ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frank Boateng
Applicant
– and –
Henrietta Botsio
Respondent
M. Z. Goose, for the Applicant
O. da Silva Santos, for the Respondent
TRIAL HEARD: February 14, 15, March 18 and June 3, 2013
REASONS FOR JUDGMENT
Daley J.
1This action proceeded to trial on the issues of child support and spousal support only, as all other matters in dispute had been resolved.
2The underlying issue to be determined was the actual or imputed income level of each party.
3The parties were married on April 5, 1997 and separated on July 25, 2008 and thus they had a marriage of approximately 11 years in duration. The parties were divorced on August 5, 2010.
4The parties have two children, namely Jeffrey Boateng, born March 7, 1999 and Justin Boateng, born February 15, 2001. Justin is a special needs child, who has been diagnosed with autism and has limitations with regard to delayed development.
5By the order of Wein J. dated June 15, 2009, the applicant, was ordered to pay arrears of child support based on an estimated income of $40,000 per year, without prejudice, for the period August 1, 2008 to June 1, 2009 fixed in the sum of $6,611.00. The order also provided that the applicant pay ongoing child support in accordance with the Child-Support Guidelines in the monthly amount of $601 commencing July 1, 2009.
6A further order was made by Gray J., on January 14, 2010 in accordance with minutes of settlement filed, which provided:
(1) the respondent mother was granted a final order of custody in respect of the children;
(2) that the applicant pay the respondent interim spousal support of $500 per month commencing January 1, 2010, without prejudice as to the quantum or retroactivity;
(3) the applicant was to pay the respondent $100 per month for s. 7 expenses commencing January 1, 2010;
(4) the applicant was to continue to pay ongoing child support in accordance with the order of Wein J. of June 15, 2009 in the monthly amount of $601 commencing July 1, 2009; and
(5) the applicant was to pay 100% of the private tutoring fees required for Jeffrey Boateng.
7At the time this action proceeded to trial the applicant was therefore paying child support in the sum of $601, spousal support at $500 and s. 7 expenses at $100 for a total monthly amount of $1,201.
8In the respondent’s evidence she testified that she and her sons reside in a three bedroom townhome. Both children attend the same school, however, Justin takes a different bus given his status as a special needs student.
9The respondent testified that she stays home and is unable to seek full-time employment as she must care for Justin. She testified that he was diagnosed with autism approximately five years ago and can be aggressive. He attended Erinoak School for 2 to 3 years following which he was integrated into a regular classroom setting.
10She testified that he is improving fairly slowly, however, he gets upset at school and she is required to attend school as often as once each week to assist him and also she travels on field trips with him. She described herself as being ‘on call’ and that she has to attend the school from time to time to bring him clean clothes.
11Justin only speaks a few words and has limited understanding. She further testified that Justin could not be left alone nor be left with his brother Jeffrey.
12Jeffrey is enrolled in grade 8 and had been receiving tutoring which the applicant had paid for, however, the respondent testified that his grades have declined since he has not recently been receiving tutoring.
13While the applicant has access rights to the children, the respondent testified that in the six months preceding the trial he had only seen the children on one overnight visit every other weekend. She wishes that he would spend more time with the children.
14The respondent testified that she has the equivalent of a grade 12 education with no other special training. She was involved in a motor vehicle accident in 2006 and at that time she had been previously employed in a factory position earning approximately $35,000 per year.
15Her tax records which were filed in the respondent’s document brief, which was marked as Exhibit 1, show her income as reported as follows:
(1) 2012 – $14,412;
(2) 2011 – $15,251;
(3) 2010 – $14,582;
(4) 2009 – $8,517.20; and
(5) 2008 – $4,902.
16The income amounts reported include child-support payments made and child tax credit amounts and social assistance. She had no earned income in this time frame.
17The respondent received statutory accident benefits following her motor vehicle accident which were terminated in 2007. She received $30,000 with respect to the settlement of her motor vehicle accident claim in 2008 after the date of separation and a further final payment of $80,000 in 2012.
