COURT FILE NO.: FS-11-17567
DATE: 20131105
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
S.D.
Applicant
– and –
J.M.
Respondent
S.D., Acting in person
J.M., Acting in person
HEARD: October 29, 2013
C. hORKINS J.
[1] The applicant S.D. (“father”) brings this motion for an order directing that the respondent J.M. (“mother”) pay child support from June 1, 2009 to date and going forward. There are four children of the marriage: R.D. born in 1992, S.D. born in 1995, C.D. born in 1999 and W.D. born in 2001.
[2] The parties separated in 2003 and since then there have been numerous court attendances. I will briefly review the background to put this motion in context.
[3] In December 2006, Justice Perell issued two orders. After a trial, Perell J. made an order for shared parenting of the four children. In a second consent order dated December 6, 2006, the parties agreed on child support, s. 7 expenses and some other financial issues. The terms of this December 6 order are relevant to the father’s motion for child support. The specifics of this order are reviewed below.
[4] The shared parenting of the children ended in 2009 when mother moved to Saint John New Brunswick to live. On May 26, 2009, the parents signed an agreement that varied the parenting order of Justice Perell. In summary, the parties agreed that the children would live with their father in Toronto and reside with their mother for one month in the summer and at Christmas. The agreement gave mother additional access as practical. Before the mother moved, the parents had shared decision making for the children. After mother moved to New Brunswick, the parties agreed that father would be responsible for all decision making for the children.
[5] The terms of this agreement were incorporated into a court order by Justice Kiteley on September 1, 2011. The events that led to Justice Kiteley’s order involved mother refusing to return the youngest child to father after an access visit. This caused father to commence this application seeking the return of the child and directing that mother pay father child support for the four children. The application proceeded and was case managed by Justice Kiteley.
[6] Mother brought a motion to vary the custody and access of the youngest child. She wanted this child to live with her in New Brunswick. Father’s motion for child support was held in abeyance while the court dealt with mother’s variation motion.
[7] In July 2013, I heard mother’s motion to vary the custody and access relating to the youngest child. In oral reasons delivered on July 29, 2013, I denied the motion. The father’s motion for support was then scheduled and heard before me on October 29, 2013. I delivered my decision on November 4, 2013 with reasons to follow. These are my reasons.
Facts not in Dispute
[8] There is no longer a dispute about whether either party owes the other monies for past s. 7 expenses. Further, it is agreed that there will be no future claim for s. 7 expenses until March 9, 2014. Only s. 7 expenses incurred after March 9, 2014 can be claimed.
[9] The father’s motion for child support initially came before Justice Goodman on September 9, 2013. It was adjourned to allow the parties to file updated financial statements.
[10] Father has narrowed his claim for child support. He advised the court that he is withdrawing his claim for return of child support monies that he says he overpaid from June 1, 2008 to May 31, 2009.
[11] It is agreed that all four children have resided with their father since June 1, 2009 when mother moved to New Brunswick. Mother agrees that subject to the issues set out below, she is required to pay father child support. Mother agrees that she has not paid any child support since June 1, 2009. Finally, it is agreed that child support owing for the eldest child R.D. ended as of August 31, 2011.
The Issues
[12] It is agreed that father’s motion raises the following issues:
(i) What is mother’s income for the purpose of calculating child support as stated in the December 6, 2006 order of Justice Perell? There is a dispute about what this consent order provides.
(ii) How is the yearly adjustment to child support to be made when income tax returns are exchanged each year?
(iii) Did father underpay child support prior to June 1, 2009 and should this be offset against what the mother owes in child support from June 1, 2009 onwards?
(iv) Has mother proven circumstances that cause her undue hardship as set out in s. 10 of the Federal Child Support Guidelines (“CSG”)? If so should the court award an amount for child support that is different from the Guideline amount?
Analysis
Issue # 1
What is mother’s income for the purpose of calculating child support?
[13] The parties agree that paragraphs 1, 2 and 4 of the December 6, 2006 consent order deal with this issue. They have different views about what para. 4 means. (It is acknowledged that there is no paragraph numbered 3 in the order.)
[14] Paragraph 1 deals with child support for January 1, 2007 to August 2007. Paragraph 2 deals with child support “effective” September 1, 2007. Paragraph 4 deals with child support as of June 1, 2008 forward.
