SUPERIOR COURT OF JUSTICE – ONTARIO
FAMILY COURT
COURT FILE NO.: F630/10
DATE: December 21, 2012
RE: LLEWELYN MARK COLE , applicant
AND:
**CHRISTINE MARIE COLE , respondent
BEFORE: VOGELSANG J.
COUNSEL:
David J. Ashford for the applicant
Christine Marie Cole in person
HEARD: October 23, 26, 2012
ENDORSEMENT
[ 1 ] The parties married on May 11, 1996 and separated June 29, 2009. They have two children: Matthew Adam Cole and Mason Christopher Cole, born September 14, 2001 and June 10, 2003 respectively.
[ 2 ] On February 5, 2010, the parties executed a separation agreement which settled the issues arising from their union. That agreement set out detailed provisions for access to the boys by Mr. Cole and contained the following child support terms:
5.1 In this section,
(a) “Table” and “income” mean “Table” and “income” as those terms are defined in s. 2(1) of the Guidelines,
(b) “special or extraordinary expenses” means “special or extraordinary expenses” as this phrase is defined in s. 7(1) of the Guidelines,
(c) “child support” refers to the monthly amount upon which the parties have agreed and may include both Table support and special or extraordinary expenses.
5.2 For purposes of determining child support for Matthew and Mason, Christine’s annual income is $36,685 and Llewelyn’s annual income is $48,000 comprised of $36,000 in salary and $12,000 per annum in cash income (grossed-up for income taxes).
5.3 Llewelyn will pay to Christine as child support for Matthew and Mason:
(a) the Table amount of $750, starting February 1, 2010. Llewelyn will make his payments twice a month by paying $375 on the 1 st and 15 th of each month; and
(b) his share of the special or extraordinary expenses as set out in the applicable special or extraordinary expenses sections below;
until a terminating event or variation occurs.
5.4 The children’s current special or extraordinary expenses are:
(a) daycare or summer camps to replace daycare in the approximate annual amount of $4,764 on a net of tax basis.
5.5 For apportioning of special or extraordinary expenses, Llewelyn’s income is 54.8 percent of the parties’ combined incomes. Therefore, Llewelyn will pay to Christine 54.8 percent of the children’s special or extraordinary expenses in the amount of $218 per month, starting on February 1, 2010. He will make these payments twice monthly in the amount of $109 on the 1 st and 15 th of each month.
5.6 In the event that the parties do not use childcare services during the summer, Christine will reimburse Llewelyn his 54.8% share for such time period as the childcare is not used.
5.7 The parties agree that additional special or extraordinary expenses will include non-covered medical and dental expenses and post-secondary education expenses. Llewelyn will pay 54.8 percent of these future expenses as they arise.
5.13 By May 15 th of each year, the parties will exchange their income tax returns and any other relevant income information to determine the appropriate amount of child support and section 7 expenses payable by Llewelyn to Christine.
5.15 In addition, either Christine or Llewelyn may seek a change in child support if there is a material change in the condition, means, needs or other circumstances of Christine, Llewelyn, Matthew or Mason that would affect child support.
5.16 A material change in the condition, means, needs or other circumstances of the parents or children may be foreseen or unforeseen, foreseeable or unforeseeable, and may include:
(a) a material change in either party’s financial position,
(b) a change causing undue hardship for either party or the children,
(c) a change in the number of children entitled to receive support under this Agreement,
(d) a change in the child’s special or extraordinary expenses,
(e) a change in the child’s residence that affects the amount of child support under the Guidelines,
(f) a change in the child’s need for support.
5.17 Christine may claim the Canada Child Tax Benefit including the National Child Benefit Supplement and the eligible dependant credit (formerly, equivalent-to-spouse credit) for the children. These benefits will not affect the child support in this Agreement.
[ 3 ] Also contained in the contract was a paragraph outlining the agreed procedure where a change could be sought to a “reviewable section.” Subparagraphs 6.1 and 6.2 are as follows:
6.1 If Christine or Llewelyn seeks a change in a reviewable section of this agreement, he or she will give the other, in writing:
(a) notice of the proposed change,
(b) evidence supporting the proposed change, and
(c) any requests for information from the other necessary to determine the issue.
6.2 A request under section 6.1(c) will be answered within 15 days.
[ 4 ] Despite the execution of the agreement, Mr. Cole commenced an application shortly thereafter which resulted in a final order of Marshman J. dated June 16, 2010, containing a recital that the parties were consenting to the relief granted. Neither the order nor that legal proceeding was mentioned in the evidence or submissions before me. Interestingly, the order deals only with custody and access and mirrors all the provisions of the separation agreement, with the inclusion of two new paragraphs set out as follows:
While the children are in the Applicant’s care, they shall not share a bedroom with the Applicant’s current spouse’s son, except in circumstances such as during a family vacation where the entire family is staying in a single hotel room and the children are supervised by the Applicant during the night.
At all times while the children are in the Applicant’s care he shall ensure that the dogs which reside on or near the property at which he currently lives are kennelled or not outdoors such that they cannot approach or come into contact with either of the children.
[ 5 ] One can surmise that there was consent to the order to alleviate some concern arising from Mr. Cole’s new partner’s son. Indeed, after he commenced this motion to change the terms of the separation agreement involving child support, Ms. Cole launched a contempt motion only a week before this trial alleging a breach of the prohibition concerning her sons sharing a bedroom with Julie Ellison’s son. That motion was adjourned sine die by Templeton J. pending the outcome of this trial.
INCOME
[ 6 ] Mr. Cole commenced his motion to change the quantum of child support in the separation agreement in September, 2011. He relied on a 2011 income for support purposes of about $43,400, substantially less than the approximated $48,000 he earned in early 2010. Ms. Cole countered in her responding material by alleging that Mr. Cole actually received over $55,400 from his main employment ($12,000 in addition to his acknowledged $43,400). In her evidence and submissions, she insisted that an income of around $60,000 should be imputed to Mr. Cole, based on his past receipt of bonuses, cash money from snow-plowing and regular work landscaping at a Bryanston property owned by an accounting firm.
[ 7 ] I listened carefully to the evidence offered by the parties and by Gene Cole, the majority shareholder of G&C Auto Repair Inc. (and Mr. Cole’s uncle). There was agreement that a somewhat unusual arrangement had previously been put in place concerning Mr. Cole’s remuneration at G&C Auto – involving his receipt of a base salary and small weekly infusions of cash – but there was no credible evidence that cash payments continue. The separation agreement itself recites a salary of $36,000 and a figure of $12,000 per annum in cash income. Although that money is stated to be “grossed-up for income taxes,” it was apparent from Mr. Cole’s evidence that he did not declare the money or include the $8,000 or $9,000 in his gross income.
[ 8 ] In any event, Mr. Cole testified that near the first part of 2010 – “around the time of the separation agreement” – a decision was made to regularize the employee payment scheme to cease the cash payments. His evidence was supported by that of Gene Cole, who said it was the company accountant who insisted on the change. Although Mr. Gene Cole could only say that the switch occurred sometime in 2009, I was impressed by his sincerity and apparent fairness. There is nothing at all to substantiate Ms. Cole’s suggestion that cash payments continued after the separation agreement was signed or that Mr. Cole benefits in some other hidden manner from his work at G&C Auto.
[ 9 ] As well, I am satisfied as to the accuracy of Mr. Cole’s evidence about the previous bonuses received by each of the three employees of this small business. I find as a fact that, in past times, Mr. Gene Cole would collect money from occasional sales of scrap metal that came into the business, distributing the proceeds at the end of the year as a “bonus.” I accept his evidence, and that of Mr. Cole, that the practice ended in 2009 and, in the words of the employer, since that time those monies (and any other cash payments received) have gone directly “into the till.”
[ 10 ] Ms. Cole urges upon me that, in the past, Mr. Cole received money outside his regular work in automobile repair by snow-plowing in winter and landscaping in the summer. I thought Mr. Cole responded believably when he explained that he was no longer cutting the grass and landscaping at the Bryanston property and attends there with their two sons only on a recreational basis. Similarly, I accept his evidence that he received only $120 from snow-plowing the winter of 2010 (which he declared), less than the $2,158 he declared as additional income in 2011. I accept that he now has no plow to continue this work and, in fact, had no snow-plow income in 2012.
[ 11 ] In her cross-examination of Mr. Cole and in her own evidence, Ms. Cole demonstrated her belief that Mr. Cole intentionally reduced the income from which he could pay child support to avoid his obligation to his children. She views his working 40 hours weekly – as opposed to 44 hours before the separation agreement and access order – with suspicion and rejects his explanation that he wanted to maximize his contact with the children by taking full advantage of his access time. I thought she was rather mean in her suggestion in re-examination that she could substitute to pick up the boys on Wednesdays after school and “keep him working [until 5 p.m.].” She muttered in the witness box: “Five p.m. is ‘after school’” – and could therefore be consistent with the words of the access order. There is no foundation at all for this position, or for her other complaints: that Mr. Cole and Julie Ellison were able – unlike her – to spend a short time in Cuba in February, 2012 (after Ms. Ellison won $2,000 in a lottery); that Mr. Cole owns a 2004 Acura and a motorcycle; that the subdivision where Mr. Cole lives may be in a “more elite” area than her own, or that Mr. Cole had sufficient money to buy Matthew a small 21 inch flat screen television for his bedroom at Ms. Cole’s home. Although these facts quite obviously irk her, they fall far short of establishing that Mr. Cole enjoys a lifestyle markedly inconsistent with his stated income and that the only reasonable conclusion is his suppression or hiding of other financial benefits.
[ 12 ] I find Mr. Cole’s income to be $43,282 (2011) and $47,695 (2012) for the purposes of the Ontario Child Support Guidelines , O. Reg. 391/97 [as amended]. There is no basis on this evidence for any imputation of additional income to him.
CHILD CARE EXPENSES
[ 13 ] While the parties were able to reach consensus concerning Mr. Cole’s contribution to the daycare expenses incurred by Ms. Cole, after that they became unfortunately incapable of reasonable behaviour towards each other. Mr. Cole demanded to see receipts for the daycare and threatened to unilaterally reduce the support he paid – while Ms. Cole refused to produce any proof of the payments she said she was making. At one juncture, she actually told him that he should go to the babysitters and obtain his own receipts. While the separation agreement specifies in para. 5.6 that Ms. Cole will reimburse Mr. Cole for contributions he has made to childcare which is not used in the summer months, she has flatly refused to do so because she sees Mr. Cole as being in arrears of support and blames him for his decision to reduce the amount paid.
[ 14 ] Ms. Cole appeared stubborn and angry in the witness box. She views Mr. Cole as conducting a continuing campaign to cause her financial woe. While she reluctantly conceded to Mr. Ashford that the terms of the agreement requiring ongoing annual disclosure of income tax returns and subsequent adjustment could mean less support, she was adamant that it was she that would have to be completely satisfied of his lessened income before she would countenance any reduction. That, she said, flowed from her expectation “that Mr. Cole take care of his children.”
RESULT
[ 15 ] Mr. Ashford has produced DIVORCEmate calculations based on Mr. Cole’s 2011 and 2012 income tax line 150 income. The printouts demonstrate the required contribution by Mr. Cole for both table amounts of child support and s. 7 daycare costs. Counsel advise that the gross amount paid for childcare was $4,764 (2011) and will be $3,750 (2012). Both those amounts are less than the annual childcare expense deduction limits and should be treated as fully deductible: see s. 7(3) Guidelines and M.(T.J.) v. M.(P.G.) (2002), 2002 49550 (ON SC) , 25 R.F.L. (5th) 78 (Ont. Sup. Ct.) . It is common ground that Ms. Cole’s income for 2011 and 2012 is $41,068.
[ 16 ] On that basis, Mr. Cole will pay table amount child support of $655 commencing May 1, 2011 and the additional monthly sum of $71 for recoverable s. 7 expenses on the first day of May, 2011 and the first day of each month thereafter except the month of December. I am limiting that payment to avoid the cumbersome and unsuccessful requirement in the agreement that the parties effect some kind of repayment or reimbursement. They are plainly unable to carry that into effect. In 2012, commencing on January 1, Mr. Cole will pay table amount support of $709 and make a monthly s. 7 contribution of $58, the latter for the 11 months before December.
[ 17 ] After this order is issued and entered, Mr. Ashford can obtain a fresh statement from the Director, Family Responsibility Office, from which the parties will be able to ascertain whether or not arrears exist.
[ 18 ] Mr. Ashford and Ms. Cole may make submissions with respect to costs in letter form addressed to me in the care of the trial coordinator. Mr. Ashford’s submissions should be sent to me and Ms. Cole within 45 days, after which Ms. Cole will have a further 15 days to send her submissions to Mr. Ashford and to me. I want to know particulars of offers to settle, if any, and when they were made. Submissions must be brief and may be in point form.
“Justice Henry Vogelsang”
Justice Henry Vogelsang
Date: December 21, 2012