Editor’s notes
Editor’s notes: Addendum released on May 27, 2015 and appended to the original decision. The corrections were not integrated in the original reasons. Corrigendum released on September 17, 2015. Original judgment has been corrected with text of corrigendum appended.
CITATION
CITATION: Cotton v. Cotton, 2015 ONSC 2703
COURT FILE NO.
COURT FILE NO.: D703/12
DATE
DATE: 2015-05-19
ONTARIO
ONTARIO
SUPERIOR COURT OF JUSTICE
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID COTTON
David Cotton, Self-Represented
Applicant
Applicant
- and -
TRACEY COTTON
Tracey Cotton, Self-Represented
Respondent
Respondent
HEARD: April 20, 21, 22, 23 & 24, 2015
The Honourable Justice C.D. Braid
REASONS FOR JUDGMENT
INTRODUCTION
[1] This trial was held in order to determine the issues of child support, equalization of net family property and spousal support. At the outset of trial, minutes of settlement were filed that dealt with custody, access and primary residence. The final order includes both consent terms as agreed by the parties and non-consent terms that determine the issues upon which they could not agree.
BACKGROUND
[2] Based on the evidence presented at trial, I make the following factual findings:
a) The Applicant, David Cotton (“the husband”), was born on June 30, 1969 (currently 45 years of age).
b) The Respondent, Tracey Cotton (“the wife”), was born on August 11, 1970 (currently 44 years of age).
c) The parties began cohabitating in 1998. They were married on August 28, 1999.
d) There are two children of the marriage:
i. Brigitte Cotton (“Brigitte”), born on May 6, 1999 (currently 16 years old); and
ii. Nicole Cotton (“Nicole”), born on March 21, 2001 (currently 14 years old).
e) The parties separated on October 3, 2011. The marriage lasted approximately 13½ years (including cohabitation).
[3] The original application was commenced in January of 2012.
[4] On February 29, 2012, the court made an interim order granting the wife primary custody of both children; and ordering the husband to pay child support of $2,000 per month. The support amount was based on the fact that the husband was earning approximately $157,000 per year and the wife was earning approximately $50,000 per year. At the time of making that order, the court acknowledged that the quantum of child support would have to be adjusted once all relevant financial information had been exchanged.
[5] On July 4, 2012, the parties entered into Minutes of Settlement in which they agreed to joint custody and a schedule for shared living arrangements between the parties. An order was made pursuant to the terms of the Minutes of Settlement. Despite the fact that the living arrangements for the children had changed, the child support was not varied.
[6] No order has ever been made for the payment of spousal support in this case.
[7] On January 8, 2014, the court made an order recommending that the Office of the Children’s Lawyer become involved.
[8] In October 2014, Brigitte went to live with the husband and Nicole began to live almost exclusively with the wife. This living arrangement continued to the date of trial, with one child residing with each parent.
[9] At the commencement of trial, Ms. Junger attended as counsel for the Office of the Children’s Lawyer. Ms. Junger advised that, with the assistance and recommendations of the OCL, the parties had resolved issues of custody, access and primary residence. Minutes of Settlement were filed and Ms. Junger was excused.
[10] The trial then proceeded on the issues of child support, equalization of net family property and spousal support.
FINAL ORDERS SOUGHT
[11] The husband seeks the following orders from the court:
a. The husband asks that this court impute the wife’s income at $80,000 and calculate support on that basis;
b. The husband agrees to an order that he pay child support to the wife for one child in accordance with the Child Support Guidelines;
c. The husband asks the court to calculate retroactive child support and seeks repayment of the amount overpaid by him;
d. The husband seeks reimbursement of section 7 expenses;
e. The husband seeks equalization of net family property, and seeks recovery of debt payments made by him after separation; and
f. The husband agrees that the wife is entitled to spousal support. The husband requests that it be set at the low end of the range and that it be time-limited for 7½ years. The husband argues that he would suffer financial hardship if required to pay more than the low-end amount of spousal support.
[12] The wife seeks the following orders from the court:
a. an order that the husband pay her child support for one child in accordance with the Child Support Guidelines;
b. an order providing guidance regarding any future section 7 expenses;
c. equalization of net family property. Although there was no equity in the matrimonial home and the husband’s pension has already been divided, the wife seeks interest on that pension since the date of separation; and
d. an order that the husband pay her time-limited spousal support for 13 years in the mid-range based on her actual income.
THE EVIDENCE
[13] This trial took five days to complete. During the course of the trial, I heard testimony from three witnesses and received more than thirty exhibits.
[14] The evidence noted below is intended to be a synopsis of some of the more relevant aspects of the testimony tendered during trial and is not intended to be a summary of all of the evidence.
[15] While I have not detailed all of the evidence heard during the course of the trial, I have very carefully considered the entirety of the evidence in my determination of the issues.
[16] The order of evidence noted below is not necessarily the order in which the witnesses testified.
The Husband’s Case
David Cotton
[17] David Cotton is the Applicant husband in this proceeding.
Mr. Cotton’s Evidence
[18] The parties met in 1998. At that time, the wife’s income was approximately $35,000/year and the husband’s income was $45,000/year.
[19] The husband currently works at Transamerica Life as a sales director, which is an upper middle position. His income has steadily increased since the parties met. In 2000, the husband wrote his Life Licence Qualification Program Exam to enhance his career as he works with brokers on a daily basis.
[20] The parties moved in together shortly after meeting and had their first child almost immediately. A short time later, their second child was born.
[21] The wife stayed home from work with the children for four years in total. This was a joint decision by the parties. The wife kept her foot in the door by working a bit for the same employer during her leave. The husband agreed that the wife’s role as a stay-at-home mom during the girls’ infant years helped the husband to reach his career goals.
[22] When the wife returned to work after staying home with the children, she went back to the same employer to work full-time in sales. The husband admitted that the wife “had some catching up to do” because she was not actively involved with her work during the four years at home with the children.
