CITATION: Bordin v. Bordin, 2015 ONSC 3730
COURT FILE NO.: FS-11-374574
DATE: 201506012
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
vico bordin
Applicant
– and –
elice bordin
Respondent
Marcel Banasinski, for the Applicant
Matthew Armstrong, for the Respondent
HEARD at Toronto: April 13, 14, 15, 16, 17, 20, 21, 22, and 23, 2105
C. Horkins J.
[1] The parties were married on May 27, 2000 and separated on December 9, 2008. The applicant husband is 41 years old and the respondent wife is 45 years old.
[2] The parties have three children ages 14, 10 and 9 years old. Custody and access were settled and a consent order was issued on November 13, 2014. Pursuant to this order, the respondent has sole custody of the children and the applicant has access. Equalization was settled and a consent order was issued on July 18, 2013.
[3] The remaining issues proceeded to trial:
(1) What is the applicant’s income for the purpose of determining child support?
(2) What does the applicant owe for child support from the date of separation forward?
(3) What does the applicant owe for s. 7 expenses?
(4) Is the respondent entitled to spousal support for the years 2009 and/or 2010? If yes, what does the applicant owe for spousal support?
(5) How should the money held in trust be shared?
The applicant’s Income
The Respondent’s Position
[4] It is the respondent’s position that the applicant has been under-employed since separation. She asks the court to impute a yearly income of $83,000 for the following reasons:
• This is the average salary for a Master electrician with 14 years of experience.
• The applicant earned an income of about $85,000 to $90,000 while he operated BSM Electric Limited (“BSM”).
• The applicant earned income from cash business that he did not report.
• The applicant failed to call his father as a witness and an adverse inference should be drawn.
• The applicant has chosen to earn less income to lower his child support obligation.
[5] For the reasons that follow, I reject the respondent’s position.
The Applicant’s Training, Employment and Self-Employment
[6] The applicant is a licensed journeyman electrician. He obtained his licence in 2001 after he passed the exams. As an apprentice, he worked at Ehrlich Electric. He continued to work for this company until 2005. Ehrlich is a union company and the applicant was a union member during his employment. He recalls working 37.5 hours a week. He cannot recall his salary. The work was commercial or industrial based. The company did not do residential work.
[7] While the applicant worked at Ehrlich, he started a small business on the side called Zap Electrical. Through Zap the applicant did commercial work on the weekends and evenings. The source of the work was a contact at Cara Foods that provided the applicant with electrical work at various Swiss Chalet restaurants.
[8] In September 2005, when the parties’ third child was born, the applicant took a parental leave. While on leave, the parties discussed the idea of the applicant starting his own electrical business and leaving his union job. They decided that the applicant would go ahead with this idea. He quit his job and started his own electrical company called BSM. The applicant rolled the work and contacts that he had from Zap into BSM. He decided to run BSM as a non-union company so he would have more control over electricians that he could hire and would avoid the risk of a strike. There is no evidence that the respondent disagreed with her husband’s decision to operate his own business.
[9] The applicant started BSM in April 2006. His main source of work was his cousin who worked for a company called TA Canada. He also had the contact at Cara Foods. The applicant relied mostly on referrals. He also did some advertising.
[10] The respondent helped her husband with some minor office work for Zap and BSM. She did data entry, mailed invoices and paid suppliers. Other than the respondent, BSM did not have any employees.
[11] The applicant did not have enough work to pay an electrician a full time salary. According to the applicant, anyone looking for work would want a guarantee of full time employment and he could not offer this. The applicant worked on one project at a time. Often there was a lull of a few weeks between jobs. Instead of looking for a part time electrician, the applicant relied on his father, Albert Bordin, who volunteered his time as a retired licensed electrician.
[12] There is no evidence that the applicant ever looked for an electrician to help him. While I accept that the applicant thought he would not be able to find an electrician, the fact is he never tried because he relied on his father who he did not have to pay.
[13] Starting in 2007, Albert volunteered his time to help his son grow the business. Albert was 62 years old at the time. The applicant did not pay his father a salary. From time to time, he filled his father’s car with gas and bought his parents the occasional present such as a dishwasher.
