Court File and Parties
Date: 2019-11-06
Court File No.: D11347/17
Ontario Court of Justice
Between:
Janet James Acting in Person Applicant
- and -
Michael Hutchinson Acting in Person Respondent
Heard: November 4, 2019
Justice: S.B. Sherr
Reasons for Decision
Part One – Introduction
[1] This case was about the respondent's (the father's) child support obligations for the parties' 11-year-old daughter (the child).
[2] The applicant (the mother) seeks an order that the father pay the table amount of support for the child pursuant to the Child Support Guidelines (the guidelines), based on his annual income, retroactive to January 1, 2017. She agrees to give him credit for child support and RESP contributions he has made for the child since then. She proposed that the father have three years to pay his support arrears.
[3] The father asks the court not to make a retroactive support order. He is willing to pay the table amount of child support pursuant to the guidelines starting on December 1, 2019. If retroactive support is ordered, he asks to be credited for child support paid to the mother, contributions to the RESP for the child and for activities and clothes he has paid for the child. He also asks to have fifteen years to pay any support arrears ordered by the court.
[4] The parties both filed affidavit evidence for the trial. They each testified and were cross-examined. No other witnesses were called.
Part Two – Background Facts
[5] Most of the facts in this case were not in dispute.
[6] The mother is 50 years old. The father is 39 years old.
[7] The parties have the one child together. The child has always lived with the mother.
[8] The parties married on October 6, 2007 and divorced on January 5, 2013. The divorce judgment did not include any corollary relief.
[9] The mother has two other children, ages 17 and 18, who live with her.
[10] The father married his current wife on May 23, 2015. They have had two children together. They are 6 years old and 18 months old. The father sponsored his wife to come to Canada. She has not been employed since arriving in Canada and is a stay-at-home mother. She is trained as a nurse but would have to upgrade her qualifications to work as a nurse in Canada.
[11] The parties attended before a mediator in 2012. They both signed a document called a mediation summary report (the report), dated February 18, 2012, that included the following terms about child support:
a) The father would pay the mother child support of $300 each month based on the guidelines.
b) The father would also contribute $100 each month to an RESP for the child to be held in the joint names of the parties.
c) If there was a material change in circumstance, child support would be reviewed and adjusted based on the guidelines and both parties' incomes and tax assessments.
[12] The report states that "this agreement is not a legally binding document".
[13] The parties carried on as if the report was an agreement.
[14] The father paid the child support and made the RESP contributions set out in the report. However, he did not disclose his significant increases in annual income to the mother.
[15] The father testified that he earned annual income of close to $45,000 in 2012.
[16] The father said that his income went up starting in 2013 when he became a driver for his employer.
[17] The mother did not ask the father for his annual income tax returns. She testified that "he wouldn't have given them to me anyway".
[18] The mother also said that she didn't ask the father to increase child support until she started this court case.
[19] The mother issued an application for custody and child support on August 10, 2017. She did not serve the father with the application. She testified that she didn't know where he lived. No one attended at court on the return date of January 17, 2018 and the application was dismissed as abandoned.
[20] The mother issued a new application for custody and child support on March 6, 2019.
[21] On May 15, 2019, the parties agreed to a without prejudice order that the father increase his child support to $500 each month starting on May 28, 2019. He has been paying this amount since then.
[22] The parties finalized the parenting issues on August 30, 2019 and their agreement was incorporated into a final order. The mother has custody of the child. Access between the father and the child is as agreed to between the parties.
[23] The father testified that he has not seen the child since New Years Day 2019.
[24] The mother does not work. She suffers from fibromyalgia. The mother supports herself and the child through monthly Ontario Disability Support Program payments (ODSP) and child tax benefits.
[25] The parties agreed that the father's annual income for the purpose of the support calculation has been as follows:
- 2017 - $99,325
- 2018 - $93,334
- 2019 - $101,816
Part Three – Legal Considerations
[26] A support claimant is presumptively entitled to prospective support from the date of notice that a support claim is being pursued. See: MacKinnon v. MacKinnon, 75 O.R. (3d) 175 (C.A.), at para. 22. The mother issued her application on March 6, 2019. Accordingly, her claim for retroactive support covers the period from January 1, 2017 until March 2019 – 2 years and 2 months.