[23] The husband filed various documents that he had printed from the internet showing what the wife should or could be earning in her sales job. The husband says that there is no reason for her not to be making more money, as their children do not have special needs and the wife does not have any special re-educational needs or special health needs. In his view, the wife has unlimited income potential.
[24] The husband stated that the wife is living in a townhouse paid for by her father (she pays the mortgage, taxes and maintenance herself). She also drives a car that was paid for by her father. The husband says that he leases a townhouse and he says that her quality of life is better than his. The husband also filed photos of the wife’s vehicles since separation. He says that the wife does not need to rely on him for support.
[25] The husband stated that he cannot afford to pay anything more than the low-range of spousal support, as he needs to look after four children and his new partner, Melissa Gibbard. He said that Ms. Gibbard’s income is modest although helpful; that he pays the bills; and that they have no money at the end of the month.
[26] Neither of the parties left the marriage with a lot of money, and there was substantial debt. The only real asset as of the date of separation was the husband’s pension.
[27] The husband testified about the consumer proposals that the parties entered into after separation. Pursuant to his proposal, he has to make payments of $350/month for 60 months (for a total of $21,000). The wife also entered into a separate consumer proposal to pay $650/month for 60 months (for a total of $39,000). Both consumer proposals are similar in terms of paying off the joint debts incurred during the marriage. It is not clear why the wife is paying almost twice as much as the husband to service their respective consumer proposals.
[28] On the issue of section 7 special and extraordinary expenses, the husband provided a spreadsheet (supported by numerous receipts) for the expenses that he wished to have partially reimbursed by the wife. The initial expenses totalled approximately $73,000, and included clothing, furniture, health expenses, a trip to Punta Cana, cellphone costs, hygiene expenses, birthday parties, etc.
[29] One of the section 7 expenses claimed by the husband was the rhinoplasty for 15-year-old Brigitte. He testified that Brigitte had a deep unhappiness with her nose that led to several issues. The tipping point was when he took Brigitte to the dentist, who took photographs and x-rays. The husband described this as a “dark day” when Brigitte saw the x-ray and photos of her nose. The husband states that Brigitte had a deviated septum, and the husband felt that the nose surgery would improve Brigitte’s health (especially her asthma). The husband and Brigitte conducted two years of planning, research and discussion, and decided that she should have the surgery.
[30] The husband acknowledged that the procedure cost a lot of money (approximately $9,780) and that a large part of it was purely cosmetic. He also acknowledged that the wife disagreed with Brigitte having the procedure. He did not try to get the procedure covered through his health insurance but says that he will make those inquiries.
[31] It is the husband’s position that the nasal surgery was for medical purposes and therefore qualifies as a proper section 7 expense that should be partially reimbursed by the wife. In support of that position, he filed two documents:
i. Note from Dr. M. Cawkwell (family doctor) that says the following:
Past History: Asthma – currently quiescent. No current symptoms. Allergies (environmental). [Emphasis added]
ii. Note from Dr. Peter Adamson (plastic surgeon) that says the following:
Ms. Cotton had both a functional and cosmetic open septorhinoplasty with bilateral inferior turbinate out fracturing performed on Thursday, March 12, 2015. The septum was deviated caudally to the right, at a convex left middle and posterior deviation, and a left inferior anterior and posterior spur, all of these deviations creating an internal nasal deformity. [Emphasis added]
[32] The husband stated that he and Brigitte believe that the surgery has improved her asthma.
[33] Nicole is involved in competitive dance, and the husband has paid for costumes, fees, etc. He has taken Nicole to competitions and included the cost of hotels, food, etc., for those trips in the section 7 expenses. The girls are also involved in competitive volleyball and horseback riding. The husband has paid Nicole’s competitive volleyball fees for this year, and he continues to pay for Brigitte’s horseback riding lessons.
[34] The husband testified about how he purchased cellphones for the girls and incurred costs associated to the cellphone plans. Before the separation, the girls were using $20 pay-as-you-go cards. The husband found that the girls were using too much data, and so he purchased cellphones with contracts. The wife did not agree with the cellphone contracts but “they were not communicating”. At a later point, the wife provided the girls with new cellphones with new contracts, and the husband must pay to end the contracts on the old phones.
[35] The husband stated that he considered clothing to be an extraordinary expense as the clothing was very expensive. The girls had become accustomed to certain clothing and they went through a lot of clothes as they grew. He said that he made sacrifices to purchase clothing for them.
[36] In March 2013, the husband took a vacation to Punta Cana in the Dominican with Nicole and Brigitte. He did not ask for the wife’s approval before taking the girls on the trip. He considered this to be an extraordinary expense for which he wishes to be reimbursed.
[37] The husband sought reimbursement for back-to-school supplies and supplies purchased for school projects. He sought reimbursement for dental costs that were not reimbursed by his health plan, miscellaneous medication costs and for Brigitte’s braces which will be put on within the next few months. He also sought reimbursement of pet costs for two parrots, a cockatiel, a cat and a dog, as he feel animals are needed in the home.
[38] The husband was asked to explain how the claimed expenses fit within the definition of section 7 special or extraordinary expenses. During cross-examination, the husband was challenged with respect to the expense claims that he was making for repayment of trips to Canada’s Wonderland, Starbucks, Silver City, and other items. The husband stated that he filed proof of all of the expenses as he “wants to demonstrate the quality of father that I am”.
[39] When he returned to court the next day, the husband provided a new list of section 7 expenses that he was claiming at trial. The husband withdrew his request to be reimbursed for some of the expenses, and reduced the total to approximately $43,300.
[40] On the issue of equalization, the husband seeks repayment of various debt payments that he made post-separation. These include a 407 bill that was in his own name; a bill for utilities at the matrimonial home; garage door repairs on the matrimonial home (where the wife resided post-separation); and post-separation payments on joint debts. He says that he made debt payments prior to entering into the consumer proposal to “keep them afloat”.