[14] In 2009, the applicant hired an untrained worker through the YMCA. This fellow had no electrical experience and he was fired after 6 months. The applicant made no further effort to look for an employee. Instead, he relied on his father.
[15] With the help of his father, the applicant was able to get a job done more quickly. It also gave him more time to look for the next job. Albert volunteered in the business in 2007, 2008 and 2009. In 2009, Albert worked day after day with his son on projects. At the end of 2009, Albert stopped helping his son on a regular basis. From 2010 through 2012, Albert only helped in the case of an emergency. He took on a more active role in the business in 2013 because BSM had a large contract and the applicant could not complete the job on time without his father’s help.
[16] The applicant did not call his father to testify. When asked why his father was not testifying, he expressed surprise and said he did not think it was necessary. The respondent argues that the court should draw an adverse inference. Assuming it was appropriate to draw such an inference, the respondent did not explain how this would assist her case. Since Albert did not testify, the respondent says I should not accept the evidence that he helped his son to build the business.
[17] I do not draw an adverse inference for the following reasons. When the respondent testified, she did not deny that Albert helped his son in the business. Albert was helping his son in 2007 and 2008 while the parties were married. The parties did not separate until December 2008. The respondent was doing some minor office work for BSM and it is reasonable to conclude that she talked to her husband about how the new business was doing. The respondent could have subpoenaed Albert to testify if she had reason to question the applicant’s evidence about his father’s role in BSM. The respondent did subpoena the applicant’s current employer and yet she did not subpoena Albert.
[18] If I did reject the evidence that Albert was helping his son, what flows from this aside from a basis to doubt the credibility of the applicant? If Albert was not helping the applicant then it would follow that the applicant was doing all of the work himself. If this were true, it does not change the fact that BSM revenue fluctuated and the business was in financial trouble by late 2014.
[19] In summary, I decline to draw an adverse inference. I accept the applicant’s evidence that his father volunteered his time to help grow the business. This was not a good business model because it was a temporary solution that allowed the applicant to rely on free help that was not sustainable.
Overview of BSM
[20] The BSM revenue fluctuated. The financial statements for BSM record the following revenue:
Year
Revenue
2006
$ 58,640
2007
$136,097
2008
$142,867
2009
$180,995
2010
$ 90,935
2011
$ 67,423
2012
$ 56,408
2013
$138,691
2014
$ 80,303
[21] This fluctuation in revenue is consistent with the applicant’s evidence that he relied on his father to help complete work from 2007 to 2009 and again in 2013. The year 2009 was the best year for BSM. In the years when Albert did not help his son the revenue dropped. Over the years, the operating expenses grew and this added to the declining net profit. In 2009 (the best year), BSM had a net profit of $60,098. In 2010, the net profit was $15,649. In the following years, the business operated at a significant loss or had very nominal net profit: 2011 ($21,438), 2012 ($29,934), 2013 ($234), 2014 ($21,792).
[22] The applicant paid himself a steady income each year. In 2007 and 2008, income was split with the respondent. After separation, his line 150 income was as follows:
Year
Applicant’s line 150 income
2009
$47,450
2010
$43,800
2011
$42,000
2012
$43,750
2013
$42,000
2014
$42,597
[23] Although the success of the business declined each year, the applicant was able to continue paying himself a steady salary because he left cash in the company after his success in 2009. I accept the evidence of Ms. Silver (the applicant’s expert) that if he had taken this cash out of the business when earned, the business would not have been able to continue paying the applicant his salary.
[24] The respondent argues that BSM had cash business that was not recorded in the financial statements. The respondent’s argument is speculative. The evidence does not support this argument and it is rejected. The respondent testified that the applicant did some residential work through ZAP and accepted cash for these jobs. However, she did not know of any cash jobs that the applicant did when he was running BSM. Each party retained a valuator to review the BSM records and provide an opinion on the applicant’s income. The experts did not see any evidence of cash business. The applicant testified that he did not have any cash business when running BSM. All of the work was commercial electrical work and the clients required a record of the billing and payment.
