ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 30159/07
DATE: 2012-07-12
B E T W E E N:
Nicholas Mills
Melanie Sager for the Applicant
Applicant
- and -
Anna-Marie Pacula (Mills)
David G. Thwaites for the Respondent
Respondent
HEARD: September 27, 28 and 29, 2011
REASONS FOR JUDGMENT
Parayeski J.
[ 1 ] The parties entered into minutes of settlement on November 4, 2008. Both were represented by counsel. The terms of those minutes were put into a consent order granted by Tulloch J. that same date.
[ 2 ] The applicant seeks to vary the child support terms of that order on the basis of material change. He also seeks to vary the terms of his access to the children relative to school bus arrangements on days when they are in his care.
[ 3 ] It is common ground that there should be no variation of the rights and obligations created by the order in the absence of a material change in circumstances.
[ 4 ] The decision of Paulseth J. in Hayes v. Hayes , reported at 2011 ONCJ 137 , sets out in concise terms the test which the party seeking variation must meet:
“…the moving party must first show on a balance of probabilities a material change in circumstances since the date of the last order, or show that evidence that was not available at the time of the last hearing is now available. The type of material change must be one that: was not foreseeable as a probable future consequence or was not a foreseeable event sprung upon an unaware payor.”
As Paulseth J. pointed out, prior to the Willick v. Willick decision of the Supreme Court of Canada, “a material change was one that was significant, grave or weighty, that was not anticipated at the time of the original order. Willick added the additional and broader test of foreseeability.”
[ 5 ] What constitutes material change must be considered in the context of the facts of the case at hand and those facts include the parties’ overall financial situation.
[ 6 ] Briefly, the applicant asserts that the following elements constitute the material change he must prove on the balance of probabilities:
an increase in his debt load;
an increase in his childcare expenses which he did not foresee tied to his increase in parenting time;
that the children are suffering while in his care because he cannot afford to maintain the same lifestyle as they enjoy while in their mother’s care; and
that his expectations of additional income have not materialized.
[ 7 ] It is worth setting out the entirety of paragraph 3 of the order of Tulloch J., which deals with child support. It is as follows:
- (1) the Applicant shall pay to the Respondent child support for the three children pursuant to the Child Support Guidelines based upon his income of $81,337.00 in the amount of $1,531.00 per month commencing September 1, 2008 and on the 1 st day of each month thereafter to continue for as long as the children are the “children of the marriage” as defined by the Divorce Act .
(2) the Applicant shall pay the adjusted child support retroactive to September 1, 2008 based upon any retroactive adjustment to his employment income. He shall provide the Respondent forthwith with particulars of any income adjustment.
(3) the quantum of child support shall be reviewed and adjusted each year effective September 1 commencing September 1, 2009 being adjusted based on the change in the Applicant’s income pursuant to any collective agreement for which the Applicant is a member of the bargaining unit.
(4) the parties shall name the children as beneficiary of the life insurance available to each party through their respective employment for so long as there exist a child support obligation. The parties shall provide the other with written confirmation of the coverage and particulars of the named trustee. The quantum of coverage shall be three times (3x) salary.
(5) the parties shall share equally the extraordinary expense of the children including:
(a) healthcare cost not covered by either parties’ benefit plans;
(b) child care, including Montessori fees, until such time is able to attend full time elementary school, which each party shall pay direct to the child care provider;
(c) extraordinary activities as mutually agreed, such consent not to be unreasonably withheld; ‘
(6) the parties shall contribute 25% of each child’s post secondary education cost.
(7) the existing RESP shall continue to be held in the joint names of the parties for the benefit of the children. In the event that there are any funds not drawn for the benefit of the childrens’ post-secondary education, the excess shall be returned equally to the parties. Each part is at liberty to establish and contribute to separate RESP effective and after November 1, 2008.
(8) the obligation of the Applicant in (1) shall continue notwithstanding that his parent time as set out in paragraphs 2 may exceed 40%.
