Court File and Parties

Court File No.: Halton 36/12 Date: January 31, 2016 Ontario Court of Justice

Between:

Lee Christopher Robson Applicant

— AND —

Kelly Amanda Brent Respondent

Before: Justice Sheilagh O'Connell

Heard on: December 15, 2014, February 6, 2015, June 3, 2015

Reasons for Judgment released on: January 31, 2016

Counsel:

• Catherine A. Haber, counsel for the respondent
• Lee Christopher Robson, on his own behalf

O'CONNELL J.:

Introduction

[1] This trial is about child support for the child L.G.B., born […], 2011 ("L.G.B."). The issues of custody and access were finalised on June 24, 2014 pursuant to the Final Order of Justice R. Zisman, made on consent of the parties.

[2] The mother seeks an order for ongoing child support based upon an income imputed to the father. She also seeks retroactive child support and that the father pay his proportionate share of the child's special and extraordinary expenses including, but not limited to, day-care, medical dental and drug expenses, therapy and counseling expenses, tutoring and postsecondary educational costs.

Issues

[3] The main issues in this trial are the following:

1. What income, if any, should be imputed to the father?
2. What should the father's proportional contribution towards the child's special and extraordinary expenses be?
3. Should retroactive child support or arrears of child support be ordered and if so, how much?

Background

[4] The applicant father is 42 years old. The respondent mother is 38 years old. The parties were in a dating relationship from May 2008 to August 2010. They were never married and they never lived together. The relationship between the parties ended before the child L.G.B.'s birth. L.G.B. was born on […], 2011. She is four years old.

[5] L.G.B. is a child with very special needs. She was diagnosed with autism spectrum disorder in 2014. She also is diagnosed with "chromosome 1 deletion". It is not disputed that L.G.B. requires several different therapies, such as speech and language therapy, applied behavioral analysis therapy ("ABA" therapy), and music therapy.

[6] L.G.B. lives with her mother and her sister H. in Burlington, Ontario. The mother and the children reside with the mother's parents. H., born […], 1997, is not the subject of these proceedings and is the mother's child of a previous relationship. The mother does not receive child support for H.. The mother is employed full-time at the Halton District School Board and also works part-time doing after care. In 2014, she earned approximately $71,830 in total income.

[7] The father lives with his girlfriend in a rented home in Willow Beach, Ontario. He has no other children or dependants. Up until the time of trial, he was self-employed as a producer of live events and performances, and a stage production manager. As an independent contractor, the father states that his income is on average no more than $25,000.00 to $30,000.00 per annum. The father declared bankruptcy in March 2013. He was not discharged at the conclusion of trial. In 2014, he states that he earned very little until he started employment in October of 2014.

[8] Shortly before the trial, the father obtained employment at the Toronto International Film Festival ("TIFF") on October 20, 2014 and received an annual salary of $47,150, as well as health and dental benefits. However, during the course of this trial, shortly before the expiry of his probationary period with TIFF, the father's employment was terminated on or about February 4, 2015. The father was therefore unemployed at the conclusion of the trial and seeking employment in his field.

The Father's Position

[9] The father submits that ongoing child support should be based on an imputed income of $30,000 per annum. The table amount of child support for this income is $245.00 per month. However, he agrees that between October 1st, 2014, to February 1, 2015, he should pay child support in the amount of $425.00 per month, which is the table amount based on his employment income at the Toronto International Film Festival.

[10] It is the father's position that he cannot afford to contribute to any of L.G.B. special or extraordinary expenses, with the exception of her day care expense. He submits that after his monthly expenses and monthly child support are paid he will only have approximately $150 per month. He states that he will continue to contribute to L.G.B.'s daycare expenses at a rate of $127 per month until he is in a position to contribute more.

[11] The father further submits that any award of retroactive child support or arrears should be calculated based on an imputed income of $30,000, for the period from August 1, 2011, to August 1, 2014, to be paid at a rate of $50.00 per month.

[12] Finally, the father acknowledges that within 30 days of any court order, he will obtain and maintain a life insurance policy in the face amount of $150,000 to at least 65 years of age. He does not agree to a face amount higher than this. He will designate the mother as the irrevocable beneficiary of the life insurance policy and shall maintain L.G.B. as a beneficiary under any health, medical dental drug and insurance available to himself so long as he is obligated to pay child support.

The Mother's Position

[13] The mother submits that the father's income should be imputed at a rate of $40,850.00 per annum, for the time period from April 2011 to October of 2014, the date the father obtained employment at TIFF. The table amount of child support for this time period is $368.00 monthly. After October of 2014, the father's income should be imputed based on the salary he was paid while he was employed at TIFF, and should continue be imputed at that amount even after he was terminated by TIFF. [1] The table amount for this income is $425.00 monthly.

[14] The retroactive child support should be payable from the date of the child's birth, […], 2011, to date, less any credit for amounts already paid, based on the imputed income of $40,000.00. The mother is also seeking a retroactive contribution to the day-care expenses.