18The parties owned their home for approximately three years prior to separation and while they resided together the applicant paid the mortgage and the respondent testified that she paid for the food. She did all of the household chores as she testified the applicant left the home at 6:00 a.m. and returned typically at 8:00 p.m.
19When they were first married they lived in a subsidized rental apartment as the applicant was initially in school when he arrived in Canada. Once the respondent obtained employment they moved into an unsubsidized apartment. After the applicant completed his course in pharmaceutical studies he was unable to obtain employment in that area so he began working as a courier which he has continued to do.
20The respondent testified that the applicant was working as a dedicated courier for the Royal Bank and that he primarily works in the downtown core of Toronto. While they resided together he was paid by cheque from United Messengers Ltd. She was not aware if any books of account or business records were kept by the applicant. As far she knew he would deposit his paycheque to his personal TD bank account.
21She testified that she observed his pay stubs which were in the order of $2,800 or $3,000 every two weeks. Copies of cheques from United Messengers Ltd. were included in the last three pages of the trial record covering the period from the end of December 2012 to the last week of January, 2013 in the amounts of $2,818.72, $2,380.95, and $2,804.02 respectively.
22The respondent testified that she believed the applicant’s income was in the order of $70-$80,000 per year. In cross-examination she agreed that this estimate of his income is gross and does not include expenses that may be deducted. She agreed that he would have to incur maintenance costs with respect to his car and she acknowledged that her own costs with respect to gas and car maintenance was in the order of $395 per month.
23Following the settlement of her motor vehicle accident claim, she used some of the proceeds to purchase a townhome. She had been previously paying apartment rent of $1,140 per month and her mortgage payment is currently $1,200 per month.
24The witness reviewed her sworn financial statements from February 2009, November 2009 and February 5, 2013. She confirmed the information contained in that statement including that her monthly total income from all sources is $2,310 which is made up of child and spousal support, child tax benefits and disability benefits related to her son. Her total expenses reflected in her sworn financial statement of February 5, 2013 were $2,491.70.
25As to debts, she confirmed that she currently has a Scotia Bank mortgage in the sum of $273,000 as well as other personal debts as outlined in Part 5 of her financial statement all totalling $299,900.
26As to her children’s needs, she estimates her expenses in that regard are in the order of $100 per month to cover the cost of gas and dental costs as well as eyeglasses. The children had no vacations or summer camps.
27When the matrimonial home was sold she received one half of the net proceeds in the sum of $30,000. The applicant paid her additional $7,500 from his share of the equalization payment in respect of unpaid child support.
28The respondent testified that the final payment with respect to the resolution of her motor vehicle accident claim in the sum of $80,000 included some portion with respect to loss of income but she was uncertain as to how much.
29She purchased the townhome for $353,000 and acknowledged that her mortgage with Scotia Bank is in the sum of $273,000.
30She also acknowledged that she had applied for a mortgage with Scotia Bank and that her monthly mortgage payment is $1,214 plus taxes of $190 for a total of $1,404 per month and she agreed that with the addition of water, heat and Hydro, her total monthly cost for the townhome is in the order of $1,600.
31Following the completion of the evidence of the respondent, counsel for the applicant produced a Statement of Income Declaration from Scotia Bank which was produced to him by a representative of the bank. Counsel for the respondent acknowledged the authenticity of the statement without formal proof and that the applicant signed it on 20 December 2012. In the income declaration the respondent stated that her total gross annual earnings/income was $58,000.
32The respondent was never examined under oath regarding this statement, it was simply admitted in evidence on consent.
33The applicant’s evidence as to the nature of his occupation and his earnings and expenses and supporting documentation was most confusing. He testified that he has been a “contracted worker” and not an employee since late 2008. He testified that he works Monday through Friday from 6:30 a.m. to 7:00 p.m. primarily in the downtown of Toronto and the Greater Toronto Area (GTA).
