DATE : January 27, 2021 COURT FILE NO. D28771/05

Ontario Court of Justice

B E T W E E N:

CARLA FERLISI ACTING IN PERSON APPLICANT

• and -

DONOVAN BOUCHER ACTING IN PERSON RESPONDENT

HEARD: JANUARY 19, 2021

JUSTICE S.B. SHERR

Reasons for Decision

Part One – Introduction

[1] This motion to change was about support issues regarding the parties’ 17-year-old son (the youth).

[2] The applicant (the mother) seeks to change the child support order of Justice Carole Curtis, dated June 4, 2009 (the existing order) which requires the respondent (the father) to pay her child support of $222 each month, based on the father’s annual income of $26,000.

[3] The mother seeks to increase the father’s ongoing child support payments to $1,000 each month, starting on February 1, 2021 and asks the court to impute income to him for this purpose. She asks that, starting on January 1, 2020, the father be required to contribute 50% to the youth’s special and extraordinary expenses (section 7 expenses) pursuant to section 7 of the Child Support Guidelines (the guidelines). She also asks that the father maintain the youth on his extended health plan available through his place of employment. 1

[4] A statement of arrears (the statement of arrears) from the Director of the Family Responsibility Office (the Director) sets out that child support arrears are $11,217, as of January 22, 2021.

[5] The Director is presently holding $12,155.59, from monies it collected when the father sold his home in September 2020. The Director is awaiting the outcome of this motion to change before it distributes those funds.

[6] The mother asks that the full amount of arrears be paid to her immediately from the funds held by the Director.

[7] The father also seeks to change the existing order. He claims that he does not owe the mother any child support, because she agreed in writing on April 6, 2016 (the agreement), that he only had to pay her child support of $100 each month, starting from January 2009. He says that he has paid the support that they agreed to. He wants the monies held by the Director to be paid to him.

[8] The father is agreeable to paying ongoing table child support of $666 each month, based on an annual income of $71,315. He objects to paying any section 7 expenses.

[9] The court read the motion to change material of the parties, their supplementary affidavits filed in support of the hearing and their filed financial statements. Both parties were affirmed at the hearing and provided additional evidence.

[10] The main issues for the court to determine are:

a) Should the father’s arrears be reduced because of the parties’ agreement, or for any other reason?

b) What is the father’s income for the purpose of calculating ongoing child support? Should income be imputed to him, as sought by the mother?

c) With respect to the mother’s claim for a contribution by the father to section 7 expenses:

i) What are the eligible section 7 expenses?

ii) What is the total amount of these expenses?

iii) How much should the youth contribute to these expenses?

iv) What amount, if any, should the father contribute to these expenses?

v) When should this contribution begin?

vi) How should these expenses be paid?

Part Two – Background and procedural history

[11] The mother is 55 years old. The father is 58 years old.

[12] The parties had the one child together. He has always lived with the mother. The mother said that he is in grade 12 and doing well in school. He plans to attend post-secondary school in September 2021.

[13] The parties started their litigation about the youth in 2004. They have been in and out of court since then.

[14] On June 4, 2009, on a motion to change support, Justice Curtis made the existing order.

[15] On April 6, 2016, the parties signed the agreement. It states that the parties had agreed that the father would pay child support of $100 each month since January 2009. The mother agreed not to seek “any other form of child support for the past, present or future other than this $100 agreement”.

[16] The mother issued her motion to change support on August 13, 2018.

[17] On December 4, 2018, Justice Curtis ordered the father to provide financial disclosure and to pay three outstanding costs orders, totaling $1,353.10, that had been ordered on previous motions to change.

[18] On February 28, 2019, Justice Curtis endorsed that one costs order of $250 had been paid by the father, leaving a balance owing of $903.10. She endorsed that the father would not be able to pursue his claim to reduce support if he did not pay these costs. 2 She also endorsed that the father’s financial disclosure was not complete – he had not provided his 2010 to 2014 income tax returns and his 2012 and 2014 notices of assessment.

[19] On April 17, 2019, Justice Curtis made an endorsement that included the following:

On consent, court was asked to make an order for the amount of arrears owing, on submissions:

Arrears fixed at $17,000.

The parties have now resiled from the consent and are unable to resolve the case.

The parties do not accept the court’s determination regarding arrears.

Another judge should hear the motions to change.

