ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-08-00577-00
DATE: 2013-01-08
B E T W E E N:
NEHA BHUPAL
Judith Nicoll, for the Applicant
Applicant
- and -
VIPUL BHUPAL
Cynthia Waite and Marvin Kurz, for the Respondent
Respondent
HEARD: December 12, 2012
REASONS FOR JUDGMENT
Justice Thomas A. Bielby
[1] Both parties are seeking to vary the order of Justice Backhouse, dated September 25, 2006 and the order of Justice Baltman, dated October 8, 2008.
[2] The respondent initiated the variation proceedings by seeking the termination of spousal support, the elimination of certain section 7 expenses and the reduction of child support generally, as a result of his alleged reduction in income.
[3] The applicant concedes the termination of spousal support. The only issue on this subject is the date on which the support is to terminate. The applicant is seeking to increase child support, submitting the respondent’s income has increased and also asks that the respondent be required to continue the current section 7 expenses and asks the list of such expenses be expanded to include a contribution to the cost of private school and the cost of tutoring.
[4] The parties were married to each other in 1988 and separated in 2004. There was one child of the relationship, Divya Hema Bhupal, who was born September 8, 2000 and who is now 12 years of age. The applicant has sole custody of Divya.
[5] The Backhouse order was made on consent. In this order, the respondent, on an income of $313,000.00, was required to pay child support and section 7 expenses totalling $3,088.00 per month. The section 7 expenses included a contribution to the cost of a full-time nanny.
[6] The respondent was required to pay spousal support of $4,912.00 per month. The spousal support was to be the subject of a review following the payment made in September 2011. Prior to the review, spousal support was only to be varied if there was a material change of circumstances.
[7] The respondent was to maintain life insurance to secure the child and spousal support in the amount of $500,000.00.
[8] With respect to the Baltman order, it was the result of a motion to vary brought by the respondent claiming that the applicant’s remarriage is a material change in circumstance.
[9] Justice Baltman determined there was no material change in that, at the time of the order of Backhouse J., it was reasonably foreseeable that the applicant would remarry as she was in a relationship at the time with her current husband. The respondent’s motion to terminate spousal support was dismissed as was his request to terminate his obligation to pay for part of the nanny expense. The respondent was required to pay one half of the costs of the nanny.
[10] Justice Baltman found that, for the purposes of support, the respondent’s yearly income was $319,695.00. In that variation motion and the response thereto, the applicant sought a section 7 contribution from the applicant with respect to the expense of Mentor College, a private school in which the applicant enrolled Divya without consulting the respondent.
[11] The applicant, however, decided not to pursue the private school claim and the learned judge ordered that the applicant’s motion for payment of the Mentor College fees may be brought back on seven days notice.
[12] At the time of the Baltman order, the applicant was not working but was planning on returning to work very shortly. She had given birth to her second child in May 2008. The learned judge felt it was unwise to terminate the nanny expense and lose the nanny only to have to later hire a new nanny.
TERMINATION DATE - SPOUSAL SUPPORT
[13] The applicant submits her spousal support should terminate April 30, 2012. She admits, however, that there is no magic to this date and that it represents the end of a reasonable period of time needed to conduct the review.
[14] The respondent submits the spousal support obligation should terminate September 30, 2011, as the review was triggered pursuant to the order after the spousal support payment for September 2011 was made.
[15] On this issue, I agree with the logic of the applicant. While the relevant order required a review, it did not dictate a termination date nor did it suggest that spousal support would terminate immediately after September 2011. It would be reasonable to impute a period of time to conduct the review. Such a review would include the exchange of financial information.
[16] The respondent’s motion to vary was issued January 13, 2012. The financial statement included with the motion does not set out any information regarding income nor that of expenses. Parts one and two of the financial statement show nothing but zeroes.
[17] I am not prepared to terminate the spousal support information as of September 30, 2011, notwithstanding the circumstances for a termination existed as of that date. I accept that proper disclosure was not made until sometime later.
