Court File and Parties

Court File No.: Halton 401/12 Date: 2014-09-03 Ontario Court of Justice

Between:

Ewa Nawrocki, Applicant

— AND —

Waldemar Nawrocki, Respondent

Before: Justice Sheilagh O'Connell

Heard on: February 10, 14, and April 7, 2014

Reasons for Judgment released on: September 3, 2014

Counsel:

• Monika Curyk, counsel for the applicant
• Waldemar Nawrocki, on his own behalf

O'CONNELL J.:

1. Introduction

[1] The Applicant, Ewa Nawrocki, ("Ms Nawrocki") seeks ongoing and retroactive child support from the Respondent, Waldemar Nawrocki ("Mr. Nawrocki") for the two children of the parties' marriage, and ongoing and retroactive contribution from Mr. Nawrocki for the children's special and extraordinary expenses.

2. Issues

[2] The issues for me to determine in this trial are as follows:

1. What is Mr. Nawrocki's income for child support purposes?
2. What ongoing table amount of child support (table amount under the Child Support Guidelines) should Mr. Nawrocki pay?
3. What, if any, contribution should Mr. Nawrocki pay towards the children's special and extraordinary expenses ("section 7 expenses")?
4. What, if any, retroactive table amount of child support should Mr. Nawrocki pay?
5. What, if any, retroactive contribution to the children's section 7 expenses should Mr. Nawrocki pay?

3. Position of the Parties

[3] Ms Nawrocki seeks ongoing child support for Sandra and Monika in the amount of $1,293.00 monthly, commencing January 1, 2014, based on an income imputed to Mr. Nawrocki in the amount of $90,000.00, pursuant to the Child Support Guidelines for Ontario. For 2010 and 2011, she seeks child support for the two children based on an imputed income of $80,000.00 and for 2012, she seeks child support based on an imputed income of $87,000.00.

[4] Ms Nawrocki submits that Mr. Nawrocki is the sole shareholder of a corporation though which all of his employment income from the same employer flows, so that he can reduce his taxable income. She further submits that Mr. Nawrocki's gross annual income has steadily increased since 2009 and that he has failed to provide adequate disclosure of his corporate and business expenses to accurately determine his income for child support purposes.

[5] It is Ms Nawrocki's position that that Mr. Nawrocki should pay retroactive child support from June of 2009 to December of 2013 in the amount of $46,310.00 and that he should pay a retroactive contribution to the children's section 7 expenses in the amount of $6,200.00 for the years of 2010 to 2013.

[6] Mr. Nawrocki agrees that he should pay child support and some payment towards the children's retroactive support and section 7 expenses. He submits that at most, his income should be imputed at $34,000.00 for child support purposes, resulting in a table amount of $450.00 per month going forward. He further submits that any retroactive payment towards child support and the children's section 7 expenses should be no more than $6,000.00.

[7] Mr. Nawrocki submits that he stopped paying child support in 2010 because he was waiting for Ms Nawrocki to commence her application for support, something she did not do until September of 2012. He states that he was advised to wait until he received the application for support before he reinstated child support payments.

[8] Both parties agree that Mr. Nawrocki is not obligated to pay child support for Sandra for the last six months of 2011 after she graduated from high school and for the entire year of 2012, when she was not enrolled in school.

4. Background Facts Not in Dispute

[9] Ms Nawrocki is a registered nurse. She resides in the city of Burlington with the two children of the marriage.

[10] Mr. Nawrocki is self-employed, carrying on a business as long haul truck driver, under a numbered corporation of which he is the sole shareholder. He resides in the city of Brampton with his girlfriend.

[11] The parties started their relationship in 1991. They married on December 4, 2000 in Mississauga, Ontario. They separated in November of 2007.

[12] The parties have two children, namely Sandra Nawrocki, born January 6, 1993 ("Sandra") and Monika Nawrocki, born on September 8, 1997 ("Monika").

[13] Monika is a 16 year old high school student. Sandra is a 21 year old full-time student at Sheridan College. Both children attend school on a full-time basis.

[14] Sandra graduated from high school in June of 2011. She suffers from an eating disorder (bulimia) and was briefly hospitalised in 2010. Sandra chose not to continue her education immediately after graduation from high school. Sandra worked part-time in the last half of 2011 and in 2012. She was not a student again until January of 2013, when she commenced her full-time program of studies at Sheridan College.

[15] Both children have resided with Ms Nawrocki since the separation and at the time of this trial, they continue to reside with Ms Nawrocki. Following the separation, Mr. Nawrocki paid child support for the children in the amount of $400.00 per month until 2009. It is not disputed that the total amount paid during this period of time was approximately $8,800 for a twenty-two month period.

[16] In the spring of 2009, Mr. Nawrocki served and filed an application for divorce. In her answer to the divorce application, Ms Nawrocki requested child support and contribution to the children's section 7 expenses. Ms Nawrocki also requested financial disclosure from Mr. Nawrocki through a number of letters from her counsel, entered as exhibits at trial. This disclosure was not provided.

[17] The last letter sent by Ms Nawrocki's former counsel requesting financial disclosure was April 1, 2010. In that letter, counsel confirmed that no disclosure had been provided and provided a number of available court dates for a case conference on the issue of child support.

[18] In February of 2010, Mr. Nawrocki made one payment of child support in the amount of $400.00, for child support owing in September of 2009. After that payment, Mr. Nawrocki stopped paying child support until these proceedings were commenced by Ms Nawrocki.

[19] Ms Nawrocki withdrew her answer to Mr. Nawrocki's divorce application and the parties' divorce was granted on an uncontested basis. She commenced this application for ongoing and retroactive child support and contribution to section 7 expenses on September 14, 2012.

[20] Mr. Nawrocki did not make any further child support payments until 2012, after Ms Nawrocki commenced this application, at which time he made payments totalling $400.00 in November and December of 2012 ($200.00 in each month).

[21] On April 15, 2013, the parties entered into a temporary, consent order in which Mr. Nawrocki agreed to pay child support in the amount of $330.00 per month, based on his 2011 stated annual income of $21,720.00.

[22] This order was made on a 'without prejudice' basis, pending receipt of Mr Nawrocki's financial disclosure of his income and expenses, which he agreed to provide pursuant to the schedule attached to same consent order dated April 15, 2013.