[27] The Supreme Court in D.B.S. v. S.R.G.; Laura Jean W. v. Tracy Alfred R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, outlined the factors that a court should take into account in dealing with retroactive applications. Briefly, there are four points that the court raised:
Whether the recipient spouse has provided a reasonable excuse for his or her delay in applying for support.
The conduct of the payor parent.
The circumstances of the child.
The hardship that the retroactive award may entail.
[28] 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 of the relevant circumstances in front of it. The payor's interest in certainty must be balanced with the need for fairness and flexibility.
[29] Retroactive awards are not exceptional. They can always be avoided by proper payment (D.B.S. par. 97).
[30] The court should not hesitate to find a reasonable excuse for delay in the following circumstances: where the recipient spouse harbored justifiable fears that the payor parent would react vindictively to the application to the detriment of the family; where the recipient lacked the financial or emotional means to bring an application; or where the recipient was given inadequate legal advice (D.B.S., par. 101).
[31] The court should take an expansive view of what constitutes blameworthy behaviour. Blameworthy behaviour is anything that privileges the payor's own interests over the child's right to an appropriate amount of support (D.B.S., par. 106). The more material the increase in income, the less likely the payor will be presumed to believe they were meeting their obligations. (D.B.S., par. 108).
[32] Where ordered, an award should generally be retroactive to the date when the recipient gave the payor effective notice of his or her intention to seek an increase in support payments; this date represents a fair balance between certainty and flexibility (D.B.S., par. 5), but where the payor 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. (D.B.S. par. 134)
[33] 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 (D.B.S., par. 121). In this case, the date of effective notice is the same as the date of formal notice – when the application was issued on March 6, 2019.
[34] It will not always be appropriate for a retroactive award to be ordered. Retroactive awards will not always resonate with the purposes behind the child support regime; this will be so where the child would get no discernible benefit from the award. Retroactive awards may also cause hardship to a payor parent in ways that a prospective award would not. In short, while a free-standing obligation to support one's children must be recognized, it will not always be appropriate for a court to enforce this obligation once the relevant time period has passed. Unlike prospective awards, retroactive awards can impair the delicate balance between certainty and flexibility in this area of the law. As situations evolve, fairness demands that obligations change to meet them. Yet, when obligations appear to be settled, fairness also demands that they not be gratuitously disrupted. Prospective and retroactive awards are thus very different in this regard. See: D.B.S., pars. 95 and 96); Titova v. Titov, 2012 ONCA 864, par. 37; Baldwin v. Funston, 2007 CarswellOnt 3168 (C.A.)
[35] Courts should attempt to craft the retroactive award in a way that minimizes hardship. Hardship to the payor parent may be mitigated by a judgment which allows for payment of an award in instalments: See: D.B.S., at para. 116; Connelly v. McGouran, 2007 ONCA 578.
Part Four - Analysis
[36] The mother did not provide a strong reason for her delay in seeking an increase in child support. She claimed that she didn't have any way of locating the father to serve him with the court papers. However, back in 2017, the father was exercising weekend access with the child and was communicating with the mother or the child to arrange it. The mother said that she didn't ask the father where he was living until March 2018 because she didn't want any problems with him. The mother started an application in August 2017 and could have spoken to duty counsel at the court to obtain an order for substitutional service if the father didn't disclose his address. The mother could have served the father and followed through with her application in 2017 with a little more effort.
[37] The mother said that she was going through health issues and couldn't afford a process server to serve the father and that is why she chose not to come to court in January 2018.
[38] The father engaged in blameworthy conduct by not increasing his child support when he received a significant increase in his annual income. He knew, or ought to have known by January 1, 2017, that the support he was paying was entirely inadequate. He had agreed in the report to adjust his support in accordance with the guidelines if there was a material change in circumstances. A doubling of his income was certainly a material change in circumstances that warranted an adjustment.