[20] On the same day, Justice Curtis made a temporary order (the temporary order) that the father pay child support to the mother of $700 each month, starting on May 1, 2019, based on an annual income of $75,000.

[21] No return date was set, and no further steps were taken by the parties. The matter was flagged by the court and on June 16, 2020, the court endorsed that if the parties no longer wanted to pursue the case, they should send a notice of withdrawal to the court. A return date was set for a case conference to give directions for the final hearing of the motion to change. The court ordered that updated financial statements be filed, together with the parties’ 2019 income tax returns, notices of assessment and their three most recent pay stubs.

[22] The next court appearance was on September 30, 2020. The mother insisted that Justice Curtis had finalized the arrears issue on April 17, 2019, contrary to what was stated in her endorsement. The court set a date before Justice Curtis for directions. The court also gave the father until October 15, 2020 to serve and file an amended response to motion to change and an updated financial statement, his 2019 income tax return and notice of assessment, and documentary proof of all income received in 2020, including pay stubs.

[23] On October 19, 2020, Justice Curtis confirmed that the amount of arrears had not been determined on April 17, 2019 and was an issue for the hearing. She also endorsed that the other issues for the hearing were:

a) If there are arrears, arrears repayment scheme.

b) Dealing with the funds held by the Director.

c) Ongoing table amount of child support.

d) Section 7 expenses.

Part Three – Credibility

[24] The court had to assess the credibility of the parties to make some of its material findings of fact.

[25] The court finds that the mother is more credible than the father. It preferred her evidence where it was inconsistent with the father’s evidence.

[26] The mother’s credibility was bolstered by the reasonable positions she took at this hearing and her history of generosity to the father regarding the support issues. She had a strong claim to adjust historical support in accordance with the father’s actual annual income but chose not to pursue that remedy. At this hearing, the mother only sought payment of the arrears as presently reflected in the statement of arrears. She only sought a contribution to section 7 expenses starting in 2020, although she absorbed these expenses alone for many years.

[27] The father was not a credible witness. Despite multiple financial disclosure orders, much of the required disclosure remained outstanding at this hearing. The court finds that this was a deliberate decision by him as it became apparent that he has been earning additional unreported income.

[28] The father was ordered to provide an updated financial statement and financial disclosure on December 4, 2018, June 16, 2020 and September 30, 2020. He did not file an updated financial statement after February 1, 2019. He did not file his complete 2019 income tax return and notice of assessment or documentary proof of his 2020 income, including up-to-date pay stubs, as ordered. He only filed a T4 for 2019. He did not file a 2018 income tax return and notice of assessment. He did not file his 2010 to 2014 income tax returns and his 2012 and 2014 notices of assessment, as ordered by Justice Curtis.

[29] The father swore false income information in his financial statement sworn on September 24, 2018. The father deposed that his annual income was $29,562. The father did not file his 2018 income tax return, as ordered, but his year-to-date income in his August 28, 2018 pay stub projected an annual income of about $73,000 from his employer, the City of Toronto. His notice of assessment for 2017 showed income of $77,947 – so he did not base his sworn income on a lesser 2017 income.

[30] The father also swore false income information in his financial statement sworn on February 1, 2019. He deposed that his annual income was $42,811 – far less than he was earning.

[31] The father failed to disclose in both financial statements that he was the joint owner of his home with his wife. 3 He kept this ownership secret from the mother and the court. The mother learned about the home through a third party – she said that the father never even took the youth to his home, in order to keep it secret from her. At the hearing, the father deposed that he sold the home for $899,000 in September 2020. He claimed that the equity in the home was $494,000.

[32] The father provided no disclosure about this sale. He also claimed that he gave his entire share of the equity in the home to his wife. He provided no documentary evidence to prove this or to justify why he would do this, other than to avoid the mother’s support claims.

[33] The father also failed to disclose additional cash income he has been earning in his financial statements. At the hearing, he confirmed that he has received income as a soccer referee and a professional boxing referee. He also acknowledged that he has started and is earning income from a snow removal business. The father tried to minimize the amount of money he is earning from these jobs. He acknowledged that he was flown by a boxing association to Mexico City to referee a fight. He claimed that he is only paid about $125 for a fight. It is unlikely that the boxing association would go to the trouble of flying him to Mexico City and just pay him $125.

