Court File: FS-97-10
DATE: 2012-12-06
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JODY KENNTH SCOTT CARRIGAN
Applicant
- and -
LEONA MICHELLE BREWER
Respondent
C. Richard Buck, for the Applicant
Michael David Lannan, for the Respondent
HEARD: September 20, 24, and 25, 2012
The Honourable Mr. Justice D. A. BROAD
Background
(a) The Parties and Separation
[1] The Applicant Mr. Carrigan and the Respondent Ms. Brewer began living together in October, 1991 and separated on October 10, 2005. They never married, but had two children together, Jacob, born December 11, 1994 and Daniel, born September 27, 1996.
[2] Although not married, the parties handled all of their financial affairs during their co-habitation jointly, pooling all of their resources and jointly purchasing two residences in succession, first a home on East Avenue, Kitchener, followed by the property on Oneida Place, Kitchener, which is the subject of this proceeding.
[3] Following their separation in October 2005 they were able to work cooperatively on resolution of most of the issues between them, including custody and access of their children and the amount of monthly child support to be paid by Mr. Carrigan. However, they were not able to resolve how to deal with the Oneida property and approached a lawyer, Ms. Rudavsky for assistance. They met together with Ms. Rudavsky and a Separation Agreement was prepared and executed by them, on the basis that Ms. Rudavsky was acting for Mr. Carrigan and Ms. Brewer was waiving the benefit of independent legal advice.
[4] A backdrop to the Separation Agreement was the plan of the parties that Mr. Carrigan would acquire a condominium on Hofstetter Avenue, nearby to the Oneida property, would move out of the Oneida residence once the purchase of the condominium was completed, and Ms. Brewer would remain in the Oneida property with the children, at least until the youngest child entered high-school. The evidence indicated that the parties’ banker required a written separation agreement to be entered into by the parties, and Mr. Carrigan’s removal from the title to the Oneida property, as a condition of approval of the financing for the condominium purchase. The Separation Agreement was entered into on December 19, 2005 and Mr. Carrigan physically moved out of the Oneida property on March 1, 2006.
(b) Background to Property Issue
[5] The meaning and effect of the Separation Agreement, insofar as it dealt with the Oneida property, was a major focus of the trial of this proceeding.
[6] The Separation Agreement at paragraph 19(2) provided that Mr. Carrigan would transfer his interest in the Oneida property to Ms. Brewer. That transfer was completed coincidently with the execution of the Separation Agreement.
[7] Paragraph 22 of the Separation Agreement was entitled “Division of Property/Equalization,” without any acknowledgement that the equalization provisions of the Family Law Act did not apply to the parties since they were never married. After a recitation that the parties acknowledged having been advised of their rights to the “equalization of their net family properties under the Family Law Act” and that the division of assets and liabilities under the agreement fully satisfied any entitlement either party may have to an equalization of their net family properties, subparagraph 22(c) provided as follows:
(c) the payment of any equalization shall not be determined until July 1, 2010, when the last of the children shall be attending High School, and the parties shall consider any reduction in child support that has been paid in the interim, the current and future value of the family residence and the current and future equity in the home as well as any other costs associated with any sale thereof.
[8] Mr. Carrigan, in reliance on paragraph 22(c) of the Separation Agreement, advances a claim to a half-interest in the current fair market value Oneida property, now that the July 1, 2010 trigger date for “determination” of “payment of any equalization” has passed, on the basis of a “remedial constructive trust”. Under the heading “Previous Cases or Agreements” in his Application, Mr. Carrigan claims that Ms. Brewer is “refusing to comply with the spirit” of the Separation Agreement.
[9] In her Answer, Ms. Brewer states that, as the parties were never married, “there should not have been a property sharing regime imposed upon them.” Her counsel argued at trial that the effect of the separation agreement was to implement a plan whereby she would remain in the Oneida property with the children, would accept child support in an amount less than that provided for in the Child Support Guidelines and would advance to Mr. Carrigan the sum of $11,900.00 for the down payment on the on Hofstetter property in exchange for Mr. Carrigan releasing his interest in the Oneida property. She argues that paragraph 22(c) of the Separation Agreement should be read out of the agreement under section 56(4)(b) of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) on the basis that she did not understand the nature or consequences of the provision. In the alternative, she argues that, if the clause is not to be read out of the agreement, upon taking into consideration all of the relevant factors, including the values of the Oneida and Hofstetter properties, the underpayment of child support by Mr. Carrigan and other assets, no equalization would be required. She also argues that she should be awarded an interest in the Hofstetter property by virtue of her having advanced the down payment for its purchase to Mr. Carrigan.
