ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: F1746-11
DATE: 2012-08-22
BETWEEN:
TAMMY SUSAN HURRELL Applicant – and – DANIEL PATRICK HURRELL Respondent
W. R. Clayton, for the Applicant.
B. D. Barr, for the Respondent
HEARD: August 1, 2012
ENDORSEMENT
m c dermid, j.:
[ 1 ] The applicant wife seeks an order:
for temporary child support;
for temporary spousal support; and
other relief as claimed in the notice of motion found at Tab 14 of the continuing record.
[ 2 ] The respondent husband seeks an order:
for the preservation of assets;
to restrain the wife from depleting assets;
imputing income to her in the annual amount of $50,000; and
for proportionate contribution to extraordinary expenses.
[ 3 ] The main issues on this motion are temporary child and spousal support. I shall deal first with child support, which involves a determination of the parties' income.
[ 4 ] By way of background, the parties were married on August 22, 1998 and separated on January 18, 2010. There are two children of the marriage: Claire Hurrell, born August 20, 1999 and Lauren Hurrell, born February 1, 2001. After establishing separate residences in March, 2010, the parties have followed a joint custody regime. The children spend approximately equal time with each parent.
[ 5 ] As a result, temporary child support must be determined in accordance with s. 9 of the Federal Child Support Guidelines .
[ 6 ] The husband has been has been paying child support of $1,400 a month from July 1, 2010, voluntarily, which he calculated by setting off his alleged 2010 income of $150,000, (which did not include his bonus), against income imputed to the wife of $45,000. Because he had not included his bonus for 2010, he agreed to pay 100% of the children's extracurricular activities. In fact, his 2010 income tax return shows line 150 income of $209,901.66 less employment expenses of $16,016.87 for a total of $193,884.79.
[ 7 ] In paragraph 14 (c) of his affidavit sworn July 16, 2012, the husband provides an estimate of his 2012 income, which includes a bonus he has already received less estimated employment expenses. The calculation is supported by current pay stubs. The estimate for employment expenses is the average of his 2010 and 2011 expenses. The income upon which he seeks to have child and spousal support ordered on this motion is $152,107.62.
[ 8 ] The wife's 2011 income tax return shows line 150 income of $15,225.98. The wife works on a permanent part-time basis at the Cumberland Laser Clinic as a medical esthetician and also carries on a business in partnership under the name of "In the Bling". The partnership conducts parties in private homes to sell fashion accessories. Her partnership income is $3,419 and her employment income is $11,806.98, for a total of $15,225 annually.
[ 9 ] The wife's position is that the support should not be based upon the husband's estimated income but on his actual income from 2011. After deducting employment expenses, his 2011 income was about $191,700.
[ 10 ] For the purposes of this motion, the husband's calculation is the best evidence I have of his current income. Therefore, I base both child and spousal support on the husband's current income of $152,107.62.
[ 11 ] The husband's position is that the wife is not maximizing her employment income and is not declaring all the income from her share of the partnership profits. He asks that income of $50,000 a year be imputed to her based on paragraphs 19 to 36 inclusive of his affidavit sworn July 16, 2012 where he includes a review of her pre-separation income and references to the extremely low profit margin on sales that "makes no sense". He also submits that she has two post secondary degrees and has the ability "to earn substantially more money than she currently reports" and that "her lifestyle is consistent with someone earning a greater income than she reports". He also refers to purchases she has made since separation. I have also considered paragraphs 11 and 12 of the husband's affidavit sworn July 27, 2012 regarding tips she is alleged to have received and the percent of sales given to the hostess of an "In the Bling" house party.
[ 12 ] The wife’s response to the husband's position is found in paragraphs 8 to 33 of her affidavit sworn July 26, 2012. There, she refers to absences from the workforce due to two pregnancies after which she alleges the parties mutually agreed that she would stay at home to care for the children. She returned to the workforce in October 2002 but then again stayed at home to care for the children from August 2005 to April 2007. In April, 2007, she started to work at Cumberland Laser Clinic and started the "In the Bling" partnership in March 2009. Her position is that she is working the maximum number of hours available to her at the clinic and that partnership sales are down due to the poor economy and the corresponding decline in demand for “frivolous products”. She deposes the most she ever earned was $40,000 pursuant to a one-year contract.
[ 13 ] The onus is upon the husband to establish the grounds for imputing income to the wife. With respect to this issue, I am guided by s. 19 (1) of the Federal Child Support Guidelines and in particular subsection (a), upon which the husband relies. At this stage of the proceedings, I have before me conflicting allegations made in untested affidavits. The husband alleges that given the age, education, experience, skills and health of the wife, her past earning history, her lifestyle and the income she could reasonably earn if she worked at capacity, additional income should be attributed to her. However, the wife's position, in summary, is that she is doing the best she can in the circumstances.