Part Four – Legal considerations for changing support orders and rescinding arrears

[34] The mother’s motion to increase the father’s child support and the father’s request to rescind all, or part of the arrears, are governed by subsection 37 (2.1) of the Family Law Act (the Act) which reads as follows:

Powers of court: child support

37 (2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and

(c) make any other order for the support of a child that the court could make on an application under section 33.

[35] Section 1 of the guidelines sets out the objectives of the guidelines as follows:

(a) to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation;

(b) to reduce conflict and tension between spouses by making the calculation of child support orders more objective;

(c) to improve the efficiency of the legal process by giving courts and spouses guidance in setting the levels of child support orders and encouraging settlement; and

(d) to ensure consistent treatment of spouses and children who are in similar circumstances.

[36] In Gray v. Rizzi, 2016 ONCA 152, the Ontario Court of Appeal set out the considerations for the court to apply when determining a retroactive downward variation of child support by a payor.

[37] The court set out that where a payor seeks a retroactive decrease in support, the D.B.S. factors 4 – such as taking into account the circumstances of the child, the conduct of the payor parent, the hardship of a retroactive award, and the reason for delaying in seeking a variation in support – remain relevant (par. 51). Although those factors require some minor alteration to suit circumstances where the payor’s income has gone down, not up, the fundamentals still apply (par. 54).

[38] The court applied the process set out in Corcios v. Burgos, 2011 ONSC 3326 as follows:

[56] First, when applying the adapted D.B.S. principles on a motion to retroactively vary child support, one must always keep in mind the ultimate issue: namely, the best interests of the child: DiFrancesco , at para. 24. As Chappel J. stated, “Ultimately, the goal in addressing child support issues is to ensure that children benefit from the support they are owed when they are owed it, and any incentives for payor parents to be deficient in meeting their child support obligations should be eliminated.”

[57] Next, a court should distinguish cases where a payor seeks relief from payment of arrears based on current inability to pay from those where arrears accumulated due to a change in the payor’s circumstances that affected the payor’s ability to make the child support payments when they came due.

[58] A payor’s request for relief from payment of arrears based on a current inability to pay generally will not result in the rescission or reduction of arrears unless the payor has established, on a balance of probabilities, that he cannot and will not ever be able to pay the arrears. Evidence that the recipient agreed to non-payment of the support is irrelevant, as child support is the right of the child and cannot be bargained away by the recipient parent.

[59] Where, however, the payor demonstrates that a change in circumstances took place during the time that arrears were accumulating which rendered the payor unable to make child support payments for a substantial period of time, the court may provide relief by varying the child support order or rescinding arrears. As Chappel J. stated: “[the court] may determine that it is appropriate to retroactively suspend enforcement of the support order during the time when the payor was unable to pay, or decrease the amount of child support owed during that time and reduce or rescind the arrears owing accordingly.”

[39] In paragraph 60 of Gray, the court stated that the following factors should guide a court in determining whether to grant retroactive relief, the date of retroactivity, and the quantum of relief:

1. The nature of the obligation to support, whether contractual, statutory or judicial;

2. The ongoing needs of the support recipient and the child;

3. Whether there is a reasonable excuse for the payor’s delay in applying for relief;

4. The ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears;

5. The conduct of the payor, including whether the payor has made any voluntary payments on account of arrears, whether he has cooperated with the support enforcement authorities, and whether he has complied with obligations and requests for financial disclosure from the support recipient. As stated by Chappel J.:

“Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission or reduction of arrears”;

6. Delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears;

7. Any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears. As put by Chappel J.:

[I]f a retroactive order reducing child support would result in the child support recipient having to repay money to the child support payor, this may militate against making the order, particularly if the payor has not given the recipient notice of the change in their circumstances, has not provided appropriate disclosure to support their claim for an adjustment to the child support, or has delayed initiating court proceedings to change the order.

Part Five – Analysis of arrears issues

5.1 The agreement

[40] The parties do not dispute the calculations set out in the statement of arrears. They also do not dispute the amount that the Director states it is presently holding from the sale of the father’s home. 5

[41] What the father disputes is whether any support should be owing, because, he says, the agreement should vitiate the support terms in the existing order.

[42] It was undisputed that the parties signed the agreement on April 6, 2016 that the father pay $100 each month for child support, starting in January 2009. The mother acknowledged that she prepared the agreement.