[ 8 ] Paragraph 1 gave full custody of the children to the respondent/mother. Paragraph 2 of the order dealt with access by the applicant/father.
[ 9 ] Subparagraph (8) of paragraph 3 is important because it forms the basis for much of the respondent’s argument. On its face, it keeps in place the applicant’s obligation to pay child support, at Guideline levels, even if his parenting time under the access parts of the order exceeds 40%.
[ 10 ] While the parties do not agree upon the exact amount of parenting time the applicant now has with the children as a result of the terms of paragraph 2 the evidence is clear that he has considerably more time than he did just prior to the order being granted.
[ 11 ] This increase in time, the applicant says, has lead to increased costs for the children being incurred by him, all or most of which he did not foresee.
[ 12 ] Those costs, he argues, have added to his financial predicament, and have increased his debt load.
[ 13 ] Predictably, the respondent dismisses the applicant’s evidence in this regard, and goes on to argue that even if such costs and the debt load had increased, the applicant is precluded by subparagraph (8) of paragraph 3 of the order from using the same as the basis for material change in circumstances as defined by the case law.
[ 14 ] The significance of the 40% figure in subparagraph (8) of paragraph 3 is that it is the minimum level of shared parenting at which the Court is to consider the incomes of both parents when determining child support. Without that subparagraph, and in the normal course of events, child support would be payable by the higher income earning parent at the difference between the figures generated by application of the Guidelines to both incomes. Here, however, the existence of that subparagraph serves, according to the respondent, to prevent the applicant from involving the set-off regime because he has waived his right to do so. Equally important is that the subparagraphs very existence means that the increased expenses complained by the applicant cannot have been reasonably unforeseen. The basic rationale for the set-off regime is the notion is that with roughly equal parenting time each parent will have similar expenses.
[ 15 ] While it is an over-simplification of the evidence for the respondent to say that the applicant’s debt load has increased solely as a feature of the legal expenses he has incurred to wage the present litigation, that proposition is at least partially true. Thus, some of this element of alleged material change is self-created.
[ 16 ] The applicant’s submissions regarding the meaning of subparagraph (8) of paragraph 3 are, at their highest, meritless obfuscation. If the order was half as incomplete and logically inconsistent as the applicant now says it is, he should have refrained from executing the minutes of settlement.
[ 17 ] The applicant argues that the development of a contrast between how the children live when with him as opposed to how they live when with their mother is in itself a material change in circumstances. The relatively better lifestyle in the mother’s home, the father asserts, is being financed by his payment of child support in accordance with the subject order.
[ 18 ] The evidence is that the mother is more prudent with her money than is the father. Their incomes are very similar. He has a new partner, and, to some degree at least, is helping to support her children. He pursues two hobbies, which he appears to have turned into businesses for tax reasons, neither of which is profitable.
[ 19 ] In any event, the Court should not use child support as a means of equalizing the lifestyles in the parents’ respective homes unless there is compelling evidence of a significant difference such that it materially affects the children. There is no such evidence here,
[ 20 ] The applicant also submits that material change arises from his anticipation of increased income from a rental unit in his home and his interest in a martial arts studio business having gone unfulfilled.
[ 21 ] I am of the view that, in order to be the basis of proof of a material change in circumstances, failed anticipation has to have been reasonably based in first instance and then the subject of reasonable effort going forward.
[ 22 ] The evidence regarding the basement apartment is less than clear. It appears that previous the settlement conference before Tulloch J. on November 4, 2008, the apartment was being rented to the woman who is now the applicant’s common law partner. The applicant’s financial statement sworn on October 27, 2008 reflects (“rent, board received $250.00 ($400 gross less utilities and expenses) related to the tenant”. The applicant then took on another tenant for a period lasting from January to August of 2009. This did not work out well, with the tenant only paying part of the rent, damaging the apartment, and then being evicted. The applicant then moved his common law partner’s son into the basement apartment, ostensibly to free up a bedroom in the main part of the home for one of his own sons. Some rent was coming in prior to the order; some rent was received thereafter, although that may have been offset by the damages caused by the tenant. Once she was evicted, the space was used for non-rental purposes as described. While I can appreciate the applicant’s disillusionment over his bad experience with one tenant, I am not convinced that he has made reasonable efforts to fulfill his rental income expectations.
