COURT FILE NO.: FS-01-0251-01
DATE: 2012-06-11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
KATHERINE ANN PORTELANCE,
Lydia Stam , for the Applicant
Applicant
- and -
DAVID YOUNG,
Roy Karlstedt , for the Respondent
Respondent
HEARD: December 1, 2011, at Thunder Bay, Ontario; written submissions received February 17, April 11 and April 20, 2012
Mr. Justice J.S. Fregeau
Reasons On Motion To Change
Nature of the Motion
[ 1 ] The respondent has brought a Motion to Change the order of the Honourable Justice A. W. Maloney, dated June 14, 2001, (the “existing order” ) as it relates to his obligation to pay periodic child support and special or extraordinary expenses to the applicant for their twin boys. Specifically, the respondent requests the existing order be varied effective January 1, 2006, due to the fact that he suffered an industrial accident in that year that he alleges has materially affected his income.
Background
[ 2 ] The applicant and respondent are 50 and 49 years old respectively. The parties had an intimate “on/off” relationship in 1991 - 1992. This relationship produced twin boys, Jonathon and James Young, born October 28, 1992, now 19 years old.
[ 3 ] Pursuant to the existing order, the respondent was ordered to pay child support to the applicant, for Jonathon and James, in the amount of $945.95 per month. This amount was based on a determination of the respondent’s income at $60,500.00 and expressly included $116.95 per month as extraordinary expenses pursuant to s. 7 of the Ontario Child Support Guidelines , O. Reg. 391/97 (the “ Guidelines ”).
[ 4 ] The respondent paid child support without default until July 2006 at which point the respondent was in a slight credit position. Unfortunately for all involved, the respondent suffered a serious workplace injury on May 29, 2006. The respondent worked very little in the years immediately subsequent to his injury, and not at all since 2009. The respondent has been in receipt of income replacement benefits of one type or another since 2006. According to a Director of the Family Responsibility Office Statement of Arrears, dated August 29, 2011, and filed as evidence on this motion, the respondent began to fall into arrears in September 2006 and had child support arrears of approximately $10,900.00 as of August 26, 2011.
[ 5 ] As a result of his inability to work due to his injury, the respondent applied for disability benefits pursuant to his employment benefit package. The disability insurance carrier was The Manufacturers Life Insurance Company ( “Manulife” ). Concurrently, the respondent applied for Workplace Safety and Insurance Board ( “WSIB” ) benefits.
[ 6 ] Manulife paid the respondent short and long-term disability benefits while his WSIB claim was being processed. The respondent’s WSIB claim was initially denied and then successfully appealed in late 2007. The appeal resulted in the respondent receiving WSIB benefits beginning in 2008. Of the WSIB benefits to which the respondent was entitled, some lump sum retroactive benefits were paid to Manulife as reimbursement for the short and long term disability benefits it had paid to the respondent.
[ 7 ] The respondent’s income tax returns for the years 2006 to 2010 confirm receipt of income from various sources for these years:
2006
Employment Income
$29,854.00
Manulife Income
$17,519.00
Total Income
$47,373.00
2007
Employment Income
$ 9,063.00
Manulife Income
$36,365.00
Total Income
$45,429.00
2008
Employment Income
$ 2,173.00
WSIB Income*
$76,654.00
RRSP Income
$ 1,632.00
Total Income
$80,460.00
2009
Other Employment Income
$ 3,032.00
WSIB Income*
$58,484.00
Social Assistance Income**
$ 701.00
Total Income
$62,217.00
(*non-taxable income subject to gross up for child support calculation; ** non- taxable, subject to gross up and net of repayment)
[ 8 ] For 2010 and years following, the respondent’s income includes WSIB benefits only, all non-taxable. The respondent’s 2010 WSIB income was $39,676.00. In 2011, for the period January 1, 2011 to April 19, 2011, the respondent received the full weekly Loss of Earnings (“LOE”) rate of $774.72 per week. As of April 19, 2011, the respondent’s entitlement was reduced and from that point to the present he has received the partial weekly LOE rate of $476.65 per week.
[ 9 ] In late 2010, the respondent was advised by WSIB that he was required to complete a labour market re-entry ( “LMR” ) program to assist him in returning to the workforce. The respondent was required to attend and actively participate in classes and programs identified by a service provider. Full benefits would continue until completion of the program. The respondent was advised that once the program was completed, he may be entitled to partial LOE benefits.
[ 10 ] The respondent received correspondence from the WSIB on April 13, 2011 confirming his anticipated completion of the LMR program on April 18, 2011. This letter notified the respondent that his full LOE rate was to be reduced to a partial LOE rate of $476.65 per week effective April 19, 2011. This appears to have been based on the respondent’s expected or potential entry level wage “in the local labour market within (his) Suitable Occupation” of $410.00 per week, regardless of the fact that the respondent had not secured any form of employment in the local labour market.
[ 11 ] Jonathon and James turned 18 years of age on October 28, 2010. These young men both attended Confederation College in Thunder Bay, Ontario, for the 2010/2011 and 2011/2012 academic years. They plan on continuing their education at Confederation College in the years to come.
[ 12 ] Jonathon and James both earned income to help with their post-secondary education costs. They have also both received student assistance in the form of loans and/or grants and Jonathon received two bursaries to be applied to his 2010/2011 expenses. Jonathon and James reside with the applicant during the summer and holidays and on many weekends during the school year.
