Court File and Parties

PETERBOROUGH COURT FILE NO.: 153/10-001

DATE: 20140916

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Roxane Pothakos, Applicant

AND:

Frank Denson (Dr.), Respondent

BEFORE: THE HON. MR. JUSTICE P.H. HOWDEN

COUNSEL: T. Davies, Counsel for the Applicant/Responding Party M. Dwyer, Counsel for the Respondent/Moving Party

HEARD: August 29, 2014

ENDORSEMENT

[1] The respondent father Frank Denson has brought a motion to change the current order as it deals with child support and the adult child’s expenses for post-secondary education where she now has her own apartment but she also returns to her mother’s home periodically and continuously for four months in the summer. The parties married on February 10, 1995 and separated on January 7, 2010. They have two children, Felixe Samantha Pothakos Denson, born August 22, 1995, and Sydney Rae Denson Pothakos, born April 28, 1998.

[2] The current order is dated June 26, 2012, was made on consent, and required payment of child support for two children commencing April 1, 2012 in accordance with the table in the Federal Child Support Guidelines using the respondent-payor’s income for the year 2010. The monthly amount payable as table support was $3,022, based on his 2010 income; it was $238,833.20. He was also to pay expenses for the children under s. 7 of the CSG commencing April 1, 2012 of $300 per month for each child “in full satisfaction of his obligation to contribute to their extraordinary expenses.” The order provided that the obligation to contribute to extraordinary expenses terminates when she is no longer attending high school full time. The order required payment by the respondent of spousal support in the sum of $3,200 per month but no change is requested regarding spousal support at this time.

[3] Para. 11 of the 2012 order required both parties to provide updated income disclosure to the other party each year within 30 days of June 26, in accordance with section 24.1 of the CSG. This part of the order removes the necessity of each party to formally request income information. The intent of this paragraph and section 24.1 is to allow the parties to make the necessary adjustment in the payment terms in accordance with yearly changes to the payor’s income and to deal with their right to request a change where circumstances warrant.

[4] The respondent father requests changes to the current order for child support and s.7 expenses to recognize the change in circumstances whereby Felixe completed high school in June 2013 and commenced full time attendance at university in Ottawa in September 2013. When this motion was brought, it was in the context of the mother and Sydney living in Sault Ste. Marie and the father continuing to reside and work as a doctor in Thunder Bay. Now the mother has relocated to Ottawa and continues to work part-time as a nurse in Ottawa. Felixe was in residence for the 2013-14 academic year. She returns to her mother’s home on weekends sometimes and for study breaks, and lives at her mother’s home for the four months of the summer.

[5] The father wishes to change the current order by reducing the period of paying table support for two children to four months of the year while Felixe is living with her mother and Sydney in the summer, and for the rest of the year reducing the current order by paying the table amount for only one child. He also wants to fix the amount of Felixe’s post-secondary education expense using an example of average annual costs according to the University of Ottawa. He then proposes to share the net expenses after Felixe’s scholarship and RESP contributions from her grandmother with contributions from himself and the applicant mother. The current order for $300 per month for Felixe’s s. 7 expenses would be vacated. The father claims that Felixe’s university-related expenses should be $14,161 while in residence during the 2013-2014 academic year, not the $28,280 breakdown of expenses put forward by Ms. Pothakos (before reduction of the total for a scholarship and RESP contributions). Felixe would pay 25% of the net total. The remainder would be shared according to income, the applicant mother to pay 33% and the respondent father 67%.

[6] According to the father’s calculations which do not include increasing the current child support for 2013 and 2014 in accordance with his income increase, he claims an overpayment (from the retroactive adjustments to the payments to commence as of June 1, 2013) of $9,798 as of July 2014, the date of his motion. He also requests a credit of $8,192.09 against an order for Felixe’s post-secondary educational expenses retroactive to September 2013 for what he has paid on that account. He says he paid $8,192.09 towards those expenses.

[7] In sum, the father states that:

Essentially what the applicant is requesting in her affidavit is that I pay full child support for Felixe even though she is not residing at her mother’s residence and also pay for her apartment where she lives in Ottawa. ...I am sure that she will visit her mother but to request that I essentially pay for two residences I would suggest is patently unfair. [Resp.’s aff., Aug. 26, 2014, para 2(e)].

[8] He also asks that the applicant sign off on her shares in his professional corporation which was formed before their separation. As the parties are now divorced and it was disclosed properly for the purposes of equalization, he suggests that it is time and it is only proper that she sign the share transfer.

[9] The applicant mother opposes the changes to the current order proposed by the respondent father. She states that he must acknowledge the increase in his yearly income and adjust the child support ordered from $3,022 per month to $3,280 per month retroactive to July 1, 2013. The date for the first yearly adjustment of child support was June 1, 2013. The respondent’s income for 2012 and 2013 increased to $261,234, an increase from his 2010 income which formed the base for the 2012 order.

[10] Regarding the respondent’s proposal to reduce the table support for Felixe for the academic year 2013-14 when she commenced university, Ms. Pothakos states that the respondent fails to recognize that she must provide suitable accommodation for Felixe whenever Felixe wishes to be with her mother in her home even though she is paying for her own apartment. The applicant says that she has recently relocated to Ottawa as a nurse at CHEO and Felixe will have the flexibility to return home for weekends or for school break.

[11] Regarding the respondent’s criticism of Felixe’s post-secondary expenses, the applicant’s breakdown of her expenses for the school year 2013-14 show a total of approximately $15,100. Felixe was living in residence. Added to those expenses were $1200 per month for groceries, toiletries, cell, clothing, travel, and entertainment. The total is 24,700. For this academic year 2014-15, she has rented an apartment off campus. Her estimated education-related expenses are shown in Ex D. The projected expenses for Felixe’s university experience are said to be $28,280.18. The major differences from 2013-14 are for the meal plan ($1300 more), added “Convenience Plan” for $500, 12 months room rental including utilities for $2,500 more than residence charges, $1200 more for groceries, set-up in new rented premises for an additional $2000, and $700 more for university arts fees. Included in the $24,700 total for 2014-15 is an allowance for travel home (to Sault Ste. Marie) - 3x $459.06 = $1,377.18. Now that the applicant has moved to Ottawa, obviously this will not be required.

[12] Counsel for Mr. Denson argued that Felixe has withdrawn from parental control and the respondent should not have to pay for two residences. He cited Bond v. Bond, [2007] O.J. No. 3677 (Div. Ct.). As well, it is an error to fail to consider the extent to which a child should be expected to contribute to his or her own education from that child’s means and abilities and assets. Lewi v. Lewi 2006 15446 (ON CA), [2006] O.J. No. 1847 (Ont. C.A.). The respondent’s position through Mr. Dwyer is that Felixe earned $4000 in a year and there is a RESP provided by her grandmother. Therefore she should contribute 25% of the s. 7 education-related expenses that are properly charged as such. He disputes several of the costs in the applicant’s list of education-related expenses for reasons set out in brackets, including bus pass and admission related fees - ($369 + $270) = $640 (included in the full time university fees); meal plan - $3,600 (duplicated by grocery and board charges); convenience plan - $500 (a pre-loaded university credit card which Felixe can purchase with her incidental money); set up in new premises, travel and furnishings - $2,000 (set up is a fixed cost and with travel and hotel is not required); textbooks, etc. - $1000 (actual expense needs to be seen); and trips home which I have already dealt with.

[13] Ms. Davies submits that Felixe, although living mostly in her own apartment, is still a child of the marriage as she has not withdrawn from her mother and she, as her mother, must still maintain accommodation and often meals and other household expenses for Felixe. It is not as if Felixe can suddenly exist on her own and still receive a full time education. She remains a member of the parties’ family as a dependant. This is not a family that, while together, was existing on the financial edge but one that lived well on an income over $300,000. The table amount of child support should be updated and continue to be paid. The respondent is owed nothing for overpayment. She cited Friday v. Friday, [2013] O.J. No. 4439 (SCJ) and Durso v. Mascherin, [2003] O.J. No. 4803 (SCJ) as cases containing approaches to the table amount of support where an adult child is at university in a separate premises for the school year and entitlement to child support. Ms. Davies provided a Support Mate calculation showing the respective net disposable incomes using different scenarios of spousal support, table amount for two children and different levels of s. 7 expenses. Where spousal support remains the same, and the respondent pays the table amount of $3,280 for two and $1,500 monthly for s. 7 expenses, without an increase in spousal support, the NDI for the respondent and for the applicant would be close to equal.

Analysis and Findings: Child Support

[14] First, it is clear to me that the 2012 order contemplated the situation until the completion of high school by Felixe. That has now happened and the fact that she has, since September 2013, been in full time attendance at university for eight months of the year, forms a material change in circumstance requiring the court, in the absence of agreement by the parties, to consider the new situation in terms of the responsibilities of each and means of each, father, mother, and child, to meet those financial requirements. I have reviewed the applicable legislation and the cases cited by counsel as well as having examined the material filed by the parties.

[15] Where a child is an adult attending full time university, the court must have regard to ss. 3(2) and 7 of the Child Support Guidelines (“CSG”), in addition to the appropriateness of continuation, or not, of the table support approach, and how each party, child, mother and father should contribute to the proper post-secondary expenses for education of Felixe.

[16] The definition of “child of the marriage’ in s. 2(1) of the Divorce Act reads:

“child of the marriage” means a child of two spouses or former spouses who, at the material time,

(a) is under the age of majority and who has not withdrawn from their charge, or

(b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life;

[17] The power of the Court to make an order varying a child support order is contained in s. 17:

17. (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,

(a) a support order or any provision thereof on application by either or both former spouses; or

(3) The court may include in a variation order any provision that under this Act could have been included in the order in respect of which the variation order is sought.

(4) Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that a change of circumstances as provided for in the applicable guidelines has occurred since the making of the child support order or the last variation order made in respect of that order.

[18] Sections 3(2) and 7 of the CSG are particularly important to this motion. They read:

(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is

(a) the amount determined by applying these Guidelines as if the child were under the age of majority; or

(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.

[19] Section 7 of the CSG provides for post-secondary educational expenses as a special expense to which the child and parents are expected to contribute:

7. (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

[20] In considering the support provisions of the CSG, the purpose of the CSG is important to bear in mind. It is a quadruple purpose:

(a) to establish a fair standard of living for children that ensures they continue to benefit from the financial means of both spouses;

(b) to reduce conflict and tension between spouses by making the calculation of child support orders more objective;

(c)to improve the efficiency of the process by giving courts and spouses guidance in setting levels of child support orders; and

(d) to ensure consistent treatment of spouses and children who are in similar circumstances.

[21] There was no issue as to the power of the court to make the variation order sought. I have found that there is a change of circumstance which bears directly on the order and the period it was meant to cover, i.e. until Felixe completed high school.

[22] I have considered the new circumstance whereby Felixe is living most of the school year away from home with frequent visits home on weekends and school break. On the evidence before me, Felixe has not withdrawn from her parents and remains a dependant as long as she must continue her education to qualify herself for a job or profession. Ingram J spoke of withdrawal as an evolutionary process. It is the normal situation that parental financial obligations continue into adulthood where a child is pursuing post-secondary education. Friday v. Friday, supra, at para. 59, citing Smith v. Ramsay (2008), ONSC 54980 at para. 9. In this case, there is no doubt that Felixe is entitled to support as an adult child who is early in that evolutionary process of beginning to become independent but she remains dependant while in full time attendance in a post-secondary course of studies.

[23] The respondent wants to stop table support for Felixe for the eight months she is at university. I have considered the law and the evidence on this point. In Lewi v. Lewi, the Ontario Court of Appeal reviewed s. 3(2) of the CSG. Though there was one dissent in that case, on this point the court was unanimous.

[24] First, the party advocating a change of approach from use of the table amount of child support bears the onus of proving that that approach is inappropriate in the circumstances of the case. The respondent’s position and evidence have not done so. I accept Ms. Pothakos’ position as the one closer to reality and to the manner in which this family would probably have dealt with Felixe’s desire to have a primary residence separate from her parents during the school year but being able to return home on weekends and holidays and study breaks, for which purpose accommodation and frequent meals and a place for her effects including clothing must be maintained. At the income level of the parents, the same approach as that adopted by Ms. Pothakos would have applied and can be followed now. I am not persuaded that an approach to child support using the support tables is inappropriate to this case. I reject the approach suggested by the respondent of removing totally child support for Felixe for eight months of the year when she is living in her apartment and attending university and also returning home regularly, and reliant for clothing, food, and the other amenities of home supplied by the applicant. As Blair and Juriansz JJ.A. held in Lewi,

The word “approach” makes it clear that the court cannot depart from the application of the Guidelines because it considers the “amount” determined under s. 3(2)(a), i.e. the table amount or additional expenses under s. 7, to be inappropriate. It must be satisfied that the standard Guidelines approach is inappropriate; clearly an exceptional situation rather than the rule.

[25] In Lewi, the majority of the Court of Appeal found the approach using the table child support levels as available to the trial judge with a child attending university and living in a separate residence part of the year. The Court held that it was open to the judge to order unreduced table support, apply that table support to the living expenses of the child at university as much as possible, and resort to s. 7 for the added costs of post-secondary education. Or where one child is attending university away from home as here, the judge could use a proportion of the table support for two children. The main point emphasized by the Court of Appeal majority was that the table amount must be considered in the context of the entire order. Lewi, at paras. 162-5.

[26] In this case, I find that use of the unreduced table amount for child support has not been shown to be inappropriate to the facts of this case. This is a case of a family who were living a life style of combined incomes over $300,000 per year with the expectation encouraged by both parents that the children would receive an education without having to contribute financially; there is no evidence in this case, as there was in Lewi and in Friday, that the adult child attending university had means of her own beyond her ability to keep her scholarship and through contributions by the grandmother to the RESP. I understand, however, that she has earned an average of $4,000 per year, and that evidence was not disputed. Though the children in Lewi had assets of their own, the Court of Appeal majority addressed the case of a child without means whose family had fostered this expectation. At para. 171, Juriansz and Blair JJ.A. wrote:

It is fundamental that the lifestyle of children should suffer as little as possible as a consequence of their parents separating. If the parents would have paid the educational expenses of the children had they not separated, then, all things being equal, the children should be entitled to expect they would pay them even though the parents have separated. That proposition applies to this case. However, regrettably, circumstances have changed.

[27] Unlike Lewi, both parents continue to work in this case and despite Ms. Pothakos part time employment, the respondent’s income has increased. As the applicant put it:

When we were together as a family unit, we lived well, to say the least. The respondent worked hard as a physician, and, with a family income over $300,000, we were more than comfortable. Since the separation, I have worked as a nurse and been fully responsible for the day-to-day care of our two children.

[28] The respondent’s income over the last two years has been $108,700 and $101,800 in 2012 and 2013, in each case spousal support being $38,000 of the total, and $71,000 and $63,000 (rounded) from employment.

[29] I have found that the evidence fails to establish that the table approach to child support is inappropriate in this case. As the applicant must still maintain a home for Felixe for study breaks, weekend visits home and holidays, with the correct approach to the s. 7 expenses by ramping down the respondent’s household expenses on Felixe’s account like groceries and clothing and toiletries which are covered in the table support, full table support for the children should continue.

[30] It is ordered that the motion to reduce the table child support to that for one child commencing on September 1, 2013 for eight months of the year and the same disposition for the academic year 2014-15 is dismissed.

[31] The respondent shall continue to pay child support for Sydney and Felixe as follows: the sum of $3,280 based on the respondent’s 2012 and 2013 income of $261,234, until further adjustment on June 1, 2015.

[32] As for the s.7 post-secondary educational expenses, the following findings apply to the 2013-14 academic year:

University fees-full time Arts $5,835.22 Student Association $195.14 Incidental fees $286.36 Health Insurance $80.00 Dental Insurance $100.00 Access License fees $22.00 Added Students Association $27.00 Residence fees $4,714.00 Meal plan $2,300 Costs of setting Felixe up for university (hotel, travel, furnishings, computer) $3,000.00 Books $1,000.00 Total: $17,559.72

[33] The 2014-15 academic year expenses for education and education-related purposes I find to be as follows:

University fees-full time Arts $6,504.00 Admission related fees $270.00 Meal plan $3,600.00 Leased room, utilities (8 months) $4,800.00 Text books $1,000.00 Set up apartment, furnishings, travel, bed $2,000.00 Total: $18,174.00

[34] The respondent states that Felixe’s means and ability to pay for her own education in part and the deductions from the total expense must be considered due to the requirements of ss. 3(2) and 7 of the CSG; however, the share to be paid by Felixe will be tempered by the fact that the parties led her to expect, until their separation, that she would not be called on to pay for her university expenses.

[35] I do not know why there are no expenses for health and medical coverage in her second year. They were not entered as expenses so I have not done so for 2014-15. The applicant’s and the respondent’s means and ability to pay the post-secondary expenses must be considered, after Felixe’s share is deducted. The evidence is that the applicant’s income for the year 2012 was $108,713 including spousal support, employment income and RRSP income. For 2013, her income was $101,806.07. After allowing for spousal support, the respondent’s income is 67% of the total and the applicant’s share 33%.

[36] In arriving at the 2014-15 total, I have not included in them several amounts which the respondent objected to, including the bus pass (included in university fees), convenience plan (as a credit card, she can obtain one if she wants one from her incidental funds, clothing and toiletries (included in child support), and travel (the mother moved to Ottawa and thus obviated further travel expense for Felixe to fly to Sault Ste. Marie); the respondent can pay for her travel to see him in Thunder Bay if he wishes her to visit him rather than him travelling to Ottawa at his own expense. He has higher net disposable income after the increased support ordered in this decision.

[37] I have noted what each parent has said about Felixe’s capacity for contributing to her education. It is required by the CSG that her means and ability to pay for a portion of her expenses must be considered. This includes the RESP contributed by her grandmother in 2013 for $3,000 and her scholarship of $1,000 as well as what she could earn and contribute from her earnings. The respondent suggested 25% of the total should be expected for Felixe, or about $4,000. The applicant’s position was that little should be expected for Felixe as she becomes stressed easily. She works hard and conscientiously as a student and the applicant states (without contradiction by the respondent) that until this motion, both parents had told Felixe that they would pay for the full cost of her education. Though the separation is a circumstance that did not exist at that time, there is no reason why Felixe should have to contribute more than a nominal amount as the applicant suggested.

[38] In Lewi, the Court of Appeal stressed the provision in s 3(2) of the CSG as requiring consideration of the child’s ability to make a contribution. This includes both capital and income. Felixe’s scholarship depends on her marks continuing to be good enough for her to keep it. The evidence is that at present she still expects to have it. As well, Mr. Denson referred to a RESP in Felixe’s name to which her grandmother contributes. Both of these are to be considered as provided through Felixe. In addition, given the expectations that both parents led Felixe to believe, and given the mother’s reservations about the effects of pressure financially on her, she should contribute only a limited amount; she has no capital at her disposal that I am aware of. There are incidental expenses always that she can better pay for at her own discretion. As the court noted in Lewi, the costs will always only go in one direction – higher. One example is the remaining four months of her yearly lease not included in the s. 7 expenses because she wants the apartment beyond the school year. For that, she should pay with her earnings, as well as other incidental expenses for entertainment and the like.

[39] Therefore, for the 2013-14 academic year expenses, the total expense for post-secondary education is $17,560. The calculation to find the respondent’s share of s.7 expenses is:

Cost $17,560 Less RESP and scholarship contribution $4,000 Net expenses $13,560 Felixe’s share $1,000 $12,560 Mother’s share (33% of combined incomes) $4,145 Father’s share (67%) $8,415

For the 2014-15 post-secondary expenses, the calculation is:

Cost $18,174 Less RESP and scholarship from Felixe $4,000 Net expense $14,174 Felixe’s share $1,000 Mother’s share (33%) $4,347 Father’s share (67%) $8,827

[40] In respect of the respondent’s personal corporation, now that the parties are separated and divorced, there is no reason for the applicant to remain as a shareholder of Denson Medicine Professional Corporation. It is ordered that Ms. Pothakos endorse forthwith the share certificate and Instrument of Stock Transfer forthwith on presentation to her.

[41] Accordingly, the application for change is allowed to meet the changed circumstances of Felixe now that she is in university. However, it will not be as the respondent requested. By s. 17(1) and (2) of the Divorce Act and the corresponding provisions in s. 37 of the Family Law Act, the court has jurisdiction to make any order to vary on the application of either parent within the findings on the evidence before the court. I find that the respondent’s request to erase support for Felixe for eight months of the year and to rescind the former s.7 order and requiring Felixe to contribute 25% of her total expenses for her education in addition to deducting for her scholarship and her grandmother’s RESP contributions through an RESP (See the respondent’s affidavit of July 10, 2014, para. 26) is not appropriate nor does it comply with the evidence of this family’s intention before separation to pay Felixe’s university – related expenses without significant contribution from her.

[42] It is ordered that the respondent father shall continue to pay as child support for their children Felixe and Sydney on the first day of each month from June 1, 2013, the sum of $3,280 until further order or written agreement by the parties, based on the income of the respondent of $261,234 in 2012 and 2013. This is to be substituted for the present para 1 which shall be deleted. Payment by the respondent toward s.7 expenses in para. 4 of the June 26, 2012 order of $300 per month is deleted as of July 1, 2013; the same monthly amount for Sydney is not affected and shall continue as in the present order.

[43] In place of the para. 4 payment for Felixe, it is ordered that the post-secondary expense of Felixe for the academic year 2013-14 is $13,026 which shall be paid, after deducting $3,000 RESP contribution and the scholarship of $1,000, in proportion to the incomes of the parents; for 2013-14 the share of the applicant being 27.8 % of their total incomes being 362,000 rounded. The respondent shall pay to Felixe $8,415 of this total on September 1, 2013.

[44] For the academic year 2014-15, it is ordered that the respondent shall pay as his share of the s. 7 expenses to Felixe, according to the same formula, the amount of $8,827, due on September 1, 2014.

[45] As of now, on account of child support, the respondent is in arrears as of September 1, 2014, in the amount of $4,128. This amount is to be paid forthwith. On account of s. 7 expenses, as of September 1, 2014, the respondent owes $635 for the 2013-14 year after deducting $8,192 paid by him, and his share is $8,827 for the 2014-15 year. I will receive submissions from counsel in respect of any request by the respondent for a credit if he continued to pay the $300 monthly for Felixe beyond the period to June 30, 2014, and if he wishes the payment for 2014-15 s.7 expenses broken down into two or three installments; however, the lion’s share of the $8,827 would have to be paid as of September 1, 2014 for fees and other expenses due early in the school year.

[46] If not agreed, counsel may file written submissions with me on the s. 7 subjects referred to in the previous paragraph, any mistakes allege in my calculations in order to settle the order, and costs. The applicant’s counsel shall do so to my chambers in Barrie within seven days and the respondent’s counsel within seven days from the applicant’s submissions.

HOWDEN J.

Date: September 16, 2014