Pallasch v. Thompson, 2015 ONSC 2017
COURT FILE NO.: 3196-14
DATE: 2015-03-31
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KRISTY PALLASCH Applicant
– and –
GEOFF THOMPSON Respondent
Counsel: Ken Lawson, Counsel for the Applicant For Self
HEARD: March 12, 2015
BEFORE: Varpio, J.
REASONS FOR DECISION
FACTS
[1] The parties married on October 3, 1998 and there are two children of the marriage. The parties divorced on January 24, 2013. Beaudion J.’s Final Order stated:
- Child Support
a. At the time of this Order, support was based upon the respective tax returns of the parties for the taxation year 2011. The Applicant’s income, less union dues, was $59,066.00. The Respondent’s income, less union dues, was $58,996.00.
b. Pursuant to the Child Support Guidelines, the Respondent shall pay to the Applicant the sum of $877.14 per month in child support.
- Life Insurance
The Respondent shall maintain his life insurance policy available through his employment which is equal to two times his annual salary naming his Estate and Estate Trustee, Mark Poirier in trust for the children as the irrevocable beneficiaries. Mark Poirier, on behalf of the Estate for the Respondent shall continue to provide the Applicant with Guideline support payable on behalf of the children for as long as the obligation to support eh children remains in force and effect.
[2] The Order also provided for exchanges of financial information and notice for any change of employment.
[3] In October 2013, the Respondent father quit his maintenance job with the City of Ottawa and relocated to Sault Ste. Marie. The father indicated in oral submissions that he decided to return to his hometown of Sault Ste. Marie because he had found someone new and had started a new relationship. In 2013, the husband earned an annual income of $60,689.00.
[4] The father brings a motion to have the amount payable in child support reduced to reflect a lower income of $30,000. The recipient mother seeks an Order imputing income to the payor father using his 2013 income[^1] and resultant Guideline support of $902 per month.
[5] The father, who is self-represented, prepared limited materials in support of his application. The mother, on the other hand, supplied affidavit evidence in which she disputed the legitimacy of the father’s attempts at securing employment in Sault Ste. Marie. In her materials, she also attached a letter (dated September 25, 2013) from the father’s chiropractor, which states:
It is my opinion that given Geoff’s symptomology, history of workplace injuries that are increasing in frequency, and his familial history of low back disability, it would be medically prudent for him to pursue a less strenuous career path. It is my opinion that were Mr. Thompson to continue in his current workplace and experience further injuries, there is a significant possibility that he could develop significant disabilities in the future.
THE LAW
[6] At paragraphs 55 to 61 of Fraser v. Fraser, 2013 ONCA 715, [2013] O.J. No. 5347, the Ontario Court of Appeal described the statutory provisions governing “underemployment”:
The issues on appeal relate to the quantum of child support payable by the father. Under s. 15.1(3) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), a court making an order for child support shall do so in accordance with the applicable guidelines. Because the father and the mother obtained a divorce, and because no order has been made under s. 2(5) of the Divorce Act designating Ontario as a province in which the provincial child support guidelines apply, the Federal Child Support Guidelines, S.O.R./97-175, are the applicable guidelines within the meaning of s. 1 of the Divorce Act.
Section 3 of the Guidelines creates a presumptive rule that, unless otherwise provided, the amount of support payable for a child is to be determined based on the income of the spouse against whom the order is sought.
"Income" is defined in s. 2 of the Guidelines as meaning "the annual income determined under sections 15 to 20." Sections 15, 16, 17 and 19 of the Guidelines are relevant to the calculation of the father's income in the circumstances of this case.
Section 15 of the Guidelines provides that, subject to any written agreement between the parties, a spouse's annual income is determined in accordance with sections 16 to 20 of the Guidelines.
Section 16 establishes the basic rule that a spouse's income should be determined based on the spouse's "Total Income" on line 150 of the T1 General tax return:
- Calculation of annual income - Subject to sections 17 to 20, a spouse's annual income is determined using the sources of income set out under the heading "Total income" in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.
Under s. 17, if a court is of the opinion that s. 16 would not provide "the fairest determination" of a spouse's annual income, the court may have regard to the spouse's income over the last three years and determine an amount that is "fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years."
Section 19 provides that the court may impute to a spouse "such amount of income ... as it considers appropriate" and provides a non-exhaustive list of such circumstances. The relevant portions of s. 19 read as follows:
19.(1) Imputing Income - The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include,
(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the spouse;
(e) the spouse's property is not reasonably utilized to generate income;
(f) the spouse has failed to provide income information when under a legal obligation to do so;
(h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax.
[7] The Courts have also found that a payor spouse cannot normally reduce her/his amount payable simply by quitting a job without a valid reason therefore: Pirner v. Pirner, [2005] O.J. No. 5093 (Ont. C.A.); Stoate v. Stoate, [2005] O.J. No. 1655 (Ont. S.C.J.); Kaye v. Kaye, [2002] O.J. No. 3747 (Ont. Div. Ct.); Drygala v. Pauli, [2002] O.J. No. 3731 (Ont. C.A.).
ANALYSIS
[8] Firstly, I accept the affidavit evidence placed before me that Mr. Thompson quit his job at the City of Ottawa in October 2013. The issues to be decided are:
- Whether said termination of employment was reasonable in the circumstances;
- Whether the father should be imputed income based upon his City of Ottawa employment; and
- Whether the father has made reasonable attempts to find similarly paying employment in Sault Ste. Marie.
[9] I have no evidence before me to suggest that Mr. Thompson quit his position as a result of the chiropractor’s letter reproduced in part above, although the timing appears to be a curious coincidence. Despite same, Mr. Thompson admitted to the Court that he relocated to Sault Ste. Marie in order to further a relationship with a new person. This fact detracts from notion that Mr. Thompson may have quit his position for medical reasons.
[10] Further, I have no evidence with respect to efforts undertaken by Mr. Thompson to remain in his position at the City of Ottawa nor do I have any evidence of any attempts by Mr. Thompson and the City of Ottawa to find accommodation at the City. Although I have no evidence in this regard, I would find it hard to believe that the City of Ottawa would not have a policy in place to help Mr. Thompson find equivalent employment were his medical condition such that he could no longer work in maintenance.
[11] I equally have no evidence before me as to whether or not Mr. Thompson sought other well-paying employment in the City of Ottawa, where high-paying jobs may be easier to find than in the City of Sault Ste. Marie.
[12] As indicated in the caselaw recited above, it is a parent’s responsibility to care for their children to the best of the reasonable abilities. If it were the case that Mr. Thompson could not work for medical reasons (and assuming that no other factual considerations weighed upon the analysis), Mr. Thompson would undoubtedly be relieved of some of his support burden since he could not realistically hope to fulfil the obligations outlined in Beaudoin J.’s Order. However, and despite the chiropractor’s letter, the evidence before me does not support such a finding given:
- Mr. Thompson’s admissions regarding the reasons for his move to Sault Ste. Marie;
- The fact that he quit his employment with the City of Ottawa (as opposed to being terminated); and
- That I have no other evidence regarding the medical evidence and its impact upon his employment.
[13] I am thus Ordering that Mr. Thompson’s motion be converted to a trial requiring viva voce evidence. I cannot determine the reasonability of his claim for a reduction in support without a better understanding of both his medical evidence as well as the reasons that he quit his employment with the City of Ottawa. I note that the vast majority of the evidence will originate in Ottawa and, as such, the parties may wish to consider a change of venue application.
[14] Given the above, it would be unreasonable for Mr. Thompson to benefit from quitting a position that enabled him to provide for his children while his future employment prospects were uncertain. Mr. Thompson bares the onus of satisfying the Court that quitting a lucrative position in Ottawa for an uncertain future in Sault Ste. Marie was reasonable in the circumstances. I thus order that Mr. Thompson pay $902.00 per month in child support commencing April 1, 2015 based upon an imputed income annual income of $60,689.00. Mr. Thompson will have the ability to dispute this imputation once his trial is heard.
[15] With respect to arrears, I will leave that to the trial judge.
[16] As to extraordinary expenses, the following paragraph shall be added to Beaudoin J.’s Final Order:
Effective January 1, 2014, the Respondent Father shall contribute a minimum of $100.00 a month for extraordinary expenses and activities, which shall continue to be enforceable by the Family Responsibility Office.
[17] As to the insurance issue, I Order that paragraph 5 of Beaudoin J.’s Order should be changed to read:
An Order that the Respondent Father shall maintain life insurance in the amount of $120,000.00, identifying the Applicant as the irrevocable beneficiary in trust for the children, and that such policy is to be maintained for so long as the Respondent is required to provide for the support of either child.
[18] The insurance issue can be reviewed at trial.
COSTS
[19] Upon review of Rule 57.01 of the Rules of Civil Procedure, none of the factors outlined appear to suggest that substantial indemnity costs are appropriate in the circumstances. As such, given the factors outlined in that Rule, I order that Mr. Thompson pay Ms. Pallasch $5000 in partial indemnity costs to defray her Ottawa lawyer’s fees, and $1500 in costs to defray her Sault Ste. Marie lawyer’s fees. These sums are inclusive of disbursements and HST and are payable within 30 days of the release of this decision.
Varpio J.
Released: March 31, 2015
CITATION: Pallasch v. Thompson, 2015 ONSC 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KRISTY PALLASCH
- and -
GEOFF THOMPSON
REASONS FOR DECISION
Varpio J.
Released: March 31, 2015
[^1]: This latter figure is the amount sought in the Response to Motion to Change – other figures were presented in Ms. Pallasch’s factum but the Court will only consider the sum sought in the Response.