[ 13 ] The applicant has a very limited income and a limited income earning potential. The applicant’s total income for the years 2008, 2009 and 2010 was $5,223.00, $254.00 and $942.00 respectively. In 2011, the applicant worked only sporadically and earned little income. The applicant suffers from serious health issues, including colitis, which greatly restricts her already limited income earning ability. The applicant testified that she relies on family, friends and her children to help make ends meet.
[ 14 ] The respondent concedes that the applicant’s current and potential income render her unable to contribute anything to the children’s out of pocket post-secondary education expenses. It is recognized by this court that the applicant provides a home and support for the children on weekends during the school year and during holiday and summer vacation periods.
The Issues
[ 15 ] The issues to be determined on this motion are:
Has there been a change in circumstances within the meaning of the Guidelines justifying an order varying the existing order?
If so, to what date should the variation order be retroactive to?
If a variation order is appropriate, what is the annual income of the respondent for the relevant periods and should any income be imputed to the respondent for the period after April 19, 2011?
Is the respondent obligated to provide support for the children beyond their 18 th birthday while they are in attendance at Confederation College?
If so, what are the children’s extraordinary expenses for the relevant periods, what should the children’s contributions to their expenses be and what is the respondent’s proportionate contribution to the children’s expenses?
The Positions of the Parties
The Respondent, the moving party
[ 16 ] The respondent submits that his May 29, 2006 workplace injury has prevented him from continuing with the employment he enjoyed at that time, which was the same employment he had at the time of the existing order.
[ 17 ] The respondent submits that his loss of employment income and his receipt of WSIB benefits constitutes a change in circumstances within the meaning of s. 14 (1) of the Guidelines , thereby entitling him to a variation of the existing order.
[ 18 ] The respondent submits that any variation order should be retroactive to January 1, 2006, the year of his accident and resultant change in income.
[ 19 ] For the purposes of any variation order, the respondent submits that a determination of his income under s. 16 of the Guidelines would not be the fairest determination of his income based on the facts of this case.
[ 20 ] The respondent submits that his income tax returns for the years 2006 to 2009 inclusive do not fairly reflect his income for child support purposes. The respondent’s tax returns for 2006 and 2007 include all monies received by the respondent from Manulife, despite the fact that these funds were repaid to Manulife by WSIB and/or the respondent. The respondent’s tax returns for 2008 and 2009 include all WSIB income in the year of receipt rather than the year in which his entitlement to these benefits accrued. The respondent submits that using these tax returns to determine his income, as required in the first instance by s. 16 of the Guidelines , would overstate his true income in some years and inappropriately apportion it in others.
[ 21 ] The respondent submits that his income for Guideline purposes should be calculated in accordance with s. 17(1) of the Guidelines , where his income amounts should be determined in a fair and reasonable manner in light of the unusual circumstances pertaining to his income over the years 2006 to 2009.
[ 22 ] The respondent submits that, for the purpose of calculating his income pursuant to s. 17 of the Guidelines for the relevant periods, certain factors have to be taken into account to arrive at the fairest determination of his income.
[ 23 ] The respondent submits that none of the money received by him from Manulife as either short or long term benefits in 2006 or 2007 should be included in the calculation of the his income for those years. The respondent submits that this money was repaid to Manulife by WSIB and/or the respondent, as required, upon the successful appeal of his WSIB claim. It is the respondent’s position that to include both the Manulife funds and all WSIB funds received in the income calculation overstates his income over the relevant period of time.
[ 24 ] The respondent concedes that there was a shortfall in the funds repaid to Manulife compared to the funds received from Manulife by the respondent. This shortfall totalled $4,120.00, being $2,515.08 in short-term benefits and $1,605.00 in long-term benefits. The respondent submits that, if I decide these funds should be included in his income for child support purposes, the allocation of the funds to particular years is somewhat arbitrary. The respondent submits that it is equally fair and reasonable to allocate the $2,515.00 in short-term benefits to either 2006 or 2007, and the $1,605.00 in long-term benefits to either 2007 or 2008.
[ 25 ] The respondent submits that the social assistance funds he received in 2009 should not be included in his income for child support purposes. The respondent received $2,029.00 in social assistance payments in 2009. Of this amount, $1,328.00 was repaid by the respondent and/or WSIB. The difference of $701.00 has never been repaid, even after the District of Thunder Bay Social Services has demanded repayment from the respondent. For this reason, the respondent suggests that this $701.00 should not be included in his income for 2009.
[ 26 ] The WSIB benefits that the respondent received included lump sum retroactive payments and concurrent periodic payments to him, as well as lump sum payments to Manulife. In addition, the WSIB payments included both LOE benefits and Non-Economic Loss benefits.
[ 27 ] The respondent accepts that all LOE benefits received should be included in income for child support purposes and “grossed-up” as they are non-taxable income. The respondent submits that the Non-Economic Loss benefits ($20,230.00) are equivalent to damages for personal injury and should not be included in income for child support purposes.
[ 28 ] As evidenced by the respondent’s 2008 and 2009 Tax Return Summaries, the respondent received $76,654.00 and $58,484.00 respectively from WSIB in those years. The respondent submits that, based on correspondence from WSIB, which were filed as evidence on this hearing, these sums were paid as retroactive payments for the years 2006 to 2009. The respondent submits that the fairest way to calculate his income over the relevant period would be to allocate the WSIB benefits to the year in which the respondent was entitled to them and for which they were paid retroactively, as opposed to the year in which the lump sum payments were received.
