CITATION: Powell v. Powell, 2015 ONSC 1874
COURT FILE NO.: F1222/95
DATE: 2015/04/14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Danielle Adrienne Powell
William Clayton, for the applicant
Applicant
- and -
John Anthony Powell
Anthony Little, for the respondent
Respondent
HEARD: January 27, 2015
LEITCH, J.:
[1] On November 9, 2009, the applicant brought a motion to change the order of Marshman J. dated July 18, 1996 (the “1996 order”). The applicant’s motion to change sought an order that the respondent provide his income information for the past three years; an order that the respondent pay child support in accordance with the Child Support Guidelines, S.O.R. 97-563; an order that child support be tax neutral pursuant to the Guidelines; and evidence that the respondent had complied with the 1996 order.
Background Facts
[2] The applicant and the respondent were married September 29, 1984, and have three children, Robert, born April 1, 1987, Marc, born October 8, 1988, and Jessica, born April 21, 1993.
[3] After they separated, the applicant and the respondent entered into minutes of settlement which form the basis for the 1996 order.
[4] Pursuant to the 1996 order, the respondent was to pay child support in the amount of $250 per month per child indexed annually in accordance with the consumer price index. The child support was to be tax deductible by the respondent and was to be part of the applicant’s taxable income. Child support was to be paid until each child turned 23 years of age unless the child ceased to be in full-time attendance at an educational institution prior to that time.
[5] Pursuant to the 1996 order, the respondent’s child support obligations for Robert and Marc ended on their 23^rd^ birthdays. Robert and Marc pursued post-secondary education beyond the age of 23. To their credit, they both have obtained master degrees. The affidavit evidence of the applicant is that the respondent paid nothing with respect to their post-secondary education costs. The applicant does not seek any contribution from the respondent for these expenses.
[6] Pursuant to paragraph 8(3) of the 1996 order, the respondent was to provide the applicant with a complete copy of his income tax return on or before May 15 in each year.
[7] The respondent was steadily employed until his health declined. He has been in receipt of disability benefits for a number of years.
Issue Number 1 – Child support for Jessica
[8] There is no issue that Jessica, born April 21, 1993, is in full-time studies. The respondent acknowledges his obligation to pay child support for Jessica. It is agreed by the respondent that effective January 15, 2015, he will pay $253 per month as support for Jessica in accordance with the Child Support Guidelines. This child support shall continue for as long as she is enrolled in school on a full- time basis and residing with the applicant (residing with the applicant shall include living away from home to attend post-secondary education).
Issue Number 2 – The issue of retroactivity – the date of the motion to change or an earlier date
[9] The applicant seeks an order fixing arrears retroactive to January 1, 2006. Mr. Clayton’s position, on behalf of the applicant, is that the applicant’s intention in that regard was clear from the first case conference. Mr. Little’s position, on behalf of the respondent, is that the issues on the motion are retroactive only to the date the motion was made, namely November 9, 2009.
[10] I am satisfied that the applicant’s position on the retroactive date was reflected in the trial management endorsement dated March 23, 2013, which confirms Mr. Clayton’s position on this issue. Therefore, the amount of child support in arrears shall be calculated retroactive to January 1, 2006.
Issue Number 3 – The quantum of arrears – the issue of the respondent’s income
[11] As Mr. Clayton observed, at the end of the day, fairly modest sums are in issue considering the significant volume of paper that eventually has been filed in relation to this motion to change and considering how long it has been outstanding. Mr. Clayton lays the responsibility for both the delay and the volume of material at the feet of the respondent who, he asserts, did not provide income disclosure as required by the 1996 order, did not produce his medical information pursuant to court order on a timely basis and did not comply with other court orders respecting financial disclosure on a timely basis.
[12] Mr. Clayton notes that pursuant to the December 1, 2014, order of Czutrin, J. the respondent was ordered to produce his tax returns from 2009 to 2013, his 2014 year-to-date income, a copy of the unredacted settlement agreement with his former employer and a calculation of support paid and what should have been paid in accordance with the guidelines up to December 19, 2014. Justice Czutrin made a further order January 8, 2015.
[13] Fulsome financial disclosure was only made by the respondent shortly before this motion was heard. This disclosure enabled the applicant to prepare a chart which is attached as Schedule A, outlining the respondent’s line 150 income from January 1, 2006, to January 1, 2015; the amount of support paid by the respondent; the amount of support payable pursuant to the Child Support Guidelines; and the corresponding over or under payment.
[14] Up to January 1, 2014, the annual arrears were not large amounts and, as at that date, the respondent had slightly overpaid his support obligations.
[15] The 2014 fiscal year is complicated because the respondent’s employment was terminated on September 22, 2014. He received $36,500 net in settlement of a grievance he filed. The respondent also received disability benefits from Standard Life Insurance Company and CPP Disability Insurance in the amount of $30,657.84.
[16] The applicant’s position is that the respondent’s income for the purpose of assessing child support for 2014 should be at least $82,803. This amount is calculated based on the respondent’s disability income of $36,658 plus the grossed-up value of the non-taxable income of $36,500.
[17] The applicant seeks an order fixing the arrears at $12,500.40.
[18] On the other hand, Mr. Little’s position on behalf of the respondent is that the applicant’s paperwork has been very confusing. He submits that there are no arrears to the extent the applicant asserts. He also notes that the respondent has increased his child support each and every year since the Family Responsibility Office became involved.
[19] The respondent also takes the position that the amount received to settle his grievance should not be included as income for the purpose of assessing his child support obligation.
[20] In considering this issue, I note that during the time he was fully employed the respondent underpaid child support considering his child support obligation in accordance with the Child Support Guidelines. I accept the affidavit evidence of the applicant that the respondent did not make financial disclosure in accordance with the 1996 order. The respondent’s underpayment of support reduced as his income declined. His income was relatively stable until 2012 when it declined from approximately $46,200 to $39,500. In 2012, he received employment income of just over $5,000 in addition to his long-term disability benefits and CPP. Thereafter, his income was limited to his disability benefits until his receipt in 2014 of the settlement from his grievance.
[21] In all of the circumstances of this case, I am satisfied that it is fair and reasonable that the respondent’s child support obligations be assessed on the basis of his line 150 income for 2014, in accordance with s. 16 of the Child Support Guidelines. His income in 2014 reflects an amount paid by his employer to satisfy an employment grievance. He was paid an amount akin to damages for wrongful dismissal. He has not provided any evidence to establish any hardship if child support is assessed on that basis.
[22] Accordingly, the amount of outstanding child support arrears is fixed at $12,500.40 as of January 1, 2015, in accordance with Schedule A. This amount shall be collected through the Family Responsibility Office.
Issue Three – reimbursement by the respondent of the applicant’s lost income tax refunds
[23] The applicant submits that she is out-of-pocket a significant amount of money because the respondent failed to consent to a variation that the child support would be treated for tax purposes in accordance with the Child Support Guidelines. The applicant filed an affidavit from a bookkeeper who has prepared the applicant’s tax returns for many years. The applicant’s bookkeeper prepared a calculation of what she described as the “lost refund” representing the difference between the refund the applicant actually received and the refund she would have received had the child support been excluded from the applicant’s income. The lost refund from 2006 to 2013 inclusive is $22,487.56.
[24] The bookkeeper’s affidavit indicates that if an order is made making the child support receivable pursuant to the Child Support Guidelines retroactive to a certain date, then the applicant can file to have her taxes reassessed. Therefore, there is the potential that the applicant could recover her “lost refund” in that way.
[25] I am not inclined to make the order sought by the applicant. I do not find such an order appropriate in these circumstances. The respondent has paid support in accordance with the 1996 order. I have found the applicant is entitled to the relief she sought in relation to arrears and ongoing support. However, I am not satisfied that justice requires this additional order.
Issue Number 4 – Section 7 expenses
[26] The applicant submits that the respondent should have contributed to special and extraordinary expenses in relation to the children as required by s. 7 of the Child Support Guidelines.
[27] Furthermore, pursuant to the 1996 order, the respondent was obliged to maintain an account with a balance of $4,000 in order to pay for medical expenses in relation to the children over and above what was provided under his employer’s medical plan. The respondent did not do so.
[28] The applicant seeks reimbursement of fees paid for the extraction of Robert’s wisdom teeth, which were not covered by insurance in the amount of $1070.34. I am satisfied that the applicant is entitled to an order requiring the respondent to reimburse her for that amount. This amount shall also be collected through the Family Responsibility Office.
[29] The respondent is ordered to contribute to Jessica’s special and extraordinary expenses in accordance with s. 7 of the Child Support Guidelines proportionate to the applicant’s and respondent’s respective incomes.
Issue Number 5 – The obligation to maintain life insurance
[30] The 1996 order required the respondent to maintain a life insurance policy naming the children as beneficiaries in the amount of $100,000. In addition, the respondent was to provide annual proof that the policy remained outstanding and valid. The respondent has not fulfilled this term of the 1996 order.
[31] The respondent’s insurance coverage may now be less than $100,000. The applicant has deposed that the respondent unilaterally reduced his coverage to $50,000.
[32] I agree with the applicant’s position that life insurance should be maintained as long as Jessica is entitled to support to secure the respondent’s support obligation. The respondent shall file proof of the life insurance and shall maintain the existing policy. I trust that counsel can resolve the specific terms of an order reflecting this obligation.
Issue Number 6 - Costs
[33] The applicant seeks full indemnity costs or as Mr. Clayton put it “something close to what she [the applicant] has spent” in pursuing this motion, noting in particular that from 1996 to 2014, there was no confirmation or disclosure of income and had the respondent complied with the 1996 order, the applicant would not have had to incur the significant expense that she has incurred.
[34] The applicant was billed $4,574 September 30, 2010; $6097.15 December 28, 2011; June 5, 2012, $2,249; $1,283.98 November 28, 2014. As a result, the applicant has paid total fees paid up to this point in time of $14,204.13.
[35] Further, Mr. Clayton filed a printout showing unbilled fees of $2300.
[36] I accept the proposition advanced by Mr. Clayton that had timely disclosure been made, this motion may not have been pursued. I am satisfied that the applicant is entitled to costs. I find that the respondent is most responsible for the delay in concluding these issues and that he did not promptly comply with his disclosure obligations required by court orders.
[37] I am satisfied that the applicant is entitled to an award of costs of $10,000, all inclusive. This amount shall also be collected through the Family Responsibility Office.
Justice L. C. Leitch
Released: April 14, 2015
CITATION: Powell v. Powell, 2015 ONSC 1874
COURT FILE NO.: F1222/95
DATE: 2015/04/14
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Danielle Adrienne Powell
- and –
John Anthony Powell
REASONS FOR JUDGMENT
LEITCH, J.
Released: April 14, 2015