(c) Background to Child Support Issue
[10] There have been changes in the living arrangements of the parties’ two children subsequent to the date of separation and the execution of the Separation Agreement. From March 2006 to the end of 2007 both children primarily resided with Ms. Brewer. Commencing in January 2008 the parties implemented a "week-about" arrangement. Effective May 2010 Jacob began residing with Mr. Carrigan full-time and Daniel split his time between Ms. Brewer and Mr. Carrigan.
[11] The Separation Agreement provided for Mr. Carrigan to make monthly child support payments of $800, which was significantly less than the guideline amount based on Mr. Carrigan's income. When the change to the "week-about" arrangement took effect, Mr. Carrigan unilaterally reduced his monthly child support payments to $400.00. An interim order was taken out in December 2010, on consent, reducing Mr. Carrigan’s monthly child support payments to $236.00 to reflect the changes in the living arrangements of Jacob.
[12] The parties disagree with respect to the characterization of Daniel’s residency arrangement for the purposes for the purposes of the Child Support Guidelines.
[13] Mr. Carrigan argues that, on a correct analysis of the residency arrangements of the children over the period subsequent to separation, he has overpaid child support in the sum of $7,226.00 to September 2012, and that Ms. Brewer is obliged to pay ongoing child support to him in the sum of $89.00 per month. Ms. Brewer argues that Mr. Carrigan has underpaid child support in the sum of $23,251.00 to September 2012 and that he is liable to pay ongoing child support to her in the sum of $229.00 per month.
Issues
[14] The issues for determination are as follows:
Did paragraph 22(c) of the Separation Agreement have the effect of preserving an interest for Mr. Carrigan in the Oneida property?
Should paragraph 22(c) of the Separation Agreement by set aside on the basis that Ms. Brewer did not understand the nature or consequences of it?
Does Mr. Carrigan have a claim to an interest in the Oneida property on the basis of remedial constructive trust and if so, in what amount?
If Mr. Carrigan has an interest in the Oneida property, does Ms. Brewer have a corresponding interest in the Hofstetter property?
What was the effect of the changes in the living arrangements of the children on the obligations of the parties to pay child support?
Analysis
(a) Meaning and Effect of paragraph 22(c) of Separation Agreement
[15] It is trite law that a provision in a contract is to be read in the context of the contract as a whole. It is therefore useful to examine the entire Separation Agreement in order to attempt to discern the meaning an effect of paragraph 22(c).
[16] In paragraph 2 entitled “Background” it is stated that “this Agreement is entered into on the basis of the following, among other, facts,” following which is listed four paragraphs. Paragraph 4 provides that the parties desire to settle by agreement all their rights and obligations with respect to various matters, including “possession, ownership, equalization and division of their property.”
[17] Paragraph 19 deals with the Family Residence and provides at subparagraph (b), after reciting that they held it as joint tenants, that “the parties agree to convey any and all right, title or interest either may have in the home to [Ms. Brewer] pursuant to the provisions of this agreement.” The parties agreed to sign any and all documentation required to give effect to such conveyance at the time the Separation Agreement was executed.
[18] As indicated above, paragraph 22 deals with “Division of Property/Equalization” and at subparagraph (c) the statement that “the payment of any equalization shall not be determined until July 1, 2010” is made. The provision directed that the parties “shall consider” various matters including “any reduction in child support that has been paid in the interim, the current and future value of the family residence and the current and future equity in the home as well as any other costs associated with any sale thereof.”
[19] Each of the parties testified as to what they thought paragraph 22(c) meant and what was intended by it. Ms. Rudavsky, who drew the agreement on the parties’ joint instructions, also testified with respect to the circumstances under which it was prepared and her discussions with the parties at that time.