5. The Respondent Shall Provide the Following Disclosure to the Applicant

a. A sworn financial statement

b. Copies of all personal income tax returns with schedules, attachments, business expenses and information sips filed by the Respondent with CRA 2009, 2010, 2011, and 2012 (if available for 2012)

c. Copy of any applications by the Respondent for a line of credit card, for mortgage for 2009, 2010, and 2011

d. Copies of all bank statements for the Respondent (personal and business) and credit card statements if any for 2009, 2010 and 2011.

e. Both parties agree that all disclosure shall remain confidential and shall not be disclosed to any other person.

f. Respondent to provide the Applicant with a copy of his work benefit plan.

[23] At the time of trial, the temporary order for child support made April 15, 2013 continued to be in full force and effect. Mr. Nawrocki is in compliance with this support order, although there are a number of remaining items to be produced in the order for financial disclosure.

5. Summary of the Relevant Evidence at Trial

1. Ewa Nawrocki

[24] Ms Nawrocki is 53 years old. She and the children reside in Georgetown, Ontario in the former matrimonial home. Ms Nawrocki is a registered nurse with a nursing home care agency. She works full-time as a home care nurse and also takes on extra shifts in a hospice to maintain the family home and the standard of living that the children were accustomed to prior to the parties' separation. She is a salaried employee and receives t-4 slips from her employer. She has been employed by the same employer for approximately 9 years.

[25] According to the evidence filed, including her t-4 slips and notices of assessment from Revenue Canada, Ms Nawrocki's gross annual employment income for the past four years was the following, not disputed by Mr. Nawrocki:

• 2010: $48,146.00
• 2011: $70,104.00
• 2012: $75,301.00
• 2013: $75,301.00

[26] Ms Nawrocki expects to earn the same income for 2014, although she would prefer not to work extra shifts at the hospice in addition to her full-time employment.

[27] When the parties separated, the children were 14 years old and 9 years old. Ms Nawrocki testified that she did not have Mr. Nawrocki's address after the separation and any access between he and the children was sporadic. Mr. Nawrocki did not make arrangements to see the children through her, but contacted the oldest child Sandra on her cell phone to arrange access. He would pick the children up from the home and return them for occasional visits. Ms Nawrocki testified that Mr. Nawrocki never contacted her to ask how the children were doing or to request information about their health or education. All of his communication was through the oldest child Sandra.

[28] Ms Nawrocki testified that after the parties separated, Mr. Nawrocki voluntarily paid child support in the amount of $400.00 per month in 2009, although the payments were often late and irregular. The amount of child support payable was chosen by Mr. Nawrocki. According to Ms Nawrocki, she did not know how Mr. Nawrocki arrived at the figure of $400.00 as she never knew how much money he earned.

[29] A series of child support cheques were introduced as exhibits at trial on consent of the parties. The last payment of child support received from Mr. Nawrocki prior to these proceedings being commenced was in February of 2010. This amount was $400.00, and according to the cheque signed by Mr. Nawrocki, it was for the child support owed in September of 2009. A cheque received in December of 2009 was for the child support owed in July of 2009.

[30] Ms Nawrocki was served with Mr. Nawrocki's application for an uncontested divorce in 2009. She retained a lawyer to serve and file an answer seeking child support. The lawyer who wrote to Mr. Nawrocki's lawyer at the time on three separate occasions seeking financial disclosure to properly determine child support. The letters were introduced as exhibits at trial and were dated June 25, 2009, August 12, 2009 and April 1, 2010.

[31] In each of the letters, Ms Nawrocki's counsel reiterates her claims for child support, contribution to section 7 expenses and financial disclosure. In the letter dated August 12, 2009, Ms Nawrocki's counsel as the time advised that she will not consent to the divorce being severed from the corollary relief unless the financial disclosure requested is provided. In the letter dated June 25, 2009, Mr. Nawrocki was also advised that the youngest child Monika needs braces and that the cost will be $5,700.00. Ms Nawrocki's employment benefits do not cover orthodontic expenses.

[32] Ms Nawrocki testified that in 2010, she withdrew her answer to the divorce so that it could proceed on an uncontested basis. It was her intention to pursue child support separately thought the court process at that time, however, she became preoccupied with Sandra's mental and physical health, which was significantly deteriorating, and she did not have the financial means to continue with the litigation at the time.

[33] Ms Nawrocki testified that Sandra started to develop symptoms of bulimia in 2009. Ms Nawrocki became very concerned and tried to get Sandra into treatment, but Sandra refused. Sandra was purging at night and refusing to eat during the day. By 2010, her mental and physical health was greatly affecting her academic performance. Although normally a very good student, Sandra started to do very poorly in high school in 2010 and in 2011.

[34] Ms Nawrocki described Sandra as having mood swings, aggressive behaviour, and angry outbursts, including punching the walls and "smashing doors". Their relationship deteriorated dramatically and Ms Nawrocki attempted to get Sandra into the Eating Disorders Clinic at Oakville Trafalgar Memorial Hospital. Ms Nawrocki testified that she was desperate and that she tried to reach Mr. Nawrocki for help. She testified that she did not have his cell phone number so she looked on Sandra's phone to retrieve his number. According to Ms Nawrocki, when they spoke, Mr. Nawrocki did not seem to be concerned and that he minimized her concerns.

[35] Ms Nawrocki testified that in the winter of 2010, she obtained a court order to have Sandra involuntarily committed to Oakville Trafalgar Hospital for treatment. Sandra was detained involuntarily overnight and referred for treatment upon her release. Sandra refused the treatment for a period of time but eventually she went to four sessions at the Eating Disorders Clinic. Sandra's condition improved over-time.

[36] Sandra was able to graduate from high school in May of 2011. She did not pursue post-secondary education at that time and worked for the remainder of 2011 and the entire year of 2012, while living at home with Ms Nawrocki. During her break from school, Sandra worked part-time at MacDonald's on an average of 7 to 10 hours per week. Ms Nawrocki is not pursuing child support for Sandra during that eighteen month period.

