COURT FILE NO.: FS-10-3953-00

DATE: 2013-03-25

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

KELLY KALVERDA Applicant

• and -

GORDON CHRISTOPHER KALVERDA Respondent

Counsel: Noel Da Silva, for the Applicant Robert S. Leschied, for the Respondent

HEARD: March 22, 2013, at Brampton, Ontario

Price J.

Reasons for Order

NATURE OF MOTION

[1] A year ago, Gordon and Kelly Kalverda (“Mr. and Ms. Kalverda”) were close to agreement on the wording of Minutes of Settlement that were to vary a Separation Agreement they had signed in 2008 after their six and a half year marriage ended. Then, when Mr. Kalverda, who is a home renovation contractor, lost his major ongoing contract, and a partnership that he later entered into failed, and he was unable to sustain his child support payments at the level he had provisionally agreed to pay, he refused to sign the draft Minutes of Settlement that Ms. Kalverda’s lawyer had prepared based on the negotiations that had taken place. Ms. Kalverda has therefore returned a motion she had made to the court in 2012 to vary the parties 2008 Agreement, and has asked the court to grant her judgment in the terms of the unsigned Minutes of Settlement that her lawyer sent most recently to Mr. Kalverda.

BACKGROUND FACTS

[2] Mr. and Ms. Kalverda, each of whom is now 38 years of age, were divorced three years ago, on March 2, 2010, after a six and a half year marriage that began July 14, 2001 and ended in separation on January 4, 2008. There were two children of their marriage, Mikayla Chelsea Kalverda, who is 9 (born Jun 12, 2003) (“Mikayla Kalverda”) and Brayden Austin Kalverda, who is 6 (born Aug. 14, 2006) (“Brayden Kalverda”), who continued living with their mother following their parents’ separation.

[3] Mr. and Ms. Kalverda resolved most of the issues arising from their marriage in a Separation Agreement which they entered into on March 6, 2008. That Agreement gave the parties’ joint custody of the children, provided that they would reside primarily with Ms. Kalverda and that Mr. Kalverda would exercise access to them on alternate weekends from Friday to Sunday, every Tuesday, overnight, and on alternate Wednesdays, overnight. Mr. Kalverda agreed to pay child support in accordance with the Federal Child Support Guidelines (“the Guidelines”), based on his 2007 income of $39,323.00.

[4] Ms. Kalverda re-married on December 31, 2010. She and her husband, together with Mikayla and Brayden, moved to Rockwood, Ontario in January 2011. Four months later (in May 2011), Mr. Kalverda and his partner, Suzanne Smith, with whom he had entered into a long term relationship on December 5, 2010, moved, with Ms. Smith’s seven year old daughter, to Alton, a 20 minute drive from Rockwood.

[5] At about that time, Ms. Kalverda applied to the court to vary the terms of the parties’ 2008 Separation Agreement to increase the amount of child support that Mr. Kalverda was paying for Mikayla and Brayden Kalverda. By 2010, his income had increased from $39,323.00 to $44,521.00. After a Case Conference held on April 12, 2011, the Kalverdas and their lawyers met on April 29, 2012, in an effort to reach a new agreement.

[6] At their meeting on April 12, 2012, the parties agreed to a general framework for settlement, and they agreed to adjourn Ms. Kalverda’s motion from May 24 to June 14, 2012, and then from June 14th without a fixed return date, so that their lawyers could negotiate the wording of their April 29, 2012, minutes of settlement.

[7] During the course of the parties’ negotiations, Mr. Kalverda’s renovation business underwent major changes. On April 5, 2012, he lost his major ongoing contract, and on April 23, 2012, he entered into partnership with a business associate, James Forbes, which they called “Kalfor”, which ended eight months later, in January 2013. These changes reduced Mr. Kalverda’s income to the point where he felt that he was unable to maintain child support payments, even at the level provided for in the parties’ 2008 Separation Agreement.

[8] Mr. Kalverda rejected the latest draft submitted to him by Ms. Kalverda’s lawyer, notwithstanding that the only issue that seemed to remain in dispute between them was a reference to their youngest child, Braydon’s, allergies. Brayden had suffered from allergies in the past, and Ms. Kalverda was concerned that they might re-emerge in the future, aggravated by three dogs that Mr. Kalverda kept as household pets. When Mr. Kalverda refused to sign the 2012 draft Minutes, arguing that Brayden appeared to have outgrown his allergies, Ms. Kalverda returned her motion to court, amending it to add a claim for judgment in accordance with the unsigned Minutes of Settlement that her lawyer had sent to Mr. Kalverda.

ISSUES

[9] The court must determine whether the Kalverdas reached an agreement in 2012 and, if so, whether it should be enforced. In any event, it must decide whether the parties’ September 2008 Agreement should be varied and, if so, in what respects.

PARTIES’ POSITIONS

[10] Ms. Kalverda argues that she and Mr. Kalverda had reached agreement on substantially all issues in dispute between them, and that judgment should therefore issue in the terms of their draft Minutes of Settlement. Mr. Kalverda argues that he and Ms. Kalverda had not yet resolved the issue concerning Brayden’s allergies, the steps that Ms. Kalverda wanted him to take to manage the allergies, and whether she would be entitled to apply in the future to vary his access to Brayden experienced further problems in that regard. In addition, he argues that owing to his present employment circumstances, he is unable to pay child support at the level the parties had discussed in their negotiations.

ANALYSIS AND EVIDENCE

[11] The court must initially make a finding as to whether the parties had reached an agreement and if it finds that they had done so, it must decode whether to exercise its discretion to enforce the agreement.

[12] The determination as to whether the parties had reached agreement involves a finding of fact that must be made on a “case by case basis”, s noted by the Newfoundland Unified Family Court in Freake v. Freake, (2007).[^1] Of an agreement was reached, it is enforceable if it has not been executed.[^2]

[13] I have considered the draft minutes with reference to the ten factors that the Ontario Court (General Division), in Nigris v. Nigris, (1993),[^3] held that the court should consider when exercising its discretion as to whether to enforce an agreement:

1. The terms were not improvident or unconscionable.
2. There was no inequality of bargaining power.
3. Neither party acted in bad faith.
4. Neither counsel acted without authority.
5. The terms are sufficiently clear as to avoid further litigation.
6. The terms deal with most of the issues in dispute.
7. The terms were negotiated, for the most part, with the parties in each other’s physical presence, the remaining terms being ones that were reasonably addressed through correspondence between counsel to give effect to the parties’ intentions, as expressed at their meeting.
8. Eleven months intervened before Mr. Kalveda communicated his uwillingness to accept the last draft that Ms. Kalveda’s lawyer had sent to him.
9. The reference to Brayden’s allergies is not inconsequential, since it reflected Ms. Kalverda’s desire t keep an avenue open for reviewing the terms of Mr. Kalverda’s access if circumstances relating to Brayden’s health changed, even if in a manner that would not amount to a material change in circumstances, since his allergies were the parties considered when discussing the terms.
10. While Mr. Kalverda’s refusal to sign the draft minutes has undoubtedly caused Ms. Kalverda uncertainty and put her to greater expense, I find that the expense she is incurring to resolve that uncertainty would have been incurred even if I found that the agreement was complete, since Mr. Kalverda would have been entitled, in any event, to apply to vary the agreement based on the circumstances that befell his business in 2012, which I find were a material change in circumstances that would have supported an application to vary.

[14] Mr. Kalverda seeks a reduction in the amount of his child support obligation now, to allow him time to recover his income-earning ability, subject to a future review of support. His objective, in this regard, is similar to the avenue that Ms. Kalverda seeks to have Mr. Kalverda’s access reviewed if circumstances relating to Brayden's health should change.

[15] For the foregoing reasons, I find that the parties did not reach a final agreement and, if there was such an agreement, I would exercise my discretion not to enforce it. Instead, I will have reference to the terms that the parties had negotiated, with variation, where appropriate, to reflect the changes of circumstances that have occurred since the Kalverdas and their lawyers met on April 27, 2012.

CONCLUSION AND ORDER

[16] Mr. Kalverda asserts that the income he earned in 2010 should not be imputed to him at this time as it does not reflect his reduced income earning capacity until he is able to re-build his business. He states that he is currently able to pay $500.00 per month in child support, which would reflect an income of $34,400.00, and can continue contributing $100.00 per month to the children’s RESP. He states that he expects to be generating income at least at his 2010 level of earnings by September 2013.

[17] Ms. Kalverda is currently on maternity leave from her employment until September 2013. She therefore does not have an immediate need for contribution to daycare expenses for the children, but she expects to have such expenses when she returns to work in September. In the meantime, Mr. Kalverda owes $667.00 for expenses that Ms. Kalverda incurred in the past year for the children’s lacrosse and hockey and he must contribute his share to these expenses, totaling $2,000.00 per year, on an ongoing basis.

[18] Based on the foregoing, it is ordered that:

1. Mr. Kalverda shall pay the following to Ms. Kalverda, from April 1 to September 1, 2013:

a) basic child support in the amount of $500.00 per month for the support of Mikayla Kalverda and Brayden Kalverda based on his imputed income in the amount of $34,400.00;

b) 60% of the children’s s. 7 expenses, such expenses being fixed in the amount of $167.67 per month ($2,000.00 per year) for their hockey registration fee and lacrosse fees, based on his imputed income of $34,400.00 per year and Ms. Kalverda’s imputed income of $23,660.00 per year.

c) $100.00 per month to the children’s Registered Education Savings Plan and show proof of such contributions to Ms. Kalverda;

2. Mr. Kalverda shall additionally pay to Ms. Kalverda $657.50 as a retroactive payment toward the children’s past s. 7 expenses.

3. Beginning October 1, 2013, Mr. Kalverda shall pay the following amounts to Ms. Kalverda:

a) Child support in the amount of $655.60 per month, being table child support for two children, based on his imputed income in the amount of $33,500.00 per year;

b) 40% of the children’s s. 7 expenses, such expenses being fixed in the amount of $167.67 per month ($2,000.00 per year) for hockey registration fees and lacrosse fees, plus such daycare expense as is documented by signed receipts by an arm’s length daycare provider unrelated to either party, based on his imputed income in the amount of $33,500.00 per year and Ms. Kalverda’s imputed income in the amount of $70,000.00 per year;

d) $100.00 per month to the children’s Registered Education Savings Plan and show proof of such contributions to Ms. Kalverda;

4. Mr. and Ms. Kalverda shall continue to have joint custody of Mikayla Kalverda and Brayden Kalverda. The children shall continue to reside primarily with Ms. Kalverda.

5. Regular access: Mr. Kalverda shall have access to the children as follows:

a) Week one: Friday after school until Tuesday morning at school;

b) Week two: Monday overnight until school on Tuesday morning;

c) The children will spend the balance of their time with Ms. Kalverda.

d) Mr. Kalverda shall exercise increased access to the children during the months of July and August, in that during those months, he shall exercise access to the children overnight on Tuesdays on both week one and week two.

6. Holiday access shall be as follows:

a) Family Day weekend: The children will spend Family Day in odd years with Mr. Kalverda, beginning in 2013, and in even years with Ms. Kalverda, beginning in 2014.

b) Christmas: In odd years beginning 2013, Mr. Kalverda shall have the children on Christmas Eve from morning and overnight until noon on Christmas Day; Ms. Kalverda shall have the children from noon Christmas Day until noon on December 27th in those years. In even years, beginning 2014, Ms. Kalverda shall have the children on Christmas Eve from morning and overnight until noon on Christmas Day; Mr. Kalverda shall have the children from noon on Christmas Day until noon on December 27th in those years.

c) New Years: In odd years beginning 2013, Ms. Kalverda shall have the children New Year’s eve day, and overnight, until noon New Years Day.

d) The children’s remaining Christmas and New Year’s holidays will be equally shared by Mr. and Ms. Kalverda. After the holidays, the schedule will revert to regular access set out above.

e) Parents’ birthdays: The children will always celebrate with their parent on their respective birthdays.

f) Easter: The children will spend Easter weekend with Ms. Kalverda in odd years beginning in 2013, and with Mr. Kalverda in even years beginning in 2014.

g) Victoria Day and July 1st weekend: The children will always spend the Victoria Day holiday with Ms. Kalverda and the July 1st holiday with Mr. Kalverda.

h) August Civic Holiday: The children will spend the August Civic holiday with Mr. Kalverda in odd years, beginning in 2013, and with Ms. Kalverda in even years, beginning in 2014.

i) Labour Day: The children wil spend Labour Day weekend with Ms. Kalverda in odd years beginning in 2013, and with Mr. Kalverda in even years, beginning in 2014.

j) Thanksgiving: The children will spend Thanksgiving weekend with Mr. Kalverda in odd years, beginning in 2013, and with Ms. Kalverda in even years, beginning 2014.

k) Mother’s Day and Father’s Day: The children will always spend Mother’s Day weekend with Ms. Kalverda and Father’s Day weekend with Mr. Kalverda.

l) March break: The children will spend March break with Ms. Kalverda in odd years, beginning in 2013, and with Mr. Kalverda in even years, beginning in 2014.

m) Full weeks: Mr. and Ms. Kalverda shall each spend three weeks with the children each year, beginning in 2013. In those weeks, Monday access shall be suspended. The children shall spend one of the three weeks with each parent during the Winter months and two weeks, not consecutively, during the Summer months (July and August), the first choice to be exercised by Ms. Kalverda in odd years beginning 2013, and the first choice to be exercised by Mr. Kalverda in even years beginning 2014.

n) Milestone changes in education (meaning any change of school or transition from elementary to high school or from high school to college or university) and registration in advanced athletic or musical activity (meaning such activity as requires travel outside the cities in which either Mr. or Ms. Kalverda reside) shall, at least sixty days before registration or enrollment, and changes in access necessitated by hospitalization of either child for more than 48 hours shall be mediated by a mediator selected by the parties or, if they are unable to agree, appointed by the court upon application by either party. The cost of mediation shall be deemed to be a special and extraordinary expense within the meaning of s. 7 of the Guidelines, and shall be borne by the parties in the same proportion that each is contributing to other special and extraordinary expenses. Before proceeding to mediation, the parties shall exchange any relevant information about their proposals for schools or athletic or musical activity in writing for the other party to consider. The mediation shall be paid for in proportion to the parties Line 150 income from the Notice of Assessment last issued by the Canada Revenue Agency in relation to their income. If the mediation does not result in agreement, the mediator shall act as an arbitrator and release a written decision, which the parties may appeal to this Court, by motion on notice to the other party and supported by written material, which shall include the arbitrator’s decision.

7. Both Mr. and Ms. Kalverda shall be permitted to remove the children from the Province of Ontario for vacations. The party wishing to remove the children from the Province of Ontario shall provide the other party with 30 days written notice of the dates of his/her intended vacation. The other parent shall sign a consent to travel form within two days of the other party’s request and such consent to travel shall not be unreasonably withheld.

8. If necessary, Mr. and Ms. Kalverda shall mutually agree upon an alternative location for access exchanges.

9. Mr. Kalverda shall have reasonable telephone access to the children at all reasonable hours.

10. The responsibility for taking the children to the doctor or dentist shall be shared by the parties. If Mr. Kalverda does not respond to a request or is not able to take the children, then Ms. Kalverda shall take the children to the appointment, which shall mean that the attendance by each parent shall not be equal.

11. So long as the children are children of the marriage within the meaning of the Divorce Act, each party shall maintain life insurance on their respective lives in the principal amount of $200,000.00 naming the other party irrevocably as beneficiary in trust for the children and each party shall provide proof to the other by January 15th each year that their respective policy remains in full force and effect.

12. Each of Mr. and Ms. Kalverda shall file their respective income tax returns with the Canada Revenue Agency by April 30th of each year beginning 2013, and shall, by June 1st of each year beginning 2013, produce to the other their complete Income Tax return as filed with the Canada Revenue Agency, including all schedules and attachments, and shall, within two weeks after receipt, produce to the other their Notice of Assessment from the Canada Revenue Agency.

13. Mr. Kalverda, shall additionally produce to Ms. Kalverda by July 1st and October 1st of each year beginning 2013, and by January 1st and April 1st of each year beginning 2014, an affidavit listing every bank and trust company account, including line of credit and investment account, and credit card and line of credit he has operated at any time within the preceding three months, alone or with any other, in Canada or elsewhere, personally or through any business, incorporated or otherwise, together with the monthly statements for each such account and credit card.

14. The parties shall by July 1st of each year beginning 2014, exchange proposals regarding the adjustments required to child support and contributions to s. 7 expenses, to be effective January 1st of that year, and proposed s. 7 expenses for any post-secondary expenses for the following year.

15. Any dispute regarding adjustments to child support or contributions to s. 7 expenses shall be mediated by a mediator selected by the parties or, if they are unable to agree, appointed by the court upon application by either party. The cost of mediation shall be deemed to be a special and extraordinary expense within the meaning of s. 7 of the Guidelines, and shall be borne by the parties in the same proportion that each is contributing to other special and extraordinary expenses. Before proceeding to mediation, the parties shall exchange any relevant information about their proposals for such adjustments in writing for the other party to consider. The mediation shall be paid for in proportion to the parties Line 150 income from the Notice of Assessment last issued by the Canada Revenue Agency in relation to their income. If the mediation does not result in agreement, the mediator shall act as an arbitrator and release a written decision, which the parties may appeal to this Court, by motion on notice to the other party and supported by written material, which shall include the arbitrator’s decision.

16. If the parties are unable to agree on costs, each may submit written argument, not to exceed four pages, double spaced, with a Costs Outline and any relevant Offers to Settle, by April 15, 2013.

Price J.

Released: March 25, 2013

[^1]: Freake v. Freake, 2007 CarswellNfld 307, per Nfld. UFC, at para. 15. [^2]: Lunardi v. Lunardi (1988), 31 C.P.C. (2d) 27 (Ont. H.C.), at paras. 40 to 42. [^3]: Nigris v. Nigris, [1993] WDFL 544, at para. 52