Court File and Parties

Court File No.: D3228/99 Date: 2012-11-20

Ontario Court of Justice

Toronto North Family Court

Between:

Minora Coutinho Applicant

- and -

Marlon Coutinho Respondent

Counsel:

• Paul Luizos, for the Applicant
• Acting in Person (Respondent)

Heard: November 19, 2012

Justice: S.B. Sherr

Endorsement

Part One – Introduction

[1] This is the applicant's (the mother) motion to change the February 17, 2004 child support order of Justice Geraldine Waldman (the support order). In her motion to change she sought an adjustment of the child support payable by the respondent (the father) retroactive to February 17, 2005.

[2] The respondent has also asked to change the support order. He has asked to eliminate paying special expenses pursuant to section 7 of the Child Support Guidelines (the guidelines) that are contained in the support order. He also made a claim to reduce his child support due to undue hardship pursuant to section 10 of the guidelines.

[3] At a prior court appearance I ruled that child support would be adjusted as of July 1, 2008. This is three years prior to the issuance of the mother's motion to change. I made this ruling after taking into consideration the four factors set out in the case of D.B.S. v. S.R.G.; Laura Jean W. v. Tracy Alfred R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, being:

1. Reason for the delay in bringing the claim;
2. Conduct of the payor parent;
3. Circumstances of the child;
4. Hardship that may be caused by a retroactive award.

[4] The mother submitted that the father owes her a support adjustment of $25,879 since July of 2008. The father's position is that he cannot afford to pay arrears that would be created by an adjustment of his child support obligation.

[5] Many of the facts on this motion to change were not in dispute, including the incomes of the parties since 2008 and the support that the father has paid since July of 2008. The issues in dispute are:

a) Can the father establish a claim for undue hardship under section 10 of the guidelines?

b) What expenses claimed by the mother qualify for coverage under section 7 of the guidelines?

c) What should be the father's contribution to the section 7 expenses? What contribution should the children make to these expenses?

d) At what rate should the father repay arrears created by this order?

Part Two – Background Facts

[6] The mother is 45 years old. She works in a cafeteria at the University of Toronto.

[7] The father is 47 years old. He is employed with Bell Canada in the capacity as Manager – Finance. He lives with a new partner and a child from that relationship.

[8] The parties were married in 1995 and separated in 1998. They have lived separate and apart since that time.

[9] The parties had two children together who are now 16 and 17 years old (the children). The children have always lived with the mother. They have not seen the father for several years.

[10] The support order of Justice Waldman provides that the father pay to the mother the guideline table amount of child support of $692 per month, based on his annual income at that time of $49,400 and special expenses of $142 per month. This order has not been changed since it was made in 2004, despite the father's significant increase in income.

[11] The father has paid the child support set out in the support order.

Part Three – Income of the Parties

[12] The mother's income since 2008 has been as follows:

• 2008 - $39,743
• 2009 - $45,385
• 2010 - $39,483
• 2011 - $32,163
• 2012 - $25,539

[13] The father's income since 2008 has been as follows:

• 2008 - $78,921
• 2009 - $70,304
• 2010 - $76,337
• 2011 - $75,777
• 2012 - $80,251

[14] The father filed a letter from his employer on this motion stating that his income is $65,000 per annum. However, his pay stub from September 14, 2012, shows that he has already earned $56,845 through September 14th. This sum projects to the father earning an income in 2012 of $80,251. I find that the father's pay stub, particularly this late in the year, is much better evidence of what his income will likely be in 2012 than the employer's letter, which appears to only include his base pay.

Part Four – Undue Hardship

[15] The father asked that his child support obligation be reduced due to undue hardship. Although his pleading did not reference the applicable legislation, his claim would need to meet the test set out in section 10 of the guidelines.

[16] The father argued that he is supporting a child from his new relationship. He also claimed that he is supporting his partner's two children. He also says that he is helping support his parents in India.

[17] Undue hardship claims are governed by section 10 of the guidelines which reads as follows:

Undue Hardship

10. (1) On the application of either spouse or an mother under section 33 of the Act, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the parent or spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.

Circumstances That May Cause Undue Hardship

(2) Circumstances that may cause a parent, spouse or child to suffer undue hardship include:

(a) the parent or spouse has responsibility for an unusually high level of debts reasonably incurred to support the parents or spouses and their children during cohabitation or to earn a living;

(b) the parent or spouse has unusually high expenses in relation to exercising access to a child;

(c) the parent or spouse has a legal duty under a judgment, order or written separation agreement to support any person;

(d) the spouse has a legal duty to support a child, other than a child of the marriage, who is:

• (i) under the age of majority, or
• (ii) the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life;

(e) the parent has a legal duty to support a child, other than the child who is the subject of this application, who is under the age of majority or who is enrolled in a full time course of education;

(f) the parent or spouse has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability.

Standards of Living Must Be Considered

(3) Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the parent or spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other parent or spouse.

Standards of Living Test

(4) In comparing standards of living for the purpose of subsection (3), the court may use the comparison of household standards of living test set out in Schedule II.

Reasonable Time

(5) Where the court awards a different amount of child support under subsection (1), it may specify, in the order for child support, a reasonable time for the satisfaction of any obligation arising from circumstances that cause undue hardship and the amount payable at the end of that time.

Reasons

(6) Where the court makes an order for the support of a child in a different amount under this section, it must record its reasons for doing so.

[18] It is very difficult to make out a successful undue hardship claim under section 10 of the guidelines. There are three parts to the test:

1. The person making this claim must show that there are circumstances that could create undue hardship.

2. If this is the case, the person making the claim must show that his or her standard of living is lower than that of the responding party's.

3. If the first two parts of the test are made out, the court has the discretion to make a support order different than the table amount, based on the means, needs and circumstances of the parties.

See: Matthews v. Matthews, [2001] O.J. No. 876 (SCJ).

[19] The respondent must prove more than hardship. She must show that the hardship is exceptional, excessive or disproportionate, not merely awkward or inconvenient. Hanmore v. Hanmore, 2000 ABCA 57.

[20] The respondent has the onus of providing adequate supporting documentation to prove her undue hardship claim. See Van Gool v. Van Gool.

[21] The father did not come close to meeting his onus under section 10 of the guidelines. His only legal support obligation (other than the subject children) is to the child he has with his current partner. He claims that his partner is only earning $12,000 per annum running a daycare, but provided no evidence of her income. His partner's two children do not live with them – they live with an aunt. The father has no support obligation for these children. The father also has no support obligation for his parents. The mother pointed out that the paternal grandfather has a comfortable pension from Air India and that the paternal grandparents own property in India. The father did not dispute this in his evidence.

[22] The father did not prove on a balance of probabilities that paying the support required by the guidelines would be exceptional, excessive or disproportionate.

[23] The father also did not prove on a balance of probabilities that his standard of living is lower than the mother's.

[24] The father's undue hardship claim is dismissed.

Part Four – Special Expenses

4.1 Entitlement

[25] The mother claimed an adjustment for special expenses payable pursuant to section 7 of the guidelines. The expenses she has claimed include expenses for camping, cottage trips and tutoring for both of the children.

[26] Subsections 7 (1) and (1.1) of the guidelines read as follows:

Special or Extraordinary Expenses

7. (1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child's best interests and the reasonableness of the expense in relation to the means of the parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation:

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

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

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

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

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

Definition, "Extraordinary Expenses"

(1.1) For the purposes of clauses (1) (d) and (f):

"extraordinary expenses" means

(a) expenses that exceed those that the parent or spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that parent's or spouse's income and the amount that the parent or 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 clause (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 parent or spouse requesting the amount, including the amount that the parent or 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,

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

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

[27] 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, 77 O.R. (3d) 601.

[28] Section 7 requires that the expense be reasonable in relation to the means of the parents and those of the child and to the family's spending pattern prior to the separation. See Correia v. Correia, 2002 MBQB 172. In that case, Justice Allen set out a number of factors to be taken into account in determining the reasonableness of a s. 7 expense:

1. the combined income of the parties;

2. the fact that two households must be maintained;

3. the extent of the expense in relation to the parties' combined level of income;

4. the debt position of the parties;

5. any prospects for a decline or increase in the parties' means in the near future; and

6. whether the non-custodial parent was consulted regarding the expenditure prior to the expense being incurred.

[29] I am satisfied that the mother incurred the special expenses claimed.

[30] I find that the expenses claimed by the mother for camping and cottage trips are not extraordinary special expenses as defined in clause 7 (1) (e) of the guidelines. These expenses were for ordinary family activities that should be covered by the table amount of child support.

[31] Clause 7 (1)(d) of the guidelines provides that a court has the discretion to order that a payor contribute to an expense such as tutoring if the expense is extraordinary (that is, an expense that exceeds the amount which the recipient would reasonably be expected to cover taking into account the table amount of support payable and the recipient's income), reasonable and necessary. See: O'Connor v. Houlder, [2012] O.J. No. 3986, per Justice Ellen Murray.

[32] The mother's evidence is that the tutoring expenses for the children total approximately $4,800 annually. Given the mother's modest financial circumstances now and in the years in question, and the table amount that would be payable, I have no difficulty in finding that the tutoring expenses are "extraordinary".

[33] I find that the amounts claimed by the mother for tutoring expenses are reasonable, given the combined income of the parties, the fact that two households must be maintained, the extent of the expense in relation to the combined income of the parties and the debt position of the parties. I also considered that the parties have had no communication with one another and the father was not consulted about the tutoring expense.

[34] The evidence also satisfied me that the tutoring expenses are necessary. The children have received tutoring in math and english since 2010. The mother filed evidence from the children's teachers highly recommending the tutoring. The older child was struggling in english and math and the younger child was struggling with math. The children's grades have significantly improved with the tutoring. The mother is hoping that the children's grades improve to the point where they are accepted by the University of Toronto. This would be a significant financial benefit for the mother (since she is employed by that university) as the children would be entitled to free tuition. The father will also benefit (by way of reduced support obligations) if the children are able to attend at the University of Toronto.

4.2 Total of Special Expenses

[35] The following are the annual totals of allowable special expenses:

• 2008 – 0
• 2009 - 0
• 2010 - $1,770
• 2011 - $4,900
• 2012 - $4,440

4.3 Father's Contribution to Special Expenses

[36] The guiding principle in determining the amount of a special expense referred to in subsection 7 (1) of the guidelines 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 (subsection 7 (2) of the guidelines).

[37] I have reviewed the father's financial circumstances and see no basis to deviate from the general principle that he should pay his pro-rata share of the children's special expenses, after taking into consideration any contribution from them.

[38] 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 (subsection 7 (3) of the guidelines).

[39] The mother provided evidence that both children worked during the summer for the first time in 2012. They each earned approximately $2,500. Given their age and the combined incomes of the parties I find that they should each contribute 50% of their earnings towards the special expense in 2012 and on a go-forward basis.

[40] The court also has to consider any tax credit that the mother can claim for the tutoring expenses. The mother is entitled to claim up to a $500 tax credit for tutoring for each child under the age of 16, under the Ontario Children's Activity Tax Credit. This credit provides for a modest reduction in the total amount of the special expense. The older child would have been eligible for this tax credit in 2010 and 2011. The youngest child would have been eligible for this credit from 2010-2012.

[41] A software calculation shows that the father's share of special expenses in 2010 was $92 per month.

[42] A software calculation shows that the father's share of special expenses in 2011 was $275 per month.

[43] In 2012, I have reduced the special expense of $4,440 (through November of 2012) by 50% of the children's earnings (total of $2,500), leaving a balance of $1,940. The mother can also claim the Ontario Children's Activity Tax Credit for the younger child this year. A software calculation shows that taking into consideration these factors, the father's share of special expenses in 2012 is $143 per month.

Part Five – Calculation of Support Arrears and Repayment

[44] The father has been paying the mother $834 per month since July of 2008. This is comprised of the guideline table amount of $692 per month plus $142 per month for special expenses.

[45] The adjustment for child support is calculated as follows:

Year	Table Amount	Section 7	Support Payment	Total	Amount Paid	Amount Owing
2008	$1,158	0	$1,158	$6,948	$5,004	$1,944
2009	$1,041	0	$1,041	$12,492	$10,008	$2,484
2010	$1,124	$92	$1,216	$14,592	$10,008	$4,584
2011	$1,082	$275	$1,357	$16,284	$10,008	$6,276
2012	$1,175	$143	$1,318	$14,498	$9,174	$5,324

Total Arrears Owing: $20,612

[46] In reviewing the father's financial statement I find that he does not have the ability to pay all of the arrears created by this order at once.

[47] I have also considered that the father knew or should have known that he was significantly underpaying child support since at least 2008. He is an educated man and was in court many times over child support issues since 1999. He has been financially advantaged by his underpayment of child support and the mother and the children have been financially disadvantaged by this. This is blameworthy conduct.

[48] Balancing these considerations the father will be required to pay the support arrears created by this order at the rate of $425 per month starting on January 1, 2013. This will give the father approximately four years to repay the support he should have been paying all along.

Part Six – Order

[49] An order shall go on the following terms:

a) The order of Justice Waldman dated February 17, 2004 shall be changed to provide, that starting in July of 2008, the father shall pay to the mother child support as set out in paragraph 45 above.

b) The father shall pay the mother ongoing child support of $1,318 per month, starting on December 1, 2012. This is comprised of the guideline table amount for two children of $1,175 per month, based on the father's annual income of $80,125 per annum and his contribution to the tutoring expense for the children of $143 per month.

c) The child support arrears created by this order, as set out in paragraph 45 above, are $20,612. The father may repay these arrears at the rate of $425 per month, starting on January 1, 2013.

d) The parties shall exchange their complete income tax returns and notices of assessment and the mother shall provide the father with copies of all receipts for the children's special expenses by June 1st of each year.

e) A support deduction order shall issue.

[50] The software calculations showing how the father's contribution to the special expenses was calculated are attached to this decision. I suggest that the father review these calculations with a lawyer to ensure their accuracy. The parties will have 14 days from the date of this order to make any submissions about possible inaccuracies in the software calculations (such as figures being inputted incorrectly), or any possible mathematical errors in this decision. Any submissions should be in writing, on notice to the other party, and be delivered to the trial coordinator's office. If submissions are made, the other party will then have 7 days to serve and file their written response. If no submissions are received in 14 days, this order may be taken out by the mother.

[51] If the mother wishes to seek costs she shall make written submissions no later than December 17, 2012. She should wait until after the 14 day period set out in paragraph 50 above has expired, or if submissions are made, until the court has made its final ruling. The father shall then have until December 31, 2012 to make a written response. The submissions should not exceed two pages, not including any offer to settle or bill of costs.

Justice S.B. Sherr

Released: November 20, 2012