Court Information

Court: Ontario Court of Justice File Number: Brampton 630/15 Date: November 27, 2015

Between: Heather McCoy, Applicant

— AND —

Michael Oakins, Respondent

Before: Justice Philip J. Clay

Heard: November 24, 2015

Reasons for Judgment Released: November 27, 2015

Representation:

• The Applicant acted on her own behalf.
• The Respondent acted on his own behalf.

CLAY J.:

PROCEDURAL BACKGROUND

[1] The Applicant mother ("the mother") issued her Application on July 3, 2015. She sought a number of grounds of relief. The parties signed Minutes of Settlement on the first appearance date of September 3, 2015. A final order was made that day on all issues with the exception of child support, s.7 expenses and retroactive child support and s.7 expenses.

[2] The Respondent father ("the father") filed an Answer on September 24, 2015. A case conference was held on October 14, 2015. At that time the court was advised that the parties had signed a Child Support Agreement on March 10, 2014. The parties had created the document themselves and had a friend witness their signatures.

[3] The mother acknowledged that the father had paid table child support pursuant to the Agreement to and including a payment due May 1, 2015. The father had not paid table child support since. The father conceded that he had stopped paying table child support in May as he had been laid off from his employment. The father obtained new employment about a week after the case conference. The mother acknowledged that he had made a payment to her of $1,000 which was to be applied to table child support.

[4] With respect to s.7 expenses both parties were content with the terms of their agreement that the father was to pay 50% of same. The father had paid his half of some expenses since the Agreement. The mother sought payment for 2014 and 2015 expenses to which the father had not contributed.

[5] At the conference a disclosure order was made. Pursuant to that order the mother filed an affidavit attaching the receipts for the s.7 expenses that she sought. The father did not file an affidavit but he brought to court with him his employment insurance information. The missing disclosure related to union hiring rules and his job applications. The mother was offered an adjournment given the failure to disclose. She opted instead for cross-examination of the father on the relevant issues.

[6] At the time of the conference this matter was scheduled for a summary trial. It was to proceed on affidavit evidence but due to disclosure issues each party gave oral evidence. The mother provided information as to the costs of the two youngest children's after school program. She had the gross costs paid but had not done a calculation of the net after tax cost. I advised the parties that that information was significant in this matter. They consented to me determining the financial facts and then inputting that information into a software program known as DivorceMate to calculate the net after tax costs. At the end of the evidence and submissions I reserved my decision.

ISSUES

[7] The following issues remained to be determined:

1. Should income be imputed to the father pursuant to s.19 of the Child Support Guidelines (CSG) for the year 2015 based upon the allegation that he was intentionally unemployed?

2. How should expected income for 2016 be calculated so that an ongoing amount of table child support can be determined?

3. What does the father owe to the mother for s.7 expenses incurred in 2014 and 2015?

EVIDENCE

The Mother

[8] The mother accepted that the father was laid off from his job acquired through his union on May 23, 2015. She said that the father took no steps to find employment throughout the summer. She acknowledged that the father had begun working again with a different company arranged through the union on or about October 17, 2015.

[9] The mother told the father in April 2015 that she would take him to court if he did not pay 50% of the s.7 costs. She then filed as evidence a text message from the father sent April 16, 2015 in which he made the comment "We'll I'll be unemployed when we go and my lawyer will be in contact." She also stated that prior to the separation the father was laid off and he actively looked for work. He changed union locals so that he could accept a job before his local called him back. She said in effect that the father was not motivated to look for work and that he did not even check with his union as to whether there were opportunities available. She said that child support should not be based upon his unemployment insurance income but that the court should find that the father could have found work. As the father's income pre-layoff on May 23 was $37,247.85 that income should be pro-rated to a 2015 income of $86,000.