[ 14 ] On the basis of the affidavit material before me, I am unable to find on a balance of probabilities that the wife is intentionally under-employed. Accordingly, I decline to impute any additional income to her for the purposes of this motion. This is an issue that can best be determined at trial. Therefore, for the purposes of this motion, I will fix her current income from employment and her partnership at $15,225.
[ 15 ] Attached as Tab 14 J to the husband's affidavit sworn July 16, 2012 is the DIVORCEmate calculation, using the advisory SSAG guidelines and the mandatory Federal Child Support Guidelines , based upon the husband income of $152,808 and the wife's income of $15,226. It provides for child support for two children of $1,842. It also provides the following range for spousal support using the "with child support" formula: Low: $1,776; Mid $2,695; High $3,112.
[ 16 ] In her Financial Statement sworn July 6, 2012, the wife shows monthly income of $2,031.62 and expenses, including expenses for the children, of $2,815.49, thus generating a monthly deficiency of $783.87. Given the circumstances and the fact that this is a temporary order, I fix temporary spousal support in the sum of $1,776 a month plus temporary child support of $1,842 per month, for a total of $3,618 a month. In addition to her own income, this will meet the wife's temporary need for child and spousal support. Also, according to the DIVORCEmate calculations, it will result in each party having about fifty percent of their joint net disposable incomes.
[ 17 ] Temporary child and spousal support totalling $3,618 a month shall be paid on the first day of each month commencing August 1, 2012.
[ 18 ] Ms. Barr submits that such an order will create a hardship for the husband because of his mortgage payment of $2,000 a month. However, I am satisfied that he has the ability to pay the amount ordered for temporary spousal and child support.
[ 19 ] The wife seeks an order that child and spousal support be made payable from April 1, 2010, or, in the alternative from November 1, 2011 when she commenced this application, subject to a credit to the husband for voluntary monthly payments of $1,400. Again, because this is a motion for temporary relief, this issue is better determined at trial.
[ 20 ] The husband seeks a temporary order regarding special or extraordinary expenses. On page 11 of his affidavit sworn July 16, 2012, he claims to have spent $11,950 for extracurricular expenses for the children. He deposes that these expenses do not include "competitions, tournaments or equipment or additional expenses", which he has also paid. In paragraphs 62 to 65 of her affidavit sworn July 26, 2012, the wife deposes that the husband has not provided any receipts to support his expenses and that his 2011 income tax return claims a total of $659 for the children's activities and $1,674 in total for extraordinary expenses. She also points out that he received a tax deduction for child care expenses.
[ 21 ] The issue of extraordinary expenses incurred prior to August 1, 2012 is adjourned to be dealt with at trial. I make a temporary order that extraordinary expenses incurred on and after August 1, 2012 be shared by the parties in proportion to their respective incomes. The party seeking to incur the expense shall notify the other party in advance of details of the nature and amount of the expense and, although the husband feels it is "an extremely tedious exercise", shall provide a receipt for it after it is incurred. If the parties are unable to agree with the assistance of counsel about whether the expense is authorized by s. 7 of the Federal Child Support Guidelines , they are at liberty to have the issue determined on motion to the court.
[ 22 ] On the basis of the material before me, I make the following additional temporary orders, to remain in force until varied by agreement in writing or by any future order of the court:
Each party shall be and is hereby restrained from disposing of or depleting any assets in her or his possession or control, either directly or indirectly, including through a corporation or partnership, except in the ordinary course of business and upon 15 days prior notice to the other party.
Each party shall preserve assets owned personally by that party or on or behalf of that party.
The husband shall maintain the wife as the irrevocable beneficiary of his life insurance policies for so long as he obliged to pay child or spousal support to the wife.
The husband is ordered to maintain the wife and the children as beneficiaries of any extended health care benefits available to them through his employment or under private contract.
[ 23 ] If counsel are unable to settle the issue of costs, Mr. Clayton shall deliver submissions to Ms. Barr within 15 days; Ms. Barr shall respond within 15 days and both counsel shall file their submissions, not to exceed five pages in length, within 35 days, after which I will make an order for costs on the basis of the material before me.
Mr. Justice D. R. McDermid
Released : August 22, 2012.
COURT FILE NO.: F1746-11
ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: TAMMY SUSAN HURRELL Applicant – and – DANIEL PATRICK HURRELL Respondent ENDORsEMENT Mr. Justice D. R. McDermid
Released: August 22, 2012.