[43] The court will not give any effect to the agreement for the reasons set out below.

[44] The agreement is not a domestic contract as defined in section 51 of the Family Law Act (the Act). Section 51 of the Act states:

“domestic contract” means a marriage contract, separation agreement, cohabitation agreement, paternity agreement or family arbitration agreement; (“contract familial”)

[45] Section 54 of the Act sets out that the parties must have cohabited for the agreement to be considered a separation agreement. 6 The parties did not cohabit, so it is not a separation agreement. Section 54 of the Act states:

Separation agreements

54 Two persons who cohabited and are living separate and apart may enter into an agreement in which they agree on their respective rights and obligations, including,

(a) ownership in or division of property;

(b) support obligations;

(c) the right to direct the education and moral training of their children;

(d) the right to custody of and access to their children; and

(e) any other matter in the settlement of their affairs.

[46] Even if the parties had cohabited and the agreement was a domestic contract (separation agreement), the agreement would not be enforceable as it was not witnessed. Subsection 55 (1) of the Act reads as follows:

Form and capacity

Form of contract

55 (1) A domestic contract and an agreement to amend or rescind a domestic contract are unenforceable unless made in writing, signed by the parties and witnessed

[47] Even if the agreement was an enforceable domestic contract, the court would have disregarded it as the terms of the agreement were not reasonable having regard to the guidelines. Subsection 56 (1.1) of the Act reads as follows:

Contracts subject to child support guidelines

56 (1.1) In the determination of a matter respecting the support of a child, the court may disregard any provision of a domestic contract pertaining to the matter where the provision is unreasonable having regard to the child support guidelines, as well as to any other provision relating to support of the child in the contract.

[48] The court finds that the support terms in the agreement are unreasonable having regard to the guidelines for the following reasons:

a) The support payment of $100 monthly was grossly less than the appropriate amounts that the father should have been paying for child support under the guidelines. In 2016, when the agreement was signed, the father reported income of $68,947. His income has increased since then.

b) The existing order required the father to annually provide the mother with copies of his income tax returns and notices of assessment. The court accepts the mother’s evidence that the father never provided this disclosure to her.

c) The court accepts the mother’s evidence that:

i) The father never disclosed his actual income to her. He did not report substantial increases in annual income starting in 2015.

ii) The father would constantly tell her that he could not afford to pay her more than $100 each month.

iii) She relied on the father’s representations about his income. This was not unreasonable. His notices of assessment in 2010 and 2011 both showed income of $15,125. His notice of assessment in 2013 showed income of $10,321.

d) The court finds that the mother entered into the agreement based on false financial representations made by the father.

e) The court accepts the mother’s evidence that she felt under duress to sign this agreement. She deposed that the father had promised to take the youth to a Jamaican resort. She had already paid for the trip. The youth was looking forward to the vacation. Then, she said, the father threatened not to take the youth unless she entered into this agreement. She said that she had never received much money from the father and had little expectation that he would ever give her more. She said that she couldn’t bear to disappoint the youth and signed the agreement. 7

f) The mother and the youth were disadvantaged by the paltry support paid by the father. While only paying $100 each month, the father accumulated assets, including a home with his wife that had equity of at least $494,000 by September 2020.

[49] The mother did not have independent legal advice before signing the agreement.

[50] Lastly, evidence that a recipient agreed to non-payment of the support is irrelevant, as child support is the right of the child and cannot be bargained away by the recipient parent. See: Gray v. Rizzi, supra, paragraph 58.

5.2 Father’s request to rescind arrears

[51] The father failed to provide any other valid reason for reducing the arrears.

[52] The father claimed that he has financial obligations for his two other children and paying the arrears will cause him hardship. One of those children is 27 years old and is not a dependant. He provided no proof of support being paid for his other child.

[53] The father’s income has significantly increased since the existing order was made. He accumulated substantial equity in his home. The Director is holding sufficient funds to satisfy the arrears. The father will not suffer any hardship from an order for the immediate payment of arrears.

[54] The father is very fortunate that the mother chose not to pursue a retroactive increase in support. She has been very generous and fair with him regarding child support. His failure to pay adequate support, combined with his secrecy about his income and assets has been blameworthy conduct. Yet, it was remarkable to hear the father describe the mother at trial as a greedy person, only interested in taking all his money. He testified:

“She wants, wants, wants”.

“She will take every penny she can”.

