ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FC-13-359-1

DATE: 2014/03/03

BETWEEN:

DENISE GILBY
Applicant

– and –

LIONEL GODDARD
Respondent

Self‑represented

Sarah Kennedy, counsel for the Respondent

HEARD: January 3, 2014 (Ottawa)

REASONS FOR DECISION

PARFETT J.

[1] This motion to change brought by the Applicant mother requests an order varying child support retroactive to January 1, 2012, payment of section 7 expenses, termination of spousal support, a change in the custody and access regime to week on/week off, and final decision‑making power on issues of daycare and education given to the Applicant. The Respondent has brought a cross‑motion seeking sole custody or in the alternative final decision‑making power on issues of daycare and education, a variation in child support, setting the pro rata contribution to section 7 expenses, and reinstating the Respondent as a beneficiary of the Applicant’s employment benefits plan.

[2] Certain of these requests can be dealt with summarily. There will be an order declaring that neither party is entitled to spousal support. As pointed out by the Applicant, both parties worked throughout the marriage and neither party has been disadvantaged by the marriage, therefore neither is entitled to spousal support. The Respondent did not dispute the Applicant’s position. The Applicant did not dispute the Respondent’s request to be reinstated as a beneficiary of her employment health insurance and therefore there will be an order to that effect. Finally, both parties will contribute pro rata to the children’s section 7 expenses retroactive to February 13, 2013; prior to that date such expenses are to be shared equally pursuant to the Separation Agreement dated July 28, 2011. An accounting will have to be done regarding what expenses have been paid and by whom. Such evidence was not placed before the court.

Background

[3] The parties were married on December 27, 2005 and separated on November 10, 2010. They are the parents of two children, Benjamin (D.O.B. May 27, 2004) and Matthew (D.O.B. June 20, 2007).

[4] Until September 2010, the parties resided in Vancouver, British Columbia. The Applicant was employed with the Federal Government and the Respondent was the owner of a movie production company. In September 2010, the parties moved to Ottawa. The Applicant is still employed by the Federal Government and the Respondent has continued to work in the movie production business.

[5] The parties entered into a Separation Agreement on July 28, 2011.[^1] That agreement provided that the parties would have joint custody of the children and that during the school year, the primary residence of the children would be with the Respondent. The Applicant had overnight access on Wednesday from after school to Thursday at the start of school, as well as every second weekend. During the week when the Applicant did not have the children on the weekend, the children also spent Thursday night with her. After the agreement was signed, the Wednesday overnight was changed to Thursday in order to reduce the number of exchanges. During the summer school vacation, the children’s primary residence switched to the Applicant and the Respondent had the same access as the Applicant during the school year.

[6] Child support was off‑set and was based on the Applicant’s annual income of $86,232 and the expectation that the Respondent’s annual income would be $70,000. On that basis, the Applicant paid the Respondent $175 per month. Section 7 expenses were to be shared equally by the parties.

[7] In June 2012, the Respondent advised the Applicant that his income had not reached the anticipated level of $70,000 in 2011 and that child support needed to be increased as a consequence. The Applicant requested financial disclosure. Ultimately, this motion to change was filed.

Issues

[8] There are three issues to be determined in this motion:

1. Is a set-off of child support appropriate in the particular circumstances of this case;

2. What is the Respondent’s income; and

3. Should there be a change to the current custody and access regime?

4. Child support

[9] The set‑off of child support is provided for in accordance with section 9 of the Federal Child Support Guidelines, which states as follows:

Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account

a) the amounts set out in the applicable tables for each of the spouses;

b) the increased costs of shared custody arrangements; and

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

[10] As noted in 2005 3362 (ON CA), there is no universally accepted manner for calculating the amount of time children spend with each parent. However, there are several general principles that can be gleaned from the case law:

• It is desirable to be as precise as possible when determining the reality of the parents’ access and custody situation;[^3]

• Where an agreement is specific as to when access time starts and ends, an hourly accounting is preferable;[^4]

• Time spent at school or daycare should not be excluded from the time attributed to the primary residential parent;[^5]

• In order to reach the 40% threshold set out in section 9 of the Federal Child Support Guidelines, a parent must spend a minimum of 3,504 hours with the child over the course of a year;[^6]