[ 29 ] Pursuant to the methodology suggested by the respondent, his income for child support purposes for 2006 to 2009 would be as follows:
2006
Employment Income
$29,854.00
*WSIB Income Allocated to 2006
$20,862.00
Plus 30% Gross-up
$ 6,258.00
Total Income for Child Support Purposes
$56,974.00
2
2007
Employment Income
$ 9,064.00
*WSIB Income Allocated to 2007
$37,314.00
Plus 30% Gross-up
$11,192.00
Total Income for Child Support Purposes
$57,570.00
2008
Employment Income
$ 2,173.00
*WSIB Income Allocated to 2008
$38,317.00
Plus 30% Gross-up
$11,495.00
Total Income for Child Support Purposes
$51,985.00
2009
Employment Income
$ 3,032.00
*WSIB Income Allocated to 2009
$38,645.00
Plus 30% Gross-up
$11,593.00
Total Income for Child Support Purposes
$53,270.00
(*non-taxable and subject to gross up)
[ 30 ] The respondent’s actual WSIB income for 2010 was $39,677.00. The respondent submits that this figure, subject to gross up, should be used for child support purposes.
[ 31 ] For 2011, the respondent suggests that his actual 2011 WSIB income, subject to gross up, should be used for child support purposes, without the imputation of further income. The respondent submits that his WSIB income in 2011 is $28,939.75, comprised of 15 weeks at $754.00 per week and 37 weeks at $477.00 per week.
[ 32 ] The respondent submits that income should not be imputed to him for the purposes of calculating his child support obligation for the period of time subsequent to the reduction in his WSIB benefits. The respondent submits that he has suffered permanent disabilities as a result of his 2006 industrial accident. The respondent suggests that these disabilities severely limit his ability to earn income through employment.
[ 33 ] The respondent submits that he did complete the WSIB LMR program, as required, but that it did little to assist him in finding employment in a field consistent with his limitations. The respondent submits that only sedentary employment would be suitable for him and that he has made reasonable efforts to find employment of this nature in his community, but was unsuccessful. In these circumstances, the respondent submits that income should not be imputed to him.
[ 34 ] In addressing the issue of the children’s extraordinary expenses, the respondent submits that there was no evidence led at this trial to substantiate a continuation of the $116.95 per month toward extraordinary expenses, as ordered in the existing order. The respondent submits that this amount should be retroactively deleted to 2006, the year of his accident.
[ 35 ] The respondent concedes that he is obligated to pay child support for Jonathon in the presumptive Guidelines amount until his 18 th birthday on October 28, 2010. After Jonathon turned 18, the respondent submits that the presumptive rule in s. 3(1) of the Guidelines does not apply and that the court must consider s. 3(2) of the Guidelines and apply s. 3(2)(b), rather than s. 3(2)(a). Given the limited income of the respondent, the inability of the applicant to contribute to s. 7 expenses and Jonathon’s own resources, the respondent submits that it is appropriate to consider the condition, needs, means and all of Jonathon’s circumstances together with the financial abilities of the parties in order to determine an appropriate amount to contribute to Jonathon’s post-secondary expenses.
[ 36 ] The respondent submits that Jonathon had $18,416.00 available to him for his 2010/2011 academic year, comprised of 2010 employment income, high school bursaries and Ontario and Canada student loans. The respondent submits that this amount exceeds Jonathon’s expenses for that year. The respondent submits that Jonathon had $10,690.93 available to him for the 2011/2012 academic year, comprised of 2011 employment income, OSAP and a further Canada student loan.
[ 37 ] The respondent submits that Jonathon took only one course in the second term of the 2011/2012 academic year. The respondent submits that this course load is not a full-time program of education and that Jonathon, as an adult, is not entitled to support if not enrolled in a full-time program of education.
[ 38 ] In all of the circumstances, the respondent submits that child support for Jonathon should terminate retroactively to October 28, 2010; the date of his 18 th birthday.
[ 39 ] The respondent concedes that he is obligated to pay child support for James in the presumptive Guidelines amount until James turned 18 years old on October 28, 2010. After this date, taking into account all financial circumstances, the respondent submits that the amount of support he is required to pay for James should be reduced to $300.00 to $400.00 per month.
[ 40 ] The respondent submits that James had $11,369.00 available to him for the 2010/2011 academic year, comprised of $590.00 in employment earnings, and $10,908.00 in Canada/Ontario student loans. The respondent submits that this is very close to the cost of his expenses for the year and that only a nominal amount of support should be ordered for that year.
[ 41 ] For the 2011/2012 academic year, the respondent submits that James had $3,404.00 available to him from his employment. As no evidence was presented to the court confirming student loans or grants available to James for the 2011/2012 academic year, the respondent submits that I should assume he would be entitled to an amount equivalent to the amount he received in the previous year, namely $10,908.00. In the respondent’s submission, this would result in James having approximately $14,300.00 available to him for the 2011/2012 academic year. The respondent submits that this amount of money exceeds James’ expenses for the school year and that support for James should continue at a nominal rate of $200.00 to $300.00 per month.
The Applicant, the responding party
[ 42 ] The applicant notes that the respondent is requesting a retroactive variation of his child support obligation to 2006, the year of his accident. The applicant submits that a variation to 2006 is inequitably beneficial to the respondent because it ignores the years immediately after the existing order when the respondent’s income exceeded the $60,500.00 income figure in the existing order. The applicant also suggests that a variation retroactive to the date of the existing order is inappropriate, since such a variation would be akin to a retroactive appeal of that order.
[ 43 ] The applicant submits that the respondent did not initiate this Motion to Change until October 2009. Even after the motion was initiated, the applicant submits that the respondent did not provide appropriate income disclosure until late 2011. For these reasons, the applicant submits that if a variation is ordered as a result of a change in the respondent’s income, it should only be retroactive to October 2009, when this motion was initiated or, in the alternative, from the date he made proper disclosure (late 2011) forward.