[41] The 407 bill was approximately $3,000 in March of 2012 (shortly after separation) but the amount owing increased to $5,000 before the husband paid it off. He is asking for the wife to pay half of $5,000 because they both used that 407 account.
Credibility of Mr. Cotton
[42] Although the husband was articulate, he was prone to exaggeration when it came to financial issues. He was confident that the wife should be making more money at her job, despite having no real evidence to support that position. He stated that he would suffer undue hardship if he had to pay spousal support at any amount higher than the minimum amount, despite the fact that he has a disposable income far in excess of the wife’s income. I find that his evidence was self-serving and overstated at times, which detracted from his credibility.
Melissa Gibbard
[43] Melissa Gibbard is the current common-law partner of Mr. Cotton (the Applicant husband).
Melissa Gibbard’s Evidence
[44] Ms. Gibbard testified that she has been dating Mr. Cotton for approximately three years, and they currently reside together. They plan to get married as soon as Mr. Cotton is divorced.
[45] Ms. Gibbard works as an administrator at a brokerage for a life insurance company. Ms. Gibbard’s T4 for 2014 was filed, which showed that she earned $48,488.56 last year. She has two children from previous relationships: 14 year old Dillon and 5 year old Lily. Ms. Gibbard receives no spousal support from her former partners. She receives $6,000/year in child support for one of the children and none for the other. Together, the husband’s new blended family consists of three children and two adults living in the house full-time.
[46] Ms. Gibbard testified about some medical costs for the children that are not covered by work health coverage plans. She also pays daycare at $300 per month.
[47] She testified that she and Mr. Cotton lead a conservative lifestyle. They go to the gym and stay home with the kids. They have a lot of animals. All of their money goes to the children and to groceries.
[48] Ms. Gibbard stated that Mr. Cotton is “very generous with Brigitte and Nicole”. She has “never seen (him) deny them anything, much to (her) frustration sometimes”. She further stated: “Kids need to appreciate that money does not grow on trees. David never wants to say no; he is a loving, wonderful father.” Ms. Gibbard would like to have the kids do a chore for the money to help teach them a little bit of responsibility.
[49] I find that Ms. Gibbard was a credible witness.
The Wife’s Case
Tracey Cotton
[50] Tracey Cotton is the Respondent wife in this proceeding.
Tracey Cotton’s Evidence
[51] The wife is claiming $9,029.66 in section 7 expenses. The expenses include dance, horseback riding, volleyball and Nicole’s braces. She disputes many of the expenses claimed by the husband and says that they are not proper section 7 expenses. She stated that she has also incurred costs for school supplies, cellphones and for taking Nicole to out-of-town competitions, but does not believe that they are proper section 7 expenses so did not claim them.
[52] The wife provided a list of the section 7 expenses of the husband that she agreed with, which totalled $8,755.40. This included horseback riding, dance, volleyball, and Brigitte’s braces. The wife’s summary of past section 7 expenses was marked as Exhibit 32 in the trial. Since the amounts are so similar, the wife is willing to forego any repayment of any past section 7 expenses. She also stated that she would be willing to contribute 50 per cent of future section 7 expenses.
[53] The wife works as an outbound sales representative at Complete Communications Inc. She testified that her income is 100 per cent commission and filed a letter from her employer confirming this arrangement. She stated that, like any sales job, her income fluctuates based on the strength of the market and the deals that she is able to close. She testified about various trips she has won as awards for top performance in her field.
[54] When the wife was asked about her low income in 2013, she stated that a lot was going on that year with the courts and the separation. She testified that the market was not that great, which also affected her sales. Despite earning a lower commission than in other years, she still won a reward trip to Miami from her employer that year as recognition for her good work. The wife further stated that she earned larger commissions in 2011 and 2014 because she closed some good deals. She acknowledged (under cross-examination) that 2011 was a difficult year emotionally, but she was still able to make $78,000 that year.
[55] With respect to spousal support, the wife stated that her salary will never get her to the level of the husband. She stayed home with the girls for four years and helped advance his career, including attending dinners with his work partners.
[56] Prior to her maternity leave, the wife was invited to join the “Circle of Excellence”. This was an incentive offered by Rogers Communication to ten people across Canada, which would have meant significantly greater income for the wife as she would have been paid residuals for each phone sold, based on continuing contract arrangements with Rogers. Because the wife was on maternity leave at the time this arrangement was offered, another colleague got into it in her place. The Circle of Excellence set-up no longer exists, but the wife missed out on the opportunity to make significantly more income over a number of years. It is not clear that this program would have brought her further ahead in her career today if she had participated, but she missed out on approximately $50,000/year additional income during the years that the program was running.
[57] The wife testified that she has had difficulty due to the breakdown of the marriage and re-establishing herself as a single mom. She continues to attend counselling and has difficulty focusing at work. She had a hard time with giving up the matrimonial home and she misses Brigitte, who now lives primarily with the husband.
[58] The wife is seeking the mid-point of spousal support for 13 years and is content that it be time-limited.
[59] The wife testified that she came into the relationship with some savings and a car that had been paid off. After separation, she had to completely rebuild and be able to provide for herself and her daughters.
[60] Moving forward, the wife would like to see the girls going back and forth between the residences of the parties.
Credibility of Tracey Cotton
[61] The wife presented her evidence in a concise but detailed manner. She was straightforward and made no attempt to avoid answering questions. She was not evasive and she did not contradict herself. Considering the entirety of her testimony, I find the wife to have been a credible witness.
[62] I accept the wife’s evidence that her career has suffered as a result of staying home with the children for four years, and as a result of the breakdown of the marriage. Further, I accept her evidence that she has been recognized by her employer for her hard work, and that her income will fluctuate because she is in a 100 per cent commission sales job. Despite vigorous cross-examination, I find that her evidence on this point was clear and credible.