[15] Paragraph 1 imputes employment and interest income to each party. Father’s total imputed income is offset by mother’s total imputed income. Child support of $894 a month is based on father’s net imputed reduced income. The paragraph states as follows:
Effective January 1st, 2007, the Respondent shall pay to the Applicant child support in the monthly sum of $894.00 based on imputed employment income to him of $60,000 and imputed 2007 interest income to him of $10,000 for total imputed income of $70,000 (full table amount of $1,618), which shall be offset by a corresponding child support amount to be paid by the Applicant to the Respondent by imputing employment income to her of $25,000 and imputed 2007 interest income to her of $5,000 for total imputed income of $30,000 (corresponding table amount of $724.00). In the event that the children's residency schedule, as ordered by the Court, is such that they reside with the Respondent less than 40% of their time, there shall be no corresponding set off from the Respondent's table amount obligations, as set out herein.
[16] Paragraph 2 covers child support for the period effective September 1, 2007 and requires father to pay child support of $1,168 a month. This is based on father’s imputed employment and interest income. The total of father’s imputed income is offset against mother’s imputed income. Unlike paragraph 1, paragraph 2 does not assign imputed investment income to mother. Paragraph 2 states as follows:
Effective September 1st, 2007, the Respondent shall pay to the Applicant child support in the monthly sum of $1, 168.00 based on imputed employment income to him of $75,000 and imputed 2007 interest income to him of $10,000 for total imputed income of $85,000 (full table amount of $1,892), which shall be offset by a corresponding child support amount to be paid by the Applicant to the Respondent by imputing income to her of $30,000 (corresponding table amount of $724.00). In the event that the children's residency schedule, as ordered by the Court, is such that they reside with the Respondent less than 40% of their time, there shall be no corresponding set off from the Respondent's table amount obligations, as set out herein.
[17] Paragraph 4 states what will happen as of June 1, 2008. On June 1 each year, “if either party requests it”, they are to exchange “income information” as required by s. 21(1) of the CSG. They will then “calculate the appropriate table amount of support … with the express proviso that at no time can [mother’s] income be less than $25,000 or [father’s] employment income less than $75000”. The full text of this paragraph is as follows:
On June 1st of each year, commencing on June 1st, 2008, if either party requests it, the parties will provide to each other the income information referred to in section 21 (1) of Child Support Guidelines and the parties will then calculate the appropriate table amount of support and/or the parties' respective contributions to add-on expenses, with the express proviso that at no time can the Applicant's income be less than $25,000 or the Respondent's employment income be less than $75,000 for the purposes of adjusting either party's child support obligations, and interest income will be as reported on each party's most recently filed income tax return.
[18] Since moving to New Brunswick, mother has only earned employment income in 2011. She worked part-time from February to August 2011 as a clerk in a store and earned $5,469.36. After mother moved to New Brunswick, she and her husband bought two properties in need of major renovations. They have been doing the renovation work themselves as an “investment project”.
[19] Mother has earned investment income every year. The income tax returns and notices of assessment that have been produced reveal the following investment income:
2012 $19,851 - notice of assessment
2011 No income tax return or notice of assessment
2010 $8,222.02 - income tax return
2009 $12,152 - notice of assessment
2008 $ 15,513 - Reassessed notice of assessment
[20] It is clear that mother’s reported total income has never exceeded $25,000. As a result. she says that child support as of June 1, 2009 should be calculated on the minimum income of $25,000 set out in paragraph 4.
[21] Father states that there is a drafting error in paragraph 4. He says that the intent of the consent order was to add mother’s investment income to the $25,000 minimum employment income and to calculate child support based on this total.
[22] I appreciate father’s frustration. He has been solely responsible for the children since mother moved to New Brunswick in June 2009 and she has not paid father any child support. Mother’s nonpayment of child support is clearly wrong and must be addressed immediately.
[23] I do not accept that there is a drafting error in the order. I have no evidence aside from father’s belief that an error occurred. While this order is somewhat unusual in how it approaches income for the parties, the words of the order support mother’s position. My reasons follow.
[24] In paragraph 1, the order clearly stipulates an amount for imputed “employment” income and “investment” income.
[25] In paragraph 2 the same approach is taken for father. Imputed employment and investment income are both set. However, a different approach is taken for mother. The order simply states that “income” of $30,000 will be imputed to mother. While $30,000 is the total of the two imputed amounts in paragraph 1, the fact is that the order characterizes the $30,000 as “income” not “employment” income.