[ 44 ] The applicant submits that the respondent’s income tax returns are accurate and represent the fairest determination of his income for child support purposes. In particular, the applicant submits that the respondent’s income tax returns for 2008 and 2009, the years in which he began to receive WSIB income, including retroactive lump sum payments, are an accurate reflection of his income and the fairest determination of it for child support purposes.
[ 45 ] The applicant submits that the respondent has voluntarily reduced his income beginning in April of 2011 and that income should be imputed to him from that time forward for the purposes of calculating his child support obligation. The applicant submits that the evidence establishes that the respondent did not fully participate and complete the required WSIB LMR program, despite being aware that his benefits would be reduced if he did not do so. The applicant submits that the reduction in WSIB benefits suffered by the respondent in April 2011 is solely a result of his own inaction. The applicant submits that income should be imputed to the respondent on an on-going basis at a rate equivalent to the full weekly WSIB rate of $774.72/week or $52,371.00, plus a 30% gross up to account for the fact that the benefits are received tax free.
[ 46 ] The applicant submits that she has very limited income and, realistically, a very limited income earning potential. The applicant submits that her age, health issues, limited education and limited employable skills severely restrict her ability to earn income. The applicant submits that she resides in subsidized, geared to income housing to which she is entitled because Jonathon and James are deemed to reside with her on a full-time basis. The applicant submits that she is dependent on child support to provide a home for her children. The applicant has relied on family and her adult children to help make ends meet.
[ 47 ] The applicant submits that the respondent has an on-going obligation to provide child support for Jonathon and James beyond their 18 th birthdays because they are both enrolled in full-time programs of education and have not withdrawn from parental control. The applicant submits that the respondent should be required to pay periodic monthly child support in amounts determined by the Child Support Guidelines , and should be required to contribute to each of their post-secondary education expenses as well.
[ 48 ] The applicant submits that Jonathon’s choice to register for only a single course for the second term of the 2011/2012 academic year was logical, reasonable and part of his long term academic plan. It is submitted that Jonathon required only a single course in the second term of 2011/2012 to enter his preferred area of study in the 2012/2013 academic year. The applicant submits that it made no sense to register and pay for a full course load when this was not required. He chose instead to register and pay for only one course in the second term, work part time and register for a full course load in the fall of 2012. In these circumstances, the applicant submits that the court should consider Jonathan to have remained in a full time program of education throughout the 2011/2012 school year.
[ 49 ] The applicant acknowledges that both Jonathon and James have earned income which must be considered in determining the respondent’s required contributions to their expenses. The applicant suggests that the children should be required to contribute 66% of their respective annual incomes to their expenses, pursuant to s. 7(2) of the Guidelines . The applicant suggests that the federal and provincial student assistance received by each of the children should not be taken into account when determining the contributions of the children pursuant to s. 7(2) of the Guidelines .
[ 50 ] The applicant submits that the costs of each of the children’s education, beginning in 2012/2013, should be fixed at $10,000.00, subject to variation, where each child will provide the respondent with written confirmation of full-time enrolment on an annual basis.
[ 51 ] The applicant submits that the amount of extraordinary s. 7 expenses incurred by her, prior to the children beginning their post-secondary education, should be fixed at $3,483.22, which is the total actual cost of orthodontics for Jonathon between 2004 and 2006. The applicant submits that she paid this entire expense without contribution from the respondent. The applicant submits that the respondent should bear his proportionate share of this expense.
Discussion
Issues 1 and 2
Has there been a change in circumstances within the meaning of the Guidelines granting jurisdiction to vary the existing order? If so, to what date should the variation order be retroactive to?
[ 52 ] The amount of child support required to be paid by the respondent pursuant to the existing order was determined in accordance with the child support table. The order was based on a determination of his income at $60,500.00 per year. Section 37(2.1) (a) of the Family Law Act (R.S.O. 1990, c. F.3, as am.) (the “ Act ”) grants a court jurisdiction to vary a child support order, prospectively or retroactively, if there has been a change in circumstances within the meaning of the Guidelines .
[ 53 ] Section 14(1) of the Guidelines provides:
CIRCUMSTANCES FOR VARIATION – For the purposes of subsection 37(2.2) of the Act and subsection 17(4) of the Divorce Act (Canada), any one of the following constitutes a change of circumstances that gives rise to the making of a variation order:
in the case where the amount of child support includes a determination made in accordance with the table, any change in circumstances that would result in a different order for the support of a child or any provision thereof.
[ 54 ] I am persuaded that the industrial accident suffered by the respondent on May 29, 2006, and the resultant change in his income from that point forward, constitutes a change in circumstances within the meaning of s. 14(1) of the Guidelines . In order to take the respondent’s change in circumstances into account, it is appropriate that the existing order be varied.
[ 55 ] I find that it is appropriate to vary the existing order retroactive to January 1, 2006, as requested by the respondent. The respondent did not request a variation beyond that date and the applicant agreed that a variation beyond that date was not appropriate. I do not accept the applicant’s suggestion that a variation be retroactive only to October 2009, when the Motion to Change was initiated, or, in the alternative, to October 2011, because of delayed income disclosure. The issue of delayed income disclosure on the part of the moving party is more appropriately brought forward when addressing costs. Restricting the variation to the date the motion is initiated ignores the fact that it is the change in the respondent’s income, beginning in 2006, that constitutes the change in circumstances giving rise to the variation.