“She wants to bleed every penny I have”.

“I have nothing”.

[55] The father’s request to reduce the arrears is dismissed.

5.3 Payment of arrears

[56] The father asked, if arrears are found owing, that he be permitted to pay them at the rate of $200 each month and that the funds held by the Director be paid immediately to him.

[57] The father submitted that the parties had agreed to payment of arrears of $200 each month before Justice Curtis on April 17, 2019. However, Justice Curtis endorsed that both parties had resiled from the consent about arrears. She endorsed that the calculation of arrears and how they were to be paid were issues for trial. The father asked the court to disregard the parties’ consent when he sought to rescind all his arrears at this hearing. He cannot now turn around and rely on the term of that consent (that was not accepted by Justice Curtis) that he likes.

[58] There is no reason why these arrears should not be immediately paid in full to the mother. It is a debt owed to her. She has been deprived of proper support for many years. The father has received a considerable windfall by paying inadequate support.

[59] The court’s expectation is that absent any competing claims, the Director will pay the funds it is presently holding to the mother in satisfaction of the arrears.

Part Six – The father’s income

6.1 Legal considerations

[60] Section 19 of the guidelines permits the court to impute income to a party if it finds that the party is earning or is capable of earning more income than they claim.

[61] 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. See: Drygala v. Pauli, [2002] O.J. No. 3731(Ont. CA).

[62] 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, [2009] O.J. No. 1552. (Ont. C.A.).

[63] Once a party seeking the imputation of income presents the evidentiary basis suggesting a prima facie case, the onus shifts to the individual seeking to defend the income position they are taking. See: Lo v. Lo, 2011 ONSC 7663; Charron v. Carriere, 2016 ONSC 4719.

[64] The court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations as provided for in section 21 of the guidelines, and impute income. See Smith v. Pellegrini, [2008] O.J. No. 3616, (Ont. S.C.); Maimone v. Maimone, [2009] O.J. No. 2140, (Ont. S.C.). The parent must make full and complete financial disclosure to ensure that the information required to make a decision on the issue is before the court. Charron v. Carriere, 2016 ONSC 4719.

[65] A person’s lifestyle can provide the basis for imputing income. See: Aitken v. Aitken [2003] O.J. No. 2780 (SCJ); Jonas v. Jonas, [2002] O.J. No. 2117 (SCJ); Price v. Reid, 2013 ONCJ 373.

6.2 The father’s income from the City of Toronto

[66] The father has worked for the City of Toronto since 2015. He filed his notices of assessment for 2015 to 2017. They showed line 150 income as follows:

2015 – $73,975 2016 – $68,947 2017 – $77,947

[67] The father did not produce any of his income tax returns or his 2018 and 2019 notices of assessments, despite multiple production orders. As set out in paragraph 29 above, based on a pay stub filed, his 2018 income projected to be about $73,000.

[68] The father filed his 2019 T4 from the City of Toronto setting out income of $71,315.

[69] The father filed no documentary proof of his 2020 income, despite production orders.

[70] The father is still working for the City of Toronto. He asks that the court use his 2019 income from the City of Toronto for the purpose of determining ongoing support. The court will not do this. He earned a higher income from this employer in 2017 and 2018. He did not reveal his 2020 or 2021 income. The court finds that the fairest determination of the father’s annual income from the City of Toronto, starting in 2021, is to use the $75,000 amount, determined on a temporary basis by Justice Curtis, on April 17, 2019.

6.3 Imputing income to the father

[71] The mother claims that the father has been earning considerably more income than he is reporting. She says that he has worked as both a soccer referee and a professional boxing referee, in addition to his work for the City of Toronto. She said that he referees boxing matches around the world. She said that he provides personal training and has been running a snow removal business. She believes that he is in the process of starting a security business. She deposed that most of this supplementary income is paid to him in cash. She asks that the father’s income be imputed to an amount that will require him to pay a monthly guidelines table amount of $1,000 (this equates to an annual income of $111,000).

[72] The father acknowledged that he works part-time as a soccer referee and a professional boxing referee. He also acknowledged that he started a snow removal business in the fall of 2020. He claimed to earn nominal income from these jobs. He did not comment on the mother’s evidence that he did private personal training. For the reasons set out in paragraphs 27 to 33 above, the court finds that the father is not credible and is minimizing his supplemental income.

