ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 311/02
DATE: 2013/07/31
BETWEEN:
DONALD ROSS SCOTT
John H. Cunningham, for the Applicant
Applicant
- and -
BRENDA JANE GRAY
Self-represented Respondent
Respondent
HEARD: July 10, 11, 12 & 26, 2013
The Honourable Madam Justice W.L. MacPherson
JUDGMENT
[1] This is a motion to change an order made by Justice Scott on May 13, 2009.
[2] The relevant terms of that order are as follows:
Based on the Applicant’s income for 2008 being $102,200.00, commencing on July 1, 2009 and monthly thereafter the Applicant shall pay to the Respondent the sum of $1,431.00 per month (payable bi-weekly) as child support for Brendon and Devin.
The Applicant shall pay the said child support to the Respondent until one or more of the following events occurs:
a. The child ceases to reside with the Respondent, “reside fulltime” includes the child living away from home to attend an educational institution funded (at least in part) by a government in Canada, or to pursue summer employment, or obtain medical treatment, or to take a vacation during scheduled holidays, providing the child is otherwise maintaining a residence with the Respondent;
b. The child attains the age of 18 years of age and ceases (except for medical reasons) to be in fulltime attendance in an educational institution funded (at least in part) by a government in Canada;
c. The child marries;
d. The child dies;
e. The child is no longer a child of the marriage as defined by the Divorce Act;
f. The Respondent dies, or
g. The Applicant dies.
The Applicant shall provide the Respondent, on or before June 1 in each year, with a copy of his Income Tax Return and Notice of Assessment and any Notices of Reassessment as received from Canada Revenue Agency for so long as the Applicant has an obligation to pay periodic child support without request. The adjustment of child support, if any, shall be made as of July 1 in each year. The first exchange and adjustment of child support would be June 1, 2010 and July 1, 2010 respectively.
Both the Applicant and Respondent shall contribute to the special and extraordinary expenses of the children’s activities. Based on the Applicant’s employment income for 2008 being $102,200.00 and the Respondent’s agreed imputed income being $25,000.00, the Applicant shall contribute 80% of the special and extraordinary expenses provided for in Section 7 of the Federal Child Support Guidelines, S.O.R./97-175 (the Guidelines), for any activity of either child which exceeds $100.00 provided the Respondent has obtained the Applicant’s consent to the activity expenses which consent shall not be unreasonably withheld.
The Applicant shall maintain the Respondent as a beneficiary in trust for the children on his life insurance policy available to him through his employment for so long as he is required to pay child support. The Applicant shall not name any other individual as a beneficiary under this policy during such time as he is required to pay child support.
Commencing June 1, 2009 to and including December 31, 2011, the Applicant shall pay to the Respondent the sum of $1,000.00 per month as spousal support. After December 31, 2011, the Applicant’s obligation to pay spousal support to the Respondent shall cease and no spousal support shall be paid by either party to the other after that date.
The spousal support shall not be varied unless there is a material change in circumstances. A change in the marital status of either party shall not be considered to be a material change in circumstances. If a material change in circumstances occurs. The party seeking the variation shall give the other party written notice of the variation he or she is seeking and the Applicant and Respondent shall then confer either personally or through their respective solicitors to settle, what, if any, variation should be made. If no agreement has been reached within 30 clear days after the notice has been given to the other party the variation sought may be determined at the instance of either party by an application pursuant to the Family Law Act or pursuant to the Divorce Act.
CLAIMS
[3] The Motion to Change was brought by the Applicant in June 2012 and he seeks to terminate his obligation to pay child support for both children. He also seeks to terminate his obligation to maintain life insurance for the benefit of the Respondent and the children.
[4] In her response to the Motion, the Respondent is opposed to a termination of the child support for Brendon prior to June 2013. She seeks a contribution toward Brendon’s education expenses and medical expenses. The Respondent also seeks to vary the termination of spousal support and to have ongoing spousal support paid.
SPOUSAL SUPPORT
[5] I am going to deal with this issue first, as it will be relevant to a determination of the contribution of each of the parties toward any education expenses.
[6] The parties were married in 1989 after a four year common law relationship. They separated in October 1998 after being together for a total of 13 years. The parties were divorced in March 2003.