[15] At the outset of trial, the mother calculated that the total retroactive amount of child support and arrears owing from date of birth to December, 2014 was $13, 721.00, and submitted that this amount should be paid at a rate of $200.00 per month, not $50.00 per month, as proposed by the father. This amount did not include any amounts owing for the 2015 year.

[16] It is also the mother's position that the father should be responsible for forty percent of L.G.B.'s special and extraordinary expenses going forward, including any special therapies, medical, dental and drug expenses. The mother is not seeking a retroactive award for the section 7 expenses.

[17] According to the mother, at the time of trial, the average monthly section 7 expenses, including the day-care expense, were $1, 291. 38 per month, as set out in Schedule "C" of her most recent Financial Statement filed, sworn December 9, 2014.

[18] Finally, the mother submits that the father should obtain life insurance of $300,000 in base coverage, given that L.G.B. is a child with very special needs and may be dependent longer than is ordinarily expected.

Litigation History

[19] The father commenced this application in January of 2012. He was seeking access to L.G.B.. In her answer and response, the mother crossed-claimed for child support, contribution to the child's section 7 expenses and retroactive child support, among other relief.

[20] The litigation between the parties has been lengthy and very highly conflict. The custody and access issues were eventually resolved after two comprehensive social work reports conducted by a clinical investigator for the Office of the Children's Lawyer. On June 24, 2014, the parties entered into a final consent order granting the mother sole custody of the child and the father weekly supervised access at a supervised access centre.

[21] As the father was self-employed throughout most of the proceedings, there were numerous procedural orders made for financial disclosure. The mother was granted leave to question the father on his financial circumstances and a questioning was conducted on May 27, 2014.

[22] On June 27, 2012, on consent of the parties, the father was ordered to pay temporary child support to the mother in the amount of $200 per month commencing August 1, 2012. This was apparently based on an income imputed to the father of $25,000, on a temporary without prejudice basis, pending full financial disclosure based on an agreed upon imputed income of $25,000.

[23] On November 19, 2012, the father was ordered to pay the sum of $127 per month towards the child's day care expenses commencing November 1, 2012, again on a temporary without prejudice basis.

[24] The above temporary orders for child support continued to be in effect at trial. According to the most recent statement of arrears prepared by the Family Responsibility Office filed at trial, the father owed arrears pursuant to these two orders in the amount of $2,202.00.

Summary of the Relevant Evidence

[25] The court heard three days of evidence. Mr. Robson testified and was cross-examined by Ms. Haber. In addition, a transcript of the questioning conducted by Ms Haber was entered as evidence at trial. Ms. Brent also gave evidence in this trial.

[26] As the father was self-represented, he was provided with the Ontario Court of Justice's Guide to Self-Represented Litigants in family law proceedings. The court endeavoured to ensure that Mr. Robson was aware of the law, the rules of evidence and trial procedure in order to preserve trial fairness.

Evidence of the Father

[27] As indicated, the father describes himself as a manager and producer of live events. He has worked in this field for approximately fifteen years. The father received an Honours Diploma from Seneca College in 1997 for Event Planning and he has also taken computer assisted design courses in the Events Management field.

[28] The father testified that has been largely self-employed as an independent contractor and has had a number of small contracts in this field. Since 2002, he has run his own business. He has also worked as a stage manager, a studio management engineer, an audio technician, and a production technician.

[29] On the first day of this trial, the father testified that he had recently been hired by the Toronto International Film Festival as an assistant production manager for all third party and in-house events, including the Film Festival. He testified that this was the kind of work that he did as an independent contractor. The starting salary with TIFF was $47, 150.00.

[30] The father's evidence in chief was completed on December 15, 2014, however, the mother's counsel was unable to start her cross examination on that day. The trial was adjourned to February 6, 2015, which was the first available date for the parties.

[31] When the parties returned on February 6, 2015, the father advised the court that his employment with TIFF had been terminated on February 4, 2016, while he was still on probation. The father suggested initially that his termination may have been caused by the mother contacting his employer to ascertain his hours of employment. When pressed, the father then testified that he was advised that he was not "a good fit" with the organization. The father testified that he was given two weeks' notice and was awaiting a letter of reference.

[32] As mother's counsel had just received this information at trial, she sought an adjournment before commencing her cross-examination to get further information from the father's employer with respect to the reason for his termination. The mother's adjournment was granted to June 4, 2015, on consent of the parties. The date was suggested by counsel for the mother to permit her sufficient time to obtain disclosure of the father's employment record and to also allow the father sufficient time to gain new employment if possible.

[33] The parties returned on June 4, 2015. The father had not gained new employment at that time. The father acknowledged in cross-examination that his termination and nothing to do with the mother's attempt to contact his employer. The father refused to provide any further information regarding his termination however he testified that he was not terminated due to any cause. The father would not release his employment file pertaining to his termination and initially did not authorize the mother's counsel to obtain any further information from his employer. He maintained his position that his employer and he unanimously decided that he was not a good fit for the organization. The father acknowledged that he was not provided a letter of reference from TIF.