[26] The wording and approach in para. 4 is different again. The order states that father’s “employment income” can never be less than $75,000, at no time can mother’s “income” be less than $25,000 and “interest income will be as reported on each party’s most recently filed income tax return.”
[27] Father argues that paragraph 4 of the order should have described mother’s income as “employment” income (and not just “income”) The fact that the word employment is missing, he says is an error. To support his position, he points to the fact that the paragraph goes on to state that “interest income will be as reported on each party’s most recently filed income tax return.” In my view, this does not assist father in proving that a drafting error occurred. Paragraphs 1 and 2 simply take a different approach. These paragraphs set an imputed interest income for father. However, as of June 1 2008, the words clearly state that interest income will no longer be imputed. If requested, the parties are to exchange “income information” as required in s. 21 of the CSG. This information was requested and as a result paragraph 4 was triggered.
[28] This leaves the fact that paragraph 4 describes father’s “employment” income whereas it refers to mother’s “income” without calling it “employment” income. What is the point of this distinction? Reference to father’s minimum “employment” income of $75,000 and mother’s minimum “income” of $25,000 must be viewed in the context of the CSG.
[29] Section 2(1) of the CSG defines income as the “annual income determined under sections 15 to 20”. Section 15 states that “annual income is determined … in accordance with sections 16 to 20”. Section 16 provides that subject to ss. 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by Revenue Canada agency and is adjusted in accordance with Schedule III.
[30] In the T1 General form, employment income is one of the sources of income that makes up the total income recorded in line 150 of the form. “Income” in the T1 is the total of all forms of income listed in the form. Therefore viewed in the context of the CSG, the reference to father’s minimum was to his line 101 “employment income” whereas the choice to describe mother’s minimum as “income” can only mean that this is a minimum for total income (and this includes investment income).
[31] In summary, mother’s income for the purpose of determining child support as of June 1, 2008 can be no less than $25,000.
Issue #2
How is the yearly adjustment to child support to be made when income tax returns are exchanged each year?
[32] In my view, the wording of the consent order is clear about how adjustments are to be calculated: “[C]ommencing on June 1, 2008 … the parties will provide to each other the income information referred to in section 21(1) of the [CSG] and the parties will then calculate the appropriate table amount of support”. [Emphasis added.] The intention is that as of June 1 each year the child support will be adjusted as of that date, if required by the income information. This is the interpretation that father has applied.
[33] Mother argues that when the income information is exchanged on June 1, the parties must go back and adjust what has been paid for the first six months of that year. There are no words in the consent order to support mother’s interpretation. I reject her position and accept the father’s position.
Issue # 3
Did father underpay child support prior to June 1, 2009? If yes, should this be offset against what mother owes in child support from June 1, 2009 onward?
[34] Mother advances the argument that father has underpaid child support. It flows from her position that each year the parties must go back and calculate what should have been paid from January to May 31, based on that year’s income information produced on June 1. Since I have rejected mother’s interpretation of the adjustment under paragraph 4 of the order, there is no need to consider this issue.
Issue # 4
Undue Hardship
[35] Has mother proven circumstances that cause her undue hardship as set out in s. 10 of the CSG? If so should the court award an amount for child support that is different from the CSG amount?
[36] Section 10(1) of the CSG states:
- (1) On either spouse’s application, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.
[37] Seeking relief under s. 10 is a three step process. First, mother must prove that there is an undue hardship. Section 10(2) lists circumstances that may cause undue hardship. Mother relies on s. 10(2)(a) and (b) that state as follows:
(2) Circumstances that may cause a spouse or child to suffer undue hardship include the following:
(a) the spouse has responsibility for an unusually high level of debts reasonably incurred to support the spouses and their children prior to the separation or to earn a living;
(b) the spouse has unusually high expenses in relation to exercising access to a child;
[38] If undue hardship is not proven then the claim for relief under s. 10 fails and that is the end of the analysis. If it is proven it does not automatically entitle the claimant to relief. Under s. 10(3) the claimant must then prove that the standard of living in her household is lower than the standard of living in the household of the other party. Section 10(3) states:
Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other spouse.
[39] If the claimant is successful on the first two steps, then the final stage of the analysis requires the court to determine the appropriate amount of child support payable.