[18] It will be ordered that the respondent’s obligation to pay spousal support shall terminate on April 30, 2012.
RESPONDENT’S INCOME
[19] With respect to the order of Justice Baltman, part of the order was on consent. It was agreed that the respondent’s income was $319,695.00, presumably as of the date of the order, October 8, 2008. The respondent’s line 150 income for that year was $275,667.00.
[20] In the current variation motion, the applicant hired Bonnie Prussky to conduct an income analysis regarding the respondent. Before the court are two of her reports.
[21] The respondent retained Patricia Harris to critique those reports.
[22] Neither expert was cross examined. Argument on the hearing was completed on the evidence contained in the affidavits. The Court is left, therefore, with competing opinions without having the opportunity to watch and listen to any expert evidence and thereby make credibility findings.
[23] The first Prussky report filed as an exhibit to an affidavit, sworn July 2012, calculated the respondent’s 2011 income to be $429, 994.00. The report noted that the respondent’s current wife was employed part time as a medical assistant.
[24] This report was the subject of a critique by Ms. Harris, dated September 17, 2011. It was initially included in a third party affidavit and was only recently included in an affidavit of Ms. Harris, sworn December 10, 2012. The applicant was justified in making the submission that the inclusion of an expert’s report through a third party is improper. It becomes hearsay and the author of the report is not subject to cross examination. The second critique was put before the court in the same fashion.
[25] However, I will accept as evidence the critiques included in the two Harris affidavits, sworn December 10, 2012. I find there is no real prejudice to the applicant in accepting them. The reports were available well before December 10th, and I was not advised of any earlier requests made to cross examine Ms. Harris.
[26] In both Harris critiques, it is noted that the critique does not itself contain a conclusion as to the income of the respondent. Harris does indicate, however, that the respondent’s 2011 income was $233,000.00.
[27] The court was advised that both experts had an opportunity to consult with each other in an effort to reduce the gap between their conclusions as to income. In an affidavit sworn November 22, 2012, Ms. Prussky reduced her opinion of the respondent’s 2011 income to $339.511.00.
[28] In the Harris critique in response to the second Prussky opinion, the author suggests an income attributable to the respondent for 2011 of $265,640.00. The difference in the two opinions was over the salary paid to the respondent’s wife and the amount of retained earnings.
[29] Ms. Prussky was of the opinion that only one half of the income paid to the wife was legitimate, and the balance was considered income splitting for tax purposes. She was also of the opinion that the retained earnings were excessive and that a large amount thereof ought to be included as income.
[30] At first blush, it seems somewhat contradictory that the applicant would challenge the income paid to the respondent’s second wife. The annual income of the new wife is $54,000.00 but the new spouse has the academic credentials to manage an office and be a medical assistant. The applicant works for her husband who earns over $600,000.00 through his dental corporation. The applicant works as his dental office manager and the hours she works are 9:00 a.m. to 3:00 p.m., which is less than fulltime. Her background is that of a television news reporter and would appear to be much less qualified in the role she has undertaken. She is paid $70,000.00. Consideration was given to Mr. Kurz’s argument that, “what is good for the goose is good for the gander.”
[31] The fact is, however, that the applicant’s husband’s income is not being challenged or analyzed. It may very well be that a portion of the salary paid to the applicant could be challenged as nothing more than income splitting.
[32] Without the ability to test the credibility of the expert’s, I am being asked to pick one over the other for the purposes of fixing the respondent’s income. I am unable to do that. It is the burden of the respondent to establish, on a balance of probabilities, a reduction in income to the extent necessary to establish a material change of circumstances. He has not done so, given the conflicting evidence.
[33] In arguing an increase in the respondent’s income, the applicant has the same burden which she has not met for the same reasons.
[34] For child support purposes, therefore, the respondent’s income will remain at the level set out in the order of Justice Baltman, being $319,000.00.
[35] The Child Support Guidelines indicate basic support on that income is $2,513.60.
NANNY EXPENSE
[36] Divya is now 12 years old. The Court was advised she has taken a babysitting course and at times is left alone with and in charge of her younger sister. The respondent argues that Divya’s need for a nanny no longer exists.
[37] More importantly, counsel for the respondent asks the Court to consider the wording of section 7 (a) of the Child Support Guidelines, which includes in these expenses, “child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment.”
[38] The expense of a nanny is a child care expense. The applicant is entitled to such a child care expense; it is necessary as a result of her employment.
[39] It is the evidence of the applicant that she takes both of her children to school in the morning and picks them up after school. She is with the children when they are not in school. The terms of her employment with her husband allow this.
[40] It is the argument of the respondent that the nanny expense is not necessary as a result of the applicant’s employment. Accordingly, the expense of the nanny, as it relates to Divya, is not a section 7 expense.
[41] Counsel for the applicant did not respond specifically to the argument relating to the child care wording of section 7. She made submissions on the benefit of the nanny and the importance the nanny plays in Divya’s life. She submitted that the respondent should bear his proportionate share (80%) of one-half of the nanny’s expenses. Evidence is before the Court as to the multiple after school activities Divya and her sister are involved in and the assistance provided by the nanny in regards to these activities.
[42] I have no doubt that the nanny plays an important role in the lives of the children and specifically in the life of Divya. However, I find that the expense of the nanny is not necessary to allow the applicant to work and is not an allowable section 7 expense.
[43] The circumstances are materially different than they were before Justice Baltman. Divya was much younger and required more child care. Further, while it was understood that the applicant would return to work, her likely hours of work were unknown.
[44] There was no evidence before the Court as to what, if any, child care arrangements and expense related to Divya are necessary during the summer holidays and at other holidays. If such an expense will be incurred necessarily, then such expense may be a legitimate section 7 expense going forward.
[45] The respondent will no longer be required to contribute to the cost of the nanny.
MENTOR COLLEGE PRIVATE SCHOOL EXPENSE
[46] Divya is enrolled at Mentor College, a private school. For her first few years as a student, Divya went to public school and then was enrolled in Mentor College by her mother, the applicant. The respondent was not consulted with respect to this decision.
[47] By all accounts, Divya is a very bright, well adjusted child. She maintains an 83% average. The Court was not made aware of any special needs related to Divya.
[48] It is the applicant’s argument that Divya is thriving in this school and has many friends at the school. She is able to participate in many extracurricular events provided by the school which are not provided by public schools. The applicant submits the expense is necessary and reasonable.
[49] The respondent argues the expense is not necessary and relies on section 7(d) of the Child Support Guidelines which includes, “extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs.” He argues the expense is not necessary or reasonable.
[50] I am guided by the decisions in Nitkin v. Nitkin [2006] O.J. No. 2769 (ONSC), a decision of G. P. Tomaso J., and Howe v. Tremblay, 2007 44350 (ON SC), [2007] O.J. No. 4043 (ONSC), a decision of C.J. Horkins J. Both learned judges referred to the ground of necessity and reasonableness in considering the issue of private school.
[51] In paragraph 83 of the Nitkin case, the learned judge noted there was no evidence to suggest private school meets the needs of the children. There was no evidence to suggest the needs could not be met in public school.
[52] At paragraph 84, it was noted that the mere fact a child attends private school does not mean the expense is necessary and must continue. The claim for a section 7 contribution for private school was denied.
[53] I have also had reference to the OCJ decision of S.B. Sherr J. in Casals v. Casals [2006] O.J. No. 5602. The learned judge found private school expense to be a legitimate section 7 expense. The child had been enrolled in the private school for a number of years and the non custodial parent had been contributing to the expense. The child was thriving and only had one year left of high school.
[54] While the applicant relies on this decision, it is distinguishable on its facts.
[55] There is very little evidence before the Court as to Divya’s needs and why they could not be met by the public school system. There is no suggestion that she was doing poorly in public school and is now doing so well as a result of her going to Mentor College. The applicant, in fact, acknowledged that her daughter did well in public school. There was no evidence provided as to Divya’s “particular needs.”
[56] While it may be true the class sizes are much smaller at Mentor, that information in itself is not enough to meet the threshold.
[57] I do not question the applicant’s decision and I am sure Divya is happy at Mentor College and thriving therein. It may be that the education provided by Mentor College is preferable to that provided by a public school. However, that does not give rise to an obligation on the part of the respondent to contribute.
[58] I find that, on the evidence, there is no necessity in relation to the private school expense.
[59] On the issue of reasonableness, if the necessity ground could be met, I would have considered the expense reasonable given the incomes of the parties.
[60] The respondent will not be required to contribute to the cost of private school. If the applicant feels compelled to withdraw the child from Mentor College and, as a result, incurs new extracurricular costs for activities in which Divya enrols, the issue of section 7 expenses can be revisited.
[61] The expense is not denied on the grounds that the respondent was not consulted. While it would have been appropriate for the applicant to at least advise the respondent of her decision, as the applicant has sole custody I do not in these circumstances consider consultation necessary.
[62] The applicant argued that she paid for this expense with the spousal support she received. She submits that, with the termination of spousal support, her ability to meet this expense is compromised. This consideration is irrelevant to my deliberations. The issue is solely whether the expense is allowed under section 7.
[63] I also have not taken into consideration that the issue was before Baltman J. and was adjourned. I accept the applicant decided not to pursue the claim at that time and there was no adjudication on the merits on the issue at the time.
OXFORD LEARNING CENTRE TUTORING EXPENSE
[64] Divya is tutored on a regular basis at a cost of $3,200.00 per year. The applicant submits the respondent should contribute. While it can be said generally the tutoring would be beneficial, the Court was not advised of any particular needs of Divya that would require or benefit Divya. There is no suggestion she is achieving the grades she is as a result of the tutoring or that she wouldn’t be doing as well academically without the tutoring.
[65] The tutoring is not a necessary section 7 expense and I conclude, therefore, that the respondent should not be required to contribute to the tutoring.
LIFE INSURANCE
[66] The issue is to determine the amount of life insurance coverage required after the termination of spousal support. The applicant submits coverage of $350,000.00 should be provided. The respondent submits the benefit amount ought to be $270,612.00.
[67] There is very little evidence before the Court on how these amounts are determined. The original amount, $500,000.00, was to protect a large spousal support of over $4,000.00 per month as well as child support. Now that spousal support is terminated it seems to me a face value of $275,000.00 is appropriate.
DISPOSITION
[68] As a result of the above, I order:
The order of Backhouse J., dated September 25, 2006 is varied by terminating spousal support as of May 1, 2012, and that paragraph 7 therein be deleted.
The order of Backhouse J., dated September 25, 2006, paragraph 14 is varied by deleting the phrase “and spousal” from the second line and by amending the amount of life insurance to $275,000.00.
The order of Justice Baltman, dated October 8, 2008, paragraph 8 therein is amended to reflect that, as of October 1, 2012, the respondent shall pay guideline child support to the applicant for the child Divya, born September 8, 2000, in the amount of $2,513.60 per month.
The order of Justice Baltman, dated October 8, 2008, is varied by deleting paragraph 7 therein, the respondent’s obligation to pay a share of the nanny expenses terminating October 1, 2012.
The applicant’s motion to include in the section 7 expenses the claims for a nanny, the private school expenses and the cost of tutoring through the Oxford Learning Centre is dismissed.
A support deduction order is to issue.
[69] All the other terms set out in the orders of Backhouse J., dated September 25, 2006, and Baltman J., dated October 8, 2008, are to remain in full force and effect.
[70] If the parties cannot reach an agreement as to costs, cost submissions can be made in writing within 20 days. The submissions are to be no more than six pages in length.
Justice Thomas A. Bielby
Released: January 8, 2013
COURT FILE NO.: FS-08-00577-00
DATE: 2013-01-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Neha Bhupal
Applicant
- and –
Vipul Bhupal
Respondent
REASONS FOR JUDGMENT
Justice Thomas A. Bielby
Released: January 8, 2013