[34] The father testified that he was devastated by the lost opportunity at TIFF. He stated that he has struggled financially since that time and that he had been actively searching for paid employment in his field. The father filed a new and updated financial statement deposing that is current monthly income as a self-employed contractor was approximately $1500 per month, or $19, 444.00 per annum. The father also filed a list of all of the organizations and employers that he had applied to the following his termination. That list was entered as exhibit at trial.

[35] When asked if the father had any proof or documentary evidence of his current income the father testified that he did not have any documented pay statements of any kind.

[36] When asked why he had not produced any job applications or responses from potential employers, the father testified that he did not produce any job applications because of the fear that the mother would contact or telephone the prospective employer, based on his past experience with her. He testified that his priority is to obtain gainful employment and that he is actively searching for this.

[37] The father produced his income tax returns and notices of assessment for the years 2009 through two 2014. He also produced his bank statements for his two bank accounts for the relevant time period. According to the notices of assessments filed, the father's line 150 income between 2009 and 2013 was the following:

1. 2009: $5387
2. 2010: $6905
3. 2011: $7837
4. 2012: $10,065
5. 2013: $2942.16

[38] The father did not produces 2012 income tax return or his 2013 notice of assessment. He testified that he could not find his 2012 income tax return and that the 2013 notice of assessment has not yet been issued by the Canada Revenue Agency. His 2014 tax return was with his lawyer.

[39] During his questioning on May 27, 2014, the father acknowledged that his tax returns above were not accurate as they did not reflect his cash income. He admitted that he did not declare his cash income to Canada Revenue Agency. He estimated that the cash income he did not declare was approximately 24,000 per year. At this trial, the father admitted that over the years, he earned approximately 24,000 to 25,000 in cash income which he had not reported to the CRA, nor did he declare this income on his income tax returns.

[40] The father admitted that he had not paid any tax on his declared income until 2013, when he paid approximately $34.00 in tax on his declared income of $2,942.16.

[41] During cross-examination, the father's bank accounts were also examined. The father acknowledged that in 2013, the deposits that he made into his two accounts were approximately $30,666. However, the father then testified that he sometimes transfers cash from one account into the other account to pay bills and that this calculation was inaccurate. He first testified that he had proof that the transfers between the accounts were documented. However, when it was apparent that there were no matching transfers, he testified that he did not actually transfer amounts, he just withdrew cash from one account and deposited it into the other account at another time. In reviewing the accounts, there did not appear to be corresponding withdrawals and deposits or dates that corresponded.

[42] The father further testified that his mother had loaned him some of the money deposited in 2013. He did not recall if the loans were in the form of cash or check, but recalled three separate loan amounts. He acknowledged that he did not have any proof or documentary evidence that his parents had provided loans during this period.

[43] The father admitted that he has not contributed anything towards any of L.G.B.'s section 7 expenses, other than her daycare expense. He testified that is all that he can afford. He further testified that he had entered into a voluntary payment agreement with FRO in which he pays a total of $400.00 per month: $200.00 towards ongoing support, $127.00 towards day-care expenses and the balance towards the arrears owing. The arrears owing on June 5, 2015 were approximately $2,200.00.

[44] The father's bank statements between January and May 2014 were reviewed by mother's counsel. During the same period of time where the father did not pay anything for towards L.G.B.'s special expenses, he made approximately $400 in beer and alcohol purchases, however the father testified that those purchases were made by his girlfriend and not him. The amounts deposited into these accounts were significantly lower than his 2013 deposits.

[45] The father is currently living with his girlfriend in a three-bedroom home in Willow beach Ontario. He pays $750 per month plus utilities. The father did not disclose his girlfriend's income and testified that he was not at liberty to discuss that at this trial. The father testified that he moved into this larger three-bedroom lakefront home to reduce costs and to eventually have appropriate accommodation for overnight access for L.G.B.. The father admitted that he was previously paying $700 per month for a one bedroom apartment.

[46] The father further testified that prior to obtaining the position at TIFF, he has struggled financially for years and has been actively searching for employment in his field. He testified that file bankruptcy in March 2013 as a result of a significant debt load. The father listed his former lawyer for unpaid legal fees as well as the respondent mother for an outstanding cost order owed to her as outstanding creditors. He admitted that he transferred his motor vehicle, valued at approximately $7500 to his girlfriend prior to his bankruptcy.

[47] In December 2014, the father testified that he would be discharged from bankruptcy shortly and that he was paying approximately $200 per month to his trustee. In June of 2015, the father testified that he the last time that he had paid his trustee was approximately five months ago and that he had yet to be discharged from bankruptcy. The father had no debt listed on his most recent financial statement.

[48] The father also acknowledged in cross-examination that he had does not have a valid driver's license as a result of drug and alcohol related conviction. According to the father, he has not lost his license permanently and be able to have it reinstated if he pays the appropriate fine.

The Mother's Evidence

[49] The mother is a full-time teacher at the Halton District School Board. She also supplements her income by working part-time in an aftercare program. Her current gross income at the time of trial was approximately $71,800. The mother testified that in 2014, her T4 income at the Halton District School Board was $69,209.40 and in addition she received approximately $200 net monthly for her part-time employment.