[10] With respect to s.7 expenses the mother said that she required PLASP after school care for Kyle (10) and Michael (8). She stated that despite requests the father had refused to contribute. She provided a letter with the total amount paid in 2014 and 2015. She had filed a Notice of Assessment indicating an income of $89,052 in 2014 but she noted that she had withdrawn nearly $10,000 from her RRSP in that year of separation to purchase the father's interest in the home. She said that $78,000 was a more accurate figure for her ongoing income. The mother wanted the father to pay 50% of the s.7 costs as they had agreed. She had deducted child care costs from her 2014 income and would be doing so again in 2015. When the 2014 payments are added up from the PLASP letter the total amount expended was $2,356 all of which was tax deductible.

[11] The 2015 payments in the letter ended with the payment made September 21, 2015. The information provided was that PLASP was $288 every two weeks for two children and $144 every two weeks for one child. The mother said that she took Kyle out of PLASP in early November because she could not afford to pay for both kids without the father's contribution. Kyle was then left alone at home after school although he telephoned his mother immediately after getting home off the bus. Cody was often home and a neighbour was available in the event of problems. The mother was not comfortable with the situation though and said she would re-enrol Kyle if she received some financial help.

The Father

[12] The father said he is a sheet metal worker and he obtains work through his union local. He was laid off from work on May 23 due to a shortage of work. He said there were two reasons for this lay-off. Firstly, it was an especially cold winter which meant that the outer shells of buildings could not rise up from the ground. He worked on the interiors so if there was no outer shell there was no interior to work on. Secondly, the Pan Am games reduced access to many job sites in downtown Toronto so many projects had to be on hold for a period of time.

[13] The father admitted that he did not look for work. He said that all the work he does is through his union. He said that during a prior lay-off he had been told about a job that was available to members of local 285. He left local 30 to join 285 and got the job from which he was just laid off. He had steady work for about a year and a half. He said that the union hiring system was straightforward. When you lost a job you were assigned a number. When your number got to the top of the list the union would call you when the next job became available. He conceded that you could refuse the work and still stay at the top of the list and other members did this on occasion if they thought a bigger and better job was just around the corner. He said that he had not reached the top of the list until October 17 and when he got the call he accepted his current job. He said that there was no point in looking for other work because he was in a good local which worked on medium sized jobs which meant that the list turned over more quickly than the much larger local 30 where he used to be a member.

[14] As to his text on April 16 the father said that he was upset and "blowing off steam." He said he would not quit a job to reduce his child support. He noted that until the lay-off he had always paid. The father said that he had worked as a sheet metal worker for 18 years. The first 10 were with his father's company. In the 8 years that he had worked union jobs he had worked a full year about 2 or 3 times. He said it was common to be laid off at least once and often twice during the year. He said that they were usually short periods of unemployment and that the summer of 2015 was the longest lay-off he had experienced.

[15] The father's position was that 2015 child support should be based upon the income that he actually earned that year. This was $37,247.85 to May 23 and $9,956 in unemployment pay until October 17. He produced a pay statement from his new employer and he agreed with the mother's calculation that when his vacation pay-out was added to his hourly wage that he made a wage of $46.56 hourly. He said that some weeks he could work 42 hours and others 32 hours. He said an average week would be 37 hours. He also said that there was shut-down at the company for the last two weeks of December. This meant that he will earn $1,722.72 a week until on or about December 18. This works out to $17,230 for the balance of the year. When the numbers are added up it amounts to approximately $64,434 in 2015.

[16] The father had not paid for Michael's rep hockey expenses for 2015 of which his one half share was $1,005 and he had not paid for Cody's lacrosse expenses for 2015 of which his one half was $125. By the time of final submissions he changed his position and agreed to pay those costs.

[17] The father had not paid for PLASP expenses. He said that when the parties were together the maternal grandmother often looked after the kids after school. He also said that, at age 17, Cody could look after his younger brothers from approximately 3:45 p.m. until 5:30 or 6:00 p.m. when the mother got home from work. Initially at least he did not seem to understand why he should be required to pay for the mother's costs of going to work.

THE LAW

Imputing Income

[18] The CSG address imputing income in section 19. The subsections that are relevant to the issues in this matter are set out as follows:

19. (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;

[19] The leading case in Ontario on income imputation is Drygala v. Pauli. In that case the Court of Appeal set out a three part test. That test is as follows:

1. Is the spouse intentionally underemployed or unemployed.

2. If so, is the intentional underemployment or unemployment required by virtue of his reasonable educational needs, the needs of the child of the marriage, or reasonable health needs.

3. If the answer to #2 is negative, the court must decide whether it should exercise its discretion, and if so, what income is properly imputed in the circumstances.

[20] This case makes it clear that:

1. there is no need to find a specific intent to evade child support obligations before income may be imputed. The court can look at whether the act is voluntary and reasonable;

2. The payor is intentionally under-employed if he chooses to earn less than he is capable of earning; and

3. imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children, and in order to meet this legal obligation, a parent must earn what he is capable of earning.

Section 7 Expenses

[21] The claims by the mother for a contribution to extra-curricular activities and child care costs are made under s.7 of the CSG. The sub-sections that are relevant to this matter are set out below:

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:

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

(f) extraordinary expenses for extracurricular activities.

(1.1) For the purposes of paragraphs (1)(d) and (f), the term "extraordinary expenses" means

(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse's income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate;

(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.

(4) In determining the amount of an expense referred to in subsection (1), the court shall not take into account any universal child care benefit or any eligibility to claim that benefit.

ANALYSIS

Father's Income

[22] The parties agree that the father's income for 2014 was $83,408. The sole issue is whether the father should have sought and obtained employment after being laid off on May 23, 2015. As the father obtained similar work at the same pay as his prior job beginning on October 17 the issue is further narrowed. The mother states that the court should impute to the father the income that he would have earned if he had not been laid off. The father states that the court should look at the actual income received in 2015.

Intentionally Unemployed?

[23] I understand why the mother would have doubts about the father's motivation to return to work. He did send a very insensitive message in April when he said he would not be working when the matter came back to court. He had failed to contribute any monies for his son's child care even when it should have been quite clear to him from the Agreement that he signed in March 2014 that child care was an expense to which he had to contribute his one half share. He did refuse to pay for Michael's hockey even though the parties had paid for rep hockey for all three of their sons when they were together and the father had paid for Michael's in the 2014 year. Adding to the mother's suspicion was the fact that this was the longest lay-off the father had ever had and that at the time of his last lay-off he had taken the initiative to change union locals to secure a good job. This was the backdrop to the mother effectively being told by the father that there was no point in him looking for work and that he simply had to wait for the union to call.

[24] The father's statements to the mother were regrettable and his failure to pay for child care was inexcusable. Nevertheless, I have to look at all of the evidence before me to determine if the father was intentionally unemployed between May and October 2015.

[25] Firstly, I find that the father has demonstrated through his 18 years of employment as a sheet metal worker that he is able to obtain and maintain employment on a regular basis. I accept his evidence as to how the hiring system works in the union to which he belongs. There is no doubt that he was laid off as confirmed by his Record of Employment. I have no reason to doubt the father's evidence that he accepted the first call to return to work when the union called him with the job that began on October 17. The father was direct and forthright when responding to questions about not actively seeking employment. He said that during previous lay-offs which occurred most years he had never actively sought employment directly with the construction companies. In 2013 he was told about a company that was hiring and changed locals to obtain the job. He provided a credible reason for the May lay off and the slowdown in work in his field during the summer of 2015. He said that he had obtained a job that had lasted for well over a year with local 285 and he was confident that another good long term job would become available. It took longer than he expected but he is now working for the union rate of pay on an indefinite contract.

[26] Therefore, while I find that the father caused the mother unnecessary financial worries by misleading her about not working, in the end result I do not find that the father was intentionally unemployed. The father's action in staying with his local and awaiting another good union wage job was reasonable in the circumstances. I find that the father should be found to have an income in 2014 based upon the amount actually received (or to be received) during 2015 which is the sum of $64,434.

Ongoing Income

[27] The father now has employment which prorated to 50 weeks a year (given the two week shutdown) would annualize to approximately $86,000. I need to determine the father's income for the purpose of setting an amount of child support to begin in 2016.