[63] While I found that the husband was prone to exaggeration, I find that the wife accepted facts that could be viewed as detrimental to her case; and she was reasonable in her approach. Where the evidence of the parties differed with respect to financial information, I accept the evidence of the wife over that of the husband. ISSUES
[64] The following is a list of the issues that arose during this trial:
A. Imputation of the wife’s income;
B. Retroactive and ongoing child support;
C. Section 7 special and extraordinary expenses;
D. Equalization of net family property;
E. Retroactive and ongoing spousal support; and
F. Divorce.
A. Imputation of the Wife’s Income
[65] The court has a broad discretion when determining the issue of spousal support to impute income to one or both parties. In Marquez v. Zapiola, 2013 CarswellBC 3038, the British Columbia Court of Appeal stated the following with respect to the issue of imputing income:
The test for imputing income for intentional under-employment or unemployment is one of reasonableness, having regard to the parties' capacity to earn income in light of their age, education, health, work history and work availability. A spouse's capacity to earn income will include that person's ability to work or to be trained to work.
[66] In 2011, the wife earned $78,031. The parties separated at the end of that year. The wife’s income since the date of separation has fluctuated between $54,526 and $74,938.68. The wife testified that, since her job is in sales and she works on 100 per cent commission, her income can fluctuate from year to year.
[67] The husband argues that this court should impute the wife’s income at $80,000 since the date of separation.
[68] I am not prepared to impute income to the wife. I find that her income fluctuates from year to year, and that she has been recognized by her employer as a good performer. There is no evidence that she is underemployed or is otherwise deliberately keeping her income low.
[69] In his submissions, the husband stated that the reduction in the wife’s income in 2012 and 2013 seemed to be “punitive to David” as it coincided with court proceedings. When it was pointed out that the wife’s income increased to approximately $75,000 in 2014 (immediately before trial), the husband conceded the weakness in this argument. There is no evidence to support the husband’s theory that the wife is suppressing her true income in order to obtain a more favourable support order.
[70] For these reasons, I decline to impute income for the wife.
B. Retroactive and Ongoing Child Support
[71] I am guided in my determination of the issue of child support by sections 15.1(1), (3) and (4) of the Divorce Act and by the Child Support Guidelines.
[72] The parties agree to the following:
a) That the husband has been paying child support and should continue to do so. The parties do not agree on the amount that is appropriate for retroactive child support.
b) Once the court determines what income is to be applied, that child support should be the guideline amount. This should be calculated based on the fact that one child resides with the wife.
c) That child support properly commenced in March of 2012.
d) On February 29, 2012, the husband was ordered to pay $2,000/month in child support commencing in March of 2012. As of the date of trial, he is not in arrears.
e) The order for payment of child support was made prior to full financial disclosure, so the parties have asked the court to retroactively determine the appropriate child support since the date of separation. It is acknowledged that there will be a substantial overpayment.
f) The parties’ description of the living arrangements for the children and the annual income of the parties (taken from their tax returns and T4s) are set out in the chart below.
[73] The parties disagree as to what year’s income should be applied to calculate retroactive child support. The husband argues that the court should consider the previous year’s income for calculating retroactive child support. For example, when calculating the proper child support for 2012, he argues that the court should consider the 2011 incomes of the parties. The husband was unable to provide me with any authority for this position, except to point out that his method of calculating past support would benefit him by approximately $6,000. He essentially says that it would be unfair to apply the calculation less beneficial to him.
[74] The Court of Appeal in Vanos v. Vanos 2010 ONTCA 876 at paras. 13-14, held that the court must consider the actual income from a prior year when calculating support for prior years:
[13] In our view, where the amount of child support that should have been paid in a prior year is under consideration, the payor’s actual income for that year is the amount that should be used to calculate support for the prior period, so long as the payor’s actual income for the prior period is known.
[14] When calculating prospective child support, income from the previous year is used to calculate future support, essentially as a matter of convenience, because actual income for the upcoming year is incapable of exact determination. However, where, as here, the actual amount of income earned in a prior year is known, it is that amount that should determine the quantum of support that should have been paid. [Emphasis added]
[75] This court is bound to follow the direction of the Court of Appeal when calculating child support for prior years, and is required to apply the actual income for those prior years.
[76] During the course of the trial, the court and the parties considered numerous calculations that had been prepared using software to calculate child and spousal support according to the Child Support Guidelines and the Spousal Support Advisory Guidelines. In the chart below, the court has provided the calculations of support based on the exact income of the parties as set out in their income tax returns or T4s that were filed during the trial.
[77] I therefore find that the calculation of retroactive child support is as follows:
Time Period
Living Arrangement
Wife’s Income for that year
Husband’s Income for that year
Child Support/Month
Overpayment
March-June 2012
Wife Primarily
66,215
163,877
2,170
-170 x 4 = -680
July-December 2012
Shared
66,215
163,877
1,186
814 x 6 = 4,884
January-December 2013
Shared
54,526
176,451
1,504
496 x 12 = 5,952
January-September 2014
Shared
74,939
175,299
1,196
804 x 9 = 7,236
October-December 2014
One child with each parent
74,939
175,299
769
1,231 x 3 = 3,693
January-May 2015
One child with each parent
74,939 (for 2014)
175,299 (for 2014)
769
1,231 x 5 = 6,155
Total Retroactive Child Support
4,884 +
5,952 +
7,236 +
3,693 +
6,155
27,920
– 680 =
27,240 Overpayment
[78] As a result, the wife owes the husband $27,240 in overpayment for retroactive child support.
[79] Since I have declined to impute the wife’s income, ongoing child support shall be set at $769/month commencing June 1, 2015.