[50] The mother owned an income producing property in the Burlington area until 2015. According to her income tax returns filed, she received a gross rental income of approximately $21,028.00 per year from this property [2] . The property was valued at $399,000.00 in her financial statement sworn December 9, 2014. However, the mother testified that in 2015, she had to sell this property so that she could provide for her children and pay her ongoing legal fees which she estimated at $150,000. It is unclear what the net sale proceeds were from the sale of that property. The mother had considerable debts owing to her parents and a line of credit listed on her financial statement, totalling in excess of $550,000.00, prior to selling her investment property. The mother testified that she was on "the verge of bankruptcy".

[51] The mother, L.G.B. and her older daughter H., who is in first year university, live with her parents in Burlington Ontario. In cross-examination, she acknowledged that she does not pay rent to her parents. According to her most recent sworn financial statement at trial her housing expenses are marked at zero, although she pays for her cell phone, cable and internet. She and the children have been living with her parents since 2003.

[52] In June of 2015, the mother testified that since January 2015, she had only received the following payments in child support from the Family Responsibility Office:

1. January 16, 2015: $1086.03
2. January 26, 2015: $200.00
3. February 3, 2015: $200.00
4. March 13, 2015: $59.91.

[53] The mother testified that L.G.B. was diagnosed with Autism Spectrum Disorder, Chromosome 1.21 Deletion, and Anxiety Disorder. She has very special needs and requires many therapies and treatment. L.G.B. is in full-time day-care with 'Mosaic Kids". L.G.B. also receives speech, language and occupational therapy through Erin Oak Kids Treatment Centre for children with disabilities. The agency's main or core service is to provide services for children with autism. The speech and language therapy services are free services for L.G.B..

[54] Currently, L.G.B. requires the following special and extraordinary expenses, according to the mother:

1. ABA therapy (private);
2. Speech and Language therapy (through Erin Oaks);
3. Music therapy (private);
4. Occupational therapy (through Erin Oaks)
5. Day-care (through Mosaic Kids)

[55] According to the mother's most recent sworn financial statement filed at trial [3] , L.G.B.'s special and extraordinary expenses are approximately $1,291.00 per month and are the following:

1. Daycare: $11,171.40
2. Music Therapy: $525.00
3. ABA Therapy: $3,800.00

[56] However, the mother provided an updated and revised accounting of L.G.B.'s special and extraordinary expenses at trial as follows:

1. Mosaic Kids Daycare (for both the 2014 and 2015 years): $9,300.00 per year;
2. Music/art therapy: $1,242.37 per year;
3. Private Art therapy: $80.00 weekly or $320.00 monthly, or approximately $3,800.00 per year (accounting for holidays);
4. Private ABA therapy: $60.00 for two hours weekly, ($240.00 monthly) or approximately $2,800 per year, although, according to the mother's testimony, this amount has been sporadic and intermittent, due to the ABA's therapist's injury and the mother's ability to pay for this therapy;

[57] L.G.B. also takes swimming and ballet lessons.

[58] The total monthly amount of the above special and extraordinary expenses is approximately $17,142.37 per year or $1,428.53 monthly. The mother did not provide complete documentation regarding the annual cost of the ABA therapy or the art therapy, which also appeared to be a cost incurred intermittently. It was unclear to the court why the mother was not receiving ABA therapy through Erin Oak Kids Treatment Centre, which provides ABA therapy for children with autism at a subsidized or greatly reduced rate, or in some cases, at no cost.

[59] The mother testified that she notified the father in advance of the cost and the incurring of all of the special expenses that L.G.B. requires. However in cross-examination, she admitted that she did not communicate with the father directly or tell him directly that L.G.B. was receiving some of the therapies or activities, including the ABA therapy. She also acknowledged that she had not communicated with him about L.G.B.'s ballet lessons. The mother stated that the father had the right to contact some of the treatment providers himself directly.

[60] Regarding the father's employment at TIFF, the mother did not believe that the father's termination was involuntary. She further testified that during their dating relationship, she recalls that the father often works full-time hours and received only cash income. The mother admitted to making one telephone call to TIFF during the father's probationary period to see if the father could changes employment hours and work through his lunch to accommodate L.G.B.'s access schedule. She testified that she did not provide any identifying information and simply asked very general questions regarding employment policies for employees with special needs children.

THE LAW AND GOVERNING PRINCIPLES

The Determination of the Father's Income for Child Support Purposes

[61] The purpose of the Child Support Guidelines is to establish a fair standard of support that ensures that children continue to benefit from the financial means of both spouses after separation, using a methodology that strives to achieve objectivity, efficiency and consistency.

[62] Both parents have an absolute responsibility to support their children to the extent that they are able to do so. Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children.

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

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) .

[64] 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, [2006] O.J. No. 1660, [2006] O.T.C. 409, 2006 CarswellOnt 2581 (Ont. Fam. Ct.).

