any provision thereof on application by either or both former spouses; or (b) a custody order or any provision thereof on application by either or both former spouses or by any other person.

28The Federal Child Support Guidelines, S.O.R./97-175 (Guidelines), were designed to ensure fairness to all children. The objectives are described in s. 1:

1. The objectives of these Guidelines are: (a) to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation; (b) to reduce conflict and tension between spouses by making the calculation of child support orders more objective; (c) to improve the efficiency of the legal process by giving courts and spouses guidance in setting the levels of child support orders and encouraging settlement; and (d) to ensure consistent treatment of spouses and children who are in similar circumstances.

29In determining child support for payors who are shareholders, directors and officers of corporations, the court is guided by s. 18 of the Guidelines which states:

18.(1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in section 17 and determine the spouse’s annual income to include

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or (b) an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances.

30As stated by the Ontario Court of Appeal in Wildman v. Wildman (2006), 82 O.R. (3d) 401 (C.A.), the purpose of s. 18 to allows the court to “lift the corporate veil” to ensure that the money received as income of the payor fairly reflects the available monies for the payment of child support. This is especially significant when the payor is the sole shareholder who has the ability to control income of the corporation. Section 18 permits the court to complete accounting through the evidence of what is available for child support.

31Furthermore, s. 19 of the Guidelines permits the court to determine income for the purposes of support.

19.(1) The court may impute such amount of income to a 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 a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; (b) the spouse is exempt from paying federal or provincial income tax; (c) the 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; (e) the spouse’s property is not reasonably utilized to generate income; (f) the spouse has failed to provide income information when under a legal obligation to do so; (g) the spouse unreasonably deducts expenses from income; (h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and (i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.

(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.

32The general principles stemming from the cases, Katarzynski v. Katarzynski 2012 ONCJ 294; and Laurain v. Clarke, 2011 ONSC 7195, 16 R.F.L. (7th) 316, is that the court may impute income to a payor who has other sources of income available. These include untaxed business income used to pay the payor’s personal expenses, that can be “grossed up”, inheritances that could be available for support, untaxed business income, and pre-tax income of the corporation paid to a person with whom the corporation does not deal at arm’s length. A key observation is that the reasonable of an expense of the company is not measured by whether is permissible to be deducted under the Income Tax Act.

33In Riel v. Holland (2003), 67 O.R. (3d) 417, the Ontario Court of Appeal confirmed that the personal component of a payor’s expenses paid by the company should be grossed up for taxes to reflect the tax savings of the payor.

Analysis

34Firstly, child support is based on the payor’s current income, see s. 2(3) of the Guidelines.

35The court must review the payor’s income set out in Line 150 of the T1 General Form as adjusted in accordance with Schedule III of the Guidelines.

36The person who is alleging a different income has the onus to prove that allegation. As stated in s. 18, the court can take into account the spouse’s pre-tax corporate income provided that the amount does not exceed the corporation’s pre-tax income. In addition, s. 19 permits the court to add back as income expenses which are unreasonably deducted.

Mr. Desnoyer’s report

37Mr. Jean-Claude Desnoyers was retained by the father to prepare a report setting out the father’s income for 2010 to 2014 inclusive in accordance with the Guidelines In his report dated 20 April 2015,

38Mr. Desnoyers determined the father’s income for 2010 through 2014 and a projection for 2015 were made. In preparing for his report he used the Guidelines “available income” definition. He states that, except for 2013, the father’s income is derived from the company ILI. The three sources of revenue are as follows: (1) revenue from the rental of three properties; (2) revenue from the father’s work as a consultant; and (3) the sale of industrial computers. In preparing for his report he relied on the financial statements of the business. He admitted that this was a limited report and that the conclusions could change if a more intensive report had been prepared.

39He made the following assumptions: that there would be no changes if there was an audit that they received all the relevant information, that the father has no other sources of income, that there were no sales that had not been recorded and that the personal expenses paid by the Company were reasonable.

40He concluded that the father’s income is as follows:

2010: $56,000 2011 $ 91,000 2012: $135,000 2013: $ 92,000 2014: $117,000 2015: projected between $ 43,090 and $ 93,000

41In imputing income as set out above in his schedule, Mr. Desnoyers commenced with line 150 of the tax return, added the revenue available to the company, added personal expenses, grossed up the personal expenses and deducted the revenue imputed to the father on the RRSPs for failure to repay. Revenue Canada deems RRSP withdrawals if a minimum repayment is not made in the taxation year.

