COURT FILE AND PARTIES
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SUSAN MUSGRAVE, Applicant
AND
RICHARD DAVID MUSGRAVE, Respondent
BEFORE: M. Linhares de Sousa J.
COUNSEL: Adriana Doyle, counsel for the Applicant
Leonard Levencrown, counsel for the Respondent
HEARD: February 20, 2014 at Ottawa
ENDORSEMENT
Introduction
1I released my decision on this motion on December 6, 2013. A second hearing on this matter was necessary and held on February 20, 2014, to deal with the following issues which the parties could not resolve:
(1) Whether an employment severance payment received by Mr. Musgrave should be included in his 2013 income, thus bringing his annual income for that year to $148,000, as found by me in my decision of December 6, 2013?
(2) Whether this court should consider the new evidence produced by Ms. Musgrave concerning the child Andrew’s school marks for his second and subsequent terms at Algonquin College when such evidence was available at the time the motion was argued in October of 2013? In the event that the Court does, should there be a termination date to the child support being paid for the child Andrew?
(3) Costs of the motion and of this second appearance.
Severance Payment and Income
2With respect to question 1., Mr. Musgrave argues that upon the parties’ separation the parties determined that their respective employment severance payments for the duration of the marriage were found to be roughly equal and hence there was not a division between the parties of this respective asset. This fact was not disputed by Ms. Musgrave. According to Mr. Musgrave, to now include the employment severance payment which he received into income for child purposes would be unfair to him.
3Ms. Musgrave argues that property division and child support are two different issues, the latter dealing with the best interests of the children and the former dealing with fairness and equity between spouses. Ms. Musgrave submits that for the year 2013, Mr. Musgrave had his employment severance payment put into his income stream from which the children are entitled to benefit. It should therefore be included in Mr. Musgrave’s income for the purpose of child support.
4The weight of the jurisprudence, both in this province and in other Canadian provinces supports Ms. Musgrave’s submissions that these payments and comparable payments ought to be included in Mr. Musgrave’s income for the purpose of determining the quantum of child support. (See MacDonald v. MacDonald, 1997 ABCA 409, 1997 CarswellAlta 1062, (Alberta Court of Appeal, 1997); Druhan v. Druhan, 2010 CarswellOnt 5268, 2010 ONSC 3430; Stevens v. Boulerice, 1999 14995 (ON SC), [1999] 49 R.F.L. (4th) 425; Gibson v. Gibson, [2002] O.J. No. 1784 and more recently in Fraser v. Fraser, 2013 ONCA 715 where the Ontario Court of Appeal at paras. 94 to 107 found the reasoning of Aitken J. in Stevens v. Boulerice, supra, persuasive).
5On the facts of this case, Mr. Musgrave’s employment severance payment added to his 2013 income was effectively income replacement. Mr. Musgrave, upon the separation from Ms. Musgrave, did not share the value of his severance payments with her. Consequently, arguments of unfairness or “double dipping” do not apply to the facts of this case where a consideration of such funds as income is the right of the child and not for enriching the asset holding or lifestyle of the mother.
6For these reasons, for the year 2013, for the purpose of determining Mr. Musgrave’s obligation to pay child support for the two children his income will include the employment severance payment received by him and be found to be $148,000.
Future Adjustments to Child Support
7In the case of any future adjustments to child support that may arise as a result of a change in Mr. Musgrave’s income, at this hearing the parties agreed that upon the mutual exchange of financial information, done by June 1st of each year, in support of such a variation of child support, based on a change in Mr. Musgrave’s income for the previous year the change in child support would be made and payable retroactive to January 1st of the year in which the financial information is exchanged. The parties acknowledge that they have an obligation to exchange such financial information on a yearly basis as provided for in the balance of the existing order which continues to remain in force.
8In his correspondence to me dated February 28, 2014, about which I will say more below, counsel for Mr. Musgrave submitted that annual retroactivity to January 1st of each year should not take place. Rather, the annual change in child support, if any, should take place on July 1st of each year as has been done in the past. Mr. Levencrown argues that,
I would submit to you that there are no grounds to order retroactive support in this case as Mr. Musgrave has always paid and his conduct is exemplary.
9The grounds would be the agreement he expressed on behalf of his client during the oral argument. I am not prepared to open this issue up again to argument. Consequently, retroactive adjustment to annual child support, if any, in any given year shall be made retroactive to January 1st of each year.
Ongoing Support for Andrew
10With respect to question 2 concerning ongoing support for the child Andrew, Ms. Musgrave, as a result of my ruling given in my Reasons for Decision on the motion, has now produced documentation concerning the progress Andrew is making in the Police Foundation course at Algonquin College since his enrolment in that course. (See exhibit #2).
11Why this evidence was not produced when this motion was first argued, I still do not understand. Counsel’s explanation and submission that it was an oversight is not very persuasive. The progress in school which the children were making and whether that progress justified continuing child support are at the very heart of the conflict between these parties. This evidence was asked for and should have been produced long before now. The delay in its production has contributed to the prolongation of these proceedings.
12Counsel for Mr. Musgrave argues that Andrew’s school progress reports should not be accepted at this late date and child support for Andrew should be terminated immediately. Alternatively, he argues that, in view of the history of this case, Mr. Musgrave’s obligation to pay support for Andrew should be terminated at some reasonable date in the future, allowing for Andrew to complete his course within a reasonable time.
13An examination of Andrew’s marks for his 2013 winter, spring and fall terms in the Police Foundation’s course show the following. In his spring term Andrew completed all courses with mixed results including some very good marks. In the second term Andrew began with a full load of courses (7). He withdrew from two courses and failed two courses, barely completing only three courses. During this time, according to the evidence of Ms. Musgrave, Andrew was given substantial additional help including medication because of his personal challenges. During the fall term, Andrew continued his studies with a reduced load of courses (5) instead of 7 with authorization from Algonquin College. Of these 5 courses Andrew failed two of them and completed the other 3 with higher marks than he received in this previous term. I assume that this is what Ms. Musgrave meant when she stated in her affidavit that Andrew’s progress in his second year “is progressing very well”, although that choice of words hardly describes the full and accurate picture of Andrew’s education progress to which Mr. Musgrave, as the joint parent, was entitled.
14Andrew has commenced his winter term of 2014. It is too early to know anything of his progress at the current time. The evidence provided by Ms. Musgrave concerning this term of Andrew’s course does not even make clear what courses Andrew is effectively taking. Furthermore, Andrew will have to make up all of the courses which he has failed or not completed to date to finish his course.
15In view of all of this information, I find it hard to understand how Ms. Musgrave in her previous affidavit could have indicated that because of Andrew’s reduced work load she estimated that Andrew would complete his Police Foundation course in the spring of 2014. That has now been revised to January of 2015. Given the number of courses which Andrew seems to be able to complete each term with some success, this estimate is realistic and reasonable on the evidence before me.
16To terminate Andrew’s support now would be, in my view, to penalize the child for his parents’ conflict. I do not believe Andrew should be punished for the conduct of his parents. Andrew faces many personal challenges in the pursuit of his chosen education which need to be accommodated. Clearly, time is one of these accommodations. However, on the evidence a reasonable time can now be fixed based on the post-secondary course chosen by Andrew and his demonstrated pace of work.
17It is therefore, ordered that support for Andrew shall continue until December 1, 2014, inclusive of that month, and terminate at that time. All section 7 expenses relating to Andrew pursuing his studies at Algonquin College, as identified by me in my previous Reasons for Decision shall also continue to be shared by Andrew’s parents in proportion to their income for so long as Andrew is registered and progressing in the Police Foundation Course.
18Ongoing support will continue to be conditional on Andrew being registered in the Police Foundation Course at Algonquin College and on Mr. Musgrave receiving, as soon as they are available, proof of Andrew’s registration and of Andrew’s progress reports for each term in the course. If at the end of December, 2014, Andrew still has not received all of his credits in that course any continuing financial support for the pursuit of his education he is to receive from his parents after that date will have to be discussed and agreed to by Andrew and each of his parents. Should Andrew decide at any time to change his course of studies, Mr. Musgrave’s child support obligation will terminate and any ongoing financial support for the pursuit of his education Andrew is to receive from his parents will have to be discussed and agreed to between Andrew and each of his parents.
19An outstanding issue remains concerning what Andrew can contribute to his education from his own resources as he is obligated to do. This was raised by me in my Reasons for Decision dated December 6, 2013. Andrew has had part-time employment with Loblaw’s Canada since October, 2013. There is no evidence concerning his earnings. Andrew should by now have received some statement of his earnings for 2013. Mr. Musgrave is entitled to this information so that he can make an informed argument as to what Andrew might contribute towards his own education.
Calculations and Section 7 Expenses
20As a result of my ruling, some calculations of ongoing support and proportional sharing of section 7 expenses had to be done. I requested that counsel undertake these calculations. With respect to this, I received counsel’s correspondence dated February 26, 2014 (from counsel for Ms. Musgrave) and February 28, 2014 (from counsel for Mr. Musgrave). Ms. Doyle’s calculations were not contested by Mr. Levencrown other than to argue that driving lessons and bus passes are not proper section 7 expenses. I have ruled on this issue in my Reasons for Decision dated December 6, 2013, and am not prepared, nor do I see any reason for opening up this issue for submissions. These expenses will be included in the section 7 expenses to be shared proportionally by the parents.
21Based on calculations presented by Ms. Doyle, which I accept, Mr. Musgrave is shown to owe a total of $6,894.26 in retroactive section 7 expenses for both Andrew and Spencer, which also takes account of any credits owed to him for payments already made. At a minimum it would not be unreasonable to expect Andrew to contribute $895 towards his own education from his earnings per year. Mr. Musgrave is therefore found to owe a total of $6,000 in retroactive section 7 expenses for both Andrew and Spencer which would render Mr. Musgrave current in his contribution to the children’s section 7 expenses.
22Mr. Musgrave is ordered to pay $4,000 of these section 7 expenses forthwith. The balance of $2000 shall be paid by July 1, 2014, along with the retroactive child support for two children, if any, owed by Mr. Musgrave once the annual review of quantum of child support takes place between the parties.
Ongoing Support for Spencer
23In her correspondence to me dated February 26, 2014, counsel for Ms. Musgrave raises the issue of ongoing support for the child Spencer. She asks does that include university costs because “as was stated at the hearing Spencer has been accepted to University for September, 2014?”
24Firstly, I am not sure what hearing Ms. Doyle is referring to. My recollection of the evidence at the first hearing was that Spencer’s education plan was to go on to University. No concrete or further evidence of this was provided at the motion. No concrete evidence of his recent University acceptance was presented at the second hearing nor do I recall this issue even being raised at the second hearing.
25Secondly, in keeping with indisputable jurisprudence my reference the “children’s college costs” in paragraph 46 in my Reasons for Decision, dated December 6, 2013, of course would include University costs if that is the education route reasonably followed by the children. The difficulty in this case is not whether “college” includes “university” it is the parents’ inability to communicate and cooperate in the interests of their children and in remembering that the purpose of child support is for the benefit of the children and not for sustaining their parental conflict. Nonetheless, the parents’ inability to do this does not relieve Ms. Musgrave of the duty to properly and completely disclose to Mr. Musgrave all of the information to which he is entitled concerning Spencer’s plans for post-secondary education as an adult child.
26Thirdly, has there been proper disclosure and proof presented on the part of Ms. Musgrave to Mr. Musgrave concerning Spencer’s ongoing support relating to his post-secondary education? I think not. For example, has Spencer completed his high school credits? When did he do this? What University has accepted Spencer and in what course? How long will the course be? What are the anticipated total education expenses for the commencement of Spencer’s University education in September of 2014? What earnings can Spencer expect to make between now and the commencement of his first year in University so that he can make some contribution to his University costs?
27Consequently, my ruling concerning Spencer remains the same. Mr. Musgrave is obligated to continue paying child support for Spencer in accordance with the Child Support Guidelines, O. Reg. 391/97 for so long as he remains a “child of the marriage” within the meaning of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) as am.
Costs
28The final question is costs. This was a motion brought by Mr. Musgrave to terminate his child support obligations towards his two children Spencer and Andrew. Ms Musgrave contested the motion and further responded by seeking ongoing support for the child Michael. Support for Spencer and Andrew was the main issue even though there were a number of subsidiary issues raised by the parties such as arrears of child support and proportional sharing of the children’s section 7 expenses. In the result of this motion, Mr. Musgrave has not succeeded completely on the main issue of the motion. His obligation to pay support for Spencer continues for the reasons given. His obligation to pay support for Andrew has been terminated at some date in the future for the reasons given. Support for Michael was denied for the reasons given.
29It can be said that Mr. Musgrave was unsuccessful on the issue of Spencer’s support and that Ms. Musgrave was completely successful on this issue; Mr. Musgrave has been somewhat successful on the issue of the termination of Andrew’s support in that Andrew’s support has been continued but terminated at a fixed future date; and, Mr. Musgrave succeeded completely on the question of Michael’s ongoing support and Ms. Musgrave was unsuccessful on this issue. I would have to conclude that overall success on this motion is mixed. In light of this neither party to this motion, is presumed to be entitled to costs pursuant to Rule 24(1) of the Family Law Rules, O. Reg. 114/99 and this Court may apportion costs as appropriate pursuant to Rule 24(6).
30Counsel for Mr. Musgrave submits that this is a case for no order of costs. This is particularly so in view of the fact that this second hearing was required because of the deficiency of Ms. Musgrave’s disclosure concerning Andrew’s schooling. I accept that Ms. Musgrave’s disclosure concerning Andrew’s schooling was deficient without any persuasive explanation, which contributed to the necessity of a second hearing in this matter. This was unreasonable behaviour on her part. The failure of Mr. Musgrave’s counsel to raise the issue of Mr. Musgrave’s income for the year 2013 was of course another reason that the second hearing in this matter was necessary. This can be considered unreasonable behaviour on his part.
31Mr. Musgrave did not make an offer to settle in this matter. Counsel for Mr. Musgrave has not provided a bill of costs.
32Counsel for Ms. Musgrave submits that Ms. Musgrave should receive an order for costs on a substantial indemnity basis. She claims substantial success on the motion with which, for the reasons given, I do not agree. Ms. Musgrave views this motion brought by Mr. Musgrave as the last of his previous other attempts to terminate his child support obligations to the children of this family.
33Ms. Musgrave made an offer to settle dated October 15, 2013. Pursuant to Rule 24(4) this offer is to be considered in the context of the reasonableness of a party’s behaviour. In light of the outcome of this motion the offer is a reasonable one although in all of its constituent parts, not one that puts into play the mandatory provision of Rule 18(14) of the Family Law Rules.
34I also observe with respect to this offer and its date, that in light of Ms. Musgrave’s deficient disclosure concerning Andrew’s ongoing education, it would have been very difficult, if not impossible for Mr. Musgrave to assess the reasonableness of her offer to settle on October 15, 2013, thus underscoring the importance of complete and adequate disclosure in family law cases. Nonetheless, this fact did not prevent Mr. Musgrave from at least attempting to make some reasonable offer to settle in this matter which might have led to some reasonable resolution dialogue, which of course he did not do.
35With respect to the other factors which this Court must consider on the question of costs found in Rule 24(11), this case, while important for the parties was not particularly complex or difficult. It did, however, provide yet another opportunity for this couple to continue their matrimonial conflict. I have already discussed the question of the reasonableness or unreasonableness of each party’s behaviour in the case. Given the experience of counsel and the nature of the conflict between these parties, I take no issue with the bill of costs submitted by counsel for Ms. Musgrave. Counsel for Mr. Musgrave does not dispute the bill of costs presented. He could hardly dispute the bill of costs when he himself has not submitted his own bill of costs. I believe it is fair to conclude that Mr. Musgrave has spent a comparable amount of costs on his own legal fees.
36Finally, it is evident that neither party could reasonably afford this litigation. Put another way, the children of this couple could have more profitably used, in the pursuit of their education, through their parents’ cooperative assistance and available resources, what their parents have spent on this litigation.
37For all of these reasons, and in view of the fact that Ms. Musgrave at least made some reasonable offer to settle in this case prior to its hearing, I order Mr. Musgrave to pay a nominal amount to Ms. Musgrave’s costs, which I fix in the all inclusive amount of $3,000 payable within 60 days of the release of this Endorsement.
M. Linhares de Sousa J.
Released: March 5, 2014
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: SUSAN MUSGRAVE, Applicant
AND
RICHARD DAVID MUSGRAVE,
Respondent,
BEFORE: M. Linhares de Sousa J.
COUNSEL: Adriana Doyle, counsel for the Applicant
Leonard Levencrown, counsel for the Respondent
ENDORSEMENT
M. Linhares de Sousa J.
Released: March 5, 2014