• Where an agreement provides that one parent has the ‘right of first refusal’ to care for the child when the other parent cannot, the exercise of that right does not impact on the calculation of set‑off support.[^7]

[11] The Applicant argued that in 2012, she had the children 60% of the time and in 2013 she had the children 52% of the time. She points to the fact that she has the children for significant periods of time when the Respondent is travelling. Specifically, she indicated that in 2012, the children were in her care for most of February, 15 days in March, 13 days in June and 21 days in September. The Respondent points out that these time periods fall squarely within the principle that exercise of the ‘right of first refusal’ cannot be used to calculate set‑off child support. In addition, the Respondent contends that the Applicant has provided no other evidence for her assertion that she has the children more than 40% of the time. On the other hand, the Respondent has provided a detailed breakdown of the number of hours each parent has spent with their children based on the custody and access regime set out in the Separation Agreement.[^8] This breakdown indicates that the Applicant spends 2,968.8 hours per year with the children; less than the 3,504 hour amount that is required to meet the threshold.

[12] I accept the breakdown that the Respondent has provided the court and I find that the Applicant does not meet the minimum 40% threshold required for a set‑off child support arrangement. The Applicant will therefore pay $1,288 per month to the Respondent for child support based on an annual income of $89,564.

2. Respondent’s income

[13] It is necessary to determine the Respondent’s income in order to calculate the pro rata share of section 7 expenses that each parent must pay. The Respondent is self‑employed and as noted earlier he owns and runs a movie production company. The move from Vancouver to Ottawa had a significant negative impact on his business as he left a large movie-producing venue for a small one. The Respondent’s Notice of Assessment for 2011 indicates a total income of $23,207.[^9] In his financial statement dated November 28, 2013, the Respondent indicates that his 2012 income was $46,223.[^10] According to the accountant’s report, his income in 2013 was $56,446.[^11] I note that the Respondent’s Notices of Assessment indicate that in 2009, he earned $47,400 and in 2010, $52,062.[^12]

[14] The Applicant disputes the validity of the Respondent’s evidence concerning his earnings. She argues that because he is self‑employed, he can decide the income that he reports to Canada Revenue Agency (“CRA”) and therefore, he is able to conceal his true earnings and secondly, she contends that the Respondent is deliberately under‑employed in order to avoid paying child support.

[15] The Applicant hired an accountant, Mr. Jeffrey Miller, to review and comment on the 2012 activity in the Respondent’s personal and corporate[^13] bank and credit card accounts with the objective of determining the Respondent’s ‘combined income’. Mr. Miller indicates that the Respondent’s income in 2012 was $103,436.76.[^14] In response to this report, the Respondent hired Mr. Steven Pittman, also an accountant, to do a critique of Mr. Miller’s report and then to conduct his own income assessment. The Applicant was provided the opportunity to provide the court with a reply report. The Applicant prepared her own report critiquing Mr. Pittman’s report.[^15]

[16] The first issue to deal with is the assessment of the competing experts’ reports. With respect to the Applicant’s own reply report, I note that she is neither an expert nor objective and consequently, I can give no weight to her report. With respect to Mr. Miller’s report, I note the following:

• He did not indicate – and may never have been advised – that the purpose of his report was to establish the Respondent’s income for the purpose of determining child support in the context of litigation;

• He did not provide a curriculum vitae with his report in order to assist the court in assessing his expertise;

• He did not indicate that his report was prepared in accordance with section 20.1 of the Family Law Rules, nor did he attach a Form 20.1 (Acknowledgement of Expert’s Duty) to his report;

• He did not review any available financial statements relating to the Respondent’s corporations, review the Respondent’s shareholder loan account, nor did he review corporate accounting records to determine how revenues and expenses were treated in those statements; and finally,

• He did not contact the Respondent (or ask to contact the Respondent’s bookkeeper or his corporate accountant) about any unsupported deposits or indeed any questions that it is apparent he had concerning monies coming into the Respondent’s accounts. Instead he simply added any unexplained items to the Respondent’s income and furthermore made an unhelpful speculation about concealed bank accounts. As noted in Mr. Pittman’s report, had Mr. Miller asked the appropriate questions or sought the appropriate information, much that was unexplained would have been explained.

[17] As a result, I find that Mr. Miller substantially overstated the Respondent’s income in 2012. In so doing, Mr. Miller has done a disservice to the court and more importantly to the Applicant, since a properly prepared expert’s report might have shortened this litigation. However, I also note that it is not clear from his report that he knew that it was to be used for the purpose of litigation.

[18] Mr. Pittman’s report is everything that Mr. Miller’s report is not. I accept the income determination made by Mr. Pittman for the Respondent for the years 2011, 2012 and 2013. Consequently, I find the Respondent’s income to be as follows:

• 2011 - $26,050

• 2012 - $49,243

• 2013 - $58,263[^16].

[19] The weighted average income for the past three years is $49,887[^17] and that is the quantum that will be used to determine the Respondent’s pro rata share of section 7 expenses.

[20] The Applicant argues that further income should be imputed as she contends that the Respondent is deliberately under‑employed. She points to the declaration in the Respondent’s Affidavit in Support of Custody and Access dated March 18, 2013[^18] that he was working part‑time. In my view, that is not evidence of under‑employment. In addition, I note that the Respondent’s income in the two years before the move to Ottawa is similar to his most recent income, and that although there was a significant reduction in his income in 2011, his income since has increased steadily. This evidence does not support an allegation of deliberate under‑employment. Given that the burden of establishing under‑employment lies with the party alleging it, I cannot find that the Respondent is deliberately under‑employed and I will not impute further income to the Respondent.

[21] In conclusion, based on the Applicant’s income of $89,564 and the Respondent’s income of $49,887, the Applicant’s pro rata share of section 7 expenses is 64% and the Respondent’s share is 36%.

3. Custody and access regime

[22] The Respondent is asking for sole custody of the two children or in the alternative, a parallel parenting regime in which he has final decision‑making power over the children’s education and daycare arrangements. He does not want any change to the current principal residence and access regime. In contrast, the Applicant is seeking a week on/week off arrangement, joint custody with final decision‑making power in the areas of education and daycare.

[23] Although the Separation Agreement signed by the parties was never incorporated into a court order, and therefore, section 17 of the Divorce Act does not apply, courts are nonetheless loathe to vary a custody and access arrangement set out in an agreement unless there is good reason to do so.[^19] Continuing conflict between parents is not in and of itself a reason to change custody and access arrangements unless that conflict is negatively impacting the children.[^20] Finally, joint custody requires parents to cooperate in a manner that best serves the interests of the children.[^21]

[24] In this case, there is evidence that both children are suffering emotional problems, at least in part, as a consequence of the parental conflict.[^22] With respect to Benjamin, Dr. Ozard specifically recommends that he not attend an after‑school daycare program as this appears to contribute to his anxiety. Dr. Macdonald emphasized that Matthew requires structure and routine in order to manage his behaviour better. Currently, the children attend the after‑school care program when they are in their mother’s custody and when in their father’s custody, they go home to a nanny. On at least one occasion, according to the Applicant, the Respondent has taken the children out of the after‑school program without consulting or advising her.

[25] Both children have Individual Education Programs (“IEP”). In Matthew’s case, he arrives later in the day for school as it was felt that he would cope better with a shorter school day. The Respondent points out that the Applicant’s insistence that Matthew attend an after‑school care program flies in the face of this recommendation. The Applicant notes that there is a significant difference between the classroom and a daycare program. I agree. However, as noted above, Dr. Ozard clearly recommends that Benjamin be cared for in his home after school. The Applicant dismissed Dr. Ozard’s recommendation, but did not provide a reason for doing so.

[26] In my view, given Dr. Ozard’s opinion regarding Benjamin and Dr. Macdonald’s assertion that Matthew requires routine and consistency, it would be best for the children to be cared for at home. The Applicant raised the problem that the nanny works out of the Respondent’s home making it difficult for her to pick up the children for her access. I cannot see any reason why the nanny could not work from whichever home the children will be spending the night. It is consistency of care and routine that is important, not location.

[27] The Applicant seeks week on/week off custody and access and the Respondent wants to maintain the current arrangement. The motivation for each party’s position seems to be more related to its effect on the payment of child support than the interests of the children as I was not presented with any evidence by either party supporting their preferred regime as being in the best interests of the children. It is not – as suggested by the Respondent – the current custody and access regime that is negatively impacting the children’s emotional health but instead the continued conflict between the parents. Changing the amount of time that the children spend with each parent is not going to change that fact. Once again, given the medical evidence regarding the need for stability, I would be very reluctant to make any changes in the current regime and I will not do so.

[28] The only issue that still remains to be decided is whether the Respondent should be granted sole custody or whether a parallel parenting program should be put in place. I find that joint custody is still be the best option in this case. The dispute in this matter was primarily financial in nature. That issue has now been resolved. These parents have not had any difficulty with custody and access. The current arrangement has been in place since 2011 and it has gone smoothly apart from the dispute over after-school care. There is no evidence before me that the parents have had any difficulties making decisions together other than the daycare issue. In the circumstances, both parents will continue to have joint custody and they should continue to resort to the dispute resolution provisions contained in their Separation Agreement.

Conclusion

[29] As noted at the outset of this decision, neither party is entitled to spousal support. The Respondent will be reinstated as a beneficiary of the Applicants’ employment health insurance The Applicant will pay $1,288 per month to the Respondent for child support based on an annual income of $89,564 and the Respondent’s annual income is set at $49,887. Consequently, the Applicant’s pro rata share of section 7 expenses is 64% and the Respondent’s share is 36%. The children will attend after-school care at home and the nanny can move between the houses with the children. For the reasons noted above, I will not make any changes in the current custody and access regime and both parents will continue to have joint custody.

Costs

[30] The parties should resolve the issue of costs themselves, if possible. However, if the parties cannot resolve the issue of costs, brief written submissions of not more than one page, with attachments including Offers to Settle and a detailed Bill of Costs, are to be provided within 15 days with a right of reply within a further five days.

Madam Justice Julianne A. Parfett

Released: March 3, 2014

Footnotes

[^1]: Vol. 1, Tab 12A of the Continuing Record.
[^2]: 2005 3362 (ON CA), [2005] O.J. No. 507 (C.A.) at para. 2.
[^3]: LL. v. M.C. 2013 ONSC 1801 at para. 35.
[^4]: Ibid at para. 31.
[^5]: Ibid at para. 38; see also Torrone v. Torrone, 2010 ONSC 661 at para. 9.
[^6]: Ibid at para. 37.
[^7]: Chrysler v. Chrysler, [2006] O.J. No. 1211 (S.C.J.) at paras. 15 & 23.
[^8]: Vol 3, Tab 2B of the Continuing Record.
[^9]: Vol 1, tab 7 of the Continuing Record.
[^10]: Vol 3, tab 3 of the Continuing Record.
[^11]: Vol 3, tab 3D of the Continuing Record.
[^12]: Vol 1, tab 7 of the Continuing Record.
[^13]: Mr. Miller used the bank account of Goddard Films Inc. only.
[^14]: Vol 1, tab 12C of the Continuing Record.
[^15]: Vol 2, tab 5U of the Continuing Record.
[^16]: Schedule 6, Vol. 3, tab 2D of the Continuing Record.
[^17]: Ibid.
[^18]: Vol 1, tab 6 of the Continuing Record.
[^19]: St. Pierre v. St. Pierre, 2005 14007 (ON SC), [2005] O.J. No. 1669 (S.C.J.) at paras. 3 & 59. See also T.J.M. v. P.G.M., 2002 49550 (ON SC), [2002] O.J. No. 398 (S.C.J.) at paras. 19 & 23 re the treatment of agreements under the CLRA.
[^20]: Wreggitt v. Belanger, 2001 20827 (ON CA), [2001] O.J. No. 4777 (C.A.) at paras. 12 & 18‑20.
[^21]: Kaplanis v. Kaplanis, 2005 1625 (ON CA), [2005] O.J. No. 275 (C.A.) at para. 11.
[^22]: Dr. Brian Macdonald’s report at Vol 3, tab 2K and Dr. Jennifer Ozard’s letters at Vol 3, tabs 2O and 2P of the Continuing Record.