[20] It is noted that counsel for Ms. Brewer did not rest his argument on a suggestion that paragraph 22(c) of the Separation Agreement lacked sufficient certainty to be enforced. However, the question is raised squarely by the wording of the provision and, if necessary, the allegation in the Respondent’s pleading that “there should not have been a property sharing regime imposed upon them” is broad enough to encompass it as an issue. Moreover, it was addressed by counsel for the Applicant in argument. In any event, it is, in my view, incumbent on the court, when called upon to give effect to a contractual provision, to consider whether its wording, in the context of the entire agreement and all relevant and admissible evidence, is capable of enforcement in the manner sought by the party seeking to enforce it.
[21] It is well-established that the test for interpretation and certainty of the terms of a contract is objective. One party’s views about the agreement, or how it would later work, not agreed to by the other side, is irrelevant. See Ko v. Hillview Homes Ltd. 2012 ABCA 245, 2012 CarswellAlta 1759 (Alta. C.A.) at para. 26, citing, among other cases, Eli Lilly & Co. v Novopharm 1998 CanLII 791 (SCC), [1998] 2 SCR 129.
[22] The question for determination is whether the parties, by the words that they used in paragraph 22(c) of the Separation Agreement, read in the context of the entire agreement, intended to create a binding obligation on Ms. Brewer to account to Mr. Carrigan for any part of the value of the Oneida property on July 1, 2010, notwithstanding the conveyance to her of his interest therein at the time of the making of the agreement, and if so, how that interest is to be quantified.
[23] The principles governing the creation of contractual obligations were very usefully summarized by Justice Healey in the recent case of Picavet v. Clute 2012 CarswellOnt 4575 (SCJ) at paras. 9 to 13. The principles which are relevant to this matter can be listed as follows, as extracted from Picavet v. Clute, and the cases therein referred to:
(a) the test of agreement for legal purposes is whether parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract, and the terms of such contract;
(b) the law is not concerned with the parties' intentions but with their manifested intentions. It is not what an individual party believed or understood was the meaning of what the other party said or did that is the criterion of agreement; it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms;
(c) a contract will not exist if it lacks the requisite certainty and clarity;
(d) no contract exists if the essential provisions that were intended to govern the contractual relationship have not been settled or agreed upon, or the contract is too general or uncertain;
(e) where terms are missing or have not been finalized, or there is some ambiguity about the precise meaning of what the parties appear to have agreed to, the general tenor of the decisions is against any possibility of completing the parties' work for them and creating a valid contract out of vague contractual intent that may be evidenced by their language or conduct; and
(f) the court cannot make a contract for the parties if they have not agreed upon its material terms.
[24] In my view the principles governing the creation of a contract apply equally to the creation of a contractual obligation within a larger comprehensive contract – in this case an obligation to equalize the parties’ properties at a future time.
[25] The case of Neher v. Kossowan, 2008 CarswellAlta 847 (Alta QB) confirmed that when construing an agreement, the court must give effect to the plain meaning of the words used unless it would result in an absurdity to do so. Words other than terms of art are to be construed in their ordinary and natural sense. It is also noted that the same rules govern the interpretation of domestic contracts as govern the interpretation of contracts generally (see Krone v. Krone, 2011 CarswellNfld 67, at para. 112 quoting James G. McLeod & Alfred A. Mamo, Annual Review of Family Law, (Toronto: Thomson Carswell, 2008) at page 625.)
[26] It is apparent from a simple reading of subparagraph 22(c) that the parties left for future determination the payment of “any equalization” of their net family properties, leaving aside the question of whether they ever had, as unmarried common-law spouses, any equalization obligation to one another under the Family Law Act in any event. The provision does not include a fixed methodology or formula by which the “determination” is to be made, but rather identifies certain factors which the parties “shall consider”.
[27] In my view, any contractual provision should be read generously in order to find the existence of a binding obligation if the language is capable of supporting it. However, the specific language used by the parties in this case does not simply defer payment of an equalization which the parties might have determined to be obligatory. Rather, the parties, by the language of the provision, deferred a “determination” of whether such an obligation should be imposed at all. The question of whether there should be an equalization, as well as the calculation of such equalization, if there is to be one, was left open for future negotiation. The use of the prefix “any” before “equalization” confirms that the parties had not decided that there should, or would be, an “equalization” and the use of the word “consider” confirms that they intended that the calculation of any such equalization would be fully open to negotiation. The language used by the parties, in my view, is incapable of supporting the creation of a binding obligation to “equalize” their net family properties on July 1, 2010. The clause is a classic “agreement to agree.”
[28] Professor Fridman observed in The Law of Contract in Canada (2006 5th ed.) at pp. 22-23 that there may be circumstances where the parties have made an “agreement to agree” where the court may enforce an obligation to negotiate in good faith, as follows:
There cannot be a contract to enter into a contract. Nor can there be a contract to negotiate, i.e. an agreement to agree. The underlying principle is that all of the terms of the agreement between the parties must be settled. There must be nothing left for negotiation. However, while an agreement to agree is not enforceable as a contract, an agreement which leaves a price to be negotiated can create an obligation to negotiate in good faith and not to withhold agreement unreasonably.
[29] The leading case cited by Professor Fridman in support of the foregoing proposition was Empress Towers Ltd. v Bank of Nova Scotia (1990) 73. DLR (4th) 400 (BC CA) leave to appeal refused [1991] 3 WWR xxvii (SCC), involving an option to renew a commercial lease where the parties evidenced an intention to grant to the tenant an option to renew, but left to future negotiation the determination of the amount of the prevailing market rent at the time the option was exercised. It is noteworthy that Justice Lambert, writing for the majority, made it clear, at para. 9, that the key to implying terms that the landlord would negotiate in good faith and that agreement on market rental would not be unreasonably withheld, was that the parties had agreed that there should be a right of renewal at the prevailing market rental. The terms were to be implied under the officious bystander and business efficacy principles in order to prevent the renewal clause, which was clearly intended to have legal effect, from being struck down as uncertain.
[30] In contrast, in the present case, it cannot be said that the parties clearly stated that there would be an equalization, but rather they stated that the payment of “any” equalization would not be determined until the future date. The courts have consistently maintained that they should not supply essential terms necessary to convert an “agreement to agree” into a concluded contract, even if such an implied agreement may be considered to be very fair and one calculated to do justice between the parties, if it was not the agreement the parties reached or intended. See Kelly v. Watson 1921 CanLII 23 (SCC), [1921] 1 WWR 958 (SCC).
[31] In my view, the dispute resolution provisions at para. 36 of the Separation Agreement do not assist Mr. Carrigan on the issue of whether subparagraph 22(c) preserved to him a claim to an interest in the Oneida property. Subparagraphs 36(1) to (4) provided for negotiation and possibly mediation “of any differences between [the parties] on any matter in this agreement.” Subparagraph (5) stated that “if it is unreasonable to expect a difference between the parties to be resolved by negotiation or by continued negotiations under paragraph (1) and (4) herein, any such difference will be resolved by a Court of competent jurisdiction upon application brought by either party.”
[32] The statement that any differences between the parties “on any matter in this agreement” shall be resolved by a court of competent jurisdiction adds nothing to the common law principle that disputes respecting the interpretation and enforcement of contractual obligations are to be resolved by the court, in the absence of a binding arbitration provision. It does not clothe the court with any additional power to impose an agreement to “equalize” the parties’ properties at a future date, and the terms thereof, where the parties themselves have not manifested an intention to create an obligation for such equalization. It is only where the parties have clearly created an obligation, and the price or value thereof is capable of objective discernment, that the court will supply that price or value. See Mitsui & Co. (Canada) Ltd. v Royal Bank 1995 CanLII 87 (SCC), [1995] 2 SCR 187 at para. 35. In this case, in the absence of any objective standards for weighing of various factors to be “considered” on an equalization, the court would be left with crafting a solution based on an externally imposed sense of what is “fair.” The parties themselves chose not to provide a methodology for such a determination in their agreement and they now come, in this proceeding, with diametrically opposed conceptions of what would be “fair.”
[33] Neither party took the position that parol evidence respecting the discussions between them and with Ms. Rudavsky at the time of preparation and execution of the Separation Agreement should not be received and utilized to assist in determining what the parties intended, notwithstanding the customary limitations on the use of parol evidence to assist with interpretation of a contract.
[34] Ms. Rudavsky, who was called by the Applicant under summons, testified that she went over the draft Separation Agreement with the parties paragraph by paragraph. She stated that although the parties signified to her that there should be a payment to Mr. Carrigan in respect of the equity in the Onieda property, she had trouble trying to get from them a formula or detailed calculation for such payment. They both advised that they wanted it to be a flexible calculation which they would do in the future. She tried to get them to agree on a firm number but it was quite evident to her that neither party was interested in a firm number and they “could calculate the terms at the end of the day.” She testified that, although there was an expectation by the parties that there would be something paid to Mr. Carrigan in the future, part of her problem was “getting something fixed for them.” Her understanding was that there would be a payment to Mr. Carrigan in the future, but “based on their conditions” and “the exact amount to be paid to him would be very difficult to say.”
[35] On cross-examination Ms. Rudavsky admitted that she could not figure out what paragraph 22(c) meant. She also acknowledged that the effect of para. 19 of the agreement was that Ms. Brewer would receive sole title to the Oneida property, entitling her to do what she wanted with it. She could dispose of the property at will or could re-mortgage it. Ms. Rudavsky stated that this “was part of my concern.”
[36] Ms. Rudavsky testified that because of the number of considerations that would go into a determination of an amount to be paid to Mr. Carrigan in the future, para. 22(c) “was too vague for future determination” and she expressed that to both parties.
[37] Mr. Carrigan testified that it was his basic idea that para. 22(c) be drawn in the way that it was. He stated that his concern at the time was that the children be safe with their mother in the house on Oneida. He thought that after five years, when the youngest child entered high school, “I would get what was mine out of the house.” He testified that Ms. Brewer agreed to this.
[38] On her Questioning, read into the record as part of the Mr. Carrigan’s case, Ms. Brewer at questions 288 to 290, stated that both parties intended that the sum of $11,900.00 that she contributed to the down payment on the Hofstetter property was what Mr. Carrigan was getting for his interest in the Oneida property, in exchange for “drastically reduced child support payments.”
[39] In my view, even if it is admissible, the parol evidence of the parties themselves, which conflicts, and that of Ms. Rudavsky, which serves to confirm the uncertainty and vagueness of the provision, does not assist in giving the provision respecting a future “equalization” any greater certainty or support for an enforceable legal obligation. Ms. Rudavsky’s handwritten note to her file, made on the date of her meeting with the parties, in which she noted “property split already – no issue with joint debts – divided already – worked out between them – equity to be paid later” does not add to her evidence, nor does it assist with the interpretation of the provision. The meaning of the provision is to be discerned from the language used rather than from external notes of the lawyer who drew the document.
[40] Counsel for Mr. Carrigan put to Ms. Brewer a 2007 handwritten letter in which she advised Mr. Carrigan “No I am not agreeing to your new terms. We have an agreement already in writing, signed by a lawyer. You pay $800/month child support and the equalization of assets will be revisited in 4 years. Not every 4 wks when you get upset.” In my view, this letter does not assist to establishing a binding obligation on Ms. Brewer to “equalize” the parties’ assets in July 2010. It was not made contemporaneously with the agreement and appears to be part of a negotiation, however brief, with respect to proposed changes to the arrangement reflected in the agreement. Moreover, the reference to “revisiting” adds no further certainty to the provision itself which speaks of “any equalization.” “Revisiting” connotes a negotiation, consistent with the parties having made an agreement to agree.
(b) Claim for Remedial Constructive Trust
[41] As an alternative to reliance on para. 22(c) of the Separation Agreement, Mr. Carrigan claims in interest in the equity in the Oneida property based upon unjust enrichment or “remedial constructive trust” principles, relying on the recent case of Kerr v. Baranow/Vanasse v. Seguin 2011 SCC 240. In Kerr, Justice Cromwell, writing for the Court at para. 87, stated that “when the parties have been engaged in a joint family venture, and the claimant’s contributions to it are linked to the generation of wealth, a monetary award for unjust enrichment should be calculated according to the share of the accumulated wealth proportionate to the claimant’s contributions.”
[42] There is no question that the relationship between the parties in this case was a “joint family venture.” All of their financial arrangements were pooled and shared equally, including joint ownership of the Oneida home property. This was not a case where assets were held by the parties disproportionately. The background facts in the Kerr/Vanasse case exemplify situations of unequal wealth accumulation in a common-law relationship where the court may be called upon to apply unjust enrichment principles to compensate a contributing partner having a lesser share of accumulated wealth on separation.
[43] In this case, all of the parties’ assets were shared equally on separation. It was the parties themselves who, post-separation, crafted an arrangement by means of the Separation Agreement, whereby Mr. Carrigan conveyed his interest in the Oneida property to Ms. Brewer. In my view the principles in Kerr therefore have no application to this matter.
(c) Claim for Resulting Trust
[44] Mr. Carrigan argues that the conveyance of his interest in the Oneida property was gratuitous, and that, as a consequence, a presumption of resulting trust applies and that Ms. Brewer has not discharged her onus of showing that a gift was intended. He relies upon the case of Pecore v. Pecore 2007 SCC 17 in this respect. The Supreme Court in Pecore reaffirmed the doctrines of the presumptions of resulting trust and advancement and laid down principles for their application in the context of modern social conditions. At para. 24 Justice Rothstein, stated that “the presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers” and went on to state that “where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended.”
[45] In this case, the conveyance of the interest of the Oneida property by Mr. Carrigan was done pursuant to the Separation Agreement, by which the parties comprehensively settled various issues between them, including an intention to live separate and apart and to refrain from interfering with one another, custody and access of their children, child support, release of any claim for spousal support, contribution to extraordinary expenses of the children, maintenance of health care benefits, designation of the children as beneficiaries under a life insurance policy, division of personal property, and mutual releases of claims against one another’s property and estates. Moreover, the Separation Agreement was stated to be executed by the parties under seal. It is therefore difficult to see how the conveyance provided for in the Separation Agreement can be characterized as a gratuitous transfer, particularly since, as part of the overall arrangement, Ms. Brewer agreed to provide the down payment on the Hofstetter property to be acquired by Mr. Carrigan.
[46] Importantly, pursuant to para. 25(b) of the Separation Agreement, both parties released all rights to an interest in property owned by the other which he or she had or may thereafter acquire, including all rights to an interest in “(6) any resulting constructive or other type of trust.”
[47] For the reasons set forth above, I find no basis for Mr. Carrigan’s claim to an interest in the Oneida property. It light of this finding it is not necessary to consider Ms. Brewer’s claim that para. 22(c) of the Separation Agreement be set aside under section 56(4)(b) of the Family Law Act.
[48] It is similarly not necessary to consider Ms. Brewer’s claim to an interest in the Hofstetter property by virtue of her contribution to the down-payment for its acquisition by Mr. Carrigan. It formed part of the overall arrangement surrounding the Separation Agreement and was not a gratuitous payment giving rise to a presumption of resulting trust or a claim for unjust enrichment.
(d) Child Support
[49] The parties are agreed that for the period from the date of separation in March, 2006 to the end of December, 2007 the two boys resided primarily with Ms. Brewer. During that period Mr. Carrigan paid child support in the sum of $800.00 per month pursuant to the Separation Agreement, which was significantly less than the amounts mandated by the Child Support Guidelines. The parties are agreed that the aggregate differential between the guideline amount and the amount actually paid by Mr. Carrigan for this period is $9,774.00.
[50] Commencing in January, 2008, the parties implemented a modified “week-about” arrangement, whereby the boys resided with Mr. Carrigan in Week 1 from Wednesday after school to Friday before school (2 nights) and in Week 2 ordinarily from Wednesday after school to Monday before school (5 nights) resulting in an effective 50/50 shared parenting arrangement. Although Ms. Brewer disputed that there was a 50/50 shared parenting arrangement during this period, I am satisfied, on the basis of admissions made by her on cross-examination, that this change was implemented and was maintained until May, 2010. During this period Mr. Carrigan continued to pay child in the support the sum of $800.00 per month.
[51] In May, 2010 Jacob began living full-time with Mr. Carrigan. However, the parties disagree on the situation of Daniel as it pertains to the Child Support Guidelines. The evidence is that during the periods that he was to be in the care of Ms. Brewer under the modified “week-about” arrangement he was at Mr. Carrigan’s home “hanging-out” with Jacob, who both parties agreed was his “best friend.”