[65] 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, [2002] O.J. No. 3155, 2002 CarswellOnt 2670 (Ont. S.C.J.) and Orser v. Grant (2000), 96 A.C.W.S. (3d) 644, [2000] O.J. No. 1429, 2000 CarswellOnt 1354 (Ont. S.C.) . As Justice Frances P. Kiteley 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.

[66] In Duffy v. Duffy, 2009 NLCA 48 , [2009] N.J. No. 245, the Newfoundland Court of Appeal summarized the general principles governing the issue of imputing income for child support purposes: [4]

1. The fundamental obligation of a parent to support his or her children takes precedence over the parent's own interests and choices.
2. A parent will not be permitted to knowingly avoid or diminish, and may not choose to ignore, his or her obligation to support his or her children.
3. A parent is required to act responsibly when making financial decisions that may affect the level of child support available from that parent.
4. Imputing income to a parent on the basis that the parent is "intentionally under-employed or unemployed" does not incorporate a requirement for proof of bad faith. "Intentionally" in this context clarifies that the provision does not apply to situations beyond the parent's control.
5. The determination to impute income is discretionary, as the court considers appropriate in the circumstances.
6. Where a parent is intentionally under-employed or unemployed, the court may exercise its discretion not to impute income where that parent establishes the reasonableness of his or her decision.
7. A parent will not be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations or interests. Nor will it be acceptable for a parent to choose to work for future rewards to the detriment of the present needs of his or her children, unless the parent establishes the reasonableness of his or her course of action.
8. A parent must provide proper and full disclosure of financial information. Failure to do so may result in the court drawing an adverse inference and imputing income .

The Claim for Section 7 Expenses

[67] The mother's claim for special or extraordinary expenses is brought under section 7 of the Child Support Guidelines . The relevant sections are as follows:

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. O. Reg. 391/97, s. 7 (1) ; O. Reg. 446/01, s. 2.

Sharing of expense

(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the parents or spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child. O. Reg. 391/97, s. 7 (2) .

Subsidies, tax deductions, etc.

(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. O. Reg. 159/07, s. 2.

Universal child care benefit

(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. O. Reg. 159/07, s. 2.

[68] 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.

[69] Unlike section 3 of the Guidelines , which presumptively provides for the table amount of child support, an order for section 7 expenses involves the exercise of judicial discretion. When exercising its discretion, the court should also consider the objectives of the guidelines, including section 1( a ), which reads as follows:

(a) "to establish a fair standard for children that they benefit from the financial means of their parents and, in the case of divorce, from the financial means of both spouses after separation;"

[70] 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, 197 O.A.C. 158, 252 D.L.R. (4th) 730, 13 R.F.L. (6th) 415, [2005] O.J. No. 1695, 2005 CarswellOnt 1632 (Ont. C.A.).

[71] 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, [1998] O.J. No. 3677, 75 O.T.C. 269, 1998 CarswellOnt 3652 (Ont. Gen. Div) .

[72] 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, [1997] O.J. No. 4833, 48 O.T.C. 316, 1997 CarswellOnt 4493 (Ont. Gen. Div.), paragraph [14] and [16] ; D'Urzo v. D'Urzo (2002) (ON SC) , 30 R.F.L. (5th) 277, [2002] O.J. No. 2415, [2002] O.T.C. 419, 2002 CarswellOnt 2104 (Ont. S.C.); Park v. Thompson , supra ; Zimmerman v. Doe , 159 A.C.W.S. (3d) 407, [2007] O.J. No. 2896, 2007 CarswellOnt 4721 (Ont. S.C.).

[73] 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, 11 O.F.L.R. 61, [1997] O.J. No. 3437, 1997 CarswellOnt 3212 (Ont. Fam. Ct.), paragraph [4] ; Zimmerman v. Doe , supra .

[74] In awarding section 7 special and extraordinary expenses, the trial judge determines each party's income for child support purposes and determines whether the claimed expenses fall within one of the enumerated categories of section 7 of the Guidelines . The court must be satisfied that the special or extraordinary expense is:

1. necessary "in relation to the child's best interests"; and
2. reasonable in relation to the means of the parents and those of the child and to the family's spending pattern prior to the separation.

[75] In Correia v. Correia, [2002] M.J. No. 248, 2002 MBQB 172 , 29 R.F.L. (5 th ) 28, Justice Allen set out a number of factors to be taken into account in determining the reasonableness of a section 7 expense in relation to the means of the parents:

1. the combined income of the parties;
2. the fact that two households must be maintained;
3. the extent of the expense in relation to the parties' combined level of income;
4. the debt position of the parties;
5. any prospects for a decline or increase in the parties' means in the near future; and
6. whether the non-custodial parent was consulted regarding the expenditure prior to the expense being incurred.

[76] Subsection 7 (3) of the Guidelines states that in determining the amount of an expense referred to in subsection 7 (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. This should be done even if the recipient indicates that he or she will not be claiming any tax credit or deduction related to this expense (for example, he or she obtains a discount from the child care provider by not reporting the child-care expense to Revenue Canada). Whether the recipient claims the credit or expense is her choice. The payor is only required to pay the after-tax amount of the expense. See: Ramm v. Rice, [2012] N.W.T.J. No. 82 (NTSC) ; D.L. v. F.K. [1998] N.W.T.J. No. 42 (NTSC) , K.H. v. T.K.R., 2013 ONCJ 418 .