[7] At the time of separation, the Respondent was 38 years of age. The Respondent is presently 53 years of age.
[8] Under the terms of the May 2009 order, spousal support was to terminate on December 31, 2011. This order was the culmination of a 2008 application wherein the Applicant sought to terminate spousal support. The obligation to pay spousal support was not terminated but it was varied to provide that it would be time limited and would end on December 31, 2011.
[9] While that order also included a provision that the spousal support could be varied in the event of a material change in circumstances, there was to be written notice of the variation being sought and only then could an application be brought.
[10] It is clear that a material change in circumstances is a condition precedent to a variation application. As noted by Justice Horkins in Damiani v. Damiani (2008 60702 (On SC)):
The threshold test for determining a change of circumstances was stated in Willick at p. 688:
In deciding whether the conditions for variation exist, it is common ground that the change must be a material change of circumstances. This means a change, such that, if known at the time, would likely have resulted in different terms. The corollary to this is that if the matter which is relied on as constituting a change was known at the relevant time it cannot be relied on as the basis for variation.
[11] The onus is clearly on the Respondent to show that there has been a material change in circumstances since the date of the May 13, 2009 order. The terms of that order are presumed to be correct.
[12] The Respondent took no steps to vary the order until after the Applicant had commenced this motion to change dealing with termination of the child support obligations.
[13] The Respondent signed Minutes of Settlement and did so with legal advice having been represented by an experienced Family Law lawyer, Mr. MacLeod. The Minutes of Settlement were then incorporated into the order of May 13, 2009.
[14] While in her submissions, the Respondent stated that she had been under duress when she signed the Minutes of Settlement, there was no cogent evidence presented on this issue.
[15] It was clear from the testimony of the Respondent that she was aware when she signed the Minutes of Settlement that it provided for an end to the spousal support as of December 31, 2011. The Respondent also indicated that she had received correspondence from the Applicant at the end of September 2011 confirming that the support for Devin should end in December 2011 and that she was reminded that this would coincide with the termination of the spousal support. She confirmed that she did not respond to this correspondence by making a request that the spousal support payments continue, nor did she bring such a claim until after the Applicant’s Motion to Change had been brought.
[16] The basis for the Respondent’s claim for ongoing spousal support is that she is currently in receipt of CPP disability benefits of $9,300.00 per year and that she is unable to work due to various health problems including fibromyalgia; chronic pain syndrome; chronic obstructive pulmonary disease; allergies; sleep apnea; anxiety; and post-traumatic stress disorder. She also submits that the loss of the child support payments necessitates the spousal support to be continued.
[17] The fact that the Respondent is unable to work is not something that is new to her situation. At the time of the May 2009 order, the Respondent was not employed and had not been employed for the two previous years. The Respondent was employed in the summer of 2010 but she stated that she has not worked since, nor has she applied for any employment since then.
[18] It is abundantly clear that the Respondent has significant medical issues. Although the Respondent attempted to portray these medical difficulties as having only been diagnosed and/or having gotten worse since May 2009 and that this constitutes a material change in her circumstances, the evidence presented does not corroborate this.
[19] The Respondent was permitted to file numerous medical reports from a variety of health care professionals. She did not call any of them to testify on this issue. However, it was evident from the report of Dr. O’Dea, her family doctor, that she has been treated for most of those ailments for many years and certainly since 2001. It was also clear that the back and neck pain arose as early as 1991 as a result of a fall and that post-traumatic stress disorder was apparent as early as 1995.
[20] While some of the reports which pre-dated the May 2009 order were clearly still investigating the Respondent’s symptoms, there were multiple references to fibromyalgia, chronic pain and confirming that these had previously been the suspected diagnoses. Even the report from St. Joseph’s Hospital which was dated June 29, 2009 and set out results of assessments done in April and June 2009, confirmed a diagnosis of panic disorder with agoraphobia, but also noted age of onset of the panic attacks as being 29 years of age, prior to the separation. As with the other ailments, this was a longstanding problem.