[37] Ms Nawrocki testified that she was able to convince Sandra to return to school and in January of 2013, Sandra enrolled in the Police Foundation program at Sheridan College where she is a full-time student. This program will be completed in 2014 and in September of 2014, Sandra intends to enrol in a four year paralegal program at Sheridan College. This is also a full-time program of studies.

[38] Sandra is attending Sheridan campus in Brampton. Ms Nawrocki testified that she convinced Sandra to return to school by promising to give her a car so that she can commute to and from Georgetown and Brampton. Ms Nawrocki gave Sandra her old KIA Spectra. Sandra replaced that with a 2003 Honda Civic, paid for my insurance monies and approximately $2000.00 of her own savings. Ms Nawrocki agreed to pay Sandra's insurance in the amount of $188.00 per month. Ms Nawrocki testified that it would not be possible for Sandra to get to school without a car given the lack of public transit between Georgetown and Brampton and the length of the commute. Sandra is also saving money by living at home while attending college.

[39] Ms Nawrocki filed supporting documentation, including receipts and invoices for the following expenses, for which she is seeking contribution as section 7 expenses. These documents were entered on consent as exhibits at trial, proving that the expenses were incurred. The expenses incurred were as follows:

Monika Nawrocki 2010

• Braces – Heritage Orthodontics: $5,790.00
• Skating: $993.20
• Sub-total: $6,783.20

Sandra Nawrocki 2010

• Optometrist – glasses and contact lenses: $409.98
• Total: $7,193.00

2011:

Monika Nawrocki

• Skating: $369.00
• Dental: $132.00
• Muskoka Sports Camp: $700.00
• Sub-total: $1,201.00

Sandra Nawrocki

• Dental: $300.00
• Optometrist – contact lenses: $109.00
• Total: $409.00

TOTAL: $1,610.00

2012:

Monika Nawrocki

• Skating: $140.00
• Orthotics $500.00 – 80% covered by insurance: $100.00
• Sub-total: $240.00

TOTAL: $240.00

2013:

Monika

• Skating: $270.00
• Orthodontic treatment – Heritage Orthodontics: $200.00
• Dental: $204.40
• Sub-total: $674.40

Sandra Nawrocki

• Eye Exam: $90.00
• Sheridan College – registration: $400.00
• Car insurance 188.17 x 12 – 2,258.04: $2,258.04
• Sub-Total: $2,748.00

TOTAL: $3,422.00

TOTALS FOR 2010 – 2013: $12,465.00

2. Waldemar Nawrocki

[40] Mr. Nawrocki is 44 years old. He lives with his girlfriend in Etobicoke, Ontario. They have been living together since approximately 2009. He has no other dependents.

[41] Mr. Nawrocki is a professional truck driver and he is licensed to drive long haul eighteen wheeled trucks. He has been a truck driver since approximately 1995. Mr. Nawrocki does not own his own truck. He is sub-contracted by the KAS Group of Companies ("KAS"), which is an agency that leases truck drivers to various companies to transport goods. KAS supplies the truck and fuel and leases Mr. Nawrocki's driving services to companies to transport goods.

[42] Mr. Nawrocki has worked with KAS since 2000, approximately fourteen years. He testified that he does not need to work with any other company because he is provided enough work from KAS. He is paid $18.90 per hour and $28.35 per hour in overtime. He generally works between 50 and 60 hours each week, approximately 50 weeks each year. He testified that he cannot work more than 62.5 hours in one week due to safety regulations in the industry.

[43] Mr. Nawrocki became incorporated in 2000. Mr. Nawrocki is the sole shareholder of his company, which is a numbered corporation, engaged in the transportation of goods and specialized freight, according to his corporate tax returns. The corporation's address is Mr. Nawrocki's home address. Mr. Nawrocki submits his invoices for services rendered to KAS and KAS issues the payment for services rendered in the name of the company. Mr. Nawrocki's company is registered for GST/HST with the Canada Revenue Agency ("CRA") and his company remits GST and HST on its services to the CRA. KAS pays Mr. Nawrocki's health and dental insurance through a group plan. Other than this payment, nothing further is deducted from the fees for services rendered by KAS to Mr. Nawrocki.

[44] Mr. Nawrocki's last sworn financial statement in these proceedings is dated December 10, 2012. This statement is filed in the trial record. He deposes that his income is $21, 720.00 annually, as reflected in his 2012 Notice of Assessment attached, or $1,810.00 monthly. Mr. Nawrocki brought with him an updated, but unsworn financial statement on the first day of trial, which could not be admitted as evidence because it was unsworn.

[45] Mr. Nawrocki has an accountant who prepares his individual and corporate tax returns. He has had the same accountant since 2006. Although the accountant did not testify in this trial, he provided a letter explaining how he prepared Mr. Nawrocki's tax returns, and in particular, the corporate tax returns and the business expenses claimed. This letter was admitted into evidence not for the truth of its content regarding the business and corporate expenses actually incurred by Mr. Nawrocki, but for the sole purpose of explaining how the accountant prepared the tax returns and determined expenses to be deducted from Mr. Nawrocki's income.

[46] According to his corporate income tax returns filed as exhibits in this trial, Mr. Nawrocki's gross corporate income, business expenses, and taxes paid for the past three years are as follows:

	Gross Corporate Income	Total Business Expenses	Corporate Taxes paid	GST/HST
2012	$64,201.00	$67,261.00	$110.00	$4,353.00
2011	$60,929.00	$65,789.00	0	$5,362.00
2010	$61,027.00	$61,671.00	$594.00	$3,513.00

[47] Mr. Nawrocki's personal income is itemized as a "sub-contract" expense in his corporate business expenses. According to the personal income tax returns and notices of assessments filed at trial, Mr. Nawrocki's net business income or his line 150 income on his personal income tax returns for the past three years is as follows:

	Line 150 Total Income	Taxes Due	CPP contribution due
2012	$13,020.00	0	$942.48
2011	$21,720.00	0	$1,852.57
2010	$19,800.00	0	$1,613.70

[48] According to the letter prepared by Mr. Nawrocki's accountant referred to earlier, as a truck driver, Mr. Nawrocki is entitled to claim, for income tax purposes, a meal allowance consisting of a maximum of three meals per day, up to $17.00 per meal "under a Simplified Method without having to provide receipts". Mr. Nawrocki has claimed the full amount allowed and in 2012, he claimed $8,653.00 in meal allowances, in 2011, he claimed $8, 619.00, and in 2010, he claimed $8,704.00. No receipts or documentation was provided for any of the amounts referred to above.

[49] Further, according to the accountant, the "amortization of tangible assets" deducted from corporate income refers to the purchase of "computer/communications" equipment "and other equipment" necessary for work. Mr. Nawrocki has deducted approximately $1,600.00 each year for this amortization cost. No further explanation was provided as to what the "other equipment necessary for work" entailed, nor why a computer was needed for Mr. Nawrocki's work as a truck driver. The other "communications equipment" appeared to be Mr. Nawrocki's cellular phone.

[50] Regarding the "rental and occupancy costs" claimed totalling $9,200.00 deducted in each of the three past years, according to the accountant's letter, Mr. Nawrocki's company is permitted to claim a reasonable "office in home" deduction for tax purposes. The amounts deducted are what Mr. Nawrocki and his accountant "considered a 'reasonable' portion of rent that Mr. Nawrocki paid on his residence to maintain an office and operate the business." According to Mr. Nawrocki's most recent sworn financial statement, he pays $1,030.00 each month in rent, thereby deducting as a business expense approximately 75 percent of his personal housing cost.

[51] In 2012, although $19,800.00 in "sub-contracts" were deducted as an operating expense in the corporate tax return, Mr. Nawrocki only claimed $13,020.00 in his personal income tax return as his line 150 income. According to the letter from Mr. Nawrocki's accountant, "in the year 2012, the company started researching generation of additional income for the company to supplement the transportation income which is very static. As a result, $11,580.00 research cost in 2012" as a subcontract was incurred.

[52] In cross-examination, Mr. Nawrocki explained that the $11,580.00 "research subcontract" was paid to his girlfriend, who is trying to find work as a janitor. Mr. Nawrocki testified that his girlfriend provides janitorial services to offices. The payments for her janitorial services are paid to the corporation and then Mr. Nawrocki pays her as a sub-contractor. She is listed as an employee of his corporation and he deducts her wages as a business expense. Mr. Nawrocki testified that he is currently paying his girlfriend $1,000.00 monthly from the company, even though she is only earning $600.00 monthly as a janitor. As previously noted, they have been living together and sharing expenses since 2009.

[53] Regarding the remaining expenses incurred, no other explanation was provided for the business expenses incurred by Mr. Nawrocki, which for the past three years, have exceeded his gross corporate income, resulting in a negative balance. In cross-examination, Mr. Nawrocki could not explain what the vehicle expenses of $8,862.00 were for given that KAS provides the truck and pays the fuel. He could not explain what the $5,388.00 in "equipment rental" was for, given that he does not need to rent equipment for his company. He could not explain what the $1,642.00 in repairs and maintenance for vehicles were for, other than for his own personal vehicle. He stated that this was a legitimate business expense because he had to drive his car to and from work. Further, he did not know what the $3,812.00 in "road costs" was for, nor did he have any explanation for the supplies that were incurred. The $1,997.00 in utilities, telephone and telecommunication expenses were for his telephone, which he stated he needed for the company.

[54] In cross-examination, Mr. Nawrocki admitted that he did not provide any supporting documentation, including invoices, receipts or otherwise proving that the expenses that he claimed were actually incurred as business expenses. He testified that he was advised by his counsel that the disclosure that he provided was sufficient. He acknowledged that the business or corporate write offs claimed by him account for approximately 80 percent of his corporate income.

[55] Mr. Nawrocki acknowledged receiving through his counsel, and when he was acting in person, several letters from Ms Nawrocki's counsel requesting receipts and other supporting documentation for the corporate write-offs and business expense for the relevant years. These letters were all entered as exhibits at trial. The letters contain repeated requests for this disclosure and are dated November 6, 2012, December 13, 2012, May 27, 2013, August 15, 2013, September 3, 2013, December 9, 2013, and January 4, 2014.

[56] Mr. Nawrocki eventually produced his business and personal account banking statements for 2010, 2011 and 2012. He produced six months of his business statements for 2013. He did not produce his credit card statements. According to the business statements produced, in addition to the payments to himself for his services as sub-contractor for his company, Mr. Nawrocki paid for groceries, alcohol (LCBO), general shopping (Walmart, Winners, Sport-Mart, Adidas, Shoppers Drug-Mart, Costco), his personal vehicle, utilities, (including Bell, Rogers, and Primus) and his dentist, from his business account. He also paid for a number of outdoor activities from his business account, including expenses incurred at the Bass Pro Shop, Le Baron Outdoor, Al Flaherty's Outdoor, and Ellwood Epps. These expenses totalled $20,045.00 in 2010, $19, 459.00 in 2011, and $18,697.00 in 2012.

[57] In August of 2013, according to his corporate bank statements filed, Mr. Nawrocki spent $500.00 on outdoor equipment, which he described as camping equipment. In cross-examination, Mr. Nawrocki conceded that he uses his corporate account "pretty much" the same way he uses his personal account.

[58] Although Mr. Nawrocki did not produce the complete statements from his corporate account in 2013, according to the statements filed as an exhibit at trial, the cash deposits into the corporate account for 2013 totalled $60,786.00. In 2013, Mr. Nawrocki also purchased a Ford pick-up truck for $24,420.00. After financing, the total cost to purchase the vehicle is $43,000.00, with payments totalling approximately 607.00 per month. Mr. Nawrocki acknowledged that this amount is more than one-half of his monthly income, according to his 2012 notice of assessment, which states his income is $13,020.00. This purchase was deducted as a business expense. Mr. Nawrocki described this vehicle as his "corporate vehicle" because he uses it to drive to and from his work.

6. The Law and Governing Principles

6.1 The Determination of Income for Child Support Purposes

[59] Section 19 (1) and (2) of the Child Support Guidelines, O. Reg. 391/97, as amended, assists the court in determining the income of a self-employed person for child support purposes. Section 19(1) includes nine specific sections in which income may be added back or imputed to the payor. The entire section reads as follows:

19. Imputing income.

(1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

(b) the parent or spouse is exempt from paying federal or provincial income tax;

(c) the parent or 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 parent's or spouse's property is not reasonably utilized to generate income;

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;

(g) the parent or spouse unreasonably deducts expenses from income;

(h) the parent or 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 parent or spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.