[52] On cross-examination, Ms. Brewer acknowledged and confirmed the answers given by her on her Questioning that, during her times to have him in her care, Daniel goes to Mr. Carrigan’s home every morning at 7:30 a.m., catches the school bus there at 8:15 a.m., comes back to Mr. Carrigan’s home after school at 3:30 p.m. and stays until about 6:00 p.m., before returning to Ms. Brewer’s home for dinner. He typically returns to Mr. Carrigan’s home at 7:00 or 7:30 p.m. until 10:00 p.m. and then returns to Ms. Brewer’s home at 10:00 p.m. and sleeps there. On the weekends, when he would be scheduled to be at Ms. Brewer’s home, he spends much of each day at Mr. Carrigan’s home, except for dinner, “hanging-out” with Jacob, returning to Ms. Brewer’s home at 10:00 p.m. to sleep over.
[53] Beginning in the spring of 2012 Daniel has had a part-time job on weeknights and weekends. Aside from his time at work, the pattern of eating dinners and sleeping at Ms. Brewer’s home during the periods during which he is to reside with her under the arrangement has continued. He leaves for work on the weekends from the home of whichever parent is scheduled to have him.
[54] The parties disagree on the characterization of the Daniel’s living pattern for the purposes of the Child Support Guidelines. Mr. Carrigan argues that Daniel resides with Mr. Carrigan most of the time, and calculates the respective child support obligations of the parties as one child (Jacob) full-time with Mr. Carrigan, and one child (Daniel) half-time with each parent. Ms. Brewer argues for a calculation based on one child with each parent, resulting in a straight set-off.
[55] Section 9 of the Child Support Guidelines provides that where a parent exercises access or has physical custody of a child for at least 40% of the time over the course of a year the amount of the order for support must be determined by taking into account three factors – (a) the amount set out in the applicable tables for each parent; (b) the increased costs of shared custody arrangements and (c) the conditions, means, needs and other circumstances of each parent and of any child for whom support is sought.
[56] I am satisfied on the evidence, that in May, 2010 Jacob began living full time with Mr. Carrigan and that Daniel carried on with the 50/50 week-about arrangement, as suggested by counsel for the Applicant. I do not accept that Daniel’s habit of going to “hang-out” with his brother at Mr. Carrigan’s home, had the effect of altering the 50/50 “week-about” arrangement or reducing the time spent with Ms. Brewer below 40%. Daniel continued to have dinner and to sleep at his mother’s home during the times that she was to have physical custody of him. “Hanging-out” with his brother did not, in my view, constitute an increase in Mr. Carrigan’s parenting time during those periods. It was simply that the boys enjoyed each other’s company, and Jacob lived at his father’s home and that is where they spent their time together. There is little evidence that during those times Mr. Carrigan assumed parental time and responsibility from Mr. Brewer. To the contrary, Ms. Brewer testified that Daniel continued to look to her to deal with his daily needs and concerns, often by telephone, from school and from Mr. Carrigan’s home.
[57] Ms. Brewer is responsible to pay child support in respect of Jacob commencing in May, 2010 according to the Child Support Guidelines.
[58] With respect to Daniel, the court is obliged to take the three factors in section 9, listed above, into account in determining the amount of an appropriate support order.
[59] The Supreme Court of Canada dealt with the approach to be taken by the court on the exercise of discretion under section 9 in the case of Contino v. Leonelli-Contino 2005 SCC 63. The steps to be taken are 1) a determination of the parties’ income; 2) a determination of each party’s monthly expenditures attributable to the child, based on their respective budgets; 3) determination of the ratio of income between the parties; and 4) consideration of the net worth of the parties.
[60] In this case, neither party led any budgetary evidence. The evidence did indicate that the percentage of Mr. Carrigan’s income to the combined income of the parties was 61.5% in 2010, 60.3% in 2011, and 59.3% in 2012.
[61] At paragraph 39 of Contino Justice Bastarache, writing for the majority, directed that “the specific language of s. 9 warrants emphasis on flexibility and fairness” and that the exercise of discretion by courts “calls for the acknowledgement of the overall situation of the parents (conditions and means) and the needs of the children. The weight of each factor under s. 9 will vary according to the particular facts of each case.”
[62] According to the calculations provided by the Applicant (Ex. 8), on a straight set-off basis, the monthly guideline support payable by Ms. Brewer to Mr. Carrigan from May to December, 2010 was $40.00, $79.00 for 2011 and $89.00 for 2012.
[63] Given the disparity in the parties’ relative incomes, and on the basis that a child who lives in two households should enjoy similar lifestyles ( see the annotation by Professor Jay McLeod to Green v. Green (2000), 2000 BCCA 310, 6 R.F.L. (5th) 197 (B.C. C.A.) in this respect), I would reduce the amount of monthly support to be paid by Ms. Brewer by 25% to $30.00 for 2010, $60.00 for 2011 and $65.00 for 2012. I would similarly reduce the amount attributed to Ms. Brewer in the set-off calculation for the period January 2008 to April 2010 by 25%.
[64] As indicated above, the differential between the amount of child support paid by Mr. Carrigan and the amount mandated by the guidelines was $9,774.00 in the aggregate for the period from the Separation Agreement to January 2008. However, the sum of $800.00 per month was the amount of child support negotiated and agreed to by the parties in the Separation Agreement and formed an integral part of the total arrangement made by them on separation. Paragraph 17(1) of the Separation Agreement provided that the amount of child support set out in the agreement may be varied if there is a material change in circumstances of the parties or the children. The change of circumstances did not take place until the parties adopted the modified “week-about” arrangement in January 2008. I therefore see no basis for altering Mr. Carrigan’s child support obligation for the period prior to that change.
[65] For the period January 2008 to April, 2010 Mr. Carrigan made child support payments of $800.00 per month. On the basis of the set-off, reduced for Ms. Brewer by 25% as set forth above, Mr. Carrigan overpaid by $1,278.00 in 2008, underpaid by $306.00 in 2009 and overpaid by $771.00 for January to April 2010, for an aggregate overpayment for that period of $1,743.00.
[66] From May to November, 2010 Mr. Carrigan made monthly child support payments of $400.00, and $236.00 per month from December, 2010 to September 2012, for a total paid for that period of $7,992.00. Ms. Brewer’s total obligation for that period, based upon the monthly payments set forth above, was $1,545.00, resulting in a total amount owing to Mr. Carrigan for that period of $9,537.00.
[67] In summary, Ms. Brewer owes to Mr. Carrigan the aggregate sum of $11,280.00 for the period January, 2008 to September, 2012, reflecting her underpayment of child support and his overpayment.
Disposition
[68] For the reasons set forth above, it is ordered as follows:
(a) The claim of the Applicant for an interest in the property described as 57 Oneida Place, Kitchener, Ontario, based upon a remedial constructive trust or otherwise, is dismissed;
(b) The Respondent shall pay to the Applicant the sum of $11,280.00 in respect of retroactive child support for the period January 2008 to September 2012;
(c) The Respondent shall pay interest on the said sum of $11,280.00 at the rate of 0.4 % per annum calculated from January 1, 2008 to the date of this Order;
(d) The Respondent shall pay post-judgment interest on the said sum of $11,280.00 at the rate of 3% per annum from the date of this Order to the date of payment;
(e) The Respondent shall pay child support to the Applicant in the sum of $65.00 per month commencing October 1, 2012, based upon the set-off amounts under the Federal Child Support Guidelines, discounted by 25%, in respect of one child having his primary residence with the Applicant, and one child being in the equal care of the Applicant and the Respondent , and based upon the Applicant’s 2012 income being $80,080.00 and the Respondent’s income being $54,802.00;
(f) The amount of child support shall be adjusted annually based upon changes in the parties respective incomes, on the basis set forth above; and
(g) The parties shall share post-secondary education expenses of the children under section 7 of the Child Support Guidelines in proportion to their respective incomes.
[69] The parties may make brief submissions (not to exceed three typewritten pages, exclusive of Bills of Costs, Offers to Settle and legal authorities) with respect to costs by January 11, 2013.
___________________________
D. A. BROAD, J.
Released: December 6, 2012