[80] To provide greater consistency for the parties and to take into account fluctuations in the wife’s income, I will require adjustments to child support on July 1 each year, based on incomes for the previous taxation year. The first adjustment will take place on July 1, 2016 and will be based on the total incomes for 2015.
[81] For so long as the husband has an obligation to pay support for the children, the parties must provide each other copies of both their previous year’s Income Tax Returns with all enclosures and attachments and their Notices of Assessment by June 1 each year, beginning in 2015.
C. Section 7 Special and Extraordinary Expenses
[82] Section 7 of the Child Support Guidelines provides that, in an order for the support of a child, the court may provide for an amount to cover all or any of certain extraordinary expenses, 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 parents and the child and the spending patterns of the parents in relation to the child during cohabitation. The definition of “extraordinary expenses” means expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover.
[83] Section 7 states that the court may provide for an amount to cover all or any portion of the following expenses: childcare; health insurance premiums; health related expenses that exceed insurance reimbursement by at least $100 annually; extraordinary expenses for primary or secondary school education; expenses for post-secondary education; and extraordinary expenses for extracurricular activities [Emphasis added].
[84] The guiding principle in determining the contribution of each parent to a special or extraordinary expense is that the expense is shared in proportion to income: section 7(2) of the Child Support Guidelines.
[85] In addition, in determining the amount of the expense, the court must take into account any subsidies, benefits or income tax deductions or credits related to the expense: section 7(3) of the Child Support Guidelines.
[86] In this case, the parties acknowledge that they have each incurred section 7 expenses, but there is a dispute about which expenses are appropriately considered under section 7. The wife has agreed to pay 50 per cent of reasonable section 7 expenses. The wife agrees generally, that extracurricular activities including horseback riding, competitive dance and competitive volleyball; and the future cost of braces for Brigitte are all proper section 7 expenses.
[87] The husband initially sought repayment of half of $73,316 in section 7 expenses that he has incurred in the three and a half years since separation. After further consideration, he narrowed the request to $43,300 in expenses.
[88] I find that only a limited amount of the husband’s expenses are properly “special and extraordinary expenses” within the meaning of section 7 of the Child Support Guidelines. I decline to order repayment of any of the following expenses incurred by the husband:
a. Children’s extracurricular: while some of these expenses are appropriate, I am of the view that many of these claims are not truly extraordinary expenses.
b. Clothing and school costs: none of these expenses are proper extraordinary expenses.
c. Medical and dental costs (most of the medical and dental costs were paid by the husband’s health care plan): these costs were not excessive. The wife also incurred some medical and dental costs. These will not be reimbursed.
d. Children’s Vacation (Trip to Punta Cana): this is not an extraordinary expense within the meaning of section 7.
e. Rhinoplasty: The husband paid for 15-year-old Brigitte to have rhinoplasty, despite the wife’s objections. He now seeks reimbursement for half the cost and claims that the procedure was for a medical purpose. The wife says that this was a beauty expense and not a proper medical expense.
I find that the doctors’ notes do not establish that the procedure was for a medical purpose. In fact, the family doctor stated that Brigitte’s asthma was “quiescent” with no current symptoms before the procedure was done. The husband is not entitled to be reimbursed for this procedure.
f. Cellphone costs: both parties incurred costs for cellphone use. I decline to order any reimbursement of these costs.
[89] Exhibit 32 in the trial is the wife’s summary of section 7 expenses of the parties. I find that all of the section 7 expenses listed in Exhibit 32 are appropriate, and fit within the meaning of section 7 of the Child Support Guidelines. To the extent that the husband claimed additional expenses, I find that the other claimed expenses are not proper expenses within the meaning of section 7.
[90] The wife acknowledged that, taking into account the future cost of Brigitte’s braces (which costs will be incurred in the next few months), the total section 7 expenses incurred by the respective parties are similar. Given that the issue of section 7 expenses is within the discretion of the court, I decline to order repayment of past section 7 expenses by either party.
[91] As for future section 7 expenses, this court cannot articulate every possible type of expense that may come up. However, the final order will include terms in relation to future section 7 expenses that will hopefully guide the parties to determine distribution of future expenses. The parties have had difficulty agreeing on what are reasonable expenses incurred for the children. Going forward, the husband shall be responsible for all section 7 expenses relating to Brigitte and the wife shall be responsible for all section 7 expenses relating to Nicole, except in relation to expenses for post-secondary education. There will also be a separate provision for unexpected, excessive costs which should be discussed in advance and shared between the parties.
[92] The right of child support is the right of the child. Even though the wife has agreed to pay 50 per cent of the section 7 expenses, it is my view that expenses for post-secondary education can be excessive and need to be viewed more carefully. Given the income disparities between the parties and the fact that the post-secondary program of the children is currently unknown, it is more appropriate to make the contribution of the parties reflect their respective incomes and support. I will therefore make an order that the payment of expenses for post-secondary education shall be subject to any contribution from the child, and that the contribution of the parties shall be as follows: the husband shall pay 65 per cent and the wife shall pay 35 per cent.
D. Equalization of Net Family Property
[93] In my consideration of equalization of net family property, I am guided by sections 4 and 5 of the Family Law Act.
[94] Section 4 of the Family Law Act defines “net family property”, in part, as follows:
The value of all the property…that a spouse owns on the valuation date, after deducting,
a) The spouse’s debts and liabilities;
b) The value of property, other than the matrimonial home, that the spouse owned on the date of marriage… [Emphasis added].
[95] The valuation date in this case is October 3, 2011, which is the date that the spouses separated and there was no reasonable prospect that they would resume cohabitation.
[96] The husband argues that he is entitled to equalization of debts. In support of this claim, he has filed documentation setting out debt that he says should be shared by the wife. Unfortunately, the husband did not file a Sworn Net Family Property Statement, either as part of the trial record or as an exhibit in these proceedings nor as part of the trial record.