Issue 3
What is the annual income of the respondent for 2006 to 2011? Should income be imputed to the respondent for the period after April 19, 2011?
[ 56 ] In order to determine the respondent’s income for the relevant period of time, regard must be had to sections 16 , 17 and 19 of the Guidelines , which provide as follows:
CALCULATION OF ANNUAL INCOME – Subject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.
PATTERN OF INCOME – (1) If the court is of the opinion that the determination of a parent’s or spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the parent’s or spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
(2) NON-RECURRING LOSSES – Where a parent or spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of a parent’s or spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.
19.(1) Imputing Income – The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,
(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;
(b) the parent or spouse is exempt from paying federal or provincial income tax;
(c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada
(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;
(e) the parent’s or spouse’s property is not reasonably utilized to general income;
(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;
(g) the parent or spouse unreasonably deducts expenses from income;
(h) the parent or spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
(i) the parent or spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.
(2) Reasonableness of expenses – For the purpose of clause (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act (Canada).”
[ 57 ] I am persuaded that a determination of the respondent’s income in accordance with s. 16 of the Guidelines would not be the fairest determination of that income for the relevant years. The respondent’s tax returns for 2006 and 2007 include the disability benefits received by the respondent from Manulife in those years. The respondent’s tax returns for 2008 and 2009 include all WSIB income received by the respondent in those years, despite the fact that a portion of these WSIB benefits were lump sum retroactive payments paid to Manulife as reimbursement for disability benefits paid by it to the respondent in 2006 and 2007.
[ 58 ] The Manulife benefits were all repaid by WSIB on behalf of the respondent, or by the respondent directly, but for a short fall of $4,120.00. In the circumstances, it would be inappropriate to include in the respondent’s income the benefits that were repaid. The shortfall in repayment, namely $4,120.00, should be included in income.
[ 59 ] I also find that it would be inappropriate to include all WSIB benefits in the year they were received as set out in the tax returns, when a portion of these benefits were lump sum retroactive payments.
[ 60 ] Section 17 of the Guidelines allows the court to depart from a s.16 income determination if it is of the opinion that determining income pursuant to s. 16 would not be the fairest determination of that income. In determining income pursuant to s. 17 , regard must be had to the respondent’s income over the past three years and the determination of the amount made must be fair and reasonable in light of patterns or fluctuations in income.
[ 61 ] I am persuaded that the WSIB LOE benefits should be included in income for the year in which the respondent’s entitlement to the benefits accrued, as opposed to the year in which he received them. The respondent’s WSIB Non-Economic Loss benefits will not be included in income. These are not wage replacement benefits and should not form part of the respondent’s income for child support purposes. The parties agreed that WSIB benefits received by the respondent must be grossed up for child support purposes because they are received tax free. Both parties have utilized a gross up figure of 30% and I will do likewise.
[ 62 ] The Manulife benefits will not be included in the respondent’s income, but for the $4,120.00 shortfall in repayment, the benefit of which accrued to the respondent. The $2,515.00 in short-term benefits shall be included in the respondent’s 2006 income. The $1,605.00 in long-term benefits shall be included in the respondent’s 2007 income.
[ 63 ] The respondent received social assistance in the amount of $2,029.00 in 2009. He was required to repay the entire amount, but repaid only $1,328.00. The respondent has therefore had the benefit of the $701.00 shortfall in social assistance repayment, which shall be included in his 2009 income. This figure must also be grossed up for child support purposes.
[ 64 ] As a result of these findings, I find the respondent’s income for child support purposes for the years 2006 to 2010 inclusive to be as follows:
1
2006
Employment Income
$29,584.00
WSIB Income Allocated to 2006
$20,862.00
30% Gross-up on 2006WSIB Income
$ 6,259.00
Shortfall in Manulife Repayment
$ 2,515.00
Total 2006 Income for Child Support Calculation
$59,220.00
2007
Employment Income
$ 9,064.00
WSIB Income Allocated to 2007
$37,314.00
30% Gross-up on 2007 WSIB Income
$11,194.00
Shortfall in Manulife Repayment
$ 1,605.00
Total 2007 Income for Child Support Calculation
$59,177.00
2008
Employment Income
$ 2,173.00
WSIB Income Allocated to 2008
$38,317.00
30% Gross-up on 2008 WSIB Income
$11,495.00
Total 2008 Income for Child Support Calculation
$51,985.00
2009
Employment Income
$ 3,032.00
WSIB Income Allocated to 2009
$38,645.00
30% Gross-up on 2009 WSIB Income
$11,594.00
Shortfall in Social Assistance Repayment ($701.00 Plus 30% Gross-up)
$ 911.00
Total 2009 Income for Child Support Calculation
$54,182.00
[ 65 ] For 2010, the respondent’s income included only WSIB benefits of $39,676.00. This figure, grossed up by 30%, is $51,579.00, which shall be the respondent’s 2010 income for child support purposes.
[ 66 ] The applicant submits that income be imputed to the respondent for the period subsequent to April 19, 2011. The applicant submits that the respondent failed to complete all requirements of the WSIB LMR program, which resulted in his WSIB benefits being reduced from the weekly full LOE rate of $774.72 to the weekly partial LOE rate of $476.65. The appellant suggests that income be imputed to the respondent at the weekly full LOE rate from April 19, 2011 forward.