Mr. Savage’s critique

42The mother retained Mr. Stéphane Savage to prepare a critique. Mr. Savage agreed with Mr. Desnoyers’ approach and methodology, but would impute other income.

43The limited critique report prepared by Mr. Savage dated January 15, 2016, makes the following comments:

– He relied on the Guidelines for calculating income for the purposes of determining child support; – He reviewed the income available for child support purposes for the years 2010 to 2014 and the estimation for 2015 prepared by Mr. Desnoyers; – He reviewed the unaudited financial statement of ILI from 2009 to 2014 and the corporate tax returns for the company and had discussions with the mother and her lawyer; – He confirms that the main sources of income for the father are his wages and benefits and dividends he receives from the company; – He confirms that the company provides automation consulting, IT services, owns three real estate properties which derive rental income; – In 2013 the father paid his current wife $6000 as a consultant; and – He states that the company bought a Mercedes from Pierre Guimont on April 27, 2013 in the amount of $20,000, with no supporting documentation to confirm the purchase price paid by the Company or whether personal funds were paid at all.

44He makes a finding that the company earned a range of income from $8,183 to a high of $93,957. He also found that the company’s working capital is approximately $40,000 as of November 2014, or a current ratio of two, which means two dollars of short-term assets for every dollar of short-term debt. He states, “The current ratio and the debt to equity ratio show a very strong balance sheet.”

45On page 5 of his report he states the following: “we agree with the overall approach used by Mr. Desnoyers. Our conclusions differ from Mr. Desnoyers because of additional information we obtained is not included in Mr. Desnoyers’ report not because of the approach used”. He agrees with Mr. Desnoyers’ conclusion that the profits of the company should be added to the father’s income calculation.

46He also accepts Mr. Desnoyers’ representation with respect to adding $2000 for the personal travel expenses of the father paid by the company. However, he notes that there is no supporting documentation to support this amount. He would need to review the invoices to support those expenses claimed by the company. The father indicates that no request was made for these documents.

47Mr. Savage agrees with the calculation of the gross up of personal expenses paid by the corporation.

48Regarding the RRSP income, he agrees with Mr. Desnoyers’s approach that the non-repayment of the home ownership is taxable income, but proposes that no funds were actually received and therefore they should be removed from the available income calculation.

49He indicates that the amount of $6,000 paid to the wife in 2013 and the amount of $10,220 in 2014 should be added back into income. He indicates there was no proof of service being rendered.

50Regarding the invoices to Coprodev Plus, he indicates that the father personally invoiced the company 100 invoices dating from 2009 to 2012. The invoices did not provide any business number and no HST number is disclosed in these invoices. He notes that, per the CRA, a business only needs to register HST when its total income reaches $30,000 per year. He knows that the revenue from these invoices was not declared in the father’s personal income tax or business income tax. Therefore, he attributes these invoices personally to the father as he failed to declare them on his income tax return. This amounts to $ 40,500 in 2010; $ 41,733 in 2011; and $12,636 in 2012.

51Mr. Savage indicates that there are other companies associated with this company, but no further disclosure was provided and he was therefore unable to determine income from these companies. He states that he was not provided bank statements, general ledgers, or other financial material for the other companies. The father indicates that he was never asked for this information.

52Therefore, Mr. Savage’s conclusion is that the father’s income was as follows:

2010: $ 94,000 2011: $127,000 2012: $152,000 2013: $ 97,000 2014: $127,000

Court’s findings

53The Court accepts Mr. Desnoyers’ report as it properly sets out the determination of income pursuant to the Guidelines.

54In addition to the figures set out in Mr. Desnoyers’ report, the court adds back the following amounts to the father’s income.

55Mr. Savage found at page 9 that the father in 2013 declared gross income of $28,634 on his personal income tax return and he claimed $4,248 in expenses against this income to pay income taxes, resulting in a net business income of $24,386.

56These expenses were for insurance, office rent, property taxes, phone and utilities and training. These expenses appear to be, for the most part, an allocation of expenses for using the matrimonial home. These expenses are allowed for tax purposes, but would still have been payable for his home even if he did not have a business. Therefore, those amounts of $4,248 in 2013 should be added it back into income.

57Regarding capital cost allowance, Schedule III of the Guidelines, at paragraph 11, indicates:

Include the spouse’s deduction for an allowable capital cost allowance with respect to real property.

58Therefore, the amortization of intangible assets is added back to income.

59The court is not satisfied that other amounts alleged by the mother should be imputed to the father.

60Regarding the invoices to Corprodev Plus, the father indicates that these sums were already included in his employment income. He admits that it should not be included in the employment income in 101 but rather in line 135 as business income. Neither Mr. Savage nor the mother ever contacted the father to allow him to explain this variation. This is the largest variation between the experts.

61There were no receipts or details of the work that the father’s wife performed for the remuneration she received: $6,000 in 2013 and $10,220 in 2014. He indicates that the wife came to Canada in 2005 and obtained her doctorate here in Canada in 2006. She had a contract from 2010 to 2012 with a hospital. In 2013 and 2014 the father’s wife worked in his company doing translation work, accounting and invoicing. The husband claims these were real expenses incurred by the company for and denies that this is income splitting. In 2014, she found other employment and no longer works with his company.

62In addition, the Court finds that these are not extravagant amounts and accepts that she provided work for ILI. The father indicates in his affidavit and the court accepts that at this time she was not employed and was able to assist in certain functions. The father has met his onus in establishing that these payments to a third party not at arms-length are reasonable. Therefore, these amounts will not be added back to the father’s income

63In determining whether the amortization of tangible assets is to be added back to income, the court must determine if the depreciation is reasonable. The Court, again, does not have sufficient evidence to make a determination. The court has no information regarding the capital acquisition, and the state of the depreciable property. Although the amortization is a paper entry by the accountant in the preparation of a financial statement, it does represent the methodology by which an owner depreciates equipment purchased, as tax laws require they be deducted over a period of time in accordance with the tax rules as opposed to a straight deduction at the time of purchase.

64The mother states that the vehicle was purchased by the company from the father’s brother. The father indicates that the vehicle is in the name of the company and the payments were made to the company. A copy of the check $20,000 dated April 27, 2013 is filed.

65At paragraph 50 of her affidavit sworn March 4, 2016, she states that the red figures set out in those tables should be added back to income. She states that these figures have been grossed up by 15%. There is no analysis or evidence of how she created these figures or why that income should be imputed. She states that these are personal expenses that the father enjoyed from the company on a tax-free basis.

66The mother alleges that the father has a number of companies. In his affidavit sworn June 18, 2016 the father confirms that he has two companies in his name. One registered one is ILI. The other one is AG Automation, which was founded in October 2015 but is dormant at this time. The mother suggested that the father had used AG Automation for high-risk contracts to protect ILI, indicating that he only has one company that is active.

67Regarding the inheritance, the father indicates that he did receive $95,000 from mother’s inheritance. He has spent some, and the balance of $ 30,000 is in his tax-free savings account. This is not a significant investment which will generate great returns. There is no evidence of the amount of income generated from this investment.

68In accordance with Laurain v. Clarke, income that is deriving from the inheritance can be considered, and an inheritance can be treated as a source capable of generating income on the basis of which support can be calculated.

69The court does not accept the mother’s other arguments for imputation of income. There is no evidence to corroborate her position. There is no evidence that the father is receiving dividends or incomes from other companies.

70She says she could not afford to proceed with questioning, obtain a more detailed and audited expert’s report, or pursue further financial information. She is very suspicious with respect to the father’s financial dealings and submits his lifestyle belies his income as declared in his tax return. In fact, she finds justification that he is earning substantially more than he declares from his own expert’s report: in 2012 his declared income is $45,000 whereas his own expert said that his income for support purposes was $135,000. She states that he leaves much of his retained earnings in the company and hence shelters this income.

71The court cannot determine income on speculation. It must determine income based on the evidence. An allegation was made that the father had not complied with Justice Kane’s order. No specific allegation was made as to what was missing. The court notes that the company’s financial statements and corporate tax documents were filed. Since the mother did not proceed with questioning, she was unable to explore some of the concerns she had with respect to the father’s finances. Once Mr. Savage had prepared his report and indicated missing information, no efforts were made by the mother or her counsel to request those documents from the father or ask for any clarification.

72In summary the court can only determine the income based on evidence and finds that the father provided the court ordered disclosure. No questioning took place nor was further disclosure requested by Mr. Savage or by the mother or her counsel, after the critique was conducted.

73Therefore, the court accepts Mr. Desnoyers’ figures plus the addition of the capital cost allowance for property and the 2013 deduction for home use.

74For 2015, the court assumes the income of $93,000, which is the higher amount of the estimate prepared by Mr. Desnoyers. This is less than the average of the three previous years (2012, 2013 and 2014) of $114,000. In view of the above, this a fair estimation of the projected income for 2015 as stated by his expert.

What is the retroactive amount of child support?

Mother’s position

75Firstly, regarding notice to the father, the mother indicated that she verbally requested tax document disclosure. In November 2009, she sent an email to the father again demanding the disclosure.

76Her affidavit dated March 4, 2016 contains an email from her to the father dated November 29, 2009 where she states request copies of income tax reports including company reports, rental income, etc.

77She again states that she requested all income reports from 2006 to present in both 2009 and again today. She goes on to talk about s. 7 expenses for Laura. In February 15, 2010 the mother sent another email to the husband asking for his income reports as previously and repeatedly requested for information from all the years since the divorce was finalized. Again she repeats that he has not contributed to Laura’s activities including piano and karate lessons or chess sessions. She talks about retroactive payments in an email to the father dated February 15, 2010. She states that she had not received his income reports.

78She indicates that her financial disclosure was forwarded by Mr. Brian Fisher. In a letter dated May 23, 2013, he was asked by the mother to act as an intermediary to exchange income tax documents from 2005 to 2011 inclusive. His letter confirms that he had sent him her tax documents 2005 to 2011 inclusive. He confirms that despite a request that he provide his tax documents by April 29, 2013, he had not provided those documents. The mother then brought this motion to change on July 2, 2013.

79She believes that Laura should not be deprived of the appropriate level of support due to the father’s lack of cooperation and transparency. She indicates that due to his threats, controlling behaviour and intimidation, and her lack of funds, she did not pursue child support earlier. She indicates the level of financial support was low and it affected her finances and mental health. She filed a report from Dr. Martin Rovers, a registered psychologist. The letter dated May 12, 2014 indicates that he had seen her from 2009 to 2010 and that her stress level was high. The doctor indicated that she had no funds to pursue legal proceedings.

Father’s position

80The father raised a procedural point as the initial motion to change was not clear with respect to what exactly was being claimed by the mother. In the motion to change, the relief being sought as stated with respect to the financial issues was “that the father be compelled to produce any and all information required pursuant to section 21 of the child support guidelines.”

81The father indicates that these pleadings are vague. His current lawyer requested precise details regarding relief sought.

82In any event, the father seeks for a determination by the court of ongoing and retroactive support. The father is prepared to pay retroactive support for three years prior to the commencement of the motion. He notes that the 2007, 2008 and 2009 tax returns of the parties are not before the court

83The father relies on the expert report of Mr. Desnoyers and claims that retroactive support should be based on the income set out therein back to 2010. According to the father, the amount owing in retroactive support from January 1, 2010 to December 31, 2015 is $34,240.

Legal Principles

84The Supreme Court of Canada in D.B.S. v. S.R.G., L.J.W. v. T.A.R., Henry v. Henry and Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231, confirmed the payor parent’s obligation to pay and a child’s right to receive child support commensurate with the parent’s income. The amount of support generally fluctuates with the level of income earned.

85At para. 74, the Court noted the following:

In summary, a payor parent whom diligently pays the child support amount ordered by a court must be presumed to have fulfilled his/her support obligation towards his/her children. Acting consistently with the court order should provide the payor parent with the benefit of predictability, and a degree of certainty in managing his/her affairs. However, the court order does not absolve the payor parent — or the recipient parent, for that matter — of the responsibility of continually ensuring that the children are receiving an appropriate amount of support. As the circumstances underlying the original award change, the value of that award in defining parents’ obligations necessarily diminishes. In a situation where the payor parent is found to be deficient in his/her support obligation to his/her children, it will be open for a court, acting pursuant to the Divorce Act or the Parentage and Maintenance Act, to vary an existing order retroactively. The consequence will be that amounts that should have been paid earlier will become immediately enforceable.

86The Supreme Court of Canada dealt with the issue of retroactivity and stated, at para. 125, that:

The proper approach can therefore be summarized in the following way: payor parents will have their interest in certainty protected only up to the point when that interest becomes unreasonable. In the majority of circumstances, that interest will be reasonable up to the point when the recipient parent broaches the subject, up to three years in the past. However, in order to avoid having the presumptive date of retroactivity set prior to the date of effective notice, the payor parent must act responsibly: (s)he must disclose the material change in circumstances to the recipient parent. Where the payor parent does not do so, and thus engages in blameworthy behaviour, I see no reason to continue to protect his/her interest in certainty beyond the date when circumstances changed materially. A payor parent should not be permitted to profit from his/her wrongdoing.