(2) Reasonableness of expenses. -- For the purpose of clause (1) (g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act (Canada). [Emphasis added.]

[60] A self-employed person clearly has the onus of demonstrating the basis of his or her income for child support purposes. This includes demonstrating that the business deductions from gross income should not be taken into account in the calculation of income for support purposes. See Whelan v. O'Connor, 28 R.F.L. (6th) 433.

[61] It is also well established in the case law that the self-employed person has an obligation to put forward adequate and comprehensive records of income and expenses, so that a proper determination of the amount of child support can be established. The onus rests on the parent seeking to deduct expenses from income to provide meaningful documentation supporting those deductions, failing which an adverse inference can be drawn. See Meade v. Meade, 31 R.F.L. 5th, 88 and Orser v. Grant. As Justice Frances P. Kitely summarized in Meade v. Meade, supra:

"[81] It is inherent in the circumstances of those who are self-employed or who have irregular income and expenses, that they have a positive obligation to put forward not only adequate, but comprehensive records of income and expenses. That does not mean audited statements. But it does mean a package from which the recipient spouse can draw conclusions and the amount of child support can be established. Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary."

[62] In this case, the onus is on Mr. Nawrocki has to provide supporting documentation proving that the expenses he deducted from his gross income were actually incurred, and that if they were incurred, the expenses were reasonable deductions from his income, in accordance with section 19 (g) of the Child Support Guidelines. Section 19(2) of the Guidelines makes it clear that the "reasonableness of an expense deduction" is not "solely governed by whether the deduction is permitted under the Income Tax Act (Canada." Unlike the Income Tax Act, the reasonableness of an expense for Guideline purposes requires the court to examine whether the deduction results in a fair recognition of the actual income available for child support.

[63] Here, Mr. Nawrocki provided no invoices, receipts, credit card statements, ledgers, or any documentation regarding any of his business expenses to make this determination. In fact, the bank statements that he did produce, both from his personal and business accounts, clearly demonstrated that most of the expenses deducted by Mr. Nawrocki from his income were personal expenses and for his own personal benefit.

[64] Mr. Nawrocki has been working for KAS as a truck driver for the past fourteen years. He does not work for any other company. He drives a KAS company truck. All of the expenses for the truck are paid for by KAS, including the gas, as he admitted during cross-examination. It is very apparent that the only purpose of inserting a corporation into his relationship with KAS is so that he is not treated as a salaried employee, and thereby lowering or reducing the taxes that KAS must remit and that he must pay on his income. Mr. Nawrocki has been able to write off eighty percent of his income and pay no tax, either corporate or personal, for a number of years, except for $594.00 in corporate tax in 2010. Although this may be considered reasonable and acceptable from a business point of view, it is not a fair recognition of the actual income available for child support, in accordance with section 19 of the Child Support Guidelines when determining an appropriate amount income for child support purposes.

[65] Other than the HST taxes incurred for his services to KAS, it appears that all of the deductions incurred were for Mr. Nawrocki's personal benefit and should be clawed back into his income for child support purposes. The withdrawals from his business account demonstrate that he is in fact using it as his personal account to cover his personal expenses such as groceries, alcohol, clothing, and hobbies. Mr. Nawrocki conceded this in cross-examination. As counsel for Ms Nawrocki put it, there is no reason for treating Mr. Nawrocki's gross corporate income as anything but his salary.

[65] In considering all of the expenses that Mr. Nawrocki has deducted from his gross corporate income for the past three years, without any proof that they were actually incurred, except for personal use, I will permit the HST that he must pay for services rendered to KAS, given the manner in which they have structured their relationship. I will also deduct the monies paid for his CPP contribution and a portion of his telephone and meal expenses.

[67] In my view, at least $45,000.00 in "expenses" should be added back to Mr. Nawrocki's annual income for child support purposes, for a pre-tax income of $58,020.00. This amount uses the most recent income and expenses that have been produced from his 2012 corporate tax return, which is consistent with his gross corporate income and expenses for the past three years, according to the corporate tax returns filed. I also considered his testimony that that he has worked for KAS for the past 14 years at the same rate of remuneration and number of hours, which, not including overtime, amounts to approximately $56,700.00 per annum. Indeed, his average gross corporate income for the past three years, which is essentially the fees for services that he receives from KAS, is $62,052.33. During the same period, Mr. Nawrocki claimed his line 150 income was on average, $18,180.00 per annum. [3] I also take into consideration that in 2013, Mr. Nawrocki actually deposited into his corporate bank account cash in the amount of approximately $61,000.00. My determination of the amount that should be "clawed back" into Mr. Nawrocki's income is conservative in light of the findings of fact that I have made earlier.

[68] However, the income analysis does not end there. It is appropriate in these circumstances to gross-up the additional income to the father. This is done to ensure consistency of treatment where a party is found to have arranged his affairs to pay less tax on income. See Sarafinchin v. Sarafinchin, 189 D.L.R. (4th) 741; J.V.M. v. F.D.P., [2011] O.J. No. 5347 at paragraph 85.

[69] A Divorce software analysis shows that, with the grossing up of his income to account for the tax that he should have paid as a salaried employee, Mr. Nawrocki's income should be imputed at $76,842.00 per annum. This is the amount of income that will be assessed to Mr. Nawrocki for the purpose of calculating retroactive and ongoing child support. This is a reasonable, if not conservative determination, given the evidence at trial that Mr. Nawrocki's cash or "in the bank income" for the past three years averaged approximately $62,000.00 annually, in comparison to Ms Nawrocki's "in the bank income" which averaged $51,000.00, after the tax that she pays as a salaried T-4 employee.

6.2 The Determination of Retroactive Child Support

[70] The leading case regarding retroactive child support is the decision of the Supreme Court of Canada in D.B.S. v. S.R.G.; Laura Jean W. v. Tracy Alfred R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231, 351 N.R. 201, 391 A.R. 297, 61 Alta. L.R. (4th) 1, 377 W.A.C. 297, [2006] 10 W.W.R. 379, 270 D.L.R. (4th) 297, 31 R.F.L. (6th) 1, [2006] S.C.J. No. 37, 2006 CarswellAlta 976, (the "D.B.S." cases). In that case, the court held that retroactive awards cannot simply be regarded as exceptional orders in exceptional circumstances (at paragraph 5).

[71] The court in D.B.S. sets out the factors that a court must consider in addressing retroactive claims for child support. There are four factors that the court raised, at paragraphs 94 to 116 of the decision:

1. Is there a reasonable excuse for why support was not sought earlier?
2. The conduct of the payor parent.
3. The circumstances of the child.
4. The hardship on the payor as a result of the retroactive order.

[72] The court provided further guidance in considering these four factors as follows:

1. Reasonable Excuse for the Delay in Applying for Retroactive Support

[73] A delay will generally be unreasonable when the recipient knew higher support payments were warranted but decided not to apply. However, the court should not hesitate to find a reasonable excuse for the delay where the recipient spouse harbored justifiable fears of the payor's reaction, the recipient lacked the financial or emotional means to bring an application or the recipient was given inadequate legal advice (at paragraph 101).

[74] Caution should be exercised before penalizing a child for a recipient parent's delay in attempting to recover support to which a child is entitled. There may be practical financial and psychological realities inhibiting a recipient parent's ability to pursue the issue of child support (at paragraph 172).

2. The Conduct of the Payor

[75] The court should take an expansive view of what constitutes blameworthy behavior on the part of the payor. Blameworthy conduct can be characterized as anything that privileges the payor's own interests over the children's right to an appropriate amount of support and includes hiding income and intimidating the recipient. The payor cannot mislead a recipient into believing that the child support obligations are being met when they are not being met. On the other hand, a payor who does not automatically increase support payments is not necessarily engaging in blameworthy conduct (at paragraph 106).

[76] A reasonably held belief by the payor that he was meeting his obligations is a good indicator that there is no blameworthy conduct. However, the more material the increase in the payor's income, then the less likely the payor will be presumed to believe he was meeting his obligations. Positive behaviour by the payor can also militate against a retroactive order. For example, a payor who has contributed to his children's expenses beyond his statutory obligations to do so may have met his increased support obligation indirectly (at paragraph 102 to 107).

[77] Even where a payor parent does nothing active to avoid his obligations, he may still be acting in a blameworthy manner if he consciously chose to ignore such obligations. A parent who knowingly avoids or diminishes his support obligation to his children should not be allowed to profit from such conduct (at paragraph 107).

3. The Circumstances of the Child

[78] The court must consider both the present and past circumstances of the child. A child who went through hardship due to not being properly supported may be compensated. However, the argument is less convincing when the child has already enjoyed all of the advantages they would have enjoyed if the payor had been properly supporting them. Further, a child currently enjoying a high standard of living may benefit less from a retroactive award than a child currently in need (at paragraph 113).

4. Hardship for the Payor

[79] In determining whether a retroactive award will cause hardship for the payor, the court needs to consider more than the payor himself, and must also consider his children from a second family, if any. The court should be careful to craft a retroactive award in a way that minimizes hardship.

5. Other Guiding Principles in the D.B.S. Decision

[80] None of the above factors are decisive or take priority and all should be considered in a global analysis. In determining whether to make a retroactive award, a court will need to look at all the relevant circumstances in front of it. The payor's interest in certainty must be balanced with the need for fairness and flexibility.

[81] Once a court decides to make a retroactive award, it must then determine the amount. There are two elements to this decision: first, the court must decide when the order should be retroactive to and second, the court must decide the amount of support that would adequately quantify the payor's deficient obligations during that time.

[82] The court should generally make the award retroactive to the date the recipient gave effective notice to the payor that support was being sought or the current amount needs to be renegotiated. 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. However, once the issue is raised, the recipient must still be responsible in moving the discussion forward. If she does not, legal action should be contemplated (at paragraph 124).

[83] It will usually be inappropriate to make a support award retroactive to a date more than three years before formal notice was given to the payor, subject to the exception for blameworthy conduct. However, where the payor has engaged in blameworthy conduct, the date when circumstances changed materially will be the presumptive date of the award. It will then be open to the court to determine the quantum (at paragraphs 124 and 125).

[84] The principles set out in the D.B.S. cases regarding retroactive child support apply to section 7 expenses as well. See Selig v. Smith, 2008 NSCA 54, 266 N.S.R. (2d) 102, 851 A.P.R. 102, 56 R.F.L. (6th) 8, paragraphs [25] and [26]. The court in the D.B.S. cases makes no distinction between the table amount of child support and section 7 expenses for child support.

[85] In considering all of the evidence at trial, I find that the mother is entitled to a retroactive award for child support and some section 7 expenses to August 1, 2009, which is the six weeks after the mother's lawyer first sent correspondence to the father's lawyer seeking child support, contribution towards the children's section 7 expenses, proof of the father's income, including full financial disclosure of the father's income tax returns and notices of assessment for the previous three years. The mother indicated at that time that she would be filing an answer to the father's petition for divorce seeking child support.

[86] This was clearly effective notice of the mother's claims including the claim for the contribution towards Monica's braces, which is set out in the letter dated June 25, 2009. This letter was followed up by two further letters dated August 12, 2009 and April 1, 2010, after no disclosure or contribution to Monica's braces was provided. On April of 2010, the mother's lawyer at the time sent further correspondence to the lawyer for the father with a list of available dates and times that he was available (and the Milton court) to conduct a case conference on the issue of child support.

[87] The mother withdrew her answer/claim to the father's divorce application sometime after July of 2010 and consented to the divorce proceeding on an uncontested basis. I find that the mother's delay in not commencing these proceedings until September of 2012, a period of 26 months later, not unreasonable, given the circumstances that the mother was facing at the time. The mother was dealing with a very sick child. Her financial means were also somewhat limited. She was receiving no child support at all at the time. The father admitted that he stopped making any child support payments in February of 2010.

[88] The mother is a single working parent, holding down a full-time and part-time job to make ends meet for her daughters while at the same time trying to seek treatment for her oldest daughter's serious mental and physical health issues. The mother gave evidence that she was compelled to obtain a court order in 2010 to have Sandra involuntarily committed to the Oakville Trafalgar Hospital to obtain treatment for her bulimia. The time and the energy devoted to caring for a sick daughter clearly took precedence during this period in the mother's life, and the application for child support was understandably delayed.

[89] Any concerns that I have about the mother's delay in commencing this application for child support are outweighed by the father's blameworthy conduct. The father had formal notice that the mother was seeking full financial disclosure, contribution to section 7 expenses and an increase in child support in June of 2009. He refused to provide full financial disclosure and indeed, stopped paying all child support in February of 2010. The child support he was paying was woefully inadequate. Based on his actual income at the time, the father was underpaying basic child support in the amount of $730.00 monthly.

[90] The father testified that he stopped paying child support because he was waiting for the mother to start her court application. According to his evidence, he told the mother to go through the court and the Family Responsibility Office so that he could have a record of the child support he had paid. He also testified that he had heard that Sandra had "dropped out" of high school and that he was told that "she was working fifty hours per week." He did not make inquiries himself, nor did he continue to pay any child support for Monica, who was 12 years old at the time the father unilaterally terminated his child support payments. Sandra continued to be in high school until she graduated in July of 2011.

[91] The father did not start paying child support again until November of 2012, when he began paying $200.00 monthly for two children, again a woefully inadequate amount, given that the father's grossed up income at the time has been determined to be $76,000.00 per annum.

[92] Once the father had effective notice from the mother, he should have provided full financial disclosure, adjusted the table amount of child support payable in accordance with his proper income and the Child Support Guidelines, and contributed to section 7 expenses. Instead, he stopped paying child support completely in 2010 and did not provide any child support or financial disclosure for more than two years. During this time, the father enjoyed a comfortable lifestyle. To date, he still has not complied with his legal obligation to provide full financial disclosure. At this time, the father has still not provided any documents to verify his business expenses, which account for 80% of his corporate income. He has not updated his Financial Statement since December 10, 2012, and he has not provided adequate information about his 2013 income. This is blameworthy conduct.

[93] The children have experienced hardship. The mother testified that she has not been able to afford all of the extra-curricular activities that the girls would have enjoyed, including school field trips. Sandra had to obtain a $5,000.00 student loan to attend college. They have also experienced the loss of guidance and companionship of their mother as she struggled to hold down two jobs, working long hours. Both daughters attend school full-time and are eligible for child support. As the Court stated in the D.B.S. case, at paragraph 13 of that decision, a presumption of unmet needs for a child is one which can and should be made where there is a substantial failure to provide Guideline child support over a prolonged period of time, which is the case here. There is no doubt that the children will benefit from a retroactive award.

[94] Finally, regarding any hardship to the father as a result of a retroactive award, the father has no other children or dependents. He lives with his girlfriend with whom he shares expenses and, at least until 2012, appears to split income for tax purposes. Since at least 2009, he has been earning a good income while paying virtually no tax and making no child support payments. He has been able to enjoy pursue outdoor hobbies, and make large purchases for camping, fishing and other outdoor sports equipment while paying no child support. Any hardship occasioned by a large lump sum retroactive award can be minimized by crafting an award that includes monthly instalments.

6.3 The Determination of Child Support for the Adult Child Attending College or University

[95] The determination of when it is appropriate to order child support in the table amount for an adult child attending postsecondary education is a matter within the court's discretion.

[96] The relevant Guidelines provisions are sections 3(2) and section 7:

"3(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is

(a) the amount determined by applying these Guidelines as if the child were under the age of majority; or

(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.

7(1) In a 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:

(e) expenses for post-secondary education;

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

[97] Section 3(2) is presumptive and must be used unless the court considers that approach would be inappropriate. See Lewi v. Lewi, [2006] O.J. No. 1847 (C.A.). In Lewi v. Lewi, supra, the Ontario Court of Appeal held that that in determining the question of child support for adult children, clause 3(2)(b) and Section 7 of the Guidelines require the court to consider whether an adult child is able to make a contribution toward his/her post-secondary education. The court may consider assets and income, including available money from summer employment and student loans. There is no standard formula; the matter is largely one of the trial judge's discretion. In many cases the base amount of support is varied during the eight months of the year that the child is living away from home at school. See Caravello v. Wickett [2011] O.J. No. 3761.

[98] In Vohra v. Vohra, supra, Justice Sherr cites with approval the following passage from the Manitoba Court of Appeal in Rebenchuk v. Rebenchuk, 2007 MBCA 22, 212 Man. R. (2d) 261:

"... Children have an obligation to make a reasonable contribution to their education. However, just because a child is earning income, it does not follow that all of that income must be applied to the child's education. The desirability of allowing the child to experience some personal benefit from the fruits of his or her labours should also be considered: Glen v. Glen, 34 R.F.L. (4th) 13 (para. 14)."

[99] In this case, Ms Nawrocki is not seeking retroactive contribution to Sandra's post-secondary costs. Sandra has obtained a student loan in the amount of $5,000.00 and saved some earnings from part-time employment to cover her tuition and books and miscellaneous expenses. The parties also jointly contributed towards an RESP for Sandra which covered a portion of her post-secondary costs.

[100] However, Sandra continues to live at home while she is attending school and is receiving food and shelter from her mother. She is not living in residence. I find that the presumptive table amount applies in determining child support for Sandra given that she continues to reside at her mother's home as a dependent while attending school full-time. In the future, this may change, and the amount may need to be adjusted.

[101] Accordingly, I find that a retroactive award for basic child support can be calculated as follows:

Method 1: Calculation of table amount child support arrears based on imputed incomes for 2010-2013

Year	Respondent's Income	Children	Amounts Owing	Total Owing Per Year
2010	$76,842.00	Both children	$1,130/month x 12	$13,560
2011	$76,842	Both children – 6 months; Monika – remaining 6 months	$1,130/month x 6 = $6,790; $698/month x 6 = $4,188	$10,968
2012	$76,842	Monika	$698/month x 12; Paid $400 in 2012	$3,576
2013	$90,000	Sandra & Monika	$1,130/month x 12 = $13,560; Paid as per temp. order $330 per month - $3,960 per year	$9,600
GRAND TOTAL				$37,704

6.4 The Section 7 Expenses: Entitlement

[102] The mother's claim for special or extraordinary expenses is brought under section 7 of the Child Support Guidelines:

7. Special or extraordinary expenses. -- (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.

[103] The definition of "Extraordinary expenses" is set out at section 7 (1.1) of the Guidelines:

(1.1) Definition, "extraordinary expenses" . -- 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.