[39] The father relied on a comment he said that the mother had made to him when they separated in 2012 to justify his failure to increase support - that any additional support he paid to her would just go to welfare and that he should pay any extra support into an RESP for the child instead. This is not a valid excuse for failing to increase his child support for the past seven years.
[40] The father acted in a blameworthy manner by failing to disclose his income to the mother when it materially increased. This factor substantially negates the factor of the mother's delay in coming to court – if she had been aware that the father's income had increased so dramatically, it is likely that she would have followed through with her application to increase support much sooner.
[41] The circumstances of the child have been disadvantaged by the father's failure to pay adequate support. The mother said that she and the child have had to use food banks. They shop at the thrift store. They lead an extremely modest lifestyle.
[42] The father has other support obligations for his wife and two children. He also has a $10,000 line of credit and $4,000 credit card balance. He owns an old car and doesn't have much money in his bank account. There will be some hardship for him with a retroactive order. However, any hardship can be fairly addressed by permitting him to pay the arrears over a reasonable period of time.
[43] The father is fortunate that the mother is not seeking a larger retroactive order. He should have adjusted support once his income increased in 2013. He has preferred his own interests to those of the child and has led a far better lifestyle than the mother and the child as a result. It could be argued that this claim is really an enforcement of contract as opposed to a claim for retroactive support. See: Pitre v. Lalande, 2017 ONSC 208. However, since it states on the face of the report that it isn't a legally binding document and the mother is only seeking child support from January 1, 2017, the court won't engage in that analysis.
[44] Balancing all of these considerations, the court will order that support be paid retroactive to January 1, 2017.
Part Five – Support Credits
[45] The parties agreed that the father should be credited with his support payments made of $300 each month from January 1, 2017 until May 27, 2019 and $500 each month since May 28, 2019.
[46] The mother also agreed to credit the father for the $100 amounts the father contributed monthly after January 1, 2017 into the RESP for the child. The court considered the case law that sets out that RESP contributions are not a special expense as defined in section 7 of the guidelines. Child support is intended to provide for the current needs of the child. It does not look to anticipated needs or seek to create monetary funds for the future. See: Crosby v. Crosby, [2002] S.J. No. 164 (Sask Q.B.); R.A. v. N.A., [2003] O.J. No. 3016 (OCJ); Gaetz v. Gaetz, 2001 NSCA 57.
[47] However, the court has discretion in determining the fair amount of retroactive support it should order. In the particular circumstances of this case, the court will exercise that discretion and grant a credit to the father for his RESP contributions made since January 1, 2017. Even if the report was not a domestic contract as defined under the Family Law Act, the parties operated as if it was a valid agreement. The parties had agreed that part of the father's guidelines support payments (as calculated in 2012) would go to the mother and part would be contributed into the RESP. The father made his contributions pursuant to this agreement. The mother recognized this and agreed to the father receiving credit for them. This was a very fair approach for her to take.
[48] The parties are the joint account holders of the child's RESP. The court's understanding is that the parties both have to consent to any withdrawal of these funds. If that understanding is incorrect and the father withdraws funds from the RESP for a purpose not related to the child's education expenses without the mother's written consent, the mother may seek a review of the support payable by the father.
[49] The mother agreed that the father should receive a further credit for $450 for paying for the child's after-school activities and taekwondo in 2018. He will receive a credit for these payments.
[50] The father sought a further $500 credit for clothes he bought for the child in 2017 and 2018. The father won't be credited with these payments. The mother never knew about these purchases – the father chose to keep these clothes in his home for the child.
Part Six – Calculation of Support Owing and Payment of Arrears
6.1 2017
[51] The father's income in 2017 was $99,325.
[52] The monthly guidelines table amount for one child at this income until November 30, 2017 was $871. The guidelines table amounts changed on November 30, 2017. For December 2017, it was $904.