[73] It is difficult to calculate how much income to impute to the father. It is apparent that he has lived a comfortable lifestyle. He was a homeowner and accumulated significant equity in the home.

[74] The court draws an adverse inference against the father due to:

a) His failure to comply with financial disclosure orders.

b) His failure to report his increases in income to the mother.

c) His failure to disclose his home ownership in his financial statements.

d) His failure to disclose his supplemental income in his financial statements.

e) His failure to provide any documentary evidence about his supplemental income.

[75] The court recognizes that due to the pandemic it is unlikely that the father earned much income from refereeing or from private personal training in 2020. This income will also likely be much lower in 2021 than he had previously earned. However, by 2022 the father will likely resume earning most of this income again. The court will fix the annual supplemental income from these sources at $2,500 for 2021 and at $12,500, starting in 2022.

[76] The father claims that he is only earning $300 each month from his snow removal business. No evidence was provided to support this claim and the court does not accept the father’s evidence at face value. The court will double this amount for a 5-month period and fix this supplemental annual income at $3,000, for both 2021 and 2022.

[77] The father claimed that the equity from the sale of his home was $494,000. He claimed to have given his wife his share of the equity. He provided no evidence about the sale proceeds or any reasonable reason for transferring his share of proceeds to his wife. This is capital that could have generated income. The father’s decision not to generate this income is unreasonable. Income that should have been generated from this capital will be imputed to him.

[78] In Greenglass v. Greenglass, 2010 ONCA 675, the court fixed 2% annual interest of the capital to income, where it was not generating income. In Converti v. Escobedo, 2011 ONCJ 627, the court applied an interest rate of 3% to the payor’s capital assets of $500,000 in fixing income for child support purposes. In Mason v. Mason, 2016 ONCA 725, the court applied a 4.5% interest rate to capital. In Berta v. Berta, 2016 ONSC 5723, a 6% interest rate was used; and the British Columbia Court of Appeal in Parrett v. Parrett, 2016 BCCA 151, 78 R.F.L. (7th) 1, applied a 4% interest rate.

[79] The court recognizes that interest rates are very low at this time and will apply a conservative interest rate of 2% to the father’s share of the sale proceeds ($247,000). This results in additional annual income of $4,940.

[80] Accordingly, for 2021, the court will add $10,440 8 to the father’s income of $75,000 from the City of Toronto, for a total income of $85,440. Starting in 2022, the court will add additional supplemental income of $10,000 as set out in paragraph 75, for a total of $95,440.

[81] The guidelines table amount for one child, based on an annual income of $85,440 is $796 each month. Based on an annual income of $95,440, it is $875 each month.

[82] The youth will be turning 18 very soon. Pursuant to subsection 3 (2) of the guidelines, the court finds that the guidelines approach to calculating support will remain appropriate as the youth is living at home and going to high school.

Part Seven – Section 7 expenses

7.1 The mother’s section 7 expense claim

[83] The mother asks that the father pay 50% of the following expenses for the youth pursuant to section 7 of the guidelines: 9

a) Soccer costs for 2020 and 2021 – $6,164

b) Leadership camp – 2020 – $200

c) Uninsured portion of wisdom teeth extraction – 2020 - $357

d) University applications – $350

e) Driving school – 2020 – $514

f) Car insurance – $1,152 annually

g) Cellphone costs – $1,608 annually

[84] The mother provided receipts for these expenses. The amounts are not in issue. What is in issue is which of these expenses are eligible section 7 expenses and how the court should exercise its discretion in determining how much, if anything, the father should contribute to these expenses.

[85] The mother also asks for an order that the father pay 50% of the child’s post-secondary expenses starting in September 2021.

7.2 Legal considerations

[86] 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, (Ont. C.A.).

[87] The list of special and extraordinary expenses under clauses 7 (1) (a) to (f) of the guidelines is exhaustive; if a claim doesn’t fall within any of the listed categories, it must be dismissed: Kilrea v. Kilrea, [1998] O.J. No. 3677 (Gen. Div.) at paragraph 13; and Park v. Thompson, supra.

