ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-17488-06
DATE: 2013-04-24
BETWEEN:
Monique Leona Marie Stafford
Applicant
– and –
Michael Fleming Stafford
Respondent
Michelle E. McAnulty, for the Applicant
Respondent, self-represented
HEARD: April 16 and 17, 2013
REASONS FOR JUDGMENT
R.D. Gordon J.:
Overview
[1] This trial was conducted to determine the following issues:
(1) The Applicant’s entitlement to spousal support, both retroactively and prospectively;
(2) The Respondent’s obligation to contribute to section 7 expenses incurred in the care of the children;
(3) Equalization of the parties’ net family property.
[2] The equalization of the parties’ net family property will not be dealt with at this time. Although evidence was heard on the issue, it became apparent during trial that the Respondent had entered into a Consumer Proposal in March of 2010 which had only recently been completed. Under the provisions of the Bankruptcy and Insolvency Act the Applicant’s equalization claim is stayed by virtue of the Proposal, and extinguished as a result of its successful completion. At the conclusion of trial it was determined that the Applicant’s claim for an equalization payment would be adjourned to a date to be set in consultation with the trial co-ordinator, to allow the Applicant the opportunity, should she wish, of applying to re-open the Respondent’s Proposal and seek an order lifting the stay and excluding her equalization claim, or to seek an order to amend this application to plead equitable relief or lump sum spousal support.
[3] Accordingly, this decision deals only with the issues of spousal support and section 7 expenses.
Background
[4] The parties were married on June 30, 1990 and have three children together: Curtis, born August 27, 1991, Riley, born April 7, 1993 and Alyssa, born January 4, 1995. For reasons not relevant to these proceedings they separated on July 16, 2006 and have not reconciled since. A Divorce Order was granted on August 11, 2011.
[5] The Respondent is a police officer with the Greater Sudbury Police Service. When they married, he was working with Durham Regional Police in Pickering. The Applicant joined him in Southern Ontario, where they lived until returning to Sudbury in the spring of 1994. While in Southern Ontario, the Applicant was a homemaker. On their return to Sudbury, she began to work intermittently for her parents’ business, T & G Electric. In 2000, when Alyssa began school full time, the Applicant began working 30 hour weeks, earning $12.50 per hour. By the time of the parties’ separation in 2006, her annual income was about $20,000. In the years following separation she continued to work at T & G Electric but also undertook retraining as a medical secretary. This retraining allowed her to obtain better employment so that by the time of trial her employment income had increased to just over $42,000 per annum.
[6] The Respondent has continued his career in policing and has had regular increases in his income. At separation he was earning about $82,000. In 2012 he earned about $94,000. His income varies somewhat depending on the amount of overtime available.
[7] The Applicant brought this application in October of 2006. Like many matrimonial disputes, this case has a long and tortuous history. What little trust remained between the parties when they separated has now dissipated completely. Their continuing anger with one another is almost palpable. The Respondent’s relationship with his daughter Alyssa is non-existent. It is a sad ending to what once must have been a strong and happy relationship.
[8] In order to understand the issues before me it is necessary to provide a brief summary of the parties’ situation when they separated and what has happened subsequently.
[9] A review of the parties’ financial statements reveals they were not strong fiscal managers. By the time they separation, they had amassed credit card debt of almost $24,000, personal loans of $43,000 and a line of credit and overdraft of almost $17,000. The home was mortgaged and there was an additional loan registered against it to secure payment of over $8,000 incurred for a new furnace and air conditioning unit.
[10] As one can imagine, times were tough. Not only was there all of this debt to service, but the separation necessitated a second household and all the expenses associated with it.
[11] For a short while following separation the parties continued to maintain a joint bank account. Although there is disagreement about whether the Applicant took money from the account to pay household expenses or whether payment of those expenses was arranged by the Respondent, it seems that for August and September of 2006 the Respondent’s earnings were used to pay ongoing expenses and loans amounting to $3,200 per month. Beginning in October of 2006, and reasonably regularly after that, the Respondent paid the Applicant $830 bi-weekly. In June of 2007 the Applicant brought a motion for support and the court ordered payment of child support of $1,555 per month and adjourned the issue of spousal support. On October 11, 2007 a temporary order was made based on Minutes of Settlement then filed which provided for child support of $1,550 per month and dealt with spousal support as follows: “In lieu of spousal support, the Respondent shall be responsible to make the payments on the joint loan, the joint VISA, the joint line of credit, the Rogers bill, Royal Bank overdraft and U.E.I. Financial debt.”
[12] The joint debts taken on by the Respondent amounted to about $42,000. Although I was not provided detail of the monthly amount required to pay those debts, undoubtedly it would have been in excess of $1,000. In the month following that order, the Respondent consolidated these loans and reduced his monthly payment to $426.43. Subsequently, in March of 2010, the Respondent filed a consumer proposal by virtue of which his unsecured debt of $38,813 was reduced to $20,000. The joint debts of the marriage represented about $24,000 of that unsecured debt. The proposal called for 50 monthly payments of $400 each. Of that amount, $252.63 would be attributable to the joint debts from marriage. The Respondent testified that he completed payment of the amounts required under the Proposal in March of 2013. Since that is only 36 months of payments it is reasonable to infer that he accelerated payment in order to complete his proposal more quickly.
[13] Subsequent orders of the court adjusted child support to reflect changes in his income. The Respondent was ordered to pay spousal support of $130 per month effective January 1, 2011, which was increased to $180 per month January 1, 2012.
[14] The Respondent has paid monthly support for the children since the first order in June of 2011. The child Curtis graduated from High School in 2010, took a year off from school and entered Humber College in September of 2011 for a three year course. The child Riley graduated from High School in June of 2011 and although he planned to go to college, found a job and elected to stay in the work force. The child Alyssa is in grade 12 and expects to attend university beginning in September of 2013. Although monthly child support has been paid, there have been no other payments made to the Applicant on account of section 7 expenses.
Spousal Support Issues
Ongoing Spousal Support
[15] There can be little doubt of the Applicant’s entitlement to spousal support. She was out of the work force for the better part of ten years while the parties’ children were raised. On return to the workforce she worked for little more than minimum wage until well after separation. Clearly, the case for compensatory support has been met. In addition, given the length of the marriage and the significant disparity in the parties’ incomes following separation, the Applicant would suffer disproportionately from the marriage breakdown should support not be ordered. Spousal support is therefore justified on a non-compensatory basis as well.
[16] The Respondent is of the view that his assumption of the joint marital debt alleviates his obligation to pay spousal support. He says the Applicant forfeited her entitlement to support when the temporary order of Justice Hennessy was made allowing him to make payment of the joint debts in lieu of spousal support. I disagree. The order of Justice Hennessy, made on a temporary basis to reflect the situation of the parties at that time, recognized that the Respondent’s ability to pay spousal support was lessened as a result of his assumption of the joint debts. Once those debts were retired, or in the event the Respondent received an asset of corresponding value to offset those debts, spousal support would be at issue once again.
[17] Both of those events have taken place. The joint debts from the marriage are no longer outstanding, and the Respondent will retain a portion of the Applicant’s entitlement to his pension sufficient to offset the debt he assumed. It would be patently unfair to deprive her of support in these circumstances.
[18] Based on the Respondent’s 2012 income of $94,062 and the Applicant’s 2012 income of $42,267, the Spousal Support Advisory Guidelines (“SSAG”) provide a range of support from a low of $345 to a mid-range of $684 to a high of $1,002. Having regard to these guidelines, the length of the marriage, the economic disadvantages to the Applicant arising from both the marriage and its breakdown, and the financial circumstances of the parties, an appropriate amount of spousal support is $500 per month, beginning May 1, 2013.
[19] The Applicant conceded that her entitlement to spousal support ought to be time limited. She was reasonably young when the parties separated and has made considerable strides towards self-sufficiency. She argued that support for a further nine years (for a total of 16 years) is appropriate.
[20] The duration of support requires a balancing of the parties’ circumstances. This was a marriage of 16 years, which ended when both parties were about 40 years of age. As has been indicated, the Respondent’s income during the marriage, and since, has been far greater than the Applicant’s. The Respondent is in the prime of his career while the Applicant is really just beginning in hers. The Applicant’s entitlement to support is based on both compensatory and non-compensatory bases. In these circumstances a somewhat longer period of support is indicated, and in my view a further five years, for a total of twelve years support, is appropriate. Accordingly, the Respondent’s obligation to pay spousal support shall continue until April 30, 2018.
[21] I have little doubt the Respondent will be unhappy with this aspect of my decision. He stated at various times throughout the trial that he would not be able to afford any payment in excess of the monthly child support he has been paying. What he must realize is that until his obligation to support his family has been met, he may have to seriously curtail his discretionary spending. His support obligations are paramount to the costs of keeping pets, eating out, and maintaining payments on a boat. Some difficult priorities must be set, with the children and the Applicant at the top of the list. On the positive side for him, the children will not be eligible for support forever, and the Applicant’s entitlement is time limited.
Retroactive Spousal Support
[22] In the case of Fisher v. Fisher, 2008 ONCA 11, the Ontario Court of Appeal held that retroactive support should be available when the recipient establishes at trial that she was entitled to a greater amount of interim support, the respondent had an ability to pay, and the imposition of retroactive support would not create undue hardship for the payor.
[23] Was the Applicant entitled to a greater amount of interim support than she received? In my view she was, at least for part of the time. During the initial months following separation until the order of October 11, 2007, the Respondent made regular and not insignificant payments to the Applicant which were somewhat in excess of the required child support and which attracted no tax advantage for him and no tax liability for her. These payments, in addition to his contribution towards the joint matrimonial debt, satisfied his support obligations during this period of time and I would not impose any retroactive support.
[24] From October 11, 2007 to March, 2010 the Respondent took responsibility for joint matrimonial debt that left him with a lesser ability to contribute to spousal support. Given the fairly low range of spousal support otherwise payable for that period of time, and the debt payment undertaken by the Respondent, I am of the view that he met his support obligations during this period of time and I would not impose any retroactive.
[25] In March of 2010 the Respondent entered into the Consumer Proposal which reduced his debt and debt payment significantly. At that point, the rationale for denying the Applicant spousal support was significantly diluted. Having regard to the debt he continued to pay, the respective incomes of the parties from then onwards, and the ranges suggested by the SSAG, spousal support ought properly to have been paid beginning April 1, 2010 at $500 per month, amounting to $18,500 as of today. After deducting the amounts he paid pursuant to court order totalling $4,440, there would remain due the sum of $14,010. Allowing for the Respondent’s marginal tax rate of 37%, the appropriate payment, net of tax would be $8,825.00.
[26] Did the Respondent have the ability to pay? When he entered into the Consumer Proposal, the Respondent’s payments on account of unsecured debt were reduced to $400 per month. What the Proposal did not affect was his secured debt, which he had accumulated since separation. This included a vehicle loan, a boat loan, and two mortgages taken out to purchase a home. Taking on this sort of debt at a time when he knew there to be an outstanding support claim should not serve to lessen his support obligation. In addition, when I examine his financial statements I note monthly expenses of $160 per month for alcohol and tobacco, and $200 for pet care. These are expenses that must take a back seat to legitimate support obligations to one’s family. In addition, the Respondent’s ability to retire the payments due under his proposal 14 months early indicates he had the ability to pay support.
[27] Would an order for payment of retroactive support create undue hardship on the Respondent? I accept the Respondent’s evidence that his ability to borrow anew is affected by his having filed the Consumer Proposal. I recognize that he does not have the ability to pay retroactive support by way of lump sum. However, if required to pay a reasonable amount on a monthly basis, the hardship would not be undue.
[28] Having considered all of this, it is ordered that the sum of $8,825 be paid on account of retroactive spousal support at the rate of $150 per month beginning May 1, 2013 and on the first of each subsequent month until paid in full. Such payment is not to be tax deductible to the Respondent and is not to be taxable in the hands of the Applicant.
Section 7 Expenses
[29] Section 7 of the Child Support Guidelines provides that a court may require a parent to make payment to cover all or any portion of certain expenses taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the parents and those of the child and to the spending pattern of the parents in respect of a child during cohabitation. Included are expenses for post-secondary education and extraordinary expenses for extra-curricular activities.
[30] The Applicant has submitted proof of expenses incurred for Alyssa and Riley which she claims are extraordinary expenses for extra-curricular activities. They include the costs of school trips, school activity fees, sports and driver’s education. The Respondent argued that many of these expenses do not meet the definition of “extraordinary”, that he has never been consulted before these expenses have been incurred, and that requiring him to contribute now would be to ignore the substantial amounts he says he spent for similar expenses relating to Curtis and Riley between the date of separation and the end of 2009. He gave evidence of having spent over $18,000 on hockey registration, attendance at tournaments, equipment, allowances and the like. That he contributed these funds was not challenged by the Applicant.
[31] Without ruling on what expenses might properly be claimed as extraordinary, I decline to make an order requiring the Respondent to contribute further to the expenses incurred for Alyssa and Riley. Based on his uncontradicted evidence, I am satisfied he has borne his reasonable share of the children’s extra-curricular activities, both extraordinary and otherwise.
[32] The situation is not so simple as regards post-secondary expenses incurred by Curtis. As indicated above, Curtis began attending Humber College in Toronto in September of 2011. Because the parties are basically unable to have a civil conversation there has been little effort to determine what contribution to his education is appropriate by each of them. Instead, the Respondent has simply continued to pay the guideline amount of support for two children, notwithstanding that Curtis is living in Toronto for basically eight months of each year. The Applicant says that she sends Curtis $500 of the monthly child support payment to use towards his rent payment.
[33] To reconcile the state of accounts between the parties, it is necessary to compare what the Respondent actually paid for Curtis, to the amounts he ought to have paid.
[34] What he actually paid is $1302 per month in child support. What he should have paid is monthly guideline support for one child while Curtis was away at school, a reduced monthly payment for those same months to reflect the costs of maintaining the home for Curtis’s return in the summer, and his proportionate share of Curtis’s school and living expenses incurred while he was away.
[35] For the school year running from September 1, 2011 to August 31, 2011, the calculation is as follows:
(1) The Respondent should have paid his proportionate share (70.5%) of the expenses set out in Exhibit #1, Tab #1 ($15,496.), after deducting Student Loans ($8,768) and Curtis’s contribution ($1,122.). The Respondent’s required contribution amounts to $3,952.
(2) For September through December of 2011, the Respondent should have paid monthly guideline child support for one child of $838 (based on his 2010 income less union dues, of $95,120) plus $150 per month as a contribution to ongoing expenses related to maintaining a home for Curtis to return to. The total for four months is $3,952.
(3) For January through April of 2012, the Respondent should have paid monthly guideline child support for one child of $795 (based on 2011 income less union dues, of $89,645) plus $150 per month as a contribution to ongoing expenses related to maintaining a home for Curtis to return to. The total for those four months is $3,780.
(4) For May through August of 2012, the Respondent should have paid monthly guideline support for two children based on income of $89,645, which is $1,277 per month. The total for these four months is $5,108.
(5) What the Respondent should have paid between September 1, 2011 and August 31, 2012 is the total of #1 through #4, above, or $16,792.
(6) What he actually paid during this period of time is 12 months of support at the rate of $1,302 per month for a total of $15,624.
(7) The difference between #5 and #6 is the deficiency, namely $1,168.
[36] For the school year running from September 1, 2012 to April 30, 2013, the calculation is as follows:
(1) The Respondent should have paid his proportionate share (69%) of expenses set out in Exhibit #1 Tab #1, less $600 related to the unexplained increase in transportation costs ($15,862) after deducting Student Loans ($7,733) and Curtis’s contribution ($4,191). The Respondent’s required contribution amounts to $2,717.
(2) For September through December, monthly guideline support for one child of $795 (based on 2011 income less union dues, of $89,645) plus $150 per month towards the costs of maintaining a home for Curtis to return to. The total for these four months is $3,780.
(3) For January through April, monthly guideline support for one child of $822 (based on 2012 income less union dues, of $93,000) plus $150 per month towards the costs of maintaining a home for Curtis to return to. The total for these four months is $3,888.
(4) What the Respondent should have paid during this eight month period is the total of #1, #2, and #3 or $10,385.
(5) What he actually paid was eight months of support at $1,302 per month for a total of $10,416.
(6) The difference between #4 and #5 is an overpayment of $31.
[37] For May through August, he should continue to pay child support at the rate of $1,318 in accordance with the guidelines.
[38] His total deficiency for the two years, based on these calculations, is $1,137. From this must be deducted the amounts he paid directly to Curtis towards tuition and rent, totalling $760. The balance due by the Respondent on account of child support and section 7 expenses pertaining to Curtis as of this date is therefore $377.
[39] The Respondent was of the view that he had further overpaid because the adjustments to child support required by the order of Cornell J. dated March 16, 2011 had not been implemented by the Family Responsibility Office (FRO”). I have reviewed the statement of arrears provided by FRO and made exhibit 9 at trial. About midway through page three of that statement are a number of adjustments made on May 5, 2011 and which reference C\O 160311. The adjustments include increases and decreases to the balance owing by the Respondent. I have tried to reconcile those entries with the adjustment anticipated by the order of Cornell J. and find that they match fairly closely. Give that the reference number coincides with the date of the order, the reasonable inference is that these adjustments do in fact reflect the order of Cornell J., and accordingly there is no further overpayment by the Respondent.
Other
[40] The parties raised several other subsidiary issues, which I will deal with in turn.
Health Benefits
[41] The child Alyssa has apparently had some difficulty accessing health care benefits directly from the Respondent’s provider. He is unsure why, as he arranged to have all passwords removed so that access could be much simplified. In order to attempt to resolve this, it is ordered that the Respondent provide to the child Alyssa such password(s) as he may have for his benefits account, and that he sign a direction, to be prepared by the Applicant, directing his provider to give information pertaining to Alyssa’s entitlement to benefits directly to Alyssa, and to pay such benefits directly to Alyssa.
Life Insurance Benefits
[42] The Respondent has life insurance and it is appropriate that his support obligations to his family be secured in the event of his death. Accordingly, it is ordered that the Respondent designate the Applicant and the children as beneficiaries of his life insurance in an amount sufficient to discharge his support obligations towards them, such designation to remain for so long as he is obliged to pay support.
Payment of Child Support to the Children
[43] The Respondent has asked that any award of child support be made payable directly to the children so he can be assured they receive an appropriate amount from the monthly support to defray their post-secondary education costs. Such an order may pose some difficulties with respect to continued enforcement by the Family Responsibility Office and strikes me as unnecessary. There was no evidence before me to suggest that monies paid in support over the last two years did not find their way to Curtis to assist with his schooling. I have no reason to find that the Applicant would act in this manner in the future.
Information With Respect to the Child Alyssa
[44] The Respondent has had basically no contact with Alyssa since Christmas of 2006. Notwithstanding this, he has faithfully paid his child support for her and is committed to meeting his obligation to contribute to her post-secondary expenses. He remains interested in what she is doing and would like information and input concerning her schooling. I have little difficulty ordering the Applicant to provide the Respondent with the names of the schools to which Alyssa applies, where she decides to go, the courses she takes, and the results she obtains. However, given the strained relationships involved, it would be counterproductive to have him involved in the decision making process.
Where Post-Secondary Education is Pursued
[45] The Respondent objected to Curtis attending school in another community when the same course was being offered in Sudbury. The same sort of argument may arise with respect to Alyssa’s schooling.
[46] There can be little doubt that the cost of obtaining an education will be less when the child can remain at home and avoid the expenses related to living elsewhere. That being said, in the circumstances of this case it is a decision that impacts the children more than the parents. I say this because if the children were to remain at home while attending school it is likely that their need to access student loans would be significantly lessened, if not alleviated entirely. If they choose to go to school in another community the costs are such that greater student loans need be accessed. Those loans are the children’s responsibility.
[47] Provided the children are willing to incur the student loan repayment obligation, the proportionate share of post-secondary education costs to the parents will not differ significantly regardless of where the children choose to attend.
How to Deal with Child Support on an Ongoing Basis
[48] In a situation where the parties are able to effectively communicate and there exists mutual trust concerning the payment of support, it would be optimal to have child support vary throughout the year based on what children continue to live at home, and to have the parents contribute their share of post-secondary costs directly to the children. That situation does not exist between these parties.
[49] As noted above, the Respondent’s payment of guideline child support on a monthly basis has largely covered his contribution to the post-secondary expenses of Curtis. In my view, the arrangement which will best ensure continued regular payment is the ongoing payment of monthly support by the Respondent for two children, with a reconciliation at the end of each school year following the same analysis I have used herein.
Conclusion
[50] An Order shall issue on the following terms:
(1) The Respondent shall pay to the Applicant for her support the sum of $500 per month on the first of each month, beginning May 1, 2013 to and including April 1, 2018, at which time his spousal support obligation shall be at an end.
(2) The Respondent shall pay to the Applicant on account of retroactive spousal support the sum of $8,825, payable at the rate of $150 per month on the first day of each month beginning May 1, 2013.
(3) The Respondent shall pay to the Applicant the sum of $377 on account of section 7 expenses incurred to date.
(4) The Respondent shall pay to the Applicant for the support of the children Curtis, born August 27, 1991 and Alyssa, born January 4, 1995, the sum of $1,318 per month on the first of each month beginning May 1, 2013. At the conclusion of each school year the parties shall reconcile the amounts paid by the Respondent with what ought to have been paid in a manner similar to the calculations made by me in this decision. Any deficiency shall be payable by the Respondent forthwith. Any overpayment shall be repayable by the Applicant forthwith.
(5) The Respondent shall take all steps necessary to allow the child Alyssa direct access to health care benefits available through his provider, including signing a direction, to be prepared by the Applicant, directing his provider to deal directly with Alyssa with respect to benefits available to her and to pay any such benefits directly to her.
(6) The Respondent shall designate the Applicant and the children Curtis and Alyssa as beneficiaries of his life insurance in an amount sufficient to satisfy his support obligations to them in the event of his death. Such designation shall remain for so long as he is obliged to pay support.
(7) The Applicant shall, within 14 days of receipt of the following information, provide the Respondent with:
a. The names of the schools to which Alyssa has applied;
b. The name of the school Alyssa chooses to attend;
c. The program Alyssa will be taking;
d. The grades Alyssa attains;
e. Details of costs of tuition, books and living expenses;
f. Details of Student loans obtained, and scholarships and bursaries awarded;
g. Details of monies earned by Alyssa each year.
(8) The Applicant’s claim for an equalization of the parties’ net family property is stayed. The matter is to be made returnable before me in about one month’s time, on a date to be set by the trial coordinator in consultation with the parties, to be spoken to.
[51] I will address the issue of costs with the parties when we reconvene to address the outstanding property issue.
Mr. Justice Robbie D. Gordon
Released: April 24, 2013
COURT FILE NO.: FS-17488-06
DATE: 2013-04-24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Monique Leona Marie Stafford
Applicant
– and –
Michael Fleming Stafford
Respondent
REASONS FOR JUDGMENT
R.D. Gordon J.
Released: April 24, 2013