34He testified that the Family Responsibility Office (FRO) payments with respect to support are taken from his pay at source prior to him receiving any monies from his occupation.
35The applicant, when referred to his 2011 tax return, acknowledged that he has a common-law partner namely Angelina Wopong, who resides in Africa.
36As to his expenses, the applicant testified that all of his expenses particularly with respect to his car loan and insurance are paid out of an account he has with Scotia Bank.
37With respect to his historical earnings, the applicant confirmed that he declared total income from employment in 2008 of $19,967, however, in a letter dated September 29, 2010 from United Messengers Ltd. it was stated that the applicant’s earnings in 2008, commencing in February were in the sum of $76,733.
38The applicant further acknowledged that in 2008 he declared gross revenue from courier work at approximately $56,000 and testified that some of the monies, referred to in the United Messengers Ltd.’s letter, was paid to his uncle through the business referred to in that letter namely Coplan Courier and Transportation Inc.
39Notably, the letter from United Messengers Ltd. states that the applicant was operating as that corporation for part of 2008.
40The applicant also filed in this proceeding a sworn financial statement dated December 8, 2008 where he declared his monthly income at $2,400 which annualized works out to $28,800 and yet at trial he testified that his income was in the order of $50-$58,000. In his December 8, 2008 financial statement he declared a monthly surplus of $1,223 and yet this is the year he acknowledged filing a proposal in bankruptcy.
41The applicant endeavoured to explain the conflict in his income statements and his testimony by stating that his accountant prepares his statements.
42A further contradiction to the oral testimony given by the applicant appears again in the sworn financial statement of December 8, 2000 under Part 5 where the applicant declares that he is “employed” by Coplan Courier & Transportation Inc.
43In his sworn financial statement of June 20, 2009, in Part 5 the applicant states that he is “self-employed” carrying on business under the name of “Coplan Courier.”
44In his sworn financial statement of September 14, 2010 the applicant declares that he is “self-employed” and carrying on business under the name of “United Messengers Ltd.” He denied being the principal or owner of this business and testified that the information included in his financial statement was a mistake. He acknowledged that the income declared in that statement at $3,800 per month was accurate.
45Surprisingly, the witness testified that whatever documents his accountant prepared for him regarding his financial disclosure and sworn financial statements, he just signed.
46In his sworn financial statement dated February 6, 2013, he declares himself “employed” with “United Messengers Ltd.” In this statement, he reports employment income of $21,759.00. He readily acknowledged that this was wrong. Similarly as to transportation expenses, he declared a car loan in the sum of $388 in this financial statement but acknowledged that it had been paid off in the prior year and should not been included in the financial statement.
47With respect to his sworn financial statement of February 6, 2013, he surprisingly testified that he did not fully read the sworn financial statement before signing it. Specifically, he noted that he did not claim expenses with respect to parking and maintenance for his car although he testified he is incurring those expenses. Further, his expenses do not make reference to $150 per month sum he is paying with respect to his consumer proposal. His answer for this omission was that he just signed it and if it was omitted it is his lawyer’s or his secretary’s mistake.
48With respect to his Statement of Business or Professional Activities for the Year 2011, the Applicant acknowledged that he claimed motor vehicle expenses of $21,115.92.
49Further with respect to is sworn financial statement of February 6, 2013, the applicant acknowledged that at the time he executed that statement, he owned the motor vehicle and a van but neither were disclosed in Part 4.
50Similarly, he acknowledged that in Part 4 (c) of this statement, he makes no disclosure of his bank account and declares the total value of his accounts at zero dollars.
51While the applicant acknowledges that he has in place life insurance with his two children as beneficiaries in a policy amount of $150,000 and that he pays $140 per month in premium, this is not shown in his financial statement either.
52As to his Scotia bank account records, the witness was referred to tab’s 12 to 15 of Exhibit 1 with respect to various entries in the account. He was unable to offer any explanation as to a transfer deposit of $5,000 from another account to his account. The applicant was adamant that he has only one bank account and acknowledged that FRO does not collect any monies payable with respect to support from this account.