[ 67 ] In determining the annual income of a parent for child support purposes, s. 19 of the Guidelines allows a court to impute income to a parent in certain circumstances. The relevant portion of s. 19 of the Guidelines is s. 19 (a), which provides as follows:
“(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;”
[ 68 ] I am not persuaded that the respondent is intentionally under-employed or unemployed such that it is appropriate to impute income to him. The respondent testified that his 2006 accident injured his left shoulder, neck and vertebrae. The respondent testified that he remains on medication for pain management, suffers an erratic sleep pattern, can lift only five lbs. above his waist and nothing above the level of his shoulders. The respondent testified that he has submitted his resume to retail establishments in Marathon without success, noting the Marathon area has suffered significant economic problems in recent years. The respondent testified that his physical limitations resulting from his accident render him unemployable. This evidence was not shaken on cross-examination, nor did the applicant contradict it in any way.
[ 69 ] The respondent testified that, to the best of his knowledge, he had participated in and completed the WSIB LMR program. Correspondence dated April 13, 2011, from WSIB to the respondent was filed as evidence at this hearing. This correspondence confirms that the respondent was subject to a mandatory review of his LOE benefits upon completion of his LMR program, which completion was expressly anticipated to occur on April 18, 2011. There is no suggestion in this letter that the respondent did not fulfill the requirements of this program.
[ 70 ] I interpret this document as simply informing the respondent that his full LOE benefits will be reduced in an amount consistent with what he could be expected to earn if he had secured employment in “the local labour market within (his) Suitable Occupation, Customer Service Clerk”. This reduction is to occur regardless of the fact that the respondent had not secured any employment. I do not interpret this document as informing the respondent that his WSIB benefits are being reduced because he has to complete a mandatory WSIB work transition program, as suggested by the applicant. In all of the circumstances, I am not persuaded that the respondent is intentionally under-employed or unemployed and I do not impute any income to him for the period of time after his WSIB benefits were reduced on April 19, 2011.
[ 71 ] I find that the respondent’s 2011 income includes only WSIB benefits which totalled $28,939.75, being 15 weeks (January to April 19) at $753.58 per week and 37 weeks (April 19 to December 31) at $476.65 per week. This figure must be grossed up by 30% for child support purposes, resulting in a 2011 income for the respondent of $37,622.00 for child support purposes.
[ 72 ] I find that the respondent’s 2012 anticipated income is $24,786.00, being $476.65 per week for 52 weeks. Applying the gross up to this figure results in an anticipated income of $32,222.00 in 2012 for child support purposes.
Issue 4
Is the respondent required to provide support for the children beyond their 18 th birthdays while they are in attendance at Confederation College?
[ 73 ] Section 31 of the Act establishes the parental obligation to provide support to an adult child enrolled in a full time program of education:
“(1) Obligation of parent to support child – Every parent has an obligation to provide support for his or her unmarried child who is a minor or is enrolled in a full time program of education, to the extent that the parent is capable of doing so.
(2) Idem – The obligation under subsection (1) does not extend to a child who is sixteen years of age or older and has withdrawn from parental control.”
[ 74 ] The Guidelines provide direction as to the quantum of child support to be paid to adult children enrolled in post-secondary education. The relevant sections of the Guidelines provide as follows:
“s.3(1) PRESUMPTIVE RULE – Unless otherwise provided under these guidelines, the amount of an order for support of a child for children under the age of majority is,
(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the parent or spouse against whom the order is sought, and;
(b) the amount, if any, determined under section 7.
(2) CHILD THE AGE OF MAJORITY OR OVER – Unless otherwise provided under these guidelines, where a child to whom an order for support of a child relates is the age of majority or over, the amount of an order for the support of a child is,
(a) the amount determined by applying these guidelines as if the child were under the age of majority; or
(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each parent or spouse to contribute to the support of the child.
s.7(1) SPECIAL OR EXTRAORDINARY EXPENSES – (1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation:
(e) expenses for post-secondary education; …
(2) SHARING OF EXPENSE – The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the parents or spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.”
[ 75 ] The respondent concedes that the presumptive rule set out in s. 3(1) of the Guidelines applies for Jonathon and James until their 18 th birthday. The respondent shall therefore pay support at the Guidelines amount until the children’s 18 th birthday.
[ 76 ] I am satisfied that Jonathon and James are currently both enrolled in a full-time program of education and that the respondent is therefore obligated to provide support to them to the extent that he is capable of doing so.
[ 77 ] I accept the respondent’s submission that the quantum of child support he is to pay should be determined in accordance with s. 3(2) (b) of the Guidelines , in conjunction with s. 7(1)(e) and s. 7(2) .
[ 78 ] I reject the respondent’s submission that Jonathon should be disentitled to support beginning at the end of the first term of the 2011/2012 school year due the fact that he is enrolled in only one course for the second term. The evidence of the applicant was that Jonathon only required this one course to complete his prerequisites and to be eligible for his preferred area of study beginning in the fall of 2012. For Jonathon to register in, pay for and complete non-required courses does not make sense given the overall financial circumstances that he faces. Based on all of the evidence, I am satisfied that Jonathon is diligently pursuing a full time program of education, despite the fact that he is only registered for one course in the second term of 2011/2012.
[ 79 ] Counsel for both parties were in agreement that the applicant has no financial resources to contribute to the post-secondary education costs of the two boys. The applicant, by way of her own very limited income, together with the kindness and generosity of family, provides food, shelter and support for the two boys during their summer vacation, on weekends and during holidays. The respondent’s income is modest, being $51,579.00 in 2010, $37,622.00 in 2011 and $32,222.00 for 2012 and forward. There is no evidence that the respondent has any other dependants to support. The children, through diligence, hard work and government student assistance, are able to contribute to the costs of their own education.
