CITATION: Sipos v. Sipos, 2007 ONCA 126
DATE: 20070227
DOCKET: C44951
COURT OF APPEAL FOR ONTARIO
LASKIN, CRONK and LANG JJ.A.
B E T W E E N :
ISTVAN SIPOS
D. Smith, for the appellant
(Respondent/Appellant)
- and -
JUDITH SIPOS
Judith Sipos, in person
(Applicant/Respondent)
Heard: February 2, 2007
On appeal from the order of Justice Robert Clark of the Superior Court of Justice dated January 27, 2006.
LANG J.A.:
[1] The appellant husband, Istvan Sipos, appeals from the order of Clark J., which granted the respondent wife, Judith Sipos, a divorce and determined issues regarding spousal and child support, equalization and the sale of the matrimonial home.
[2] The appellant argues that the trial judge erred by:
failing to reduce the appellant’s child support obligation by the amount of the Canada Pension Plan (CPP) child benefit;
dismissing the appellant’s claim for spousal support; and
calculating the equalization payment without crediting the appellant for income tax arrears owed at the date of separation.
[3] For the reasons that follow, I would increase child support from $192 to $201 monthly, adjust the equalization payment to credit the appellant with his 2001 income tax arrears, and otherwise dismiss the appeal.
Background
[4] At the time of trial, the appellant was 50 years of age and the respondent 49. They had been married for 28 years.
[5] The appellant had once been employed as a project superintendent for the York Region Housing Corporation. However, the appellant’s only income for the twelve years preceding the trial was a CPP disability pension and disability payments under a private policy totalling about $22,884 annually. Nonetheless, the trial judge found that the appellant earned, or was capable of earning, additional income from his construction work that he undertook despite any disability.
[6] The trial judge found that the respondent earned an annual income of approximately $36,000 from her employment at Honeywell Ltd.
[7] At the time of trial, the elder of the parties’ two children was no longer dependent. The younger child, Andrew, who was 16 years of age, was dependent and lived with the respondent. The trial judge ordered the appellant to pay the respondent child support of $192.00 monthly, based upon the appellant’s combined disability income. In addition, Andrew received, through his mother, a CPP child benefit, which amounted to approximately $200 monthly.
[8] After calculating the parties’ net family property, the trial judge ordered the respondent to pay the appellant an equalization payment of $7,893.75.
[9] On appeal, the parties agree that the trial judge made relatively minor errors regarding both their incomes. The appellant concedes that his salary in the year preceding trial was $22,884, rather than the $22,085 found by the trial judge, with the result that his child support obligation should be $201 monthly, instead of $192 monthly, as ordered by the trial judge. As well, the parties concede that the evidence at trial established that the respondent’s base income is $37,000, not $36,000, and that the respondent additionally received approximately $8,000 in overtime earnings for the year prior to trial.
Analysis
1. CPP child benefit
[10] The appellant argues that his $201 monthly child support obligation should be reduced by the $200 CPP child benefit that arises out of the appellant’s CPP disability.
[11] For several reasons, I agree with the courts that have considered and rejected the argument that the amount of the CPP child benefit should be credited against the child support otherwise owing. See Wadden v. Wadden, 2000 BCSC 960, [2000] B.C.J. No. 1287 (S.C.); Huey v. Huey (1991), 1991 CanLII 12866 (ON SC), 39 R.F.L. (3d) 14 (Ont. Gen. Div.); Williams v. Williams (1995), 1995 CanLII 17843 (ON SCDC), 18 R.F.L. (4th) 129 (Ont. Gen. Div.); Corkum v. Corkum (1997), 1998 CanLII 2691 (NS SC), 36 R.F.L. (4th) 367 (N.S.S.C.); Griffiths v. Griffiths (1999), 1999 ABQB 193, 45 R.F.L. (4th) 353 (Alta. Q.B.); Vickers v. Vickers (2001), 2001 NSCA 96, 201 D.L.R. (4th) 65 (N.S.C.A.); Peterson v. Horan (2006), 2006 SKCA 61, 279 Sask. R. 94 (C.A.).
[12] First, if Parliament had intended to provide an offset of the child benefit against support, it would have provided for that result either in the Federal Child Support Guidelines, S.O.R./97-175 (the Guidelines), or in the Canada Pension Plan, R.S.C. 1985, c. C-8 (the Act). It did not do so.
[13] Second, the benefit is not income of the appellant in the sense that he redirects it to his son simply as a matter of convenience. Instead, the Act treats the benefit as that of the child, not that of the contributor. Paragraph 44(1)(e) of the Act specifically provides that “a disabled contributor’s child benefit shall be paid to each child of a disabled contributor…”. As well, an application for the benefit is not made by the parent, but by the parent “on behalf of” the child. This is confirmed by s. 75, which provides that the benefit is payable directly to the child, unless the child is a minor, in which case the benefit is paid to the custodial parent. The appellant has no entitlement to the benefit, he has no control over its payment, it is not taxable in his hands, and it is not included in his income for the purpose of calculating his child support obligation. Accordingly, it should not be used to reduce the appellant’s obligation to pay support for his child.
[14] Third, had Parliament intended the benefit to satisfy all or part of a contributor’s child support obligation, it could have crafted a scheme that provided an increased benefit for a contributor with a dependent child, rather than a separate child benefit. Had it done so, the quantum of child support would have been calculated on the appellant’s gross income. This, however, was not the scheme devised by Parliament. See Vickers, supra, at para. 12.
[15] Fourth, the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) mandates that child support orders must be made in accordance with the Guidelines. Support is calculated on the taxpayer’s taxable income, which does not include the child benefit. The Guidelines do not provide for a reduction of Table support by the amount of the CPP child benefit and do not factor a minor child’s means into consideration, except in certain specific circumstances, none of which was raised in this proceeding. The trial judge knew that Andrew was approaching the age of majority when his means could become relevant. However, when considered in the context of Andrew’s needs, and the financial circumstances of his parents, his receipt of the CPP child benefit would not operate to reduce the appellant’s child support obligation.
[16] Accordingly, I would not give effect to this ground of appeal, except to vary the child support to $201 monthly, as conceded by the appellant. In doing so, I note that while the quantum of the appellant’s income was at issue for the purpose of his claim for spousal support, it is not challenged for the purpose of child support. This is consistent with the absence of a specific finding by the trial judge about the precise additional income generated by the appellant’s construction work.
2. Spousal support
[17] The trial judge dismissed the appellant’s claim for spousal support. The appellant challenges that dismissal on three bases. First, he argues that the trial judge erred in finding that the appellant could earn additional income when any such income would only reduce his disability payments. Second, the appellant argues that the trial judge erred in concluding that his needs were being met by his current partner. Third, he argues that the trial judge erred in failing to take the respondent’s overtime income into account.
[18] I am not persuaded by these arguments.
[19] Regarding the appellant’s income, the trial judge found that the appellant’s income was not limited to his disability pensions. The appellant does not challenge that factual finding, but argues that the trial judge failed to consider that his additional earnings would simply be applied by his private disability insurer to reduce his disability benefits, with the effect that his income would remain at $22,884.
[20] The trial judge, however, was clearly alive to this issue when he found that the appellant was in fact earning undeclared money in addition to his disability benefits. Undeclared income from his construction work (including dry walling, plumbing and electrical work) would not reduce the appellant’s benefits. In addition, the appellant was unable to explain to the satisfaction of the trial judge the purpose for which he maintained a sole proprietorship as a “consultant.” On the basis of this evidence, the trial judge was entitled to conclude that the appellant earned additional income that allowed him to provide for his own support.
[21] Further, the trial judge clearly did not accept the appellant’s evidence about his disability. He repeatedly cautioned the appellant, who was self-represented, to call medical evidence to support his claim, but the appellant declined to do so. The trial judge was entitled to conclude that the appellant’s disability, said to be caused by a combination of fibromyalgia and depression, was contradicted by the direct evidence of his physical labour in construction.
[22] In addition, there was evidence before the trial judge from which he was entitled to conclude that the appellant was living well beyond his reported means by reason of his additional income and with the apparent support of his current partner. For example, the appellant claimed automobile expenses for his leased car at approximately $700 monthly. Such expenses simply did not make sense for a man in his allegedly difficult financial circumstances. In addition, the appellant admitted that he travelled abroad with his current partner, including recent trips to California and Hungary, vacations that would not have been available on his professed income.
[23] Finally, the appellant argues that the respondent’s income was not $37,000, but $44,051, a figure that included the respondent’s overtime earnings in the year prior to trial. However, at trial, the parties based their positions on the respondent’s income without overtime and the documentary evidence did not show a consistent pattern of overtime. Moreover, the respondent was not cross-examined about whether she regularly earned overtime income and there was no evidence that overtime work would continue to be available to her. Nor did the appellant raise the respondent’s overtime earnings during his submissions.
[24] Even if the trial judge erred regarding the quantum of the respondent’s income, which I do not accept, the trial judge was correct in any event to take into account the respondent’s expenses in supporting the parties’ child, with only minimal child support from the appellant.
[25] Accordingly, on the basis of the direct evidence about the appellant’s construction income and his lifestyle, it was open to the trial judge to conclude that the appellant was not in need of support. Furthermore, in dismissing the appellant’s claim for spousal support, the trial judge specifically considered the parties’ respective incomes, the respondent’s obligations to the parties’ child, the appellant’s disability income, his other undeclared income and his underemployment. I see no basis to interfere with the dismissal of the appellant’s claim for spousal support.
3. Equalization payment
[26] The appellant relies on a notice of assessment filed at trial to establish an error regarding the trial judge’s quantification of the equalization payment. While the date on the notice of assessment is 2003, and that was the date noted by the trial judge, the notice actually relates to a 2001 taxation assessment of $2,018.69 of income taxes. Accordingly, the quantum of the equalization payment payable by the respondent to the appellant should be increased to take account of this error, resulting in an adjustment of the equalization payment to $8,902.92.
Result
[27] For these reasons, I would allow the appeal in part, by varying paragraphs 3 and 7 of the order below to provide for an equalization payment of $8,902.92 and child support of $201 monthly. I would otherwise dismiss the appeal. If the parties are pursuing costs, they may deliver brief written submissions not exceeding three pages. The respondent’s submissions shall be delivered within 30 days from the release of these reasons and the appellant’s submissions within 15 days thereafter.
“S.E. Lang J.A.”
“I agree John Laskin J.A.”
“I agree E.A. Cronk J.A.”