[21] What is new is that the Respondent does now qualify for CPP disability benefits as a result of an application made in September 2011. The report of Dr. O’Dea in support of this application was filed. However, there is no evidence that would support the Respondent’s contention that there has been a change in her health or that there was some aspect of her health difficulties that she was not aware of in May 2009, that would support a finding that there has been a material change in her circumstances.
[22] A review of the Respondent’s financial circumstances also does not support that the Respondent has a need for ongoing spousal support. Despite the fact that the spousal support ended on December 31, 2011 and that the Respondent claims to have purchased a vehicle for Brendon; paid for his car insurance when he was unable to do so; paid for his tuition for the second year at Niagara College, from all indications, the Respondent’s financial situation has improved.
[23] This is evident from a comparison of her Financial Statement sworn July 18, 2012 and the most recent Statement sworn June 26, 2013 for the purposes of the trial. These reveal that her bank account balances have increased by almost $7,000.00 and her RRSP accounts have increased by more than $3,000.00. In addition, her overall level of debt (VISA and Line of Credit) has decreased by more than $3,800.00.
[24] The Respondent owns her own home which is unencumbered. In addition, she is the contributor and subscriber of an RESP account which had a balance of approximately $27,000.00 in 2012 and a current balance of approximately $20,000.00. It was her position that as she had contributed all of these funds, technically they belong to her and she intends to transfer them to her RRSP.
[25] It is abundantly clear that the loss of the spousal support has not caused a financial hardship to the Respondent, nor is there a need for ongoing spousal support.
[26] It is also apparent (as detailed below regarding child support) that the Applicant earns a significant income or as noted by the Respondent, he earns in a month, what she earns in one year. Based solely on his income, there is no question that he does have the ability to pay spousal support. But that is not the determining factor in deciding whether spousal support should be paid. The parties were involved in a relationship that lasted 13 years. Pursuant to a prior Separation Agreement and the order of May 13, 2009, the Applicant has paid spousal support for 13 years since the date of the parties’ separation in 1998.
[27] The spousal support was terminated in December 2011 and without evidence that there has been a material change in circumstances of the Respondent, there is no basis to vary paragraph 11 of the May 13, 2009 order. In all of those circumstances, the Respondent’s motion regarding spousal support is dismissed.
CHILD SUPPORT
Obligation to Pay Child Support
[28] It is agreed that there have been a number of changes in the circumstances of the children.
[29] Devin was no longer a “child of the marriage” as of January 1, 2012. The parties have agreed and, in fact, an order was made on consent on November 23, 2012 that the child support for Devin would terminate effective January 1, 2012. As the order was not made until 11 months after the termination date, there has been an overpayment by the applicant.
[30] I accept the submissions of the respondent that while she agreed with the termination of child support as of January 2012, the documentation presented to her to sign was not limited to child support but also sought a change in custody. This was not rectified until the current Motion to Change was brought and I do not find that any fault lies with the Respondent for the accrual of the overpayment of child support.
[31] Nevertheless, I do not accept the calculations submitted by the Respondent nor the suggestion that the Applicant did not pay the correct amount to the Family Responsibility Office (“FRO”). It is clear from the FRO Statement of Arrears that while the monthly amount remitted and paid to the Respondent was less than the monthly total support payable under the existing order, there were additional payments made to ensure that there were no arrears owing.
[32] I will leave it to FRO to do the final calculation, but clearly no child support was payable for Devin as of January 1, 2012 and any accruals after that date should be credited back to the Applicant.
[33] There have also been changes in Brendon’s circumstances. He was enrolled in the Welding Technician program at Niagara College commencing in September 2010 and continuing until April 2011. He then travelled to Alberta and was in a paid co-op placement with Syncrude. It was expected that he would return to Niagara College in September 2011, but instead he remained in Alberta and continued to work. He did eventually return to Niagara College in September 2012, completing the second year of the welding program in April 2013, graduating in June 2013. As of June 3, 2013, he has obtained employment with Syncrude and has returned to Alberta.
[34] The issue to be determined is whether Brendon continued to be a “child of the marriage” after April 2011 and, if so, should the Applicant be obligated to pay child support for Brendon for any time after April 2011?
[35] In the initial submissions, the Applicant submitted that he should pay child support at 30% of the Child Support Guidelines in the amount of $173.45 per month from May 2011 to August 2011. In closing submissions, it was confirmed that the applicant accepted that Brendon continued to be a “child of the marriage” while he was attending the summer co-op with Syncrude and that full table child support was payable. However, once Brendon chose to remain in Alberta and work rather than returning to school, as of September 2011 he was no longer a “child of the marriage” and no child support should be paid.
[36] The Respondent argued that under the terms of the original order even though a child was not residing with her, if that child was pursuing “summer employment” he continued to be a “child of the marriage” entitling her to continue to receive full table child support. She also submitted that she continued to incur the cost of maintaining a residence for Brendon and that she needed the child support for that purpose. When he did return to Niagara College in September 2012, Brendon did return to live with the Respondent.
[37] The parties had agreed that the Applicant’s obligation to pay child support for Brendon revived when he returned to school in September 2012. An interim without prejudice order was made on consent on November 23, 2012 which required the Applicant to pay child support of $1,228.00 per month based on the Applicant’s 2011 income of $145,300.00 commencing September 1, 2012.
[38] Brendon completed the welding program at the end of April 2013 and began employment in Alberta in June 2013. The parties agreed that the obligation to pay child support for Brendon should terminate effective May 31, 2013 and an interim without prejudice order to that effect was made on July 26, 2013, pending the final order being made on all issues.
[39] Having heard from Brendon and the Respondent, it is clear that when Brendon travelled to Alberta in May 2011, he was doing so for purposes of summer employment and he did intend to return to school in September 2011. Under the terms of the May 2009 order, I find that although Brendon was not residing with the Respondent, his residence in Alberta was for the purpose of pursuing summer employment and despite the fact that he was fortunate enough to secure summer employment that paid exceedingly good wages, this fact would not have ended the obligation to pay child support.
[40] However, when Brendon did not return to school after the summer had ended and he continued to work in Alberta, he was not residing with the Respondent and he clearly was no longer a “child of the marriage”. Brendon did earn significant monies from May to December 2011 ($52,206.00) and from January 2012 to August 2012 ($64,264.00).
[41] While the Respondent argued that she required the monthly child support to maintain the expenses of her home and to otherwise maintain a residence for Brendon, there was simply no evidence proffered to support this statement.
[42] Accordingly, the Applicant’s obligation to pay child support for Brendon terminated effective September 1, 2011, but revived as of September 1, 2012. Based on the Applicant’s 2011 income of $145,300.00 the child support for one child payable by the Applicant to the Respondent would be $1,228.00 per month commencing September 1, 2012 to and including May 1, 2013.
Medical Expenses
[43] The Respondent had requested that the Applicant contribute toward certain medical expenses which had been incurred on behalf of Brendon and Devin. The total expenses were $1,356.85.
[44] The Applicant had reviewed the receipts and benefits documentation and was agreeable to pay $1,471.70 as his contribution toward the medical expenses.
Educational Expenses
[45] The Respondent has submitted that in Year 1 Brendon’s educational expenses totaled $12,268.86. In addition to expenses for tuition, computer, books and supplies, she has included the amount $6,244.12 for transportation expenses based on a mileage rate obtained from a Government of Canada website, with no indication as to what the rate used was based on.
[46] The Applicant is prepared to accept that the Year 1 education expenses totaled $7,478.68 based on the receipts provided by the Respondent. This includes some vehicle expenses, but did not include gas or insurance.
[47] For Year 2 the Respondent has submitted that the education expenses totaled $12,163.06, which included $6,502.56 for transportation expenses calculated using the same mileage rate and the actual tuition, computer and book expenses.
[48] The Applicant submits that based on receipts provided the Year 2 expenses totaled $11,252.75.
[49] It is evident that from September 2010 until April 2011 and again from September 2012 until April 2013 Brendon was residing with his mother in Beamsville while he attended Niagara College in Welland. A car was essential in order for him to complete his educational studies. A 2004 Saturn was purchased for this purpose at a cost of $7,485.47. The Respondent was not claiming any contribution from the Applicant for the cost of the purchase of this vehicle. Given the convoluted and contradictory evidence about the source of funds for the vehicle purchase (which included that it was paid by the Respondent; from her line of credit; from an inheritance from her parents; or that Brendon had re-paid most of the purchase amount to her), I do not find the purchase price of the Saturn to be a s. 7 expense.
[50] However, given the necessity of a vehicle to get back and forth to Niagara College campus, I would include an amount for car insurance ($2,351.36) and an amount for gas ($1,500.00) even though receipts for the latter were not provided.
[51] On this basis, I find that Brendon’s total education expenses in Year 1 to be $11,330.00.
[52] With regard to the Year 2 expenses, given that the receipts at Tab 16 of Exhibit “A” ended in February 2013 and the school year continued until April 2013, gas and maintenance expenses incurred to the end of the school year as set out in receipts found at Tab 5 of Exhibit “B” should be properly added to the total of the Year 2 expenses. However, I would not include the repair bill of $226.00 as it is not clear what this was for and how much was paid, nor would I include the cost of the tires ($1,116.11) which were purchased on May 24, 2013.
[53] As such, I find that Brendon’s total education expenses in Year 2 to be $12,035.00.
[54] The next issue to be determined is what amount, if any, should the child contribute toward those educational expenses?
[55] The Applicant submits that the child should contribute some amount toward his education expenses. Initially, he had submitted that he should be required to contribute 40% of the total education expenses. In final submissions, he took the position that Brendon should contribute $1,500.00 toward the Year 1 expenses and 50% toward the Year 2 expenses.
[56] The Respondent submits that Brendon should not be required to contribute any amount toward the Year 1 expenses and that the purchase of the Saturn should be considered his contribution. For the Year 2 expenses, it was submitted by the Respondent that the child should contribute 20 – 25% of these expenses.
[57] It is apparent that prior to attending Year 1 of his studies, Brendon did not have any employment earnings. It became apparent at the trial, that he had in fact applied for and obtained a Student Loan, although there was no documentation provided to verify the amount of the funds received; how the funds were applied; nor the current amount owing. It would also appear that there were trust funds or an inheritance from the maternal grandparents, although the amount was not clear ($9,000.00 or $19,000.00) nor was the date of receipt clear as some of these funds were apparently used for competitive wrestling expenses, which Brendon did not continue to do after commencing his studies at Niagara College.
[58] After considering all of the evidence, and in light of the fact that Brendon will be solely responsible for repayment of any Student Loan, I find that he is not required to make any contribution toward the Year 1 expenses.
[59] By the time that the Year 2 expenses were incurred, Brendon was in a very different financial situation. He had earned significant monies from May to December 2011 ($52,206.00) and from January 2012 to August 2012 ($64,264.00). It would appear that some of that income represented a taxable benefit for the reduced housing that he received while employed with Syncrude. I also have no doubt that some of that income was used to pay for Brendon’s living and other expenses while in Alberta, and as such would not be available to fund his education. However, it was Brendon’s evidence that he was able to accumulate savings while in Alberta and that he used $17,000.00 of those savings to purchase a 2008 Dodge Ram truck, although he did finance approximately $6,000.00 of the warranty portion of the purchase.
[60] After considering all of the circumstances, it is appropriate that Brendon contribute $4,000.00 toward the Year 2 expenses, which represents approximately one-third of those expenses.
[61] The next issue to be determined is what should each of the parents contribute toward Brendon’s educational expenses?
[62] The order of May 13, 2009 required the applicant to pay 80% of any s. 7 expenses and the respondent to pay 20% of such expenses. This was based on the Applicant’s income of $102,000.00 and the Respondent’s imputed income of $25,000.00.
[63] Based on the documentation submitted, it is obvious that there have been changes in the parties’ incomes since the date of the order. By 2009, the Applicant’s income had increased to $105,738.00, and in 2011 it was $145,300.00, and in 2012 it was $150,309.00.
[64] The Respondent’s income was more difficult to calculate. In 2009, her income was $16,343.00. In 2010, it was $18,498.00 which included approximately $6,000.00 in income earned from employment. By 2011, the only income received was $12,000.00 being the spousal support of $1,000.00 per month. However, in September 2011, the Respondent applied for CPP Disability Benefits and although she was initially denied these benefits, the claim was eventually accepted and she received benefits of approximately $790.00 per month retroactive to August 2010. As such, the respondent’s income in 2012 was $18,045.00 which included the ongoing CPP of $9,319.00 and the retroactive payments.