[ 80 ] I consider it appropriate to include and consider the condition, means, needs and other circumstances of the children in determining the appropriate quantum of support, given that there are two adult children enrolled in post-secondary education, that one spouse is unable to contribute to the educational expenses of the children and that the spouse providing support has a modest income. The ability of the children to contribute to their own educational costs is obviously relevant, both pursuant to s. 7(2) of the Guidelines and because these children have resources to “add to the pot”, given their earnings and the financial assistance they have received.
[ 81 ] Applying the relevant sections of the Guidelines to the facts of this case, it is obvious that the respondent and the children must share the costs of their post-secondary education. The more difficult issue to determine is the appropriate apportionment of the costs.
Issue 5
What are the children’s extraordinary expenses for the relevant periods, what should be the children’s contribution to their own expenses, and what is the respondent’s required proportionate contribution to the children’s expenses?
[ 82 ] During the course of this hearing, the parties reached agreement on the post-secondary education expenses for both children for the past two years. The agreed expenses are as follows:
Jonathon 2010/2011 $10,313.00
2011/2012 $8,245.00
James 2010/2011 $10,125.00
2011/2012 $9,011.00.
[ 83 ] The children have had the following funds available to them for the past two academic years:
Jonathon: 2010/2011 2010 employment income $6086
Graduation bursaries $1250
Ontario Student loan $4422
Canada student loan $6633
Total $18,391
2011/2012 2011 employment income $4684
Ontario Student loan $3773
Canada student loan $2233
Total $10,690
James 2010/2011 2010 employment income $590
Ontario student loan $4492
Canada student loan $6416
Total $11,498
2011/2012 2011 employment income $3,404
[ 84 ] James also received an Ontario Student Opportunity Grant in the amount of $3,608.00 for the 2010/2011 academic year. This grant was applied, as required, to pay down the Ontario portion of James’ Canada-Ontario Integrated student loan.
[ 85 ] Counsel are in agreement that James received student assistance for the 2011/2012 school year, however evidence as to the amount of same was not available at the time of trial. In the circumstances, counsel have agreed that I impute to James student assistance for 2011/2012 in an amount equivalent to what he received the prior school year, namely $10,908.00. I am in agreement with this.
[ 86 ] For the purpose of determining the appropriate contribution by Jonathon and James to their own educational costs, I propose to treat their employment income and Ontario and/or Canada student loans in the same fashion. The employment income is earned income that can and should be applied to the costs of their education. The government student assistance (loans) is money made available to the children, on advantageous terms, because of their personal and family financial circumstances. This money is intended to be applied to the costs of their post- secondary education. It is borrowed money that is required to be repaid, on a deferred basis, out of future earned income.
[ 87 ] Unfortunately, there is only one parent, with a modest income, assisting with the post- secondary education costs of two children. For this reason, and after considering all of the circumstances, I find that it is fair and reasonable for each of Jonathon and James to contribute 50% of their combined employment income and financial assistance to the costs of their own education.
[ 88 ] Jonathon’s agreed upon expenses for the 2010/2011 academic year were $10,313.00. He received bursaries of $1,250.00, 100% of which will be applied to his costs, for a net cost of $9,063.00. Jonathon had employment income and financial assistance available to him for this year in the amount of $17,141.00. Applying 50% of $17,141.00 ($8,571.00) to the net cost of $9,063.00 leaves an expense of $492.00 for Jonathon’s 2010/2011 academic year for which the respondent shall be responsible.
[ 89 ] Jonathon’s agreed upon expenses for the 2011/2012 academic year were $8,245.00. Jonathon had employment income and financial assistance available to him for this year in the amount of $10,690.00. Applying 50% of $10,690.00 ($5,345.00) to the expenses of $8,245.00 leaves an expense of $2,900.00 for Jonathon’s 2011/2012 academic year for which the respondent shall be responsible.
[ 90 ] James’ agreed upon expenses for the 2010/2011 academic year were $10,125.00. I deduct from this figure $3,608.00, the amount of the Ontario Student Opportunity Grant received by James to reduce his outstanding student loan balance. This grant represents a transfer of funds from the Ontario government to a qualifying student. The benefit of it should accrue to all parties funding the student’s education. The net cost of James’ 2010/2011 academic year is $6,517.00. James had employment income and other financial assistance available to him for this year in the amount of $11,490.00. Applying 50% of $11,490.00 ($5,745.00) to the expense of $6,517.00 leaves an expense of $772.00 for James’ 2010/2011 academic year for which the respondent shall be responsible.
[ 91 ] James’ agreed upon expenses for the 2011/2012 academic year were $9,011.00. James had employment income of $3,404.00 available to him for this year. Student assistance received by James for the 2011/2012 academic year is imputed to be $10,908.00, pursuant to the agreement of counsel. James therefore had funds available to him for this year in the amount of $14,312.00. Applying 50% of $14,312.00 ($7,156.00) to the expense of $9,011.00 for this year leaves an expense of $1,855.00 for James’ 2011/2012 academic year for which the respondent shall be responsible.
[ 92 ] These payments shall be the respondent’s required child support for both children for the months November 2010 to April 2011 inclusive and for the months September 2011 to April 2012 inclusive.
[ 93 ] The applicant has suggested that I fix the annual costs of the children’s post-secondary education while enrolled at Confederation College at $10,000.00, “given the historical difficulty in collecting support from” the respondent. The onus of establishing the entitlement of an adult child to support is on the party seeking the support. To fix the children’s educational expenses at a specified amount for future years would reverse that onus and offend the Guidelines . I am not prepared to do so.