[28] Once a child support amount is determined, as it was in the March 2014 agreement, annual income disclosure usually results in an adjustment of the table child support to the income earned in the immediately preceding year. It would not be fair to take that approach to projected 2016 income. We know that the 2015 income was low due to the long lay-off. The father has a long history of working in the same industry. His income has fluctuated over the years depending it appears as to whether he is laid off and for how long. His evidence was that in 18 years he has only worked a full year two or three times (one occasion was 2014). If income fluctuates the CSG permits a court to average the income. It would not be fair to the mother to average the last three years income as there were long lay-offs in both 2013 and 2015. I find that there should be some averaging done though as 2014 appears to be a high year and 2013 a lower year. The average of the 2013 and 2014 incomes is $75,009 which I will round down to $75,000. I find that that income should be used for 2016 child support. If the father earns more income than that in 2016 the mother will receive higher child support based upon the previous year's income through the disclosure process. If he earns less his child support will go down. Ultimately the fluctuations in income may well balance themselves out in a way that in the longer term is fair to both parties.

Section 7 Expenses

[29] The parties had agreed to share s. 7 expenses equally. The father contributed to extra-curricular activities until 2015. He has now agreed to pay one half of hockey and lacrosse and I will set out a timeline when that must be done.

[30] The issue is PLASP expenses. I find that these expenses are both reasonable and necessary and that they are incurred for the purpose of the mother's being able to work. I note that if the mother has the younger children in summer camps, in order to work, that the father should pay his one half share of the after tax costs of the camps as well.

[31] I determined the PLASP costs for 2015 by adding up the 2015 payments to September 21 as per the letter. I then added $144 every two weeks for the payment due dates of Nov. 16 and Nov. 30 as only Michael was in PLASP in November. I assumed that both boys would be back in the program for December as it was not safe to have Kyle potentially home alone and I was confident that the mother would re-enrol him as she was asked to do on November 24. There is no PLASP during the school holiday so I applied a $288 payment for the two week period ending December 14. The total for 2015 is then $5,385 all of which is tax deductible.

[32] One of the challenges for parents in dealing with s.7 expenses is the provision in s.7 (3) of the CSG that:

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.

[33] The difficulty for self-represented parents is that they do not usually have access to the software that would allow them to determine the after tax cost. In this matter the parents can afford to have a lawyer do the software calculations for them annually so that they can reconcile the amount paid by the father with the actual after tax cost for the year. Unfortunately, that was not done prior to the hearing of this Application. As noted above, as the child care deduction represents a significant amount of tax savings for the mother it was important that it be factored into the result.

[34] I have attached a DivorceMate child support calculations as a schedules to these reasons. As the parties had agreed that they would share s.7 expenses equally I have inputted the father's income into the box for the mother's income to ensure a 50% sharing. (if the mother's income was inputted the father's contribution would have been based upon proportionate income sharing.) The fitness tax credits and activity credit also reduce the gross costs of Michael's hockey in 2015.

[35] The parties agreed at the hearing that ongoing s.7 costs would not be collected by the Family Responsibility Office ("FRO") unless the father had an opportunity to pay and refused to do so. This allowed for more flexibility in adjusting the costs as the boys transitioned out of child care and changed their activities.

Summary

[36] The arrears of table child support for 2014 need to be determined. The father did not make disclosure of his increased income as he was required to do. He paid the sum of $1,256.76 each month pursuant to the agreement for a total amount in 2014 of $15,081.12. Based upon his 2014 income of $83,408 he should have paid the sum of $1,583 per month which is a total of $18,996. The difference is $3,914.88. As the father did pay the amount under the agreement and the mother did not seek an increase until this Application was brought, the father will be given time to pay these arrears at the rate of $200 a month until fully paid.

[37] In 2015 the father paid the sum of $1,256.76 for the first five months of the year. He also paid $1,000 in October 2015. This totals $7,283.80. I have found the father's income in 2015 to be $64,434 which results in a monthly table amount of $1,253. The total that should be paid in 2015 is $15,036. The shortfall in the amount paid is $7,752.20. As it turns out, the amount the father should have paid for 2015 is almost the same as the amount he would have paid if he had not unilaterally terminated all table child support when he was laid off. He knew that his lay off could not possibly result in no support for his 3 children especially since he was receiving Employment Insurance. He chose not to ask the mother for temporary relief during the lay-off and simply stopped paying which forced her to bring this Application. In these circumstances the father must pay all child support owed for 2015 before the end of 2015.