[97] The wife, on the other hand, did file a Sworn Net Family Property Statement. Based on the evidence of both parties, I find that the equalization exercise demonstrates that the parties held almost equal debt as of the date of the separation.
[98] The wife’s Net Family Property statement reveals that the husband’s net family property far exceeded her own. The primary difference was the fact that the husband accumulated a pension of significant value during the marriage. Prior to attending court, the parties agreed that the husband’s pension should be divided equally. The husband signed documentation to direct the pension administrator to transfer (to the wife) 50 per cent of the value of the pension at the date of separation. The wife’s portion was valued at $61,846.28. This was a reasonable and appropriate way to deal with the equalization of net family property.
[99] To the extent that the husband asks for an order to recoup debts paid, I decline to make such an order. The equalization of net family property does not extend to equalization of debts: see Power v. Naston-Powers, [1990] O.J. No.1628 (Ont.H.C.J.). The husband cannot use a claim for equalization of net family property to recoup a portion of debt payments made post-separation.
[100] It is worth noting that the parties had significant joint debt as of the date of separation. They each entered into separate Consumer Proposals under the Bankruptcy Act. For reasons that are unclear, the wife is paying $650/month for 5 years on her Consumer Proposal, and the husband is paying $350/month for 5 years on his Consumer Proposal. The net result of this difference in payments means that, over 5 years, the wife will pay $18,000 more than the husband in order to service the Consumer Proposal and extinguish the joint debts of the marriage. In these circumstances, the husband can hardly claim unfairness with respect to any debts that he has paid.
[101] To the extent that the wife seeks interest on the pension that is presumed to have accumulated since separation, I also decline to make that order. I do not have any evidence of the actual accumulated value of the pension since the date of separation. In addition, since the court concerns itself with equalization of assets held on the valuation date, I decline to grant the order that is being sought. The parties can arrange for that payment of $19,206.88 (which represents the estimated accumulated interest on the pension since separation) to be made outside of this court order if they so wish.
E. Retroactive and Ongoing Spousal Support
[102] The parties agree to the following:
i. That the wife is entitled to spousal support.
ii. That the wife took 4 years off of work to care for the children.
iii. That the spousal support should be time-limited. The husband argues that it should be something in the range of 7½ years; whereas the wife seeks spousal support for 13 years.
iv. That the spousal support should have commenced in January or February of 2012 after the parties separated. However, the parties also recognize that the husband can only claim spousal support for tax purposes for the current and previous taxation year. Thus, the parties will not be subject to any tax consequences if the court calculates retroactive support owing for 2012 and 2013. This would mean that the court would need to adjust the support for 2012 and 2013 to effectively “net down” the support to take the tax consequences into account.
v. Since the parties agree that spousal support is time-limited, both parties agree that this court can calculate retroactive spousal support commencing in January of 2014. Once the court determines the duration of spousal support, it can commence in January of 2014 and continue for the duration as determined by this court.
[103] Having conducted the analysis of equalization, I have determined that the assets of the marriage are minimal. Therefore, the equalization will not impact spousal support as the wife is left with few assets post-marriage.
[104] This court must therefore determine the quantum of spousal support and the length of time that it is to be paid. I am guided in my determination of the issue of spousal support by sections 15.2(1), (3), (4) and (6) of the Divorce Act and by the Spousal Support Advisory Guidelines.
[105] Section 15.2(6) of the Act sets out four objectives that the court must consider when determining whether to make an order for spousal support. These objectives are as follows:
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[106] No single objective is paramount. All four objectives must be balanced within the context of the circumstances of a particular case: see Bracklow v. Bracklow 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420 (S.C.C.).
[107] Against these objectives, section 15.2(4) of the Act requires the court to consider the condition, means, needs and other circumstances of each spouse, including the length of time the spouses have cohabited and the functions performed by each spouse during cohabitation when making an order for spousal support.
[108] Compensatory spousal support is intended to recognize the economic advantages and disadvantages arising from the relationship between spouses: see Bracklow v. Bracklow, 1999 CanLII 715 (SCC), 1999 CarswellBC 532 (S.C.C.).
[109] In Roseneck v. Gowling, 2002 CanLII 45128 (ON CA), 2002 CarswellOnt 4396, a case decided pursuant to the Family Law Act, the Ontario Court of Appeal had this to say with respect to the issue of compensatory support:
Compensatory support is intended to compensate a spouse upon the breakdown of a marriage for contributions made to the marriage, such as sacrifices made for a spouse's career and loss of economic opportunity sustained as a consequence of raising children.
[110] I find that the wife has established an identifiable economic advantage to the husband arising from the relationship and an identifiable economic disadvantage to her arising from the breakdown of the relationship, as defined by Bracklow and subsequent cases.
[111] The birth of their two children resulted in the wife’s withdrawal from the workforce for a period of time and her obligations with respect to their care resulted in her deferring the pursuit of a full-time job.
[112] There is also evidence that the wife conferred an economic advantage on the husband by assuming responsibilities the husband would have otherwise assumed, in terms of her being available to care for the children during the relationship so that the husband could work at his full-time job. This allowed the husband to fulfill his obligations of employment, thereby advantaging him economically. The wife is therefore entitled to compensatory support.
[113] Non-compensatory or needs/means spousal support is intended to assist a spouse who is unable to meet his or her needs upon marriage breakdown: see Bracklow.
[114] The Ontario Court of Appeal in Roseneck summarized the concept of non-compensatory support as follows:
Non-compensatory support focuses on the mutual obligation that arises from the marriage itself, the expectations of the parties when they married, and the need to grant relief from hardship flowing from the break-up of the marriage.
[115] I find that the wife has suffered an economic disadvantage arising from the breakdown of the relationship in that she now finds herself without the intra-spousal support of the husband that she enjoyed during cohabitation.
[116] The husband and the wife cohabited for approximately thirteen and a half years. It was not suggested that the wife earned an income approaching that of the husband. It is clear that the husband was the family’s primary breadwinner. As such, it is reasonable to assume that the wife’s standard of living was improved by the contributions of the husband.
[117] Since separation, the disparity in the parties’ incomes is still significantly pronounced, resulting in a drop in the wife’s standard of living from that which she would have enjoyed during the relationship when she was able to share in the husband’s income. I find that this is severe enough to amount to a hardship within the meaning of section 15.2(6)(c) of the Divorce Act.
[118] Considering all of the circumstances of this case as disclosed by the evidence and within the context of section 15.2 of the Divorce Act, I find that the wife is entitled to spousal support from the husband on both a compensatory and non-compensatory basis.
[119] The husband argues that spousal support should be set at the low end of the range. He says that it was a medium term marriage. He testified about his current relationship with his common-law wife and her two children, who are now his step-children. He states that he must support this new family and is unable to pay more than the bottom of the range for spousal support as a result.
[120] In Fisher v. Fisher 2008 ONCA 11, 88 O.R. (3d) 241 (Ont.C.A.), the husband argued that the financial responsibility for his new family adversely affected his ability to support his former wife. The Court of Appeal reiterated that there is a “first-family-first” principle, which provides that a payor’s obligations to the first family take priority over any subsequent obligations. The husband voluntarily assumed significant responsibility for his second family when he knew, or should have known, of his pre-existing obligation to his first family. If the payor argues that obligation to a second family decreases his ability to pay support for a first family, there must be evidence that the payor’s obligations to his first family would impoverish his second family.
[121] In the case before the court, I find that the husband has not introduced any evidence that the payment of child and spousal support to his first family would impoverish his second family. The husband’s new partner made approximately $48,500 last year and receives $6,000 per year in child support for one of her children. In light of her contribution, their household income exceeds $225,000 per year.
[122] Since the new partner and her children reside in the husband’s home, the three of them do not incur any accommodation costs over and above what the husband pays for his own accommodation. The new partner’s income and child support covers most, if not all, of the expenses for herself and her two children. Having these three individuals live in his home does not significantly impact his financial situation.
[123] The receipts filed in support of the husband’s section 7 expense claims demonstrate that the husband showered his daughters with fairly extravagant purchases. These expenses included rhinoplasty for his 15-year-old daughter; a trip to Punta Cana for the husband and the two girls; pets including three exotic birds, a dog and a cat; clothing items from Lululemon and other high-end stores; events at Canada’s Wonderland, etc.
[124] The husband cannot spend lavishly on his daughters and then claim that there is no money left for his former spouse, to whom he is required to pay support. The husband has significant disposable income but simply does not wish to contribute to the wife more than what he perceives is the minimum requirement.
[125] Considering all of the circumstances of the parties, I do not find that this is a case where a departure from the mid-range amount is justified. Support should be paid in the mid-range amount set out in the Spousal Support Advisory Guidelines for 13 years commencing January 2014.
[126] As noted above, the court considered numerous calculations during the course of the trial that had been prepared using software to calculate support according to the guidelines. Having inputted the exact incomes of the parties in 2014 into the Divorcemate Software program, the court has determined that the mid-range amount for spousal support is $1,454/month. The spousal support shall be set at that amount.
[127] The arrears of spousal support between January 2014 and May 2015 are $24,718.00. The husband shall pay that amount to the wife at the same time that she repays the overpayment of child support. I expect that this payment will largely be offset by the overpayment, but I am directing that the payments be made in full by the parties in order to ensure that the intentions are clear and the husband gets the taxable benefit from paying the spousal support.
[128] Commencing June 1, 2015, the husband shall pay spousal support of $1,454 each month up to and including December 1, 2026.
[129] The husband asks that the order for spousal support terminate if the wife cohabitates or marries; and/or upon his death. Given that support is time-limited and is both compensatory and non-compensatory, I decline to grant such an order.
F. Divorce
[130] Both parties jointly request that a divorce be granted. A Certificate of Marriage from the Registrar has been filed and is contained in the trial record. I am satisfied that the parties have been separated since October 3, 2011 and that there is no prospect of reconciliation. All of the requirements for a divorce have been met and it shall be granted.
ORDER
[131] My Final Order is as follows:
(a) Pursuant to the Minutes of Settlement filed on April 20, 2015 and on consent of the parties:
The Order of the Honourable Madam Justice Brown dated July 4th, 2012 shall be varied to provide that the primary residence of the child Brigitte Cotton, born May 6th, 1999 shall be with the Applicant father and the primary residence of the child Nicole Cotton, born March 21st, 2001 shall be with the Respondent mother.
The Applicant and Respondent shall encourage the children to have a positive relationship and access with the other parent and a positive relationship and access between siblings.
Neither party shall speak negatively of the other parent in the presence of the children, nor shall they permit others to do so. In addition neither party shall discuss this litigation with the children or issues that should be resolved between the adults, such as child support.
The Applicant shall have reasonable access with Nicole as agreed upon by the parties, taking into account the views of the child. The Respondent shall have reasonable access with Brigitte as agreed upon by the parties, taking into account the views of the child.
The Applicant and the child Nicole shall attend for counselling to be arranged and paid for by the Applicant with the goal of assisting them in moving forward with having a positive relationship as opposed to examining history.
(b) On Consent re: Applicant’s Pension:
- On or about April 20, 2015, the Applicant signed documentation authorizing the transfer of $61,846.28 of his pension to the Respondent. If the submitted paperwork is not sufficient to complete this transfer, the Applicant shall sign any additional documents required in order to effect the transfer to the Respondent.
(c) Not on Consent:
The Applicant shall pay child support to the Respondent in the amount of $769.00 per month, commencing June 1, 2015.
Child support shall be adjusted on July 1 each year, based on the parties’ incomes for the previous taxation year. The first adjustment will take place on July 1, 2016 and will be based on the parties’ total incomes for 2015.
For so long as the Applicant has an obligation to pay support for the children, the parties shall exchange copies of their previous year’s Income Tax Returns with all enclosures and attachments and their Notices of Assessment by June 1 each year, beginning in 2015.
The Respondent shall pay to the Applicant overpayment of retroactive child support for March 2012 to April 2015 in the total amount of $27,240.00. This is payable within 60 days of the date of this order.
The Applicant shall be solely responsible for any future special and extraordinary expenses for Brigitte, as those expenses are defined by section 7 of the Child Support Guidelines and payable in accordance with section 7 of the Child Support Guidelines. These expenses include (but are not limited to) the cost of braces and horseback riding, and do not include post-secondary expenses which are addressed separately below.
The Respondent shall be solely responsible for any future special and extraordinary expenses for Nicole, as those expenses are defined by section 7 of the Child Support Guidelines and payable in accordance with section 7 of the Child Support Guidelines. These expenses include (but are not limited to) the cost of competitive dance and competitive volleyball, and do not include expenses for post-secondary education which are addressed separately below.
If there are unexpected, excessive costs, the parties shall consult each other and attempt to reach an agreement with respect to sharing of those costs. As much as possible, these discussions must be held in advance of incurring the expense.
The parties shall share in any future special and extraordinary expenses for the children in relation to any expenses for post-secondary education, as those expenses are defined by section 7(1)(e) of the Child Support Guidelines and payable in accordance with section 7 of the Child Support Guidelines. Subject to any contribution from the children, the contribution of the parties toward expenses for post-secondary education shall be as follows: the Applicant shall pay 65 per cent and the Respondent shall pay 35 per cent.
Each parent shall be entitled to claim the expenses, as paid by them, on their own tax return as a child fitness credit, art credit or activity credit.
There shall be no reimbursement for past section 7 expenses incurred by either party.
The Applicant shall pay spousal support arrears to the Respondent in the amount of $24,718.00. The Applicant shall pay that amount to the Respondent at the same time that Respondent pays the overpayment of child support.
The Applicant shall pay ongoing spousal support to the Respondent commencing June 1, 2015 up to and including December 1, 2026 in the amount of $1,454.00 per month, being the mid-range figure suggested by the Spousal Support Advisory Guidelines based on the Applicant having an actual income of $175,299 and the Respondent having an actual income of $74,939.
The Applicant and the Respondent shall maintain the children as the beneficiaries on any health care plan and life insurance policy available to them through their employment.
The Applicant shall obtain and maintain a policy of life insurance on his life in a face amount sufficient to secure his child support and spousal support obligations. The Applicant shall designate the Respondent as beneficiary of that life insurance policy.
A Support Deduction Order shall issue.
(d) Divorce:
- This court orders that David Henry Barry Cotton and Tracey Shirley Cotton, who were married at Oakville, Ontario on August 28, 1999 be divorced and that the divorce takes effect 31 days after the date of this order.
COSTS
[132] In the event that the parties cannot agree as to costs, they are directed to provide written submissions as to costs, no longer than two typed pages each. The wife shall provide cost submissions by June 2, 2015 and the husband shall provide any response by June 12, 2015.
Braid J.
Released: May 19, 2015
CITATION
CITATION: Cotton v. Cotton, 2015 ONSC 2703
COURT FILE NO.
COURT FILE NO.: D703/12
DATE
DATE: 2015-05-19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID COTTON
Applicant
- and –
TRACEY COTTON
Respondent
REASONS FOR JUDGMENT
Braid, J.
Released: May 19, 2015
CITATION
CITATION: Cotton v. Cotton, 2015 ONSC 2703
COURT FILE NO.
COURT FILE NO.: D703/12
DATE
DATE: 2015-05-27
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID COTTON
David Cotton, Self-Represented
Applicant
Applicant
- and -
TRACEY COTTON
Tracey Cotton, Self-Represented
Respondent
Respondent
HEARD: April 20, 21, 22, 23 & 24, 2015
ADDENDUM TO JUDGMENT
The Honourable Justice C.D. Braid
[1] For further clarity, paragraph 7 of the Order shall be amended as follows:
The Applicant shall pay child support to the Respondent in the amount of $769.00 per month, commencing June 1, 2015. The support is for one child, namely Nicole Cotton, born on March 21, 2001.
Braid, J.
Released: May 27, 2015
CITATION
CITATION: Cotton v. Cotton, 2015 ONSC 2703
COURT FILE NO.
COURT FILE NO.: D703/12
DATE
DATE: 2015-09-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID COTTON
David Cotton, Self-Represented
Applicant
Applicant
- and -
TRACEY COTTON
Tracey Cotton, Self-Represented
Respondent
Respondent
HEARD: April 20, 21, 22, 23 & 24, 2015
CORRIGENDUM TO JUDGMENT
The Honourable Justice C.D. Braid
[1] The parties agree that the pension amount owing to the Respondent should have been stated as $64,027.35 at paragraph [98] of the judgment and in paragraph 6 of the Final Order. Having received the written agreement of the parties, paragraph 6 of the Order shall be amended as follows:
On or about April 20, 2015, the Applicant signed documentation authorizing the transfer of $64,027.35 of his pension to the Respondent. If the submitted paperwork is not sufficient to complete this transfer, the Applicant shall sign any additional documents required in order to effect the transfer to the Respondent.
Braid, J.
Released: September 17, 2015
CITATION
CITATION: Cotton v. Cotton, 2015 ONSC 2703
COURT FILE NO.
COURT FILE NO.: D703/12
DATE
DATE: 2015-09-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DAVID COTTON
Applicant
- and –
TRACEY COTTON
Respondent
CORRIGENDUM TO JUDGMENT
Braid, J.
Released: September 17, 2015