[88] In awarding section 7 expenses, the trial judge calculates each party’s income for child support purposes, determines whether the claimed expenses fall within one of the enumerated categories of section 7 of the guidelines, determines whether the claimed expenses are necessary “in relation to the child’s best interests” and are reasonable “in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation.” If the expenses fall under clause 7(1) (d) or (f) of the guidelines, the trial judge determines whether the expenses are “extraordinary”. Finally, the court considers what amount, if any, the child should reasonably contribute to the payment of these expenses and then applies any tax deductions or credits. See: Titova v. Titov, 2012 ONCA 864.

[89] The court has the discretion to apportion the section 7 expense in a different manner than pro-rata to the parties’ incomes, depending on the circumstances of the case. Salvadori v. Salvadori, 2010 ONCJ 462, [2010] O.J. No. 4425 (OCJ); Buckley v. Blackwood, 2019 ONSC 6918.

[90] The relevant provisions of the guidelines read as follows:

7. (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

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

(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.

The guidelines define “extraordinary” as follows:

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

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

(b) where paragraph (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 spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child or children,

(iv) the overall cost of the programs and activities, and

(v) any other similar factor that the court considers relevant.

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

(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.

7.3 Eligible section 7 expenses

[91] The court finds that the soccer expenses are eligible section 7 expenses. It finds that they are extraordinary extracurricular expenses. They exceed what the mother can reasonably cover, given her income and the table amount of support.

[92] The mother described the youth as an elite soccer player. He is an excellent athlete, like the father, who was a former Canadian boxing champion. Most of the soccer costs are for the child attending a soccer academy for elite players. The court finds that these costs are reasonable and necessary for the youth’s social and physical development and to enhance his special skills.

[93] The uninsured portion for the youth having his wisdom teeth removed is a section 7 expense pursuant to clause 7 (1) (b) of the guidelines. It was a reasonable and necessary expense.

[94] The youth will likely attend post-secondary education in September 2021. It is reasonable and necessary for him to make applications to universities and colleges. The court finds that the $350 spent for the post-secondary applications is an eligible section 7 expense pursuant to clause 7 (1) (e) of the guidelines.

[95] The other claimed expenses are more problematic.

[96] Driving school expenses do not fall within one of the enumerated categories under subsection 7 (1) of the guidelines. They are covered by the table amount of support. See: Zimmerman v. Doe, [2007] O.J. No. 2896 (Ont. S.C.); L.M.L. v. S.LG., 2019 ONCJ 421; Salvadori v. Salvadori, supra.

[97] The same analysis applies for the claimed car insurance expense. While such expenses may qualify as section 7 expenses if deemed to be reasonable and necessary for post-secondary education, the youth is not at that stage yet. It is not presently an eligible section 7 expense.

[98] The youth’s cellphone costs also do not fall within an enumerated category under subsection 7 (1) of the guidelines. See: Park v. Thompson, supra, par. 24. The analysis may be different if the youth resides out-of-town for his post-secondary education. This expense will not be allowed at this time.

[99] The leadership camp expense of $200 does not qualify as an extraordinary extracurricular expense pursuant to subsection 7 (1.1) of the guidelines. It is an expense that can be reasonably covered by the mother, given her income and the table amount of support being paid by the father.

[100] It is premature to make an order regarding the father’s contribution to the youth’s post-secondary costs. There are too many variables that can affect the calculation. First, he must attend post-secondary school. Next, if he attends school out-of-town, the guidelines approach may become inappropriate. See: Park v. Thompson, supra, par. 27. His ability to contribute to his own educational costs will need to be evaluated. It is unknown at this time if he will receive bursaries, grants, student loans or scholarships.

[101] The court finds that the following are eligible section 7 expenses for 2020:

Soccer expenses – $3,082 Wisdom Teeth – $357 Total: $3,439

[102] The court finds that the following are eligible section 7 expenses for 2021:

Soccer expenses – $3,082 University applications – $350 Total: $3,432

7.4 The youth’s contribution to section 7 expenses

[103] The court next needs to determine what amount, if any, the youth should contribute to these expenses under subsection 7 (3) of the guidelines.

[104] The youth earned part-time income of about $1,500 from acting in 2020. It is unknown if he can earn this income in 2021. He is also earning about $300 each month helping the father with the snow removal business. Prior to the pandemic, the youth was also working part-time as a soccer referee. However, he did not earn this income in 2020 and it is unlikely that he will earn this income in 2021.

[105] It is reasonable for the youth to make some contribution towards the section 7 expenses.