[38] The father is required to pay his one half share of the child care. Calculation 1 for 2014 attached sets out that the father's net contribution should have been $60 per month which is a total of $720 for the year.

[39] The father ultimately admitted that he should have paid for hockey and lacrosse in 2015. The mother received fitness and activity credits for Michael's hockey (but not for 17 year old Cody's lacrosse). His one half share will be reduced by the credits. Calculation 2 includes the child care that will be incurred in 2015 and the hockey costs and credits. This results in a monthly payment of $197 which is a total of $2,364 for the year to which must be added the $125 for Cody's lacrosse for a final total of $2,489.

[40] The arrears of s.7 expenses as opposed to ongoing s.7 should be collected by FRO. The total arrears are $3,209 and they shall be collected at the rate of $200 per month until fully paid.

[41] I have considered the totality of the monthly payments. The father's financial statement shows that he resides with his mother and only pays rent of $183.33 per month. As of September 23 he had bank accounts with a total of $1,290 and this after he had been unemployed for four months (he also showed a MasterCard debt of $5,032). The father's lack of financial disclosure and unilateral termination of child support lead directly to the arrears. I will not make all the arrears due immediately as that could cause a 50% garnishment of his wages if he fails to pay and I want the father to be able to contribute his share of child care costs and extra-curricular activities in 2016 in a timely way.

FINAL ORDER

1. The Respondent father shall pay to the Applicant mother support for the children Cody Oakins born May 2, 1998, Kyle Oakins born May 27, 2005, and Michael Oakins born November 10, 2007 the sum of $1,444.00 a month beginning January 1, 2016 based upon a projected 2016 income of $75,000.00.

2. The Respondent father shall pay 50% of the said children's s.7 expenses incurred after January 1, 2016 as follows:

   a) The Applicant mother shall e-mail the Respondent father with any proposed expenses for the children and the full particulars of same. The Respondent father shall respond within 5 days as to any concerns that he has. The Applicant mother shall respond to any concerns within 5 days. If the parties cannot agree upon an expense the Applicant mother's decision shall be final.

   b) The Applicant mother shall e-mail the Respondent father with an invoice for the s. 7 expense and the Respondent father shall pay to the Applicant mother directly his 50% share of the expense at least 5 days before the payment is due. The Respondent father shall pay 50% of the gross costs of an expense unless the Applicant mother e-mails him with her calculation of the after tax cost.

   c) If the Respondent father does not pay his 50% share as set out above, the Applicant mother may send the invoice, proof of the e-mail and a copy of this order to the FRO and request that it add the unpaid amount to the father's account.

   d) Upon the father providing a copy of his Notice of Assessment to the Applicant mother she shall:

   i) calculate the correct table child support to be paid for the next ensuing 12 months based upon the father's income;

   ii) calculate the net after tax cost of all child care incurred in the immediately preceding year; and

   iii) send to the father the above calculations by e-mail with a reconciliation of the amount paid by the father for 50% of the gross costs of child care and the amount he should have paid for the net after tax costs of child care and arrange for a crediting against future payments for any overpayment.

3. The Respondent father shall pay to the Applicant mother arrears of table child support for the year 2014 in the amount of $3,918.44 at the rate of $200 a month beginning January 1, 2016 and continuing until fully paid.

4. The Respondent father shall pay to the Applicant mother arrears of table child support for the year 2015 in the amount of $7,752.20 by December 31, 2015.

5. The Respondent father shall pay to the Applicant mother arrears of s.7 expenses for 2015 in the amount of $3,209.00 at the rate of $200 a month beginning January 1, 2016.

6. All other claims in the pleadings are dismissed.

7. Support Deduction Order to issue.

Released: November 27, 2015

Justice Philip J. Clay