Ontario Superior Court of Justice
COURT FILE NO.: 06-FD-319376001
DATE: 20140630
Ontario Superior Court of Justice
RE: Sean Holland v. Iwona Nadolska
BEFORE: Backhouse J.
COUNSEL: Jacqueline Peeters for Mr. Holland
Iwona Nadolska –self-represented
TRIAL HEARD: June 23 and 25, 2014
Reasons for Judgment of Backhouse, J. released June 30, 2014
[1] Mr. Holland seeks to vary effective January 1, 2013 the final consent order of Justice Perell dated December 12, 2006 by:
terminating the spousal support of $2180/month; and
varying his child support of $1447/month for the 2 children, Asha Holland born August 10, 1994 and Lukas Holland, born July 2, 1998.
[2] In the final Minutes of Settlement that were incorporated into the consent order of Justice Perell the parties could not agree on the final amount and duration for spousal support and on section 7 expenses and agreed to go to mediation/arbitration. The parties attended a few mediation sessions but no settlement was reached other than support issues up to December 31, 2012 have been settled as have Asha’s university expenses to August, 2013. A material change in circumstances need not be shown in this matter.
[3] The support was based on Mr. Holland’s 2005 income of $119,834 and Ms. Nadolska’s 2005 income of $29,014. Mr. Holland seeks child support to be fixed for the period January 2013 to January 2014 in the amount of $438/month based on an income of $30,000. Commencing February 1, 2014 he seeks child support to be fixed in the amount of $664/month based on an income of $45,000.
[4] Ms. Nadolska seeks to have income of $119,834 attributed to Mr. Holland and no variation of spousal and child support from Justice Perell’s order.
[5] The parties cohabited for 13 years. They married on March 5, 1994 and separated on July 23, 2005. Mr. Holland was 36 at the time of separation and is now 45 years of age. Ms. Nadolska was 42 at the time of separation and is now 51 years of age. Both children have had their primary residence with Ms. Nadolska since separation. Mr. Holland had access on alternate weekends and Wednesdays. At the date of separation Mr. Holland was earning $119,834. Ms. Nadolska had been out of the workforce for 7 years and had previously worked as a bartender. She had an inheritance from her father in the approximate amount of $450,000. As part of the final Minutes of Settlement, she bought out Mr. Holland’s half interest in the matrimonial home, 22 Fallingbrook Woods, Toronto, for approximately $98,000 which was sufficient to pay off his debts. She continues to own the home today where she lives with the children while Mr. Holland has lived in rental accommodation since the separation.
[6] Ms. Nadolska studied economics and political science at the University of Warsaw. She immigrated from Poland when she was 21 years of age. In Toronto, she took English at George Brown College and also took a travel industry course but found she could not make more than minimum wage in that field. At the time she met Mr. Holland, she was working as a bartender in the Royal Trust building. She continued to bartend until Lukas was born, taking time off during her pregnancies. She testified that her focus was on taking care of the home and family and supporting Mr. Holland in his career. When Mr. Holland started to make good money, they agreed it would be best for the family if she stayed home full-time.
[7] Mr. Holland attended university for 1½ years in a business course. During the marriage, he took the Canadian Securities Course and a couple of investment courses. At the time the parties met, he worked for Royal Trust in investments and mortgagees in the same building where Ms. Nadolska was bartending. He then moved to CIBC Wood Gundy and subsequently spent 7½ years at TD Evergreen as an investment broker. He then accepted an offer to work as an account sales manager for Comm Works where he worked from 1999 to 2002. From 2003 to 2010 he was the national account manager for Hostopia.com Inc. From 2010 to January, 2012, he worked as a sales manager selling software. From January 2012 to December, 2012, he worked as the director of account managers for Ceryx Corporation. He lost his position in December, 2012.
[8] Mr. Holland testified that notwithstanding efforts thereafter to find new employment in his field, he has not been successful in doing so. The documentation filed by Mr. Holland to support his efforts to find employment show that he made a concerted effort in early 2013. However, after February, 2013, based on the documentation he produced, it appears that his efforts diminished.
[9] Mr. Holland’s income at the time of separation and thereafter was as follows:
2005-$119,834
2006-$96,942
2007-$130,458
2008-$174,442
2009-$160,422
2010-$128,176
2011-$121,147
2012-$107,854.
[10] Mr. Holland has not yet filed his 2013 income tax return because he is awaiting the outcome of this case to see how the support he has paid should be treated tax-wise. In 2013, he received employment insurance in the amount of $ 20,000. In addition, he testified that he earned cash in the approximate amount of $500/month helping his brother out in his plumbing business, making a total annual income including EI of $30,000. Mr. Holland testified that in 2014, he accepted work with a friend who is in the business of restoration of brick and concrete while continuing to seek out opportunities in his field. He produced a letter from Michael Gordon Restorations dated March 2, 2014 stating that Mr. Holland’s salary will be approximately $45,000/year plus overtime. Mr. Holland testified that notwithstanding the letter, he is not a salaried employee and works as a self-employed subcontractor. He produced copies of cheques he received from Michael Gordon Restorations, beginning in February, 2014. He testified that he cashed his cheques at MoneyMart because in his financial situation, it was difficult to open a bank account. He has remarried and spent $30,000 in fertility treatments. When this was unsuccessful, he and his wife adopted a child, now 22 months old. They are considering moving to Vancouver where he believes there will be more opportunities. They are also considering moving to the United States where his wife is a citizen and has family there who could help with childcare.
[11] After separation, Mr. Holland moved into a 2 bedroom apartment where the children shared a bedroom during access visits. When he and his wife adopted the child, the bedroom was turned into a nursery and Lukas slept on the couch on access visits. In April 2014, the landlord took over the apartment for his own use. Mr. Holland, wife and child are now staying in the apartment of a friend where there is no room for Lukas to stay over.
[12] In his financial statement, Mr. Holland shows no assets and consumer debts totalling $70,733.
[13] At the time of separation, Ms. Nadolska had never worked in an office and had no business experience or computer skills. She took her first course towards getting her real estate licence prior to separation but had to re-do it in 2007 because she did not get a passing grade. She testified that both before and after separation, she suffered from depression and underwent therapy. She continued with the real estate courses in 2008 and 2009. In 2010 she was referred to CAMH for depression and attended a 15 week program of cognitive behaviour therapy to battle her depression. Just prior to her completion of the sessions, she was diagnosed with breast cancer, underwent 2 surgeries and radiation treatment. She was scheduled for breast reconstruction on 2 occasions which were cancelled at the last minute by the hospital. The surgery is now scheduled for November, 2014.
[14] At the time of separation and for a few years following, Ms. Nadolska earned investment income from her inheritance. She then found that she could not carry the mortgage and accordingly used her inheritance to pay off the mortgage. Mr. Holland has not been in full compliance with his support obligations. He has paid nothing for either spousal or child support after November, 2013. She has had to support herself and the children with a line of credit which has a balance owing of $360,000. She continues to own 22 Fallingbrook Woods, Toronto which she values currently at $1.2 million.
[15] Her income at the time of separation and thereafter was as follows:
2005 - interest/investment income of $29,014 (plus spousal support of $7,444)
2006 - interest/investment income of $12,705 (plus spousal support of $21,041)
2007 - interest/investment income of $25,876 (plus spousal support of $26,160)
2008 - interest/investment income of $13,361 and $370 business loss (plus spousal support of $26,160)
2009 - $285 business loss (plus spousal support of $26,160)
2010 - net business income of $2,478 (plus spousal support of $16,165)
2011 - net business income of $4,747 (plus spousal support of $36,154)
2012 - $1,389 business loss (plus spousal support of $2,262).
[16] In 2013, Ms. Nadolska earned gross commission income of $26,000, net commission income of $16,112.63 and received a total of child and spousal support of approximately $16,000. In 2014, to date, she has earned $66,537 in gross commission income. She has received $41,450 to date and expects to receive a further $7000 in July, 2014. From this gross income she has to pay business expenses which include membership fees, advertising, promotion, office and car expenses. Her business expenses amounted to approximately $10,500 in 2013. Around $3000 of this was for business use of her residence and $3,834 was for motor vehicle expenses, not including capital cost allowance.
[17] Asha has now completed 2 years of arts and science at Queen’s University. She is taking a summer course and is planning on continuing with graduate studies in the field of medicine. She has received $12,000/year in OSAP loans and Ms. Nadolska contributed a further $6000 in each year towards university expenses. Lukas has completed grade 9. Both are excellent students.
Analysis
[18] I am not satisfied that Mr. Holland has made bona fide efforts to find employment commensurate with his abilities. While he testified to continuing to make concerted efforts, the documentation he produced shows diminished efforts after a few months of losing his position. The impression I formed was that he was motivated to avoid paying support and preferred to work in cash jobs. His explanation for why he did not deposit his cheques from Michael Gordon Restorations into his bank account made no sense. It is far more likely that he cashed his cheques with MoneyMart to avoid the enforcement of the support order. He has paid nothing to support his children for the last 7 months. He produced no documentation to support the cash income that he made from working for his brother. I am not satisfied that he has fully disclosed the income he earned. In my view, at a minimum, Mr. Holland could earn $75,000 which I attribute to him for 2013 and thereafter.
[19] Mr. Holland submits that income should be imputed to Ms. Nadolska based on her inheritance and net worth. Ms. Nadolska used her inheritance in part to buy out Mr. Holland’s interest in the matrimonial home and to pay off the mortgage which she could not afford to pay. She has provided and continues to provide a home for the children. Moreover, she now has a line of credit. I do not consider it appropriate to attribute income to her based on her inheritance and net worth.
[20] Mr. Holland’s counsel submitted that it was reasonable to attribute employment income of $55,000 to $60,000 to Ms. Nadolska. For 2014 and thereafter, I attribute $55,000 to her. I do not consider it appropriate to attribute income in that amount for 2013 for the following reasons. Ms. Nadolska earned gross commission income of $26,000 in 2013. There were a number of impediments to her becoming self-sufficient including that she had no office, computer or business skills at the date of separation, that she suffered from depression and that she underwent treatment for breast cancer and is still awaiting reconstruction. Mr. Holland has not played a large role in the children’s care which has been primarily born by Ms. Nadolska. For 2013, I consider it appropriate to attribute income to her in the amount of $20,000.
[21] Using the parties’ 2005 incomes on which the spousal and child support was set in 2006 ($119,834 for Mr. Holland and $29,014 for Ms. Nadolska), the SSAG produce the following range of spousal support: low-$1041, medium-$1,586 and high-$2022 with a minimum duration of $6.5 years and a maximum duration of 13 years. It is submitted on Mr. Holland’s behalf that what Ms. Nadolska has received in spousal support is equivalent to the medium range amount for the medium duration of 9 years and 9 months and that therefore spousal support should be terminated.
[22] In my view, spousal support should be reduced to $654/month for 2013, being the midrange of the SSAG for the incomes I have attributed to the parties for that year. In 2014, the monthly spousal support shall terminate subject to a payment of $1.00/year. Ms. Nadolska is on her way to getting established as a real estate salesperson. However, her health prospects are uncertain. Support shall be finally terminated on December 31, 2018 if she has not applied for a variation before that date.
[23] Asha is attending university out of town. She lives at home for 4 months in the summer and during holidays and some weekends. Child support based on an income of $75,000 for 2 children is $1105 and for 1 child is $682. Mr. Holland shall pay child support in the amount of $1105 for 5 months and $682 for 7 months. In addition, he shall pay 50% of the $6000 contribution to Asha’s university expenses over and above OSAP which I consider a reasonable parental contribution in the circumstances. This is reduced by half for 2013 because Asha’s university expenses were settled up to August, 2013.
[24] Accordingly, child support is varied for 2 children for the year 2013 to the amount of $983.25/month.($1105 x 5=$5525 + $682 x 7=$4774+$1500 divided by 12= $983/month) . Child support is varied for 2 children effective January 1, 2014 and thereafter to the amount of $1108/month.($1105 x 5=$5525 + $682 x 7=$4774+$3000 divided by 12= $1108/month).
Life Insurance
[25] The face value of the policy for Ms. Nadolska and the children may be reduced to $250,000 and Mr. Holland may deal with the other $250,000 as he wishes. He shall not pledge or borrow against this policy. Ms. Nadolska is entitled to claim support over another 4 ½ years. If no further order is made in her favour, she can be removed as a beneficiary from the life insurance policy at December 31, 2018. He shall provide proof that the policy is in effect in accordance with this judgement and is in good standing each November 1.
Dental
[26] The parties shall each contribute 50% to the children’s dental expenses.
Miscellaneous
[27] Ms. Nadolska has requested that Mr. Holland be ordered to participate in therapy with Lukas. While attending therapy together may be beneficial to Lukas, it is not appropriate to order this.
[28] The parties shall each comply with the disclosure requirements of the Child Support Guidelines by May 1 of each year commencing May 1, 2015.
Costs
[29] If the parties are unable to agree on costs, Mr. Holland may make brief written submissions on costs within 14 days of the release of this decision. Ms. Nadolska may respond within 14 days thereafter.
Backhouse, J.
Released: June 30, 2014
COURT FILE NO.: 06-FD-319376001
DATE: 20140630
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Sean Holland
– and –
Iwona Nadolska
REASONS FOR JUDGMENT
Backhouse J.
Released: June 30, 2014