[106] The court will fix the youth’s contribution to the section 7 expenses at 25%. This reduces the 2020 amount to $2,579 and the 2021 amount to $2,574.

7.5 Apportionment and payment of section 7 expenses

[107] The parties earn comparable incomes. It is reasonable for the parties to each pay 50% of the remaining expenses.

[108] The court will order a lump sum payment of the 2020 and 2021 section 7 expenses, rather than periodic payments. The 2020 expenses have already been paid by the mother, as have most of the 2021 expenses. Based on the Director’s figures, it will still be holding $938.51 ($12,155.59 - $11,217.08) after it pays the outstanding amount set out in the statement of arrears to the mother. It is fair that the remaining amount be paid immediately to the mother, as partial satisfaction of the father’s section 7 expense obligation. The expectation is that the Director will do this absent any competing claims to these funds.

[109] The father will be required to pay a total of $2,576 to the mother to cover his share of the section 7 expenses set out above for 2020 and 2021. This amount is payable immediately.

7.6 Health coverage

[110] The mother also asked that the father cover the youth on the extended health benefits plan that he has available to him through his place of employment. He presently has such a plan through Green Shield Canada. The mother has the youth covered on her own extended health plan through her employer, but not all expenses are covered.

[111] The father opposed this request.

[112] The court finds that this is a reasonable request and that it is in the youth’s best interests. The court finds that this will be for the provision of the youth’s necessities pursuant to subsection 34 (2) of the Act.

Part Eight – Conclusion

[113] The court will make the following final orders:

a) This order will change all previous support orders.

b) Child support arrears are fixed in the amount of $11,217.08.

c) The arrears are to be paid immediately to the mother.

d) In addition to the fixed arrears, the father is to immediately pay the mother the amount of $2,576, as his contribution to the youth’s 2020 and 2021 section 7 expenses, as calculated in this decision.

e) Based on an imputed annual income of $85,440, the father shall pay the mother the guidelines table amount of child support for one child of $796 each month, starting on February 1, 2021.

f) Based on an imputed annual income of $95,440, the father shall pay the mother the guidelines table amount of child support for one child of $875 each month, starting on January 1, 2022.

g) The father shall cover the youth on any extended health plan for medical, dental and drug coverage that he has available to him through his place of employment and provide proof of this coverage to the mother. He is to submit any claims presented by the mother to the insurer in a timely manner.

h) This order is without prejudice to the mother’s right to seek a future contribution by the father to the youth’s post-secondary education costs.

i) A support deduction order shall issue.

j) The Director is asked to adjust its records in accordance with this order.

[114] The court finds that the mother is entitled to costs. She is the successful party and the father has acted unreasonably. He failed to advise her of his increases in income, failed to pay appropriate child support and did not comply with multiple court orders. If the mother seeks costs she shall serve and file written costs submissions by February 8, 2021. The father will then have until February 19, 2021 to make written response. Costs submissions are restricted to two pages, not including any offer to settle or bill of costs. Costs submissions are to be delivered to or emailed to the trial coordinator’s office.

Footnotes

[1] In her motion to change, the mother sought an increase in child support retroactive to 2009. However, at the hearing of the motion to change, she submitted that she was only seeking an order for the father to pay the arrears, as reflected in the records of the Director. She said that if the monies held by the Director were paid to her, she would be satisfied that this would clear up all arrears.

[2] These costs were not paid but the court permitted the father to proceed with his request to rescind arrears.

[3] The father testified that he is separated from his wife.

[4] D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 SCR 231.

[5] This information was obtained by the court on January 22, 2021 and sent to the parties. They were given the opportunity to make written submissions if they disagreed with any of this information. No submissions were made regarding this.

[6] Also see: B.C.J.B. v. E.-R.R.R., 2020 ONCJ 438, per: Justice Alex Finlayson.

[7] It is unnecessary for the court to make a finding of duress as defined by the law – there are multiple reasons not to enforce the agreement. The court is merely taking into consideration the mother’s subjective feelings of why she signed the agreement.

[8] $2,500 from refereeing and personal training, plus $3,000 from the snow removal business plus $4,940 imputed income from capital.

[9] The mother included some minor expenses for 2019 in her affidavit prepared for the hearing. She indicated at the hearing that she was only seeking a contribution to section 7 expenses starting in 2020, so the 2019 claims are not included.

Released: January 27, 2021

Justice S.B. Sherr