Reasons for Judgment

Introduction

[1] Both at and prior to the Exit Pre-Trial many issues were resolved. As reflected in the Trial Management Conference (TMC) endorsement, the following are the outstanding issues for trial:

(i) Retroactive and ongoing s.7 expenses including extracurricular activities, orthodontics, postsecondary education;

(ii) Court ordered payment for orthodontic costs and passport costs; collectible by the Family Responsibility Office (FRO);

(iii) Retroactive spousal support claim, including indexing retroactive to July 1, 2011;

(iv) Cost orders to be collectible by FRO.

Background

[2] Pursuant to Minutes of Settlement and by order of Timms J., dated, April 05, 2011, the 16 year old twins share residence with their Mother and Father on a week about basis, the 18 year old daughter lives with the Mother.

[3] Pursuant to the consent order of Gunsolus J., dated October 23, 2012, the Father’s 2011 income was acknowledged at $83,092 and the Mother’s estimated 2012 income was acknowledged at $40,000. On such basis the parties agreed to ongoing set–off base child support in the amount of $999 monthly. Presumably, these incomes are to govern the quantum of child support for 2013. Accordingly, the Mother argues, as the parental incomes are fixed, no further evidence will be produced as to income.

Mother’s Position

[4] Relying on the Father’s alleged history of non-payment and the lack of agreement as to what constitutes an extraordinary expense, the Mother requires an identification of the s.7 expenses to which the Father ought to contribute as well allocation of his contribution at 67.05%.

[5] With respect to orthodontic expenses and passports, the Mother argues that these issues are separate from the standard s.7 expense consideration, given the fact that these were ordered to be paid by the Father, on consent, and he failed to pay. According to the Mother, payment for these is an issue relating to enforcement - a cumbersome, costly and potentially fruitless exercise. She requests that an order specify these costs as child support and be collected by the Family Responsibility Office (FRO).

[6] Further, given that the parties enjoyed a 17 year relationship, the Mother advances a claim for retroactive support. At separation, she alleges that the Father’s income was $80,000 and hers was $15,000 (net of expenses) generated from her working for 2-3 doctors. Despite the fact that the Respondent Father has refused to pay spousal support, from 2010 to the date of trial, the Mother has improved her employment income, earning $40,000, such that she does not advance a claim for ongoing spousal support.

Child Support – s. 7 Expenses

[7] The twin 16-year-old boys are in full time attendance at high school and have diverse interests, which may attract the application of s. 7 of the Child Support Guidelines (CSG). Despite the week about arrangement, the Mother suggests that she pays for the boys’ clothing, haircuts, field trips, and top up of cell phones.

[8] Both boys had orthodontic services by Dr. Steinem for whose payment a consent order issued. Unfortunately, the Father argues that because of his current financial difficulties that he is unable to pay his obligations pursuant to the order of Timms J., January 12, 2011, paragraphs 3 and 4(b); nor for the s.7 expenses.

Ryan’s s.7 Expenses

[9] Ryan presents as a withdrawn teen who is not doing well at school and who refuses to continue in counselling. However, he appears to be academically and extra-curricularly proficient at music.

[10] Although, he took music lessons last year, he would like to take voice lessons, as well as purchasing the necessary software for his computer-generated music.

[11] Unfortunately there is poor communication between the parties, especially with respect to finances, such that the Mother either does not appropriately pursue the discussions of Ryan’s or the other children’s needs or simply by-passes the Father by engaging the children in their choice of activities, regardless of the financial implications.

[12] The Father does not deny that he did not contribute to Ryan’s 2010-2011 music lesson cost. However, the Father did pay $100 for two hours of studio time for Ryan in 2012. At $50 per hour, the Father indicates that he cannot pay this ongoing expense, despite the fact that he acknowledges that Ryan spends 70% of his waking hours recording on the computer.

Cody’s s.7 Expenses

[13] Cody engages himself in snowboarding and physical fitness, which activities attracted expenses in the amount of $693.24 to which the Father has not contributed in 2011. Nor did the Father contribute to Cody’s soccer for 2010-2011 which cost the Mother $275.

[14] On the other hand, the Mother acknowledges that the Father did contribute to Cody’s hockey for $400-$500 in 2011-2012.

[15] At some point, between 2010 and 2012, Cody had a paper route, and earned some monies as a result of which the Father believed Cody applied his earnings to his extracurricular activities. At trial in November of 2012, the Father acknowledged that Cody no longer has an independent source of income.

Rachel’s s.7 Expenses

[16] In 2011 Rachel attended driving school and attended karate, and the Mother paid for these activities in the amount of $703.00 and $412.00, without contribution from the Father.

[17] In September 2012 – May 2013, Rachel attended Durham College, enrolled in the Social Services programme and attained average marks of 87%. The cost for the programme has been proven at $5619.26. The Mother paid for the computer and books in the amount of ($95+$763.58+678.74) $1537.32. Receiving OSAP in the amount of $4,546, $989 of which was grant, Rachel applied the monies towards her tuition and ancillary fees in the amount of $3,976.84.

[18] Of note is the fact that Rachel deposited some of the monies into her bank account which she has had for some time, given the fact that Rachel was employed in 2011–2012 at East Side Mario’s, and currently is employed at Starbucks. Although Rachel’s ITRs were not produced, her Mother attests that she works less during the school year (1 evening per week and on weekends) in order to maintain her grades; and, she will not be able to work full time during the summer as she wishes to accelerate her education.

[19] The Father was not kept abreast of Rachel’s income or her education expenses such when the Mother asked for the Father to contribute ½ of the post-secondary costs, he declined to do so.

[20] At trial, the Mother suggested that each of the Mother, Father and the child be responsible for 1/3 of the post-secondary costs; and, that each of the Mother, Father and child be responsible for the payment of the child’s outstanding OSAP loans.

Financial Circumstances of the Parents:

[21] When the parties settled the issue of the ongoing child support, they agreed that the income for the parties in 2011 was $83,092.00 for the Father and $40,000 for the Mother. However, the Father’s 2012 income is estimated at $62,758.50, to which is added his bonus of $3900 gross, for a total income of approximately $66,658.50. The Mother works for both Enbridge and continues in her medical billing business for a total income estimate of $40,000.00. Her Mother also resides with her and the children but no evidence was adduced as to the maternal grandmother’s contributions to the household expenses; nor did I have the benefit of a 2012 ITR to review the personal expenses deducted from taxable income as a result of her continued medical billing business which she operates out of her residence.

[22] The parties agreed on October 23, 2012, the apportionment of their responsibilities for extraordinary expenses, namely: the Father was to pay 67.5% of the tendered children’s special or extraordinary expenses; however, these expenses were to exclude the extracurricular activities and Rachel’s postsecondary education expenses. Presumably, such apportionment was on a go forward basis. However, the first part of the consent is in conflict with such agreement as it recites proportionality as follows:

The applicant Joanne Elizabeth Deadman and respondent James Richard Deadman will share in proportion to the respective incomes the children’s special or extraordinary expenses in accordance with section 7 of the child support guidelines (excluding the children’s extracurricular activities and Rachel’s postsecondary education expenses), including but not limited to insured medical/dental/extended health, extraordinary educational expenses and expenses for post-secondary education for Ryan and Cody.

[23] The Court is left to apportion the parents’ responsibility for extraordinary expenses or section 7 expenses from the date of separation to the date of the consent order October 23, 2012, while the Consent Order of October 23, 2012 governs the proportionality and the recognized s. 7 expenses for 2013.

Parties’ Incomes

[24] In consideration of the Father’s assumption of payment on the joint loan in the amount of $700 per month and the Mother’s Legal Aid lien, the Mother waived spousal support from the date of separation to June 2011.

[25] Further the Mother’s income has improved since the date of separation to the date of trial, in that the Mother’s income has increased from $15,000 to $40,000, such that she is content to release the father from his obligation to pay spousal support from the date of trial forward.

[26] Whilst the mother’s income has improved, the father’s income is tenuous. He is concerned about receiving some form of financial advice as to how to manage his debt load. He even spoke of bankruptcy. It would appear that the pressure of the financial implication of the separation, as well as the fact that, it would appear that the parties financed the families living expenses through debt, has had a significant emotional impact on the father. He candidly opined, without the benefit of legal counsel, that he was contemplating retirement, even though he was not obligated to retire. If this were to occur, his source of income would be his pension, half of which is payable to the mother and a severance pay of approximately $40,000. Clearly, it would be necessary for him to obtain substituted employment in order to support the children.

[27] He suggests because of his high debt load, and monthly payments on same, he has not been able to pay either the costs owing in the amount of $1500, nor the monies for the children’s passports or the outstanding orthodontic expenses. He does not dispute his obligation to do so.

[28] His concern about finances is such that he concedes discussing finances with his children. Any further financial outlay by him by way of child or spousal support would require him to downsize and therefore put the week about arrangement for the boys at risk. Acknowledging that he has breached the court order in that regard, he insists that it is imperative that the boys who are 16 years old and the daughter, who is 18 years old be aware of the family’s financial circumstances.

[29] A review of the father’s financial statement, exhibit 6, indicates that the father expends monies on the following monthly living expenses: rent, heat and electricity =$1670; alcohol and tobacco = $ 150; utilities= $350; food and household expenses=$620; debts = $640; revealing a modest monthly amount spent on discretionary expenses of $150. His total monthly living expenses are $5991.00 and he pays $999 per month in child support for a total of $6982. As his debt load is decreasing with time, he should have some monies, currently applied to debt, as well as his discretionary spending, for the purposes of paying down any arrears of payment reflected in the judgment.

[30] His filed financial statement was created by the applicant’s counsel, on the basis of the father’s sworn testimony, as the father failed to produce an updated financial statement. Nevertheless, this statement supports the father’s assessment of the family’s finances and they have an impact on the determination of both the means and needs of the parties with respect to spousal support; as well as, the determination whether the section 7 expenses are reasonable and necessary.

[31] I find the parties’ incomes for the determination of both child section 7 expenses and spousal support to be as follows:

(a) 2009- Father - $85, 774.

Mother - $15, 000 + $2500 for personal expenses deducted for a total of $17, 500.

Mother pays 17% and Father pays 83% of s. 7s for the year 2010.

(b) 2010- Father - $87, 408.27 – extrapolated from the Trial Record’s Statement of earnings ending June 12, 2010.

Mother - $15, 000 + $2500 for personal expenses deducted for a total of $17, 500.

Mother pays 17% and Father pays 83% of s. 7s for the year 2011.

Mother - $24, 362 + $5000 personal expenses deducted and Grandmother’s contribution to income = $29, 362.00

Mother to pay 26% and Father to pay 74% of s. 7s for the year 2012

(d) 2012 – Father - $90, 057.33 extrapolated from Exhibit #5.

Mother - $40, 000 + $5000 for personal expenses deducted and Grandmother’s contribution to income = $45, 000.

Proportional contribution by Mother at 33.33% and Father at 66.66% of s. 7s for the year 2013.

[32] As no 2013 s. 7 expenses were referenced in evidence, the 2012 allocation as per the Court order of October 23, 2012, namely, that the Father pay 67.5% and the Mother pay 37.5%, shall prevail and apply to any of the children’s 2013 s. 7 expenses, as identified in the consent order of October 23, 2012.

Necessity and Reasonableness

[33] For the period from the date of the separation to the date of the 2012 court order, I am to be guided by the Child Support Guidelines (CSG), rather than the consent order of October 23, 2012.

S. 7 of the CSG states as follows:

In a child-support order the court may, on the other spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expense maybe estimated, 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 spouses and those of the child and the family’s spending pattern prior to the separation:

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health–related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child's particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

(1.1) DEFINITION OF “EXTRAORDINARY EXPENSES” –For the purposes of paragraphs (1) (d) and (f), the term “extraordinary expenses” means

(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or

(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account

(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child or children,

(iv) the overall cost of the programs and activities, and

(v) any other similar factors that the court considers relevant.

(2) SHARING OF EXPENSE – The guiding principle in determining the amount of expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.

(3) SUBSIDIES, TAX DEDUCTIONS, ETC.- Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.

(4) UNIVERSAL CHILDCARE BENEFIT – In determining the amount of an expense referred to in subsection (1), the court shall not take into account any universal child care benefit or any eligibility to claim that benefit.

[34] There is no doubt that in light of her income, the Mother could not cover all the extra expenses of the children. Hence the several expenditures were indeed extraordinary. But, I must also assess the parties’ incomes and examine the means of both parents, in determining whether the expenditure is reasonable in the circumstances. In doing so, I must review the amount of the expense, the nature and number of the activities; the special needs and talents of the children; the history of the payment for such expenses.

[35] Having found that all the requested expenses are extraordinary, what needs to be determined is whether any or all are necessary.

[36] No evidence was led as to the family’s history of spending on the children’s extra- curricular activities. However, the Father acknowledged that one of the twins had an athletic bent and the other a musical inclination. Given the family’s debt load upon separation, presumably, some of these monies were spent on the children’s activities.