[77] The court also has the discretion to apportion the section 7 expense in a different manner than pro-rata to incomes, depending on the circumstances of the case. Salvadori v. Salvadori, 2010 ONCJ 462 , [2010] O.J. No. 4425 (OCJ).

The Claim for Retroactive Child Support

[78] 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) held that there are three separate situations in which it may be appropriate for a court to order that a retroactive award be paid:

a) awarding retroactive support when there has already been a court order for child support to be paid;

b) awarding retroactive support when there has been a previous agreement between the parties;

c) awarding retroactive support where there has not already been a court order for child support to be paid.

[79] This case clearly falls into the third category. The court in D.B.S . sets out the factors that a court should take into account in addressing retroactive claims for child support. There are four factors that the court raised:

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 .

[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.

[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.

Application of the Law to the Facts of this Case

The Father's Income

[84] In this case, the onus is on the father to provide the supporting documentation necessary to prove that his income for child support purposes is $30,000 per annum. The father did not provide this documentation. The father provided no invoices, no financial year ends, no ledgers, and no statements from an accountant, or any records, or books of accounting regarding his self-employment income. He testified that all of his income is in cash because that is "the nature of his business".

[85] The bank statements that the father did produce for 2013 demonstrated that he deposited over $30,000 in cash into both of his bank accounts. The father did not provide proof, documentary or otherwise, that some of these amounts were loans from his mother. In fact, the court was surprised to learn that his mother was actually sitting in the courtroom during some of the father's evidence with respect to this issue. The court draws an adverse inference from the father's failure to call his mother as a witness, as she could have corroborated his evidence or given some evidence on whether she advanced cash loans to him in 2013.

[86] The court also takes into consideration the father's admission that he filed tax returns with the Canada Revenue Agency which were not true and which misrepresented the total cash income which he received for 2009 to 2014. The father admitted that his income was significantly higher and that he received approximately $24,000 to $25,000 in cash income during those relevant years.

[87] In considering the father's evidence at trial and the documentary evidence contained in his bank statements, and in particular his 2013 bank statement, the court finds that the father's pre-tax self-employment income was on average between $25,000 and $30,000.00 per annum.

[88] 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, or in this case, has failed to report all of his income. See Sarafinchin v. Sarafinchin , 189 D.L.R. (4th) 741, [2000] O.J. No. 2855, 2000 CarswellOnt 2640 (Ont. S.C.); J.V.M. v. F.D.P., [2011] O.J. No. 5347 at paragraph 85 .

[89] The mother's counsel has provided a calculation from an accountant which shows the grossing up of $30,000.00 of the father's cash income to account for the tax that he should have paid as a salaried employee, the father's income should be imputed at $40,850.00 per annum.

[90] However, a Divorcemate software analysis was calculated, in which the father's declared 2013 self-employment income (net) of $2, 942.16 was inputted, as well as his other non-taxable undeclared income of $27,057.84, for a total of $30,000.00. This is a more accurate calculation as the father declared $2,942.16 to the CRA in 2013 and paid some tax, albeit a very minimal amount. The Divorcemate auto gross up calculation indicates that the father's income should be imputed at $37, 192.00 per annum.

[91] In my view, having regard to the above and all of the father's circumstances, taking into consideration the father's age, education, work experience, income fluctuations, ability to sustain employment, the fact that he does not have a valid driver's licence, as well as his obligation to work to his fullest capacity, given his daughter's very special needs, the father's income should be imputed at $37,000.00 per annum. The table amount of child support for one child, based on an income of $37,000.00 is $325.00 per month.

[92] There is no evidence to suggest that the father deliberately left TIFF or that his departure from TIFF was within his control. The evidence suggests that the father was terminated prior to his probationary period because he did not meet TIFF's expectations as an employee and that this was not his decision. The father appeared genuinely upset that he was terminated by TIFF.

The Section 7 Expenses

[93] The court finds the mother's daycare expense, music, art and ABA therapies to be special expenses as defined in clause 7(1)(a), (c) and (f) of the Guidelines . It is reasonable and necessary for the mother to have child care in place for L.G.B. when she is working. It is also reasonable and necessary to have the ABA, music and art therapy for L.G.B., given her very special needs.

[94] The court does not find that L.G.B.'s ballet and swimming lessons are usual or ordinary extracurricular activities are included in the table amount of support, and therefore not extraordinary extra-curricular activities under section 7(1) (f) of the Guidelines . See Smith v. Smith (1997), 75 A.C.W.S. (3d) 703, [1997] O.J. No. 4833, 48 O.T.C. 316, 1997 CarswellOnt 4493 (Ont. Gen. Div.), paragraph [14] and [16] ; D'Urzo v. D'Urzo (2002) (ON SC) , 30 R.F.L. (5th) 277, [2002] O.J. No. 2415, [2002] O.T.C. 419, 2002 CarswellOnt 2104 (Ont. S.C.); Park v. Thompson , supra ; Zimmerman v. Doe

[95] The court was satisfied on a balance of probabilities that the section 7 expenses of daycare, music and art therapy listed by the mother are being incurred. The invoices and documentation supported these expenses. The amounts claimed are reasonable.

[96] The evidence with respect to L.G.B.'s ABA therapy was less clear. The mother testified that the ABA therapy for L.G.B. was sporadic and intermittent given that the therapist was on leave due to an injury and the mother could not afford to pay for some of the therapy. It was not clear how much the mother was actually paying for the ABA therapy on a monthly basis. The court also did not understand why L.G.B.'s ABA therapy was not paid for by Erin Oaks. L.G.B.'s speech and language therapy is fully covered by Erin Oaks and the agency does provide ABA therapy for children with autism spectrum disorder at a subsidized or greatly reduced rate.

[97] There was also no evidence led by the mother regarding the net cost of L.G.B. section 7 expenses after taking into consideration any subsidies benefits or income tax deductions or credits that the mother is eligible to claim particularly given L.G.B. special needs. As previously indicated, subsection 7(3) of the Guidelines states that in determining the amount of an expense referred to in subsection 7(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. This will be done in this case.

[98] In reviewing the mother's tax returns filed, it is clear that she has received the benefit of an income tax deduction for L.G.B.'s child care expenses, and possibly other expenses. However, whether the mother claims the credit or expense is her choice. The payor is only required to pay the after-tax amount of the expense. See: Ramm v. Rice, [2012] N.W.T.J. No. 82 (NTSC) ; D.L. v. F.K. [1998] N.W.T.J. No. 42 (NTSC) . In this case, the mother is entitled to claim her child care expenses, the total Ontario art tax credit, to a maximum of $500.00, a Ontario fitness tax credit, as well as L.G.B.'s eligible medical and health related expenses.

[99] I also find that the mother did not clearly communicate to the father all of the section 7 expenses that were being incurred on L.G.B.'s behalf. It is not disputed that the parties communicate very poorly. The mother admitted in her evidence that she did not directly advise the father that she had enrolled L.G.B. in ballet lessons or some of the private therapies that she engaged. 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.

[100] I find that a reasonable and necessary annual amount for L.G.B.'s section 7 expenses are as follows, given her special needs:

1. Daycare expense: $9,300.00
2. Music and art therapy: $1,242.00
3. ABA therapy: $3,800.00

TOTAL: $14,342.00 or $1, 195.00 monthly

[101] A Divorcemate software analysis shows that the father's proportionate share of the section expenses is 33.7%. The software analysis further shows that the father's proportionate contribution to these expenses, after taking into account any available tax credit or deduction related to the expenses is therefore $312.00 per month.

[102] The father has asked the court to reduce his proportionate contribution to these expenses to $200.00 per month. Given that the father has not contributed to any of L.G.B.'s special or section 7 expenses since her birth, and given L.G.B.'s very special needs, the court is not prepared to deviate from the guiding principle of proportional contribution, as set out in the Child Support Guidelines . However, the commencement date for the payment of these expenses will be March 1, 2016.

The Retroactive Award of Child Support or the Adjustment of Child Support Arrears Owing

[103] The mother did not did not seek child support immediately after L.G.B.'s birth , and waited until the father commenced his application for access in January 2012. Nevertheless, once the father commenced his application in January 2012, the mother immediately brought a claim for child support, approximately nine months after L.G.B.'s birth, not an unreasonably long delay. Further, both parties agree that the retroactive adjustment of child support to be paid should commence on […], 2011.

[104] There is no question that since these proceedings were commenced, the mother actively advanced her claim after that time. Child support should be payable at a minimum once the claim for child support was commenced. At that point, it becomes a calculation or adjustment of arrears owed. The father did start voluntarily paying child support on April 1, 2012 and then pursuant to the temporary without prejudice orders of June and November, 2012.

[105] I find that the father has engaged in blameworthy conduct as defined by the DBS analysis. He did not start paying child support until April of 2012, and then once ordered to do so, he significantly underpaid the table amount of child support as well as his proportional contribution towards L.G.B.'s special and extraordinary expenses, based on my findings and determination of the father's income. The mother stated at the outset that she is not seeking a retroactive contribution towards the section 7 expenses from the father, a very reasonable position.

[106] However, the mother led no evidence that L.G.B.'s circumstances have suffered by non-payment of adequate child support. L.G.B. appears to be well supported. The mother appears to receive considerable financial support from her parents, who have been very generous. The mother and her children have lived with the mother's parents since 2003 and the does not pay rent or utilities. Until 2015, the mother had a rental income producing property which according to her sworn financial statement generated approximately 20,000 annually in gross rental income in addition to the $71,000 that she earns annually. The mother led no evidence that L.G.B.'s emotional, material and physical needs have not been met, despite the father's underpayment of his child support obligations.