[25] The applicant was cross-examined about his lifestyle and various vacations with his new partner. Much of the travel was paid for by his partner. Typically, if a party is trying to prove a source of cash income, there is an analysis of the person’s lifestyle to show that the declared income could not support the expenses of that lifestyle. Often this approach is a sufficient evidentiary basis to impute cash income. The respondent did not present this type of evidence. Instead, she questioned the applicant about sporadic expenses. This was insufficient proof to show that the applicant received cash income.
BSM Fails
[26] In January 2015, BSM was not generating enough income to pay the bills and the applicant’s child support obligation. The applicant was desperate and, as a result, he made a decision to shut the business down and look for employment elsewhere. The respondent did not challenge the applicant’s evidence that BSM was no longer viable.
[27] The applicant applied online for an electrician’s job with a school board and did not make the short list for an interview. The applicant contacted Frank Cozzolino. The two men had met at school. Mr. Cozzolino owns Solutions Electric (“SE”). SE does residential work and had referred BSM some commercial work. SE hired the applicant. The applicant is now employed at SE as a full time electrician. He is paid $29/hour for the work that he does. The applicant expects to work about 40 hours a week and earn $60,000 a year.
[28] The respondent subpoenaed Mr. Cozzolino and he testified during the trial. This evidence did not assist the respondent. Mr. Cozzolino was a candid and forthright witness. His evidence demonstrates that the applicant’s job at SE is legitimate and Mr. Cozzolino is not somehow assisting the applicant in lowering his earning potential (this was implied by the respondent in argument).
[29] Mr. Cozzolino knew the applicant from school and described him as an acquaintance. SE hired the applicant because he is an experienced commercial electrician. When SE referred commercial work to BSM, the work was well done. SE does not have any electricians with commercial experience and Mr. Cozzolino wants to grow this area of his business. The applicant is on a three month probation period and once it ends he will be entitled to dental and medical benefits. Mr. Cozzolino owns the business with his ex-wife. None of the employees (including the applicant) participate in SE’s profits
[30] SE employs 6 electricians half of whom are apprentices. The licensed electricians are paid $28 or $29 an hour. Last year was not a good year for SE’s business. While 2015 was off to a slow start, business has now picked up. Mr. Cozzolino does not guarantee how many hours an electrician will work, but it usually works out to a 40 hour work week. Time and half is paid for overtime and each employee receives 4% vacation pay. As long as work is available to be done, each electrician should make about $60,000 a year.
[31] Mr. Cozzolino does not allow his electricians to do electrical work on the side since they would be competing with SE. This is a term of the employment. If Mr. Cozzolino found out that one of his electricians was doing such work on the side he would be fired.
[32] SE is a non-union company. Mr. Cozzolino explained the difference between his non-union rates versus union rates of pay. SE pays the electrician $29 an hour plus benefits that he values at $3/hour. In comparison, he explained that the union hourly rates are $32-33/ hour plus benefits that raise the rate to $45-46/hour. SE cannot afford to charge residential customers union rates.
Should Income be Imputed?
[33] The respondent argues that the court should impute $83,000 of income to the applicant for two reasons. First, she says that this is the average income for a licensed electrician with 14 years of experience. The applicant is under-employed if he does not earn this salary. Second, the respondent says that the applicant has been living a lifestyle commensurate with a salary of $83,000.
Legal Framework
[34] When considering if income should be imputed, Drygala v. Pauli, (2002) 2002 CanLII 41868 (ON CA), 61 OR (3d) 711 (C.A.) ("Drygala") requires the court to consider the following three questions:
• Is the spouse intentionally under-employed or unemployed?
• If so, is the situation required by virtue of the spouse's reasonable educational needs?
• If not, then what income is appropriately imputed in the circumstances?
[35] The onus is on the party requesting an imputation of income to establish an evidentiary basis to support such a finding: see Homsi v. Zaya, 2009 ONCA 322.
[36] The ability to impute income is not an invitation to the court to arbitrarily select an amount as imputed income. The selection of an income must be grounded in the evidence.