[104] The list of special and extraordinary expenses under clauses 7(1) ( a ) to ( f ) is exhaustive. If a claim does not fall within any of the listed categories, then it must be dismissed. See Kilrea v. Kilrea (1998), 82 A.C.W.S. (3d) 952. 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.

[105] Expenses for usual or ordinary extracurricular activities for a particular family are included in the table amount of support. See Smith v. Smith (1997), 75 A.C.W.S. (3d) 703; D'Urzo v. D'Urzo (2002), 30 R.F.L. (5th) 277; Park v. Thompson, supra; Zimmerman v. Doe, 159 A.C.W.S. (3d) 407.

[106] It is also clear from the case law that a custodial parent does not have carte blanche to enrol a child in any number of extra-curricular activities and then to look to the non-custodial parent to share all of the costs. See Forrester v. Forrester, 73 A.C.W.S. (3d) 479; Zimmerman v. Doe, supra.

[107] The mother is only seeking fifty percent of the section 7 expenses that are set out at paragraph 39 of this decision, although she is entitled to claim significantly more on a proportional basis. The expenses over a three year period total $12, 465.00 and include Monica's braces (not covered by her insurance), dental and orthotic expenses not covered by her insurance, Monika's sport summer camp in 2010, contact lens not covered by insurance, and Monica's figure skating. Monica is competing at a high level of figure skating, which accounts for the higher cost annually of approximately $900.00 per annum, and is therefore an extraordinary expense. In reviewing the section 7 expenses claimed, I find that they meet the definition under section 7 of the Guidelines, and that they are reasonable and necessary expenses, keeping in mind both parties' financial situation.

[108] The mother is also seeking contribution to Sandra's car insurance, as previously discussed, and towards a school field trip that Monica attended in the spring of 2014 in the amount of $910.00, which I find to be a reasonable extraordinary expense under section 7(1) (d) of the Guidelines. Regarding the car insurance, Sandra requires a car to commute to her campus from Georgetown to Brampton. Ms Nawrocki gave evidence that there is virtually no public transit available and that which is available would involve a very lengthy commute. Ms Nawrocki helped Sandra purchase a car, but she can no longer afford the car insurance payments, which she pays each month because Sandra cannot afford this expense. Sandra's car insurance expense is modest and reasonable, given that she is choosing to live at home to save expenses and the commute to her college from her mother's residence is three hours each way by public transit. It is unreasonable to expect Sandra to do this commute and her transportation costs are reasonable. I find that one-third of Sandra's car insurance payment, totalling $745.00 annually is a reasonable section 7 expense in light of the above.

[109] The father's total retroactive contribution to these expenses is $7,640.30 (this figure also includes one-third of Sandra's car insurance for 2014 and one-half of the school field trip for Monica).

[110] The total retroactive award for child support and section 7 expenses is therefore $45,344.30. In considering all of the D.B.S. factors in circumstances of this case, in my view, an appropriate and fair retroactive award for both child support and the section seven expenses should be $40,000.00.

ORDER

[111] For the reasons above, I make the following final order:

1. Commencing October 1, 2014, the father shall pay child support to the mother in the amount of $1,130.00 per month, on the first day of each month thereafter. This is based on the table amount for two children pursuant to the Child Support Guidelines, based on the father's imputed income determined to be $76,842.00 per annum.

2. The amount of retroactive child support and section 7 expenses owed by the father shall be fixed at $40,000.00. This amount shall be paid either in a lump sum forthwith and no later than 30 days from the date of this court Order, or at a rate of $450.00 per month, commencing October 1, 2014, until the full balance is paid.

3. The total amount of ongoing and retroactive child support payable each month is therefore $1,580.00. The monthly payment towards the retroactive child support award in paragraph 2 above shall be increased once the oldest child is no longer entitled to child support, so that the monthly payment of ongoing and retroactive support will continue to be $1,580.00 per month until the arrears are paid in full and for so long as the father is obligated to pay child support.

4. For any future section 7 expenses:

a. the mother shall advise the father in writing of the category and the expense;

b. for any expense claimed by the mother, she shall deliver proof of the expense to the father on a quarterly basis; and

c. the parents shall share these expenses equally, each contributing 50% towards the cost;

d. for future post-secondary education expenses under section 7 after the year 2015, the mother and father shall each be responsible for paying 50% of the balance of the children's post-secondary expenses, including tuition, books, and transportation costs, after RESP payments and any reasonable contribution by the children through part-time or summer employment or student loans not to exceed $6,000.00.

e. If either child lives away from home to attend residence or otherwise for post-secondary studies, then the ongoing child support provisions may be reviewed, but not the retroactive award.

f. The mother shall provide the father each school term with: proof of the children's enrolment in university or college, transcripts, details of student loans if any, tuition, book and transportation expenses and income. She is to immediately notify him and the Family Responsibility Office if either child stops attending school.

g. The parties shall exchange copies of their personal and corporate income tax returns and notices of assessment, including relevant attachments, every year by July 15th, starting in 2015, pursuant to sections 21 and 25 of the Child Support Guidelines.

h. A Support Deduction Order shall issue.

[112] If the either party seeks costs, then he or she shall serve and file costs submissions, with a bill of costs and offers to settle attached, no later than October 10, 2014. Any written response to costs submissions shall be served and filed no later than October 30, 2014.

Released: September 3, 2014

Signed: "Justice Sheilagh O'Connell"

Footnotes

[1] At the time of the trial, Mr. Nawrocki's 2013 corporate and personal income tax returns had not yet been prepared.

[2] There was no documentation provided for the actual HST/GST paid or incurred, this amount was listed as an operating expense in the corporate tax return.

[3] In 2010, he reported his line 150 income as $19,800.00; in 2011, he reported $21,720.00 and in 2012, he reported his line 150 income as $13,020.00.