[65] The Applicant agrees that the parent’s contribution should be shared such that after Brendon’s contribution, he would pay 85% of the education costs and the Respondent would pay 15% of those costs.
[66] The Respondent submits that for Year 1 expenses, the pro rata sharing should be 89% paid by the Applicant and 11% paid by the Respondent based on the parties’ 2011 incomes. For the Year 2 expenses, it is submitted that the pro rata sharing should be 94% paid by the Applicant and 6% paid by the Respondent based only on the Respondent’s ongoing CPP benefits and no retroactive amounts being included in the calculation.
[67] It is clear that the Applicant has a significant income that is substantially greater than the income of the Respondent. However, income alone is not the only consideration as under s. 7 (1) of the Child Support Guidelines I am to consider “the means” of each parent, which in this case includes the fact that the Respondent has $20,000.00 in RESPs. While I accept that these were accumulated entirely by the Respondent, it is clear that this was done for the purpose of assisting the children with their education expenses. While the Respondent’s income does not permit her to make much of a contribution to Brendon’s education expenses, she does have the means to contribute 15% toward the Year 1 and Year 2 expenses.
[68] In summary, the education expenses are apportioned as follows:
A) Year 1 $11,330.00
Applicant’s share $ 9,630.50 (85%)
Respondent’s share $ 1,699.50 (15%)
B) Year 2 $12,034.00
Brendon’s share $ 4,000.00
Sub-total $ 8,034.00
Applicant’s share $ 6,828.90 (85%)
Respondent’s share $ 1,205.10 (15%)
[69] The Applicant’s contribution toward the total education expenses is $16,459.40. He is entitled to a credit of $2,000.00 for the payment made in April 2011 toward the Year 1 expenses and as such he would owe the sum of $14,459.43 to the Respondent.
ORDER
[70] Accordingly, the following Order is made:
- The Order of May 13, 2009 shall be varied as follows:
a) Commencing May 1, 2011 and continuing to and including August 1, 2011, the Applicant shall pay child support to the Respondent for two children based on the Applicant’s income of $105,700.00 and in accordance with the Child Support Guidelines the sum of $1,473.00 per month.
b) Commencing September 1, 2011 and continuing to and including December 1, 2011, the Applicant shall pay child support to the Respondent for one child (Devin) based on the Applicant’s income of $105,700.00 and in accordance with the Child Support Guidelines the sum of $921.00 per month.
c) Commencing September 1, 2012 and continuing to and including May 1, 2013 the Applicant shall pay child support to the Respondent for one child (Brendon) based on the Applicant’s income of $145,300.00 and in accordance with the Child Support Guidelines the sum of $1,228.00 per month.
d) The above child support orders shall replace any interim without prejudice orders made in this proceeding including the Order of Justice Reid dated November 23, 2012 and the Order of Justice MacPherson dated July 26, 2013.
e) The Applicant shall pay to the Respondent the sum of $1,471.70 being 80% of the medical expenses for the children.
f) The Applicant shall pay to the Respondent as his contribution toward the 2010/2011 and 2012/2013 education expenses for Brendon the sum of $14,459.43.
g) The Applicant’s obligation to maintain life insurance for the benefit of the children and the Respondent is terminated.
h) The Applicant’s obligation to pay spousal support to the Respondent is terminated and the Respondent’s motion to revive this obligation is dismissed.
i) SDO to issue.
[71] If the issue of costs cannot be resolved, I direct that the party seeking costs shall deliver written submissions to my office within 21 days of the release of this Judgment with responding submissions to be delivered to my office within 21 days thereafter. The written submissions are not to exceed three typewritten, double spaced pages, excluding the Bill of Costs and Costs Outline.
MacPherson J.
Released: July 31, 2013
COURT FILE NO.: 311/02
DATE: 2013/07/31
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DONALD ROSS SCOTT
Applicant
- and -
BRENDA JANE GRAY
Respondent
REASONS FOR JUDGMENT
MacPherson J.
Released: July 31, 2013