[53] The total support payable for 2017 is $10,485 ($871 x 11 months + $904).
[54] The father will be credited with support paid of $300 each month and the $100 monthly contribution to the RESP. The total is $4,800.
[55] The father owes the mother $5,685 for 2017 ($10,485 - $4,800).
6.2 2018
[56] The father's income for 2018 was $93,334. The monthly guidelines table amount for one child was $857. The total support payable for 2018 is $10,284 ($857 x 12 months).
[57] The father will be credited with support paid of $300 each month, the $100 monthly contribution to the RESP, $250 for back to school costs and $200 for the child's taekwondo for a total of $5,250.
[58] The father owes the mother $5,034 for 2018 ($10,284 - $5,250).
6.3 2019
[59] The father's income for 2019 is projected to be $101,816.
[60] The monthly guidelines table amount at this income is $924 each month.
[61] The total support payable in 2019 to date is $10,164 ($924 x 11 months).
[62] The father paid $300 for support each month for 4 months. He has paid $500 for support each month for 6 months (starting on May 28). He will be credited with these payments totaling $4,200. He will also be credited with 10 RESP contributions of $100, increasing the total 2019 credits to $5,200.
[63] The father owes the mother $4,964 for 2019 ($10,164 - $5,200).
6.4 Total Amount Owing and Payment
[64] The total amount owing by the father to the mother is $15,683 ($5,685 + $5,034 + $4,964).
[65] The father asks to pay the arrears over 15 years. This would result in a payment of $87 each month ($15,683 divided by 180 months).
[66] The mother asks that the father pay the arrears over 3 years. This would result in a payment of $435 each month ($15,683 divided by 36 months).
[67] The court took into consideration that the father now has a wife and two young children to support. He has debts and nominal assets (although he has a pension). It also considered the mother's delay in seeking the support adjustment. Lastly, the court considered that the father showed some responsibility by paying the child support and the RESP payments agreed to in the report, as well as the court-ordered support, in a timely manner.
[68] However, the court also took into consideration the father's blameworthy conduct and that he received a financial windfall that permitted him to live a far better lifestyle for many years at the expense of the mother and the child. If he had disclosed his annual income and paid the appropriate amount of support when it should have been paid, he wouldn't be facing this difficult situation.
[69] Balancing these considerations, the court will permit the father to pay the arrears over four years, or at the rate of $326 each month ($15,683 divided by 48 months) starting on December 1, 2019, provided that he keeps his support in good standing.
Part Seven – Conclusion
[70] A final order shall go on the following terms:
a) The father shall pay the mother the guidelines table amount of child support for one child, based on an annual income of $101,816, in the monthly amount of $924, on the first day of every month, starting on December 1, 2019.
b) The father shall pay the mother support retroactive to January 1, 2017 and receive support credits as outlined in this decision. His child support arrears are fixed at $15,683.
c) The father may pay the support arrears at the monthly rate of $326, on the first day of every month, starting on December 1, 2019. However, if he is more than 30 days late in making any ongoing or arrears support payments the entire arrears then owing shall become immediately due and payable.
d) A support deduction order shall issue.
e) The Director of the Family Responsibility Office is requested to amend its records in accordance with this order.
f) Nothing in this order precludes the Director of the Family Responsibility Office from collecting arrears from any government source, such as HST or income tax returns, or any lottery or prize winnings.
g) If the father withdraws funds from the child's RESP, without the mother's written consent, for a purpose not related to the child's education expenses, the mother may seek a review of the support payable by the father.
h) The father shall provide the mother with complete copies of his income tax returns and notices of assessment by June 30th each year.
[71] The court wishes to emphasize to the parties that the father is no longer obligated to make a monthly $100 contribution to the child's RESP. He is free to do so, but he can't expect to receive any future credits for these payments if he does this.
[72] The parties both advised the court that they would not be seeking costs so none will be ordered.
[73] The court thanks the parties for conducting the trial in a civil manner.
Released: November 6, 2019
Justice S.B. Sherr