[107] There was also some evidence that the father may experience hardship if a large retroactive award is made against him. The father's ability to pay ongoing child support and his contribution towards L.G.B.'s special expenses may be impeded by a large retroactive award.

[108] A calculation of retroactive child support and an adjustment of child support arrears is as follows:

1. […], 2011 to March 31, 2012: Table amount of child support payable: 325.00 (Table amount) x 12 = $3,900.00
2. April 2012 to August 2012: 5 months x 325.00 less child support of 200.00 monthly paid (1625-1000) = $625.00
3. September 2012 to October 2014: 27 months x 325.00 less 200.00 monthly paid (8775-5400) = $3375.00
4. October 2014 to March, 2015: 5 months x 425.00 less 200 monthly paid (2125-1000): = $ 1, 125.00
5. March 2015 to February 2016: 12 months x 325.00, less 200 monthly paid: (3900-2400) = $1,500.00

In addition, FRO arrears at conclusion of trial pursuant to Temporary court orders: $2,200.00

TOTAL: $12,725.00

[109] The court is unaware of what, if any further arrears may have accumulated between June 2015 and January 2016, a period of approximately six months.

[110] In addition to the DBS factors that must be considered when determining retroactive child support, the court also has the discretion to adjust child support arrears owing. In DiFrancesco v. Couto (ON CA) , [2001] O.J. No. 4307 (C.A.) the Ontario Court of Appeal stated that the discretion to reduce arrears must be exercised judicially and set out the following factors to be considered:

a) The nature of the obligation to support, whether contractual, statutory or judicial;

b) The ongoing financial capacity of the payor;

c) The ongoing need of the custodial parent and the dependant child;

d) Unreasonable and unexplained delay on part of the custodial parent in seeking to enforce payment of the obligation, tempered, however, in the case of child support with the fact that such support exists for the child's benefit, is charged with a corresponding obligation to be used by the custodial parent for the child's benefit and cannot be bargained away to the prejudice of the child;

e) Unreasonable and unexplained delay on the part of the payor in seeking appropriate relief from his obligation; and

f) Where the payment of substantial arrears will cause undue hardship , the exercise of the court's discretion on looking at the total picture, weighing the actual needs of the custodial parent and child and the current and financial capacity of the respondent, to grant a measure of relief where deemed appropriate.

[111] Taking into account all of the DBS factors when considering the retroactive claim, and in considering my discretion to adjust child support arrears since the proceedings were commenced, I find that the amount of retroactive child support and child support arrears owing should be should be fixed at $10,000.00 to be payable at a rate of $100 per month, commencing March 1, 2016.

CONCLUSION AND ORDER

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

1. Commencing March 1, 2016, the father shall pay child support to the mother in the amount of $325.00 per month, and on the first day of each month thereafter. This is the Child Support Guidelines Table amount for one child, based on the father's imputed income of $37,000.00 pursuant to the Child Support Guidelines .

2. Commencing March 1, 2016, the father shall pay $ 312.00 per month towards the net cost of the child's section 7 expenses, after taking into account any subsidies, benefits or income tax deductions or credits (but not UCCB) relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit (but not UCCB) relating to the expense (s. 7(3)-(4) of the Guidelines .)

3. The total amount of retroactive child support is fixed at $10,000.00. The Family Responsibility Office's record of arrears shall be adjusted accordingly. The father shall pay the arrears owing at a rate of $100 per month, commencing March 1, 2016. Nothing in this order precludes the Family Responsibility Office collecting support arrears from any government source (refunds) or prize winnings.

4. The parties shall exchange full financial disclosure by June 1st of each year, including but not limited to, year-end financial statements for sole proprietorships or corporations, including supporting documentation, year-end statement of revenues, their complete corporate (if any) and personal income tax returns and notices of assessment, and a letter from their respective accountants (if any) setting out how the personal income has been calculated.

5. A Support Deduction Order shall issue.

[113] The software calculation showing how the father's contribution to the special expenses was calculated is attached to this decision. The parties will have seven days from the date of this order to make any submissions about inaccuracies in the software calculation (such as figures being inputted incorrectly). Any submissions should be in writing, on notice to the other party, and be delivered to Ms Pam Jazvac, judicial secretary. If submissions are made, the other party will then have seven days to serve and file their written response.

[114] If either party wishes to seek costs, they shall serve and file written submissions by March 10, 2016. The other party will then have until March 18, 2016 to serve and file a written response to these submissions. The written submissions are not to exceed three pages, not including any offer to settle or bill of costs. The submissions should be delivered to the judicial secretary.

Released: January 31st, 2016

Signed: "Justice Sheilagh O'Connell"

Footnotes

[1] This was the mother's position on June 3, 2015. It changed after the first day of trial, based on the father's change in circumstances.

[2] Mother's Income tax returns filed in 2012 and 2013, Supplementary Trial Brief

[3] Mother's financial statement sworn December 9, 2014, Schedule "C", Supplementary Trial Brief.

[4] See also, of course, the seminal Ontario Court of Appeal case of Drygala v. Pauli (ON CA) , [2002] O.J. No. 3731 (Ont. C.A.)