[37] When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered have been stated in a number of cases as age, education, experience, skills and health of the parent. (Drygala, at para. 45)
[38] It is not necessary to find actual bad faith or a specific intent to avoid child support. For the person to be "intentionally" unemployed or under-employed, all that is required is a "voluntary act" leading to unemployment or under-employment. The parent required to pay is intentionally under-employed if that parent chooses to earn less than he or she is capable of earning (see Drygala at para. 29).
[39] For the reasons that follow, the respondent has failed to prove that the applicant is intentionally under-employed.
Average Salary: Union Versus Non-Union Rates of Pay
[40] The respondent’s position is that the applicant is under-employed because he is not earning $83,000. She says that this is the average salary for a licensed master electrician with 14 years of experience.
[41] To support a salary of $83,000, the respondent relies on various statistical information that her expert Melanie Russell of Kalex Valuations Inc. (“Kalex”) provided. The applicant provided an expert report from Marnie Silver of SF Valuations (“SF income report”). Both experts are highly qualified and each considered the statistical evidence when they testified.
[42] The main focus of the experts’ work involved following the Federal Child Support Guidelines (“the Guidelines”). Since the applicant was self-employed until 2015, the experts had to identify expenses to be added back to income and gross up this amount to reflect the tax not paid (“grossed up income”). The two experts differed on the expenses that should be added back and on the tax rate for gross up. Before I review the main focus of the expert opinions, I will deal with the issue of union and non-union wage rates and the evidence that the experts provided.
[43] As explained below, this statistical information does not support the respondent’s position that $83,000 is the average salary for a non-union electrician with years of experience similar to the applicant. The evidence confirms that the rate of pay for a non-union electrician is less than a union electrician.
[44] Melanie Russell of Kalex prepared two reports. The first report was a valuation of the applicant’s interest in BSM and was jointly prepared for the parties (“the valuation report”). The respondent then hired Kalex to prepare a report calculating the respondent’s income for 2008-2012 (“Kalex income report”).
[45] It is not clear why the parties decided to incur the expense of the valuation report since the value of BSM lies in the income that the respondent was able to earn. The trial did not focus on the valuation of BSM for the respondent. The valuation report was considered solely for the fact that it contained the expert’s research about the rate of pay for union and non-union electricians.
[46] Based on research, Ms. Russell concluded that as of December 31, 2012, a licensed electrician earned in the range of $74,000 to $88,000 and the mean salary for an electrician with 14 years of experience was $83,000. The applicant has 14 years of experience. She relied on a survey from the Economic Research Institute (“ERI”). A current version of this survey shows a slight increase in the mean salary to $84,838. Ms. Russell agreed that the ERI survey does not specify whether it represents the salary for a union or non-union electricians.
[47] Kalex obtained information from the International Brotherhood of Electrical Workers (“IBEW”) regarding rates paid to their electricians. In 2010, IBEW electricians that mainly service low rise residential units were paid $48 an hour. This rate rose to $51 in 2012. For high rise residential buildings, the rate in 2012 was $57. These union rates were inclusive of benefits.
[48] Ms. Russell was presented with an excerpt from the website of the IBEW where the union states that “[u]nion wage rates are approximately 40% HIGHER than working for a non union contractor!”. Ms. Russell acknowledged that she had seen this website. She agreed that in general union pay is higher that non-union pay.
[49] Ms. Silver of SF Valuations was questioned about the research that Kalex did concerning union and non-union rates of pay. Ms. Silver considered this market remuneration evidence. She is familiar with these sources and understands that the ERI data blends union and non-union rates of pay. Ms. Silver presented a chart from Statistics Canada that shows the average earnings in 2013 in Ontario for “Electrical Trades and Telecommunication Occupations”. The average hourly rate for a union employee was $30.40 and a non-union was $23.63. While this represents a larger pool of jobs, it includes electricians. Ms. Silver testified that this data from Statistics Canada is consistent with the other market data that shows union electricians are paid more than non-union electricians. For example, another online source (Living in Canada) provides a range of wages for electricians in Canada. In 2013, this source reported that electricians in Toronto were paid per hour a low of $15, an average of $29.62 and a high of $39.26. This range covers all types of electricians including an apprentice.
