ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: D1195/09 HAMFC
DATE: 2013-July-2
RE: Carrie Lynn Gordon and Schott Richard Grady
BEFORE: The Honourable Mr. Justice D.J. Gordon
HEARD: June 13, 2013
COUNSEL: Parties appearing in person
The Honourable Mr. Justice D. J. Gordon
Endorsement
1In his motion to change, Mr. Grady seeks to change prior orders so as to reduce the amount of child support and terminate spousal support. By way of her response, Ms. Gordon (not related to me) asks that both support payments be adjusted in accordance with their respective incomes.
2In essence, I am required to recalculate the support payments since 2010 based on actual incomes.
Background
3The parties married on November 3, 1990 and separated on September 1, 2008. They have one child, Jacob Dalton Grady, born June 14, 1996. Jacob lives primarily with his mother and has regular periods of time with his father.
4Minutes of Settlement were entered into in October, 2010, resolving issues of custody, access, child support and property. An order was granted by Parayeski, J. on October 15, 2010 incorporating the settlement terms.
5Relevant to the present proceeding is the requirement of Mr. Grady to pay child support to Ms. Gordon in the monthly amount of $717.00, commencing January 1, 2010, based on his disclosed income of $79,626.00 for 2009. Notwithstanding a significant income disparity, the minutes and order provided for an equal sharing of extraordinary expenses for Jacob.
6Of some relevance, the property resolution called for an equalization payment from Mr. Grady to Ms. Gordon of $10,000.00, payable by two equal instalments in September 2010 and 2011. Part of this amount remains unpaid.
7Further, Mr. Grady was given exclusive possession of the matrimonial home. Title was to be transferred to him upon payment in full of the equalization. Mr. Grady rented the property, saying he could not afford the carrying costs. The property was subsequently sold by the mortgagee pursuant to the power of sale provisions in the mortgage. Mr. Grady is liable for the deficiency from the sale. Ms. Gordon made an assignment in bankruptcy in 2009.
8The issue of spousal support required a trial. On May 26, 2011 Brown J., granted an order that required Mr. Grady to pay Ms. Gordon $1,200.00 monthly, commencing January 1, 2010. In her reasons for decision, Brown J. indicated the award was based on Mr. Grady’s income of $89,556.00 and Ms. Gordon’s income of $22,000.00. The monthly amount was said to be slightly less than the midpoint as suggested by the Spousal Support Guidelines.
9Mr. Grady’s appeal of the spousal support order was dismissed by the Divisional Court on October 27, 2011.
10Mr. Grady was off work for a period of time due to health problems. During this period, he received disability insurance as hereafter stated. This event is what ultimately lead to the within motion to change. There is no dispute regarding his health status at the time or with the insurance received and the requirement of grossing up the tax free income for support purposes.
Issues
11As previously mentioned, the support obligation requires recalculation. At the hearing, Mr. Grady indicated Ms. Gordon’s entitlement to spousal support is not in issue at the present time. Further the parties were in agreement on most factors pertaining to support calculations, leaving only the following issues to be decided:
i) what was Mr. Grady’s income in 2010 and 2011 for support purposes, and
ii) what is the appropriate quantum of spousal support each year.
Income
i) Ms. Gordon
12There is no dispute as to Ms. Gordon’s historical income, either as to the amount reported or ability to earn. Her income was as follows:
2008 $40,962
2009 23,571
2010 23,270
2011 35,390
2012 35,266
The income fluctuation resulted from a legitimate change in employment.
13Ms. Gordon estimates her 2013 income will be $36,000.00. This is composed of base salary of $35,000.00 and overtime to date of $1,000.00 She does not anticipate further overtime becoming available this year.
14Mr. Grady says I should impute the 2013 income at $40,000.00 by extrapolating overtime over twelve months. I cannot speculate but, rather, may only make findings based on the evidence. As with his income, as hereafter discussed, the only reliable evidence is year to date. Therefore, I find Ms. Gordon to have a 2013 income of $36,000.00 for support purposes.
15Should the income of either party in 2013 ultimately be determined to differ, the parties may need to revisit the calculations in the usual manner.
ii) Mr. Grady
16For the most part, the parties agree on Mr. Grady’s historical income, the differences being noted in the following chart:
2008 $68,092
2009 79,626
2010 92,614 or 90,607
2011 88,324 or 81,619
2012 58,214
17In 2012, Mr. Grady received some employment income as well as disability insurance. The parties agree with the gross up for the latter to account for income tax not required. The amount, in total, is agreed at $58,214.00 for 2012.
18The difference in their positions for 2010 and 2011 is with the treatment for the rental loss claimed by Mr. Grady on his income tax return. The lower amounts in the chart above are the line 150 amounts.
19The rental loss pertains to the matrimonial home as previously described. Title to the property had not been transferred as the equalization payment was outstanding. Further, Mr. Grady agreed to take over the property and had exclusive possession. Brown J., in her reasons for decision, addressed rental income but restricted the support claim to employment income.
20In my view, the rental loss cannot be allowed to reduce income for support purposes in these circumstances. Accordingly, I find Mr. Grady’s income to be $92,614.00 in 2010 and $88,324.00 in 2011.
21Mr. Grady reports his base salary to be $65,000.00. He has received bonuses and stock options in the past, determined by the profitability of his employer. A bonus has been paid to Mr. Grady already in 2013. A further bonus in September is a possibility. The base salary, together with the bonus received puts Mr. Grady at a 2013 income of $79,508.00.
22Ms. Gordon initially sought to have Mr. Grady’s income imputed at a higher amount for what she anticipated the next bonus to be . At the hearing, she agreed to his income of $79,508.00, consistent with my comment on speculation as with her income. Therefore, I find Mr. Grady’s 2013 income to be $79,508.00.
Guideline Child Support
23Guideline child support, payable by Mr. Grady to Ms. Gordon may now be recalculated based on actual income. The order of Parayeski J., granted October 15, 2010, shall be varied as follows:
i) commencing January 1, 2010, $822.00 monthly on income of $92,614.00;
ii) commencing January 1, 2011, 788.oo monthly on income of $88,324.00;
iii) commencing January 1, 2012, $529.00 monthly on income of $58,214.00; and
iv) commencing January 1, 2013, $721.00 monthly on anticipated income of $79,508.00.
Section 7 Extraordinary Expenses
24The parties have agreed that future extraordinary expenses are to be shared on a proportionate basis, in accordance with section 7(2), Child Support Guidelines. Accordingly, the above noted order is varied to provide for same. By way of example, based up the incomes as above, for the remainder of 2013, Mr. Grady shall pay 69 per cent of such expenses, Ms. Gordon, 31 percent.
Spousal Support
25As mentioned previously, only the quantum of spousal support is in dispute at this time. The issues of entitlement may arise at some point in the future.
26Brown J. determined the appropriate quantum ought to be slightly less than midpoint. Although both parties take a different position, I see no reason to depart from the approach of Bro wn J.
27The midpoint for each year, based on the incomes of the parties previously determined is as follows:
2010 $1363.00
2011 846.00
2012 0
2013 505.00
28Accordingly, the order of Brown J., granted May 26, 2011, shall be varied as follows:
i) commencing January 1, 2010, $1200.00 monthly;
ii) commencing January 1, 2011, $750.00 monthly;
iii) commencing January 1, 2012, no spousal support is payable; and
iv) commencing January 1, 2013, $450.00 monthly.
29I have reviewed the financial statements of both parties. Each has debt and, no doubt, each is struggling financially. I see no reason, however, to entertain a different approach having regard to all of the financial circumstances as presented in evidence.
Other Matters
30The Family Responsibility Office will now recalculate the support arrears in accordance with the terms of my order.
31Mr. Grady asks that I limit ongoing support deductions at $1000.00 monthly, with catch-up to occur with bonuses and stock options. I decline to do so for two reasons:
i) the equalization payment remains outstanding; and
ii) the support arrears are substantial.
32Mr. Grady also requests that I also address the deduction and inclusion of the spousal support for income tax purposes. In the circumstances, I cannot direct Canada Revenue Agency in this regard. Given the arrears, it seems to me that the apportionment of support payments can be determined from the Family Responsibility Office statements.
33A support deduction order shall issue in the usual manner.
34This is not a case for costs. The request for a change was appropriate. Despite their disagreement, the parties acted reasonably. Unfortunately, neither
party could afford to retain a lawyer. Had they done so, there is no doubt a consent order would have been negotiated and requested.
35An order shall issue on the terms herein.
Gordon, J
Released: July 2 , 2013