[ 23 ] As for the martial arts studio, and the hope that it might generate income, I am not convinced that this hope is realistic in the first place. The business, which predated the separation, never made a profit. At best, it served to provide “tax write offs” based upon the losses it sustained. While I accept the applicant’s evidence with respect to a failed attempt to market the business more effectively, I am not satisfied that the unrealized profits, whatever they might have been, form the basis of proving a material change in circumstances.
[ 24 ] The applicant has failed to prove the existence of a material change of circumstances, and, thus, is precluded from obtaining any of the variations he seeks.
[ 25 ] Paragraph 3(5) of the order of Tulloch J. dated November 4, 2008 addresses the issue of extraordinary expenses. The parents are to “share equally” these costs. Sub-sub paragraph (b) deals with child care expenses. It requires equal payment by each parent relative to “child care including Montessori fees, until such time as the child is able to attend full time elementary school…” The applicant takes the position that he can avoid his obligation relative to Montessori fees because a) the order does not mandate attendance at Montessori; and b) he advised the respondent in January of 2009 that, as of September 2009, the children should be enrolled in less expensive daycare, rather than a Montessori program. He does acknowledge his obligation to pay for reasonable daycare expenses.
[ 26 ] I reject both of the applicant’s arguments in regard to Montessori expenses. Clearly Montessori fees were contemplated by the order. The fact that one parent unilaterally wanted to elect out of paying for such expenses is not a sound basis upon which to override the plain language of the consent order. The respondent has paid the relevant fees, half of which come to $7,044.00. The applicant shall pay that amount. Its payment is enforceable through the Family Responsibility Office. In the absence of evidence that the respondent enjoyed some kind of “subsidy, benefit or income tax deduction or credit relating to the expense” (see section 7(3) of the Family Law Act ), I am not prepared to guess at what adjustment might otherwise be appropriate.
[ 27 ] The order of Tulloch J. obliges the payment of child support by the applicant at the Guideline amount as applied to his employment income as a unionized teacher, with annual adjustments effective September 1 st . As I understand the evidence, he has not increased his monthly payments since the time of the order, which were $1,531.00 per month. His income from teaching only, for the following years was as follows:
September 1, 2008 $91,267.00;
September 1, 2009 $94,005.00;
September 1, 2010 $94,386.00; and
September 1, 2011 - $97,200.00.
[ 28 ] His monthly obligations relative to child support shall be adjusted to the applicable Guideline amounts. I am not prepared to do the parties’ arithmetic for them relative to calculating the arrears that will result.
[ 29 ] The respondent’s argument that the 2011 income should be $102,351.00 is fallacious as it is based upon an opportunistic interpretation of a paystub, and not the collective agreement referred to in the order.
[ 30 ] SDO to issue.
[ 31 ] If the parties are unable to agree upon costs relative to the trial, they may each make brief written submissions to me in that regard. Each set of submissions, if any, shall be not more than three type-written pages in length not including a costs outline. Such submissions are due on or before August 17, 2012 and shall be forward to my attention at the John Sopinka Courthouse in Hamilton, Ontario.
[ 32 ] Order accordingly.
The Honourable Mr. Justice M. Dale Parayeski
Released: July 12, 2012
COURT FILE NO.: 30159/07
DATE: 2012-07-12
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Nicholas Mills Applicant - and - Anna-Marie Pacula (Mills) REASONS FOR JUDGMENT Parayeski J. MDP//dm
Released: July 12, 2012