53The bank records from Scotia bank show that in the year 2011 there was total cash proceeds deposited in the account of $71,260.20 and in 2012 total cash was deposited in the amount of $78,864.17.
54The evidence shows that in 2008 the applicant had declared line 150 income of $19,967 and had taxes assessed in the sum of $3,393.51.
55In 2011 the applicant’s line 150 income declared was $21,759 and taxes assessed were in the sum of $139.01.
56The applicant did not produce his 2012 tax return, however banking records show that total cash deposited in 2012 was in the sum of $78,864.17, which sum is over and above monies withdrawn at source by FRO in payment of support in the sum of $14,412 per year.
Analysis:
57With respect to the applicant’s income, he declares in his most recent financial statement of February 6, 2013 that he has no debts nor any payments owing to his trustee with respect to the consumer proposal which he had filed. In his financial statement of September 14, 2010 he identified his liabilities as of that date at $21,600 including a trustee debt of $6,000. Thus on the applicant’s sworn financial statements he was able to discharge debt in the order of $21,600 between September 2010 and February 2013.
58The record shows that the applicant had total revenues in respect of his Courier business as follows:
(1) 2008 – total revenues of $76,773 as reported by letter from United Messengers Ltd.;
(2) 2009 – total revenues of $47,000 – in self-reported gross business income plus $14,412 per year in FRO payments withdrawn at source for gross revenue of $61,412;
(3) 2010 – total revenues of $43,343 – in self-reported gross business income plus $14,412 per year in FRO payments withdrawn at source for gross revenue of $57,755;
(4) 2011 – $71,260.20 – in bank deposits plus support payments taken by FRO at source of $14,412 for gross revenue of $85,672.20;
(5) 2012 – $78,864.17 gross revenue plus support payments taken by FRO in the sum of $14,412 for gross revenue of $93,276.17; and
(6) the average of last three years for 2010, 2011, and 2012 gross business revenue is $78,901.12.
59As to business expenses, the applicant does not make full and frank disclosure of those expenses and it is acknowledged by him that his disclosure is based on poor records and the only disclosure that is put forth as to expenses appears in his 2011 income tax return where he claims vehicle expenses of $21,115.92 as well as other expenses relating to car washes, entertainment, management expenses, telephone and advertising.
60Other than being cross-examined on the accuracy of the expenses, the only evidence as to expenses incurred by the applicant are those outlined in his 2011 income tax return – statement of business or professional activities wherein he claims $36,254.06 of business expenses as against net income of $58,014 leaving a net income of $21,759.94.
61On the other hand, the applicant’s financial statements declare car expenses in the order of $900, $450, $691 and $441 in the sworn financial statements of December 8, 2008, June 10, 2009, September 14, 2010 and February 6, 2013 respectively.
62The applicant acknowledged that his claim with respect to a car loan of $388 per month in his financial statements was improper as it was made when no such loan existed as the liability had been consolidated in the consumer proposal referred to in the June 20, 2009 financial statement.
63Given the conflicting and inadequate evidence offered by the applicant as to his income and business operating expenses, and having considered all of the expenses he has put forward with respect to his motor vehicle, gas, maintenance, insurance, parking and other business-related expenses, I agree with the submission made on behalf of the respondent that the midpoint between the average annual expense at the low range of $5,400 and the high-end expense of $21,115.92 is an appropriate measure of reasonable expenses to be deducted from gross revenue, namely in the sum of $13,257.96.
64Thus taking the average of the last three years incomes as calculated above at $78,901.12 and deducting the operating expenses from gross revenue of $13,257.96 results in a net average taxable income of $65,643.16 I find that this sum shall be the imputed income with respect to the applicant for the purpose of the calculation of support.