[37] After a review of the expenditures I find the following to be extraordinary:

a. Ryan- music lessons and studio time;

b. Cody - snowboarding and physical fitness, soccer and hockey;

c. Rachel - driving school, karate, post- secondary education.

[38] After a review of the parties’ incomes, the history of their debt, Cody’s and Rachel’s employment income, I find the following to be necessary:

a. Ryan – music/voice lessons and studio;

b. Cody – snowboarding, physical fitness, soccer and hockey;

c. Rachel – driving school, karate and post – secondary schooling.

[39] Taking into account the proportionality for each previous year, each parent is responsible to the other for the payment of the s.7 expenses owing for the years 2010, 2011 and 2012, the following sums:

a. 2010 – based on 2009 incomes, the Mother owes the Father $17.00;

b. 2011 – based on 2010 incomes, the Mother owes the Father $ 76.50 and the Father owes the Mother $803.44;

c. 2012 - based on 2011 incomes, the Father owes the Mother $825.10;

[40] As the oldest child, and in fact each child, must contribute to the post-secondary expenses, the Mother’s proposal that each parent and child be responsible for 1/3 of the post-secondary costs, is eminently reasonable, so long as the child attends a local community college/university. Having deducted the grant from the monies received by the daughter, both parents are responsible for the payment of $ 1526.06 to the oldest child. The Mother already having paid the daughter $1537.32, only the Father is responsible for his 1/3 share, namely, $1526.06 and which funds are to be collected as child support by FRO. As such, there is no need to allocate the responsibility between the parties and the child with regard to any current or future OSAP loans.

[41] Going forward, as a result of the consent order, the Father is no longer responsible for the boys’ extra-curricular expenses, nor is he responsible for the oldest daughter’s post- secondary costs, rather he is responsible for the “insured medical/dental/extended health, extraordinary educational expenses and expenses for post-secondary education for Ryan and Cody.” Despite the Applicant’s proposal that the Court interpret this agreement and identify what are extraordinary educational expenses for the boys, in advance of incurring such expense, in 2013 and after, I leave this to the parties to determine on actual evidence of what will be the boys’ extraordinary educational expenses” as opposed to their “ post – secondary expenses”.

Spousal Support

[42] The Applicant Mother seeks retroactive spousal support claim, including indexing retroactive to July 1, 2011 until January 31, 2012, a 6 month period. Based on the length of the marriage, her entitlement is evident. She seeks a lump sum award, in the amount of $3150. However, clearly her income in 2011 and 2012 was on the rise; she did not establish with clarity that she expensed for tax purposes some of her housing expenses in that she operated her business out of her home. Further, she did not establish with clarity her Mother’s contributions to her income; and, during the period July 1, 2011 – January 31, 2012, she did not establish that she was in need. No spousal support order shall issue.

Conclusion

I make the following Orders:

The Respondent Father shall pay to the Applicant Mother monies owing for retroactive s. 7 expenses the sum of ($803.44 +$825.10 - $17.00 -$76.50) $1535.04, which sum is to be enforced as child support by FRO.
The Respondent Father shall pay to the Applicant Mother the costs previously ordered in the amount of $1550, which sum shall be enforced as child support by FRO.
The Respondent Father shall pay to the Applicant Mother his arrears of orthodontic costs in the amount of $3642, previously ordered, which sum shall be enforced as child support by FRO.
The Respondent Father shall pay to the Applicant Mother the sum of $78.50 on account of the children’s passports as previously ordered, which sum shall be enforced as child support by FRO.
There shall be no order for spousal support.
Support Deduction Order to issue.

Costs

[43] Although this was an uncomplicated one day trial, the trial was necessitated by the Respondent Father’s failure to produce his updated financial information. Despite the fact that the Applicant Mother was not entirely successful, she was successful on 2/3 of the major issues. Accordingly, pursuant to Rule 24, I fix the costs of the trial in the amount of $4000 (2/3 of $6000) payable by the Respondent Father to the Applicant Mother and collected and enforced by FRO.

Olah J.

Released: May 24, 2013

Deadman v. Deadman, 2013 ONSC 2890

Case Summary

Reasons for Judgment

Introduction

Background

Mother’s Position

Child Support – s. 7 Expenses

Ryan’s s.7 Expenses

Cody’s s.7 Expenses

Rachel’s s.7 Expenses

Financial Circumstances of the Parents:

Parties’ Incomes

Necessity and Reasonableness

Spousal Support

Conclusion

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues