Court File and Parties

Ontario Court of Justice

Date: January 25, 2017

Court File No.: Brampton 1143-13

Between:

Flora Pasquereau Applicant

— And —

Ludovic Pasquereau Respondent

Before: Justice A.W.J. Sullivan

Decision on a Motion to Change a Separation Agreement

between the parties dated November 18, 2011

Heard: November 18, 2016

Decision Released: January 25, 2017

Counsel

Flora Pasquereau.............................................................................................. Self-represented

Ms. Harjyot Dhaliwal………………………….Agent for the Respondent Ludovic Pasquereau

SULLIVAN J.:

[1] Introduction

[1] This is a decision on a Motion to Change a Separation Agreement between the parties dated November 18, 2011 and filed with the court.

[2] Issues Before the Court

[2] The applicant and the respondent wanted clarification on two distinct aspects of their separation agreement. The first issue was resolved on March 22, 2016, which was arrears owing in child support as well as fixing the amount of support payable for the year 2015.

[3] The second issue that was requested to be resolved by the court was fixing an income to the applicant mother, Flora Pasquereau (Flora) in order that the parties would have a basis on which to establish child support pursuant to section 9 of the Ontario Child Support Guidelines, which is the clause dealing with how parents of children who have shared custody are to calculate child support. The court was not asked to settle the actual amount of child support that should be paid in this matter. This is left to the parents to negotiate, given the provisions set out in section 9 of the Child Support Guidelines.

[3] The Parties and Children

[4] The Applicant in this matter is Flora Pasquereau (Flora) and Ludovic Pasquereau (Ludovic) is the respondent. They are the parents to the children Yael, born 13/7/05 and Coralie, born 14/7/09.

[4] Section 9 of the Child Support Guidelines

[5] Section 9 of the Child Support Guidelines reads as follows:

Where a parent or spouse exercises a right to access to, or as physical custody of, a child for not less than 40% of the time over the course of a year, the amount of the order for support of a child must be determined by taking into account,

(a) the amounts set out in the applicable tables for each of parents were spouses;

(b) the increased costs of shared custody arrangements; and

(c) the condition, means, needs and other circumstances of each parent or spouse and of any child for whom support is sought.

[5] Respondent's Position on Income Imputation

[6] Ludovic is asking the court to impute income to Flora at a higher level than she has declared in her recent income tax return for 2015 which is $32,416. Ludovic argues that Flora's income should set at $80,000.

[7] Ludovic was somewhat surprised to learn that when they both exchanged income tax returns over the last year, Flora's income was low. The parties did not exchange annual income tax returns since 2011, although clearly directed to do so in their separation agreement.

[8] Flora's income level would affect the set-off amount calculation for child support as set out in their Separation Agreement given the shared parenting regime for their two children which is now in place. Over the past five years there was a gradual increase in shared parenting time as set out in their separation agreement that the parties signed with counsel on November 18, 2011.

[6] The Separation Agreement

[9] The relevant section of that separation agreement as it relates to this motion is as follows:

Child Support

2. "…Child support "refers to the monthly amount upon which the parties have agreed and may include both table support and special or extraordinary expenses.

2.1 For purposes of determining table support for Yael and Coralie, Flora earns approximately $60,000 for 2011 and Ludovic earns approximately $109,000 for 2011.

2.2 …d) child support shall be adjusted in year 4, when the parties commence a shared parenting regime. Child support shall then be by way of set off child support, and the parties shall utilize their previous income tax returns to determine the set off amount.

[7] Respondent's Arguments Regarding Flora's Earning Capacity

[10] It is Ludovic's position that Flora is not earning at her capacity. He notes the following reasons:

1. In 2003 Flora obtained a Master's degree in psychology while living in France.

2. Flora moved to Canada to be with Ludovic in 2006 and her psychology degree was not recognized in Canada.

3. In order for Flora's degree to be recognized in Canada, Flora needed to submit her application to the Canadian Psychological Association, references and a transcript of her work in France. She was to complete the Examination for Professional Practice in Psychology (EPPP), the Jurisprudence and Ethics Examination, (JEE), and an oral exam, plus have a period of supervision in order to have her degree recognized.

4. From the evidence it appears that Flora completed most of the supervision part of the requirements, but did not complete the JEE, EPPP, or oral exam.

5. Ludovic argues that when the parties signed their separation agreement, Flora was working for Morneau Chappel Limited as a trauma counselor specialist for six months earning $34,277 and as well in 2011 she earned $61,400.

6. According to Ludovic, Flora quit her job for Morneau Chappel in 2011 and took on a new job and signed a contract in 2012 earning $66,000 working for the Ontario Ministry of Health facilitating services in French and planning mental health services in the Aurora area of Ontario. This was a non-renewable contract, however Flora did not pass the probation period.

7. In 2013 Flora worked as a child development practitioner for College Boreal from Jan 2013 to Dec. 2013, earning $43.97 per hour. This was a contract position.

8. Ludovic argues that Flora could find employment prospects that could earn her as much as $80,000 a year and that she should be classified as somebody who can work as a bilingual psychology associate. In addition, she had at one point also operated her own consulting/psychotherapist/mediator practice for individual counselling and had an internet site in this regard.

9. Flora has gone back to university to retrain to become a primary school teacher in Ontario in the French language system. She notes that she has taken on a debt of $46,780 to do this. She currently is working as a temporary supplementary teacher in the French language school systems in Peel and Halton. From her perspective, this is a realistic long-term and sustainable employment. She places her income at approximately $47,800 if she can land a full-time position.

10. When the court reviewed with the parties the wording of the separation agreement, the court pointed out the following to the parties during this motion:

    a. section 2.1 of the agreement indicates that for the purpose of determining child support that Flora was earning approximately $60,000 for 2011 and Ludovic earned approximately 109,000 for 2011.

    b. 2.2 c) of the agreement indicates… that child support and contribution toward special and extraordinary expenses shall be adjusted annually, based upon each party's current income, and, as such, the parties shall exchange income tax returns and notices of assessment annually, commencing 2012.

[8] Court's Initial Observations

[11] The court questioned the parties on the following: if Ludovic is now surprised that Flora is earning less than $60,000 - her 2011 income noted in the separation agreement - why was there not a clear clause in the agreement that each party's respective income would be set at no less than a certain amount, such as $60,000, whether or not that was the actual earning ability of a party at the time that the shared parenting agreement came into effect?

[12] The wording of their agreement lacks clarity and one might argue that there was never an intention, expectation or contract between the parties that Flora's income would be $60,000 or higher, as a base number on which to calculate child support when the shared parenting plan came in effect.

[9] Respondent's Legal Arguments

[13] Ludovic's response to this is that the Ontario Child Support Guidelines has been interpreted or gives this court jurisdiction to look at the potential earning capacity of each parent, having regard to their age, health, education, skills and employment history and Ludovic asked the court to consider the case of Marshall v. Marshall, 2008 NSSC 119, at paragraph 18 for this above-noted proposition.

[14] In addition, it is argued that this court has the ability to give effect to the legal obligation of all parents to earn what they have the capacity to earn in order to meet their ongoing obligation to support their children and it is not sufficient to look at what they are earning when the matter is before the court, but rather the amount of income that they could earn if working to capacity.

[10] General Principles on Income Imputation

[15] Often in these cases where income is imputed to one parent, that parent was earning significantly more money before the case came before the court. Also, usually that parent has a skill or trade that could be put to work but that parent seems to be having difficulty doing so. In some instances, individuals are self-employed and, in addition, at times, that parent's lifestyle suggests an income greater than what is being declared. In several cases, individuals quit employment and become self-employed tradespersons and it is suggested that they often work for undeclared cash.

[11] Applicant's Position and Evidence

[16] On her behalf, Flora argues the following:

1. In September 2002 she obtained a diploma of higher specialized studies in clinical pathological psychology from the Universite Denis Diderot (Paris VII) France. This, according to the College of Psychologists of Ontario, is determined to be equivalent in academic level to a Master's degree from a Canadian University.

2. The highest salary that she earned in France was equivalent to $22,000 Canadian dollars working in the field of psychology.

3. In 2006 she followed her husband Ludovic to Canada as he had obtained full-time employment here. His employment continues to be the same employment that he obtained when he immigrated to Canada. In retrospect, she feels she was not equipped when she immigrated to easily fit into her area of training as she had only started to do this work in France and had only experience working in the French language and none in English.

4. In July 2005 Flora was pregnant with their first child, Yael, whom she was caring for and in July 2009 Flora gave birth to their second child Coralie.

5. A considerable part of her time was taken up by caregiving for the children. The parties separated in 2011. Upon separation she was in charge of caring for their children including a third child, who she had with another partner after separation.

6. In March 2008 Flora took her jurisprudence and ethics examination as part of her requirement to obtain a license as a Psychological Associate, but failed this exam. According to the College of Psychologists of Ontario their policy permits a candidate to write this exam four times. She did not attempt to do this for the past eight years.

7. Flora did however obtained a certificate authorizing her to be supervised as a psychological associate by a Licensed Psychologist and as noted above she found some work in a supervised practice as a psychological associate from September 18, 2007 until December 9, 2008 but did not complete the registration requirements for being issued a certificate authorizing autonomous practice as a psychological associate.

8. As noted above, Flora had obtained a position with the Ontario Ministry of Health which could have paid her approximately $66,000 year. This was a contract position for one year but she was laid off during the probation period. As she was laid off during the probation she did not receive a complete reason for this termination but felt that she did not meet certain standards requested of her.

9. Flora also set up a website to provide clients with psychotherapy, however she found that in general private company insurance plans did not cover this type of service and she was not getting work.

10. She also found that in Ontario, as a predominantly English province, Francophones struggle to have services in French, despite the fact that some regions of the province are designated for French services. She found it difficult to locate employment in French and even harder as a French-speaking psychotherapist/psychological associate.

[12] Respondent's Reply

[17] Ludovic replies to the above as follows:

1. Flora has not tried to retake the exams offered by the College of Psychologists of Ontario. The College permits a candidate to write the exam several times and the cost is about $300.

2. Flora has not provided evidence that would substantiate her claim that speaking French is a barrier to her employment as a psychological associate. He points out that in Flora's LinkedIn website she claims to be bilingual. He notes that fluency in French may actually be an asset in Ontario as a psychological associate. Ludovic however does not present any specific evidence to substantiate this last point.

3. Flora did not provide evidence to substantiate her claim that private insurers would not reimburse her for fees to clients as a psychotherapist.

4. Flora did not provide any specific evidence from her doctor regarding the stress that she claimed she experienced between 2010 and 2016 which prevented her from retraining.

5. Flora did not present any evidence that would substantiate her claim that Ludovic's business trips caused her extra stress. Her decision also to have a third child after separation was clearly her own and that there was never an agreement in their separation agreement that her role was to look after the children on a full-time basis.

6. According to Ludovic, Flora has now had eight years to complete her certification to be able to practice as a psychological associate but rather chose not to pursue this employment avenue but seek other positions as a primary teacher in the French language school system.

Legal Framework

[13] Under-employment – Child Support Guidelines

[18] Section 19 provides that the court may impute to a spouse "such amount of income … as it considers appropriate" and provides a non-exhaustive list of such circumstances. The relevant portions of s.19 read as follows:

19.(1) Imputing Income – The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the 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 spouse;

…(e) the spouse's property is not reasonably utilized to generate income;

[19] Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this obligation, the parties must earn what they are capable of earning. If they fail to do so, they will be found to be intentionally under-employed. Clause 19(1)(a) of the guidelines is perceived as being a test of reasonableness. See Drygala v. Pauli.

[20] The Ontario Court of Appeal in Drygala v. Pauli set out the following three questions which should be answered by a court in considering a request to impute income:

1. Is the party intentionally under-employed or unemployed?

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

3. If not, what income is appropriately imputed?

[14] First Question: Intentional Under-employment

[21] The onus is on the party seeking to impute income to the other party to establish that the other party is intentionally unemployed or under-employed. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made. See Homsi v. Zaya, 2009 ONCA 322. However, in Graham v. Bruto, 2008 ONCA 260, the court inferred that the failure of the payor to properly disclose would mitigate the obligation of the recipient to provide an evidentiary basis to impute income.

[22] Absence of a reasonable job search will also usually leave the court with no choice but to find that the payor is intentionally under-employed or unemployed. See Filippetto v. Timpano.

[23] The court stated in Drygala that there is no need to find a specific intent to evade child support obligations before income is imputed; the payor is intentionally under-employed if he or she chooses to earn less than what he or she is capable of earning. The court must look at whether the act is voluntary and reasonable.

[15] Second Question: Exceptions for Reasonable Educational or Health Needs

[24] Once under-employment is established, the onus shifts to the payor to prove one of the exceptions of reasonableness. When an employment decision results in a significant reduction of child support, it needs to be justified in a compelling way. See Riel v. Holland, at paragraph 23. It must be reasoned, thoughtful and highly practical. See Hagner v. Hawkins, at paragraph 19. As a general rule, separated parents have an obligation to financially support their children and they cannot avoid that obligation by a self-induced reduction of income. See Thompson v. Gilchrist, 2012 ONSC 4137; DePace v. Michienzi.

Relevant Principles:

a) Parents can take jobs with less money as long as the decision is reasonable. A payor cannot be excused from his or her support obligations in furtherance of unrealistic career aspirations. See Hanson v. Hanson; Gobin v. Gobin, 2009 ONCJ 245.

b) It is not reasonable for a payor to return to school and not pay support, unless it is justified by a sufficient increase in earning ability that will benefit the children. Carter v. Spracklin, 2012 ONCJ 193.

c) The onus is on the payor parent to justify the decision to reduce their income. The payor cannot just present the income they are earning. The payor's previous income is a rational basis on which to impute income, as it is the amount that the payor would have continued to earn but for their decision to leave their job: Olah v. Olah; Weir v. Therrien; Vitagliano v. Di Stavolo; Zagar v. Zagar, 2006 ONCJ 296; Laing v. Mahmoud, 2011 ONSC 4047.

d) The payor must prove that any medical excuse for being under-employed is reasonable. See Rilli v. Rilli. Cogent medical evidence in the form of detailed medical opinion should be provided by the payor in order to satisfy the court that his/her reasonable health needs justify his/her decision not to work. See Cook v. Burton and Stoangi v. Petersen.

e) Support payors must use reasonable efforts to address whatever medical limitations they may have to earn income. This means following up on medical recommendations to address these limitations. See Cole v. Freiwald, [2011] O.J. No. 3654, per Justice Marvin A. Zuker, paragraphs 140 and 141.

[16] Third Question: Determining Imputed Income

[25] The third question in Drygala v. Pauli is: "If there is no reasonable excuse for the payor's under-employment, what income should properly be imputed in the circumstances?" The court must have regard to the payor's capacity to earn income in light of such factors as employment history, age, education, skills, health, available employment opportunities and the standard of living earned during the parties' relationship. The court looks at the amount of income the party could earn if he or she worked to capacity. See Lawson v. Lawson.

Analysis and Decision

[17] The Court's Analysis

[26] Ludovic asks the court to find that Flora is intentionally under-employed and to impute an income to her at approximately $80,000 for the purposes of the parties setting their child support obligations.

[27] According to the evidence, Flora started but did not complete the process to upgrade her credentials to become a psychological associate here in Canada. She entered Canada with a Master's degree in psychology. She was trained entirely in French while living in France. According to her evidence she earned approximately $22,000 Canadian while working in the psychological field in France before immigrating to Canada.

[28] The evidence indicates that she has attempted to find employment in different fields. She worked as a therapist with an agency that provides services to companies for employee's benefits; as a therapist in schools and with the Ontario government in the long-term mental health services under a contract. She now has started the process of retraining to become a primary teacher and is employed part-time.

[29] This court does note that Flora's earning potential could be higher if indeed she was successful in retraining and obtaining her credentials as a psychological associate. However, the court finds that the evidence also shows that Flora is not sitting on her hands doing nothing; rather, she is using her educational skills to upgrade, albeit in a different field now as a primary school teacher in the French language system in Ontario with the earning capacity of about $50,000 if she was to obtain a full-time position. She is now working as a replacement teacher in the French language school system in the Peel and Halton regions.

[30] Flora's situation is not similar to a family that recently separates and a year or so into the separation one party is claiming child support and is met with a "defense" that the other parent now is no longer working in a profession or job that had been held for years, and or is now claiming to be ill or depressed and unemployed or wishes to reeducate into a field that is of interest to that person but will not produce realistic employment.

[31] In this matter, Flora and Ludovic separated in 2011. They signed a separation agreement with legal advice in November 2011. This formed part of the evidence in this motion to change. It is important to this court that at the time of separation it was known that Flora was not or had not successfully obtained her credentials, although she did work in the field under supervision and was providing counseling client services with two specific jobs and in 2011 earned her highest income which was approximately $60,000.

[32] It is important to this court that in the separation agreement the parties did not insist on a minimum income at this stage in their separation agreement on which to base the shared custody calculations. There was no monitoring mechanism built into their separation agreement regarding Flora's upgrading. Indeed, the only monitoring would have been through the annual exchange of income tax returns which the parties did not follow through with on their own admission.

[33] Further, the wording in the separation agreement clearly spells that now at the fifth anniversary of the signing of the agreement that a shared parenting plan is to take effect and the parties are to use their last year's income tax to base the child support calculations.

[34] The court considered relevant to Flora's situation the fact that when she arrived here she felt not fully equipped for the job market in a predominantly English-speaking province despite the fact that certain areas are designated for French language services.

[35] It is relevant to the court that shortly after immigrating to Canada, Flora was pregnant in late 2008 and gave birth to their daughter, Coralie in July 2009 and then was caring at that time for their 2 children with the assistance of Ludovic.

[36] From all of the evidence, it was evident that leading up to the separation, Flora did not pursue her credentials to become a psychological associate. It appears that Ludovic had hoped or expected that she would at one point after separation but that was not the case upon separation. If this was a worry at the time this should have been clearly spelled out in the separation agreement which was not done as noted above.

[37] This oversight was attempted to be corrected with an amendment to the separation agreement provided by Ludovic in his response to the Motion to Change found at volume 2 tab 6 of the continuing record. The wording in that proposed amendment set out a minimum income expected of Flora on a go-forward basis but this was not what was agreed to at the time of separation.

[38] In addition, it is not as if Flora was sitting on her hands; she has put her French language skills and education to work. She has been retraining to become a primary school teacher and found employment teaching primary grades. She hopes to be able to earn approximately $45,000 to $50,000 over the next few years in this profession when questioned about this by the court.

[39] One interesting result of this motion is that depending on Flora's income level and based on the parties' respective incomes, the end result is that Ludovic will be paying less in child support for the children to Flora. The rational of this is based on the Child Support Guidelines in that each family now caring for the children equally will spend money on the children based on their respective household incomes that otherwise would have been paid out in child support to the other parent in a sole custody situation.

[18] Section 9 of the Child Support Guidelines – Three-Step Process

[40] In addition, as noted above, section 9 of the Child Support Guidelines is a three-step process when calculating child support in shared parenting situations such as this.

[41] The first step is a simple mathematical set-off between the respective parties' incomes. This is a straight mathematical exercise: parent one pays child support based on their income; parent two pays child support for two children based on their income. Subtract the difference and that difference flows from the higher earner to the lower earner.

[42] The second step in this calculation asks if there is any increased costs for exercising this shared parenting arrangement, such as one family having to travel further or rearrange the configuration of one's house and/or obtain services for a special needs child in order for shared custody to be exercised. No evidence on the second part was led nor needed to be led I was told in this motion.

[43] The third step, 9(c), provides the court with the ability to exercise discretion to analyze resources and needs of both parents and children, including the child's standard of living. In order to do this, financial statements and/or the child's expense budgets are necessary. Did the additional time devoted by one parent result in a decrease to the other parent's cost or an increase to a parent's costs?

[44] The court in this matter has not been asked to conduct this above-noted analysis.

[45] This court however is sensitive to the fact that there will be an impact on the children, given the difference in the parties' incomes and the standard of living based on differences in income.

[19] Lifestyle and Financial Attitudes

[46] In this motion some indirect evidence was presented on the respective parties' lifestyles and attitudes towards financial issues when Ludovic suggested that Flora should be able to use part of her residence as an office to meet clients to provide counselling.

[47] In response to this, Flora indicated that even if she could, this would not necessarily be safe with her young children in the same residence and that she felt that Ludovic and her have different views of the use of their residences, as he rented out part of his home for income while living in the basement.

[20] Court's Discretion and Conclusion on Imputation

[48] The law set out above regarding imputing income allows the court some discretion to consider legitimate reasons for a parent to have a lower income than what is being suggested they can earn despite their abilities. The court can consider reasonable explanations and adjustments to the parties' employment prospects. There is discretion in this area of the law if the facts support the exercise of such discretion. I find that in this case the facts do support the use of this court's discretion in Flora's favour and that Flora has not intentionally attempted to be under-employed to avoid her responsibilities to support and care for her children.

[49] This court accepts the reasons provided by Flora. This court further acknowledges her attempts at employment in her initial educational field of psychology. She is not the first individual to face obstacles in having credentials certified in Canada. In addition, although there is some employment in Ontario in the French language as a psychological/associate or counselor the field is somewhat narrow in the French language but not impossible. The court can also not ignore the fact that Flora also gave birth to her children and was the initial caregiver principally for them in the years leading up to the separation and while she was attempting to retrain. This is a fact that also must be seriously considered in this matter. This is not to deny the fact that Ludovic cared for the children but obviously was working primarily outside of the home at the time.

[50] Flora has also retrained in the educational field to become a primary school teacher with good prospects of employment albeit at a different pay level. This employment is not pie-in-the-sky hopeful job prospects. There is a need in our communities for such teachers.

[51] This court cannot also ignore how the parties structured their separation in 2011 as noted above when this issue was not clearly spelled out in the separation agreement. To impose this at this stage, some five years after the fact, would create unfairness as well as an immediate imbalance in terms of the respective household incomes when considering the set-off calculations and what that would mean in terms of child support from Ludovic to Flora for the children.

[52] To impose an income of $80,000 as requested on Flora would obviously have a financial consequence and impact on the children when they would be with their mother for 50% of the time.

[53] Flora and Ludovic have recognized the importance for the children to be with each parent equally. The court recognizes the serious benefit for the children now and in the future with such a shared parenting regime given who each parent is in this separation. In other words, the children will clearly benefit from this.

[54] What, however, this court sees as somewhat of an inequity is if section 9 of the Child Support Guidelines is employed mechanically when establishing child support in a shared parenting arrangement. For this court it is more than a mathematical set-off. Each respective household circumstance in a comparative way must be considered. The history of how the separation came about based on the unique fact situation of this family weighs heavily in this court's decision and in particular how the parties structure their separation as set out in the agreement filed with this court. To employ the jurisprudence mechanically in terms of what the court should consider when imposing an imputed income would create an inequity in this family, and in particular to the children.

[55] As such, this court is not inclined to impute to Flora a level of income greater than $45,000.

[56] This court recognizes that Ludovic has lived up to his obligations with his family, financially and sharing in the care of the children. The fact situation leading up to separation and since separation is one that should not have been a surprise to the family and if it was an overriding concern historically it should have been dealt with adequately in the separation agreement, which it was not.

Order

[57] For the purposes of setting the child support between the applicant and the respondent for two children in a shared parenting arrangement pursuant to section 9 of the Child Support Guidelines, Flora's income is set at $45,000 for the year 2015/16. Ludovic's 2015/16 income is based on his Notice of Assessment received from Revenue Canada for the year 2015.

[58] On April 1, 2017, and on April 1 of each year thereafter from the anniversary of this order, the applicant and the respondent shall exchange their income tax returns as well as any notices of assessments to establish the appropriate child support payments for two children pursuant to section 9 of the Child Support Guidelines with the understanding that Flora's income shall be set at minimum of $45,000.00 or greater depending on her income as found her Federal Government Notice of Assessment.

Released: January 25, 2017

Justice A.W.J. Sullivan