87The Court required that the following be considered:

(1) Whether the recipient parent has supplied a reasonable excuse for her delay; (2) Conduct of the payor parent; (3) The past and present circumstances of the child; and (4) The hardship the retroactive award might entail.

Analysis

88A retroactive award is generally retroactive to the date that effective notice was given to the payor; however, even if effective notice is given, it not appropriate to delve too far into the past. It may be inappropriate to make a support order retroactive to a date more than 3 years before formal notice was given to the payor

89The above principles fit with the model established by the objective of the Guidelines, i.e. that the children benefit from support by treating all payors with consistency. If a payor has the benefit of tax-free income through a separate legal entity such as a corporation, then those funds should be added back into his income and grossed up for taxes. In this way, Canadian children benefit from child support that is more reflective of the income available to a payor. The tables were established on the basis of income and hence the table amounts should be determined on a fair and consistent determination of a payor’s income. For that reason, Line 150 incomes are not necessarily a true indicator of what is available for the purposes of support.

90Although, the mother did explain, in part, her delay in not demanding tax information exchanges and an adjustment of support earlier than 2009, she did not provide formal notice until 2009.

91The court considers the financial circumstances of the child and the debts that the mother had to incur as a result of the inability to receive the appropriate level of child support.

92The requirement of the father to pay this level of retroactive support would not place a financial hardship on him. He has assets, retained earnings in his corporation (where he could declare a dividend) and investments to use in paying the retroactive amount.

93There is no evidence that he has other dependents.

94There is blameworthy conduct on the part of the payor for his failure to comply with the order to provide financial tax documents, despite requests from the mother. He only provided them in 2013 after he was served with the motion to change. This is not in keeping with the letter and spirit of the Guidelines, that is, that the level of financial support to be paid by a payor parent should fluctuate with his or her income.

What is the ongoing amount of child support?

95For the reasons cited above, we do not accept the mother’s position regarding the father’s income for ongoing support.

96The best evidence is that prepared by Mr. Desnoyers. On the basis of this evidence, the court is prepared to accept that the father’s current income is $100,000 and hence child support will be payable on that income, based on the Quebec tables.

How should ongoing section 7 expenses be shared?

Mother’s position

97The expenses must be based on the mother’s income of $69,000 and father’s income of $100,000. She is suggesting that the father will pay 59% of the s. 7 expenses and the mother will pay 41%.

98She would like to confirm his contribution at this time, but presented no evidence of future post-secondary expenses as the child is still in high school.

Father’s position

99He had been paying $100 per month for s. 7 expenses, but ceased when the mother commenced litigation. He wishes to be consulted in advance for any expenses.

Analysis

100At the beginning of the motion, the mother indicated that she was not proceeding with her claim for retroactive s. 7 expenses, but would like the husband to pay his share of ongoing s. 7 expenses.

101The court did not receive any evidence of ongoing s. 7 expenses. The mother submitted that the child is very intelligent and excels in academics and is likely to attend a post-secondary educational institution. However, given that she is in high school, no budget, details or costs of university/college were provided. The court cannot assess whether a proposed expense is a proper s. 7 expense and whether party should contribute any funds to a s. 7 expense without evidence regarding that expense.

102Therefore, with respect to ongoing sharing of s. 7 expenses, the court finds that it is premature to deal with issues such as post-secondary education expenses at this time as there is no evidence before the court. In particular, the parties have not submitted evidence of an estimated budget, planned contributions from the child, or the availability of bursaries, scholarships or other funds. Once those are known the parties will share this expense in proportion to their respective incomes at the time.

103Before incurring a s.7 expense, for which the mother is seeking a contribution of 59% from the father, she will be required to advise the father in advance to obtain his consent. Such consent should not be unreasonably withheld.

104If the parties are unable to agree on costs, then the mother shall provide her submissions of two pages by July 29, 2016. The father will file his response of two pages by August 15, 2016.

Justice A. Doyle Date: July 14, 2016

COURT FILE NO.: FC-13-1519 DATE: 2016/07/14 ONTARIO SUPERIOR COURT OF JUSTICE RE: Sandra Gordon, Mother AND Alain Guimont, Father BEFORE: Justice A. Doyle COUNSEL: Self-represented Marc J. Coderre, Counsel for the Father HEARD: June 28, 2016 ENDORSEMENT Justice A. Doyle