[ 94 ] If seeking contribution from the respondent toward the children’s post-secondary education expenses, the children, or the applicant shall, on an annual basis, provide to the respondent proof of enrolment and actual and/or estimated costs for the ensuing school year. The children shall each be required to contribute 50% of their combined employment income and Ontario/Canada Student loans to their own post-secondary education costs. The respondent shall be responsible for the balance of their annual post-secondary education costs, subject to review of the applicant’s required contribution if she is able to secure regular employment in the future.
[ 95 ] Jonathon and James reside with the applicant on weekends, holidays and during the summer vacation. The applicant supports and provides for the children the best she can during these periods of time. The respondent’s obligation to support the children is not restricted to the time they are in attendance at school. They still need to be clothed, fed and sheltered during the non-academic months when they are at home earning income to contribute to their education costs.
[ 96 ] For the months of May to August, inclusive in the years 2011 and 2012 and years following, when the children are in school, the respondent shall pay to the applicant Guidelines child support in the monthly amount for two children based on his income for those years as found herein.
[ 97 ] I accept the applicant’s submission that she incurred s. 7 expenses for Jonathon in the amount of $3,483.22 between 2004 and 2006. I also accept the submission that the respondent should be responsible for his proportionate share of this expense. There is no evidence before me as to the applicant’s income for the period 2004 to 2006. The income information for the applicant that I have which is closest in time to when these expenses were incurred is 2007. In this year, the applicant’s income was $7,500.00. In 2007, the respondent’s income was $59,177.00.
[ 98 ] Utilizing these income figures, the respondent’s proportionate share of the $3,483.22 expense is 89% or $3,100.00.
Conclusion
[ 99 ] The order of the Honourable Justice A. W. Maloney, dated June 14, 2001, shall be varied effective January 1, 2006, by deleting paragraph 1 thereof and inserting the following in its place:
1(a) The respondent shall pay to the applicant child support for the period January 1, 2006 to December 31, 2006 in the Guidelines amount for two children based on the respondent’s 2006 income of $59,220.00;
(b) The respondent shall pay to the applicant child support for the period January 1, 2007 to December 31, 2007 in the Guidelines amount for two children based on the respondent’s 2007 income of $59,177.00;
(c) The respondent shall pay to the applicant child support for the period January 1, 2008 to December 31, 2008 in the Guidelines amount for two children based on the respondent’s 2008 income of $51,985.00;
(d) The respondent shall pay to the applicant child support for the period January 1, 2009 to December 31, 2009 in the Guidelines amount for two children based on the respondent’s 2009 income of $54,182.00;
(e) The respondent shall pay to the applicant child support for the period January 1, 2010 to October 31, 2010 in the Guidelines amount for two children based on the respondent’s 2010 income of $51,579.00;
(f) The respondent shall pay to the applicant child support for the period May 1, 2011 to August 31, 2011 in the Guidelines amount for two children based on the respondent’s 2011 income of $37,622.00;
(g) The respondent shall pay to the applicant child support for the period May 1, 2012 to August 31, 2012 in the Guidelines amount for two children based on the respondent’s 2012 income of $32,222.00;
(h) The respondent shall pay to the applicant child support for the periods May 1 to August 31 in subsequent years for so long as the children are enrolled in a full time program of education;
(i) The respondent shall pay to the applicant the sum of $3392.00, being the respondent’s contribution to Jonathon’s extraordinary expenses for the 2010/2011 and 2011/2012 school years;
(j) The respondent shall pay to the applicant the sum of $2,627.00, being the respondent’s contribution to James’ extraordinary expenses for the 2010/2011 and 2011/2012 school years;
(k) If seeking contribution from the respondent toward the children’s post-secondary education expenses, the children, or the applicant shall, on an annual basis, provide to the respondent proof of enrolment and actual and/or estimated costs for the ensuing school year. The children shall be required to contribute 50% of their combined employment income and Ontario/Canada Student loans to their own post-secondary education costs. The respondent shall be responsible for the balance of their post-secondary education costs, subject to review of the applicant’s required contribution should she secure regular employment in the future.
(l) The respondent shall pay to the applicant the sum of $3,100.00 as s. 7 expenses incurred by the applicant between 2004 and 2006 for Jonathon’s dental work.
(m) Should the terms of this order result in net child support arrears or s. 7 expenses being owed by the respondent to the applicant, the applicant shall be entitled to a charge on the real property of the respondent, known municipally as 20 McCullough Street, Marathon, Ontario, in order to secure the payment of same.
[ 100 ] I am aware that the order resulting from these reasons will be forwarded to the Family Responsibility Office and the necessary calculations and adjustments will be made. Should counsel have any concerns that there is any ambiguity contained in these reasons, which they themselves cannot resolve when settling the terms of the order, I may be spoken to at any time.
[ 101 ] There has been divided success on this motion to change. If the parties cannot agree on costs, they shall file written submissions as to costs, not to exceed 5 pages, including their respective Bills of Costs. The respondent shall file his submissions as to costs within 14 days of the release of these reasons, followed by the applicant’s submissions, within 14 days thereafter.
_______ ”original signed by”_ ___
The Hon. Mr. Justice J.S. Fregeau
Released: June 11, 2012
COURT FILE NO.: FS-01-0251-01
DATE: 2012-06-11
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: KATHERINE ANN PORTELANCE, Applicant - and – DAVID YOUNG, Respondent REASONS FOR JUDGMENT Fregeau J.
Released: June 11, 2012
/mls