[40] It is clear from numerous decisions that that the undue hardship test is a high threshold to satisfy (see Poirier v. Poirier (2004), 2004 NSSC 23, 1 R.F.L (6th) 377; C. (D.J.) v. C. (C.A.); Ramphal v. Doodnauth, [2008] O.J. No. 1701; Morrone v. Morrone, [2007] O.J. No. 5341; Swift v. Swift, [1998] O.J. No. 501; Kramer v. Heus, [2013] O.J. No. 1815.
[41] Hardship alone is not sufficient. “The hardship must be "undue", that is"exceptional""excessive" or "disproportionate" in all of the circumstances” (Van Gool v. Van Gool, [1998] B.C.J. No. 2513 (C.A.) at para. 51). The burden of proof is on the payor who must present the court with cogent evidence about why the table amount of child support would cause undue hardship.
[42] Mother has not proven that she suffers an undue hardship. Therefore, it is not necessary to go on and consider the remaining steps of the s. 10 analysis. My reasons follow.
[43] The evidence in this case does not trigger s. 10(2)(a). Mother does not have “responsibility for an unusually high level of debts reasonably incurred to support [her] children.” She states that if she had stayed in Toronto she would have incurred debt because it is an expensive place to live. Instead, she moved to New Brunswick to earn a living and has not incurred debt because of where she lives. This section clearly does not apply. It deals with unusually high level of debts incurred prior to separation (not post separation) and in any event mother did not incur such debt.
[44] Mother also relies on s. 10(2)(b). She states that she incurs “unusually high expenses” to exercise access to her children. Although mother filed two lengthy affidavits for this motion, there is limited evidence to support her argument. She says that the cost of travel is an undue hardship for the following reasons:
• The cost is “out of scale with [her] actual income.”
• If she pays the child support that father seeks (based on $25,000 plus investment income), this will consume a large part of her household income.
• It is punitive and harmful to the children to require mother to pay 100% of the travel costs.
[45] Mother provided copies of her visa bills that she says document her gas and hotel expenses. This evidence is poorly explained in mother’s affidavits. The various Visa bills that have been produced cover the years 2009 to 2013. Not every Visa bill in this four year time frame is produced. Presumably, she has offered the ones that document her travel costs.
[46] For the period July 7, 2009 to September 6, 2011, mother provided a summary of the expenses in the Visa bill that she says were incurred to exercise access. This summary identifies the expenses in each Visa bill that she claims were incurred to exercise access. During this time frame, mother says that she made 14 trips to Toronto. She paid $5,462.29 for gas and $1,518.29 for motels for a total of $6,980.71 (or $3,490.35 a year).
[47] There is no summary of expenses for the time frame after September 2011 and no evidence that specifies which gas and hotel charges were incurred for an access visit after September 2011. Mother states that in the last two years she has seen her children “about every six weeks”. Specific dates are not provided. She describes the cost of these visits to be “prohibitive in time and expense” and “beyond her ability to sustain without a job”. However, her affidavit does not set out how much she actually spent to exercise access in this time frame.
[48] Going forward, mother has offered no evidence about her plans for exercising access. She relies on the evidence from the Children’s Lawyer that documents the wish of the two younger children to see their mother more often. I am prepared to assume that the agreed upon access will be exercised: one month in the summer and Christmas with the children in New Brunswick. Mother has regularly exercised this access with the two youngest children. Beyond that I have no evidence of mother’s plan for access and no evidence at all as to the anticipated cost of future access.
[49] Mother states in her factum that the travel to and from Toronto has required her to replace her van and the replacement van has dropped in value because of the high mileage. She also complains about high maintenance costs due to usage. None of these allegations are supported with evidence.
[50] Since mother moved to New Brunswick, there have been several court attendances in Ontario dealing with mother’s failed attempt to have the children live with her in New Brunswick and father’s motion dealing with mother’s failure to pay child support. Naturally, when mother travelled to Toronto for a court appearance, she was able to see her children. It is unclear if she is using expenses from these trips to support her position that access costs are unusually high.
[51] As noted mother has only been employed once since moving to New Brunswick. She worked in a store part-time in 2011. Mother states that the time it takes to “work on [her] defence” and appear in court in Ontario, “prevents [her] commitment to a regular paid job”. While I accept that there have been several court attendances since the application was commenced on August 24 2011, I do not accept that they were so numerous as to interfere with her ability to find a job and earn an income.
[52] The Court’s Case History Report confirms that in 2011 after this application was commenced there were three court attendances (September 1, November 21 and December 20). The first attendance was father’s motion seeking an order directing that mother return the youngest child to him. Mother had refused to do so and her conduct necessitated this motion.
[53] In 2012, there were five case conferences (May 23, July 4, August 29, November 5 and December 11). In 2013, there were two case conference (January 9 and 16) and three settlement conferences (April 3, 26, May 27) On July 25, I heard mother’s motion to vary the custody order and I delivered judgment on July 29. The parties attended in court on September 9, 2013 to argue father’s motion for child support and this was adjourned and heard before me on October 29.
[54] Even if one were to accept that theses court attendances interfered with mother’s ability to commit to a regular job, the litigation has now come to an end and this can no longer be used as an excuse for not having a job.
[55] Despite mother’s complaint that she has no time to find a job, mother has found the time to renovate the two buildings she owns with her husband. They have “undertaken major renovations” and have been doing the work themselves. Her affidavit details the work. It includes demolition work, repairs of foundations and floors, restoring windows, installing installation and replacing exterior cladding. Mother offers no evidence about the number of hours she spends on her renovation projects. She did provide photographs of the houses and work being done. These photographs show the extensive renovations that have been undertaken.
[56] While mother says that the litigation has prevented her from committing to a regular job, she does not explain her position. Given that she had time to renovate the houses, I find that she could have found time to look for a job and work in a paid position. For example she worked from February to August 2011 as a clerk in a store and earned $5,469.36. While she was employed in 2011 she continued renovation work.
[57] When mother moved to New Brunswick, she knew there would be costs associated with her access visits. She made a choice and it did not include working as an employee and earning money except for a short period of time in 2011. This is not a situation where the person looked for work and could not find a job. Mother had a job in 2011. She has proven her ability to work and earn an income.
[58] I do not accept that this litigation prevented her from committing to a regular paid job. Mother had time to find a job and at the very least could have worked part-time during this litigation. There is no evidence of any efforts on her part to find another job.
[59] Mother’s September 25, 2013 financial statement does not support her undue hardship claim. It confirms that she has monthly interest and investment income of $5,330. The value of her investments is $539,015.
[60] It must be remembered that mother has not paid any table child support to father since leaving the children with him and moving to New Brunswick. As a result, we have no evidence of her efforts to pay child support and the undue hardship that resulted.
[61] In summary, for all of the above reasons, mother has failed to prove undue hardship.
What Child Support does Mother Owe?
[62] Father seeks child support as of June 1, 2009 when mother moved to New Brunswick. Based on my findings, child support is calculated using the base salary of $25,000 for mother. Child support is owed for four children through August 31, 2011. (It is agreed that as of this date the eldest child is no longer a child of the marriage). From August 31, 2011 forward, child support is owed for three children. Based on these facts, I calculate the child support arrears as follows.
[63] From June 1, 2009 through August 31, 2011 child support for four children based on an income of $25,000 is $613 a month or $16,551 for 27 months. For the remaining four months of 2011 child support for three children is $506 a month or $2024.
[64] As of January 1, 2012, the CSG were amended. Child support for three children based on an income of $25,000 is now $511 a month. Mother owes child support for 2012 of $6,132 and for the 11 months of 2013 she owes $5,621.
[65] In total, mother owes $30,328 in child support arrears. Going forward she owes child support at the rate of $511 for three children effective December 1, 2013.
[66] On consent mother agrees to pay the arrears in three installments as follows:
November 15, 2013 - $10,000
January 15, 2014 - $10,000
March 31, 2014 - $10,328
Costs
[67] Father seeks costs of $5,969 and mother seeks costs of $10,500. Success on this motion was divided. Given that mother has not paid any child support, it would be unusual and unfair to father to reward mother with costs. In the circumstances, father is entitled to some costs. I fix his costs at $1,000 and order mother to pay this amount.
___________________________ C. Horkins J.
Released: November 5, 2013
COURT FILE NO.: FS-11-17567
DATE: 20131105
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
S.D.
Applicant
– and –
J.M.
Respondent
REASONS FOR JUDGMENT
C. Horkins J.
Released: November 5, 2013