65As to the respondent’s income, although the respondent’s counsel concedes that in spite of her childcare duties, it would be appropriate to impute income to her at $15,000, against that I must consider the income declaration used in obtaining her mortgage, where she stated her income was $58,000. Additionally, her sworn financial statement from February 2013 states that her income from all sources, inclusive of support payments, is $27,720. The respondent offered no evidence regarding the mortgage income declaration statement.
66Given the respondent’s childcare duties, which I find are significant, and her limited education and employment skills, I find that imputed income of $15,000 a year related to some part-time employment, is appropriate and I so find that that is her income for the calculation of support.
67In reaching this conclusion I have considered the respondent’s declaration submitted to Scotia Bank where she declared income of $58,000. There is no evidence regarding this statement. It was simply filed in evidence on consent without testimony from any party or witness. The respondent’s employment and earnings history do not disclose that she has the current ability to earn income at this level. I found the respondent to otherwise be a credible witness who testified in a forthright manner. In the circumstances, I prefer to accept the respondent’s evidence at trial as well as her evidence contained in her sworn financial statements as to her earnings and expenses.
Spousal Support:
68The Court must consider the factors and objectives set out in s. 15.2 (4) and (6) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), when making an order for spousal support:
Spousal support order
Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
69Neither counsel provided any case authorities in respect of the respondent’s claim for spousal support.
70No one objective predominates the analysis and the court must balance all of the above factors and objectives in the context of the parties’ circumstances: Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813.
71The first factor that must be considered when examining the means, needs and other circumstances of the parties is the length of cohabitation. These parties cohabited for approximately 11 years and they have two children. One of the children has been diagnosed with autism and is developmentally delayed which the respondent asserts impairs her ability to obtain employment outside the home.
72It is uncontradicted that the respondent has been a full-time homemaker and caretaker with respect to the children since there birth and that she has not worked outside the home since her motor vehicle accident in 2006.
73It is the respondent’s evidence, which is uncontradicted, that pre-accident, her income was from minimum wage labour employment and she has no significant employment skills.
74It is the respondent’s evidence, which I accept, that she was principally involved in all childcare and homemaking activities. The applicant testified that he has worked full-time and long hours in his career business over many years.
75As to the applicant’s income, on average, I have determined it to be in the sum of $65,643.16 for the calculation of his support obligations. As to the respondent’s income, I have determined it to be $15,000, over and above the spousal support, child support and disability benefits received.
76While the condition, means, needs and other circumstances of each spouse must be considered in assessing what is appropriate in the way of spousal support, the factor such as the respondent’s childcare obligations must also be considered. The uncontradicted evidence is that although Justin attends school each day, I accept the respondent’s evidence that she is essentially “on call” when needed with respect to Justin in terms of attending at school to assist him when required. I also accept her evidence that she must be available both before and after school to ensure his well-being given that he cannot be left alone or with his brother.
77The evidence is unclear as to Justin’s circumstances beyond this. There is no evidence as to what the future holds for him and what level of care or supervision he will require and what resources, if any, are available apart from the respondent acting as a part-time caretaker for him.
78The level of income which I have imputed to the respondent at $15,000 per year reflects my conclusion that she is required to provide part-time care to Justin and as such, her employment opportunities and time available to work are limited.
79I also conclude that the respondent has suffered an economic disadvantage flowing directly from the marriage in the form of the extraordinary childcare duties that she has to provide for Justin. Therefore, I conclude that the respondent is entitled to spousal support based upon compensatory grounds flowing from the economic disadvantage that she has suffered and continues to suffer.
80I further conclude that although the parties’ marriage was not long term, the childcare duties of the respondent mother, especially as they relate to Justin, and the significant improvement to the applicant’s condition during the marriage as a result of the respondent taking on full responsibility for child care, and in particular Justin’s needs, supports the respondent’s entitlement to spousal support. The applicant was able to grow a self-employed courier business as a result of the parties’ functions within the marriage during their cohabitation.
81The financial disclosure provided by the applicant during this proceeding was inadequate and incomplete. It is clear that he has resources that have not been disclosed and he has no debt. He has, on the evidence available, paid minimal income tax and has received undeclared income.
82On the evidence available, it is most uncertain as to when the respondent may be self-sufficient, given her childcare responsibilities with respect to her son.
83Before considering the proper quantum of support, is necessary to address whether a review order would be appropriate in the circumstances of this case. This issue was not addressed by counsel in their submissions, however in my view it is appropriate for me to do so in this case for the reasons outlined below.
84As was noted by Binnie J in Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920 at para. 37, review orders should be limited to circumstances where there exists “genuine and material uncertainty at the time of the original trial.”
85The court in that decision further noted that a trial court should avoid making review orders in preference to permanent spousal support orders, which could be subject to the variation provision in s. 17 of the Divorce Act in the event of material change in circumstances: see also Fisher v. Fisher, 2008 ONCA 11, [2008] O.J. No. 38 (C.A.).
86The uncertainty in the present case is whether and when the respondent will be in a position to resume full-time employment. I cannot conclude that this uncertainty will become certain within an identifiable timeframe. There is simply not enough evidence available with respect to Justin’s circumstances, and his ongoing care requirements and the ability of the respondent to provide that care personally or through outside resources. As such, I must conclude that a review order would not be appropriate in the circumstances.
87It was urged on behalf of the respondent that given that the applicant had arranged his financial affairs so that historically he paid income tax, not in keeping with his actual income from self-employment, as I have determined it, for the purposes of determining both his liability with respect to child support and spousal support, the income determined must be grossed up for income tax before the calculation of support is carried out.
88Counsel on behalf of the respondent provided written submissions on the calculation of gross up, without any supporting material or evidence. Counsel for the applicant made no specific submissions on the issue of whether the applicant’s income should be grossed up. I find that the applicant has in fact arranged his business affairs to pay substantially less tax on income than would otherwise be payable and as a result the income as determined must be grossed up before the support amount is determined: Riel v. Holland, 2003 3433 (ON CA).
89I have concluded that the applicant’s income, as it has been determined in the sum of $65,643.16, must be grossed up. No evidentiary basis has been offered as to the calculation of the applicable gross up.
90While DivorceMate does provide calculation for gross up with respect to income, the parties have not advised me through their counsel that they are content that the gross up calculation within DivorceMate be applied in these circumstances.
91Having no means of calculating gross up on the applicant’s income and no evidentiary record regarding this, counsel shall arrange to schedule a half day appearance before me to offer evidence with respect to the gross up of the applicant’s income.
92In the event counsel for the respondent tenders an expert report with the appropriate calculations, such report shall be served no later than 60 days prior to the resumption of the trial, with the applicant’s responding expert report to be served no later than 30 days prior to the trial date. These reports are to be exclusively relating to the gross up calculation with respect to the applicant’s income as I have determined it above.
93Once this evidence is available, I will then determine the applicant’s liability with respect to both the payment of child and spousal support.
Other Matters:
94The applicant acknowledged having a life insurance policy in favour of the children, however it appears that that policy may not have continued after 2010. The Applicant shall obtain a policy of life insurance to secure the support obligations in the sum of $150,000 and shall provide evidence of this policy of insurance to the respondent and he shall maintain the policy in good standing until such further order of the court.
95As to the respondent’s claim for s. 7 expenses regarding the children, that matter will be addressed after the applicant’s grossed up income for support purposes has been determined by me.
96Counsel shall forthwith contact the trial coordinator to schedule a one half day court attendance for the presentation of evidence regarding the gross up calculations with respect to the applicant’s income as it has been determined. That date shall be scheduled immediately in anticipation of the parties being ready with the necessary evidence and on a date taking into account the time allocated for service of expert reports.
Daley J.
Released: September 5, 2013
COURT FILE NO.: FS-08-64658-00
DATE: 20130905
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Frank Boateng
Applicant
– and –
Henrietta Botsio
Respondent
REASONS FOR JUDGMENT
Daley J.
Released: September 5, 2013