[50] In summary, the market remuneration evidence when viewed as a whole does not support the respondent’s position that $83,000 is the average salary for a licensed electrician. It is clear that non-union electricians are paid less than union electricians. This is consistent with the evidence of Mr. Cozzolino.
[51] I reject the respondent’s position that the applicant is under-employed and that I should impute $83,000 income to him. There is no evidentiary basis for concluding that the applicant ought to have earned this amount in the past through BSM nor is there an evidentiary basis for concluding that this is what should be imputed in 2015.
[52] A union electrician may earn a higher rate of pay, but the applicant has not worked in a union job since 2006. The fact that the applicant earns less than a union electrician does not alone justify imputing the higher union income to the applicant.
[53] The applicant ran BSM as a non-union company. The business had good years only because the applicant relied on the free help from his father. He now works for SE, a non-union company. The applicant did not choose to earn less when he accepted the job at SE. The applicant testified that having left a union job at Erhlich many years ago there is “no chance” he can return to work in a union company. Even if he could return to the union, he would be at the bottom of the list of electricians waiting for a job. This means that he would be without work while waiting to receive work through the union.
[54] The respondent provided no evidence that the applicant could secure a union position. The applicant has no contacts in the union world that might help him to secure a union job. By the end of 2014, BSM was no longer viable. The applicant immediately looked for a job so he could pay his child support obligations. He reached out to SE and was hired. I find that the applicant’s actions were reasonable in these circumstances.
The Applicant’s Lifestyle
[55] The respondent’s second argument is in essence a lifestyle argument. She argues that various financial records show that the applicant has access to money that is beyond the income that he reported. The respondent relies on monies that flowed back and forth between the applicant and his girlfriend Christina. As well, she relies on monies that the applicant says be borrowed from his mother.
[56] The respondent did not prove that the applicant has been living a lifestyle that is commensurate with a higher income than what he reported. The applicant produced his bank accounts and credit card statements. He was questioned about his trips and various presents that he has bought for his girlfriend Christina. The applicant admits that he bought presents for his girlfriend. They regularly travel together and his girlfriend pays for many of the trip expenses. The applicant explained that they are in a serious relationship and they are now living together. Christina works in the pension field on a commission basis. On occasion, the applicant has loaned his girlfriend money because she needs money given her commission status. The applicant believes that the money was paid back. This evidence viewed as whole does not prove on a balance of probabilities that the applicant lives a lifestyle that is commensurate with a higher income than what he reported. It is not enough to point to presents and trips. The respondent did not offer an analysis of the applicant’s expenditures to show that he earns more than what he reported.
[57] The respondent also relies on monies that were deposited into a joint chequing account at Scotiabank. The applicant opened this account with his mother around September 2013. The respondent argues that the applicant’s withdrawals from this account show that the applicant has earned more money than he has revealed.
[58] After the parties separated, the applicant says that he borrowed $90,000 from his mother to pay for living expenses and legal fees. This money was borrowed before the joint account was opened with his mother.
[59] The applicant produced statements for this account for the months September 2013 – April 2015. The opening balance in September 2013 was $4,960.70. This reflects what was left from the $90,000 loan.
[60] The monthly statements for this account record numerous cheques that were issued. The cheques were not produced during the trial. It is not known if the respondent asked for the cheques. The applicant testified that the cheques were issued to pay for legal fees, accounting fees and an expert that dealt with custody.
[61] On October 17, 2013, the applicant deposited $160,000 in the joint account. This was the applicant’s own money that he received from his share of the matrimonial home. The respondent did not challenge this evidence. This deposit is consistent with the fact that the parties settled their property issues in 2013. On October 24, 2013, he transferred $90,000 from the account to his mother to pay back the loan. The respondent did not challenge this transfer. The applicant used the remaining money to pay for legal and expert fees.
[62] By October 2014, the applicant had very little money left in this account. He borrowed $50,000 from his mother and it was deposited into the account on October 24, 2014. On January 15, 2015, the applicant transferred his RRSP ($12,000) into the account. He borrowed a further $50,000 from his mother on April 6, 2015.
[63] At the time of trial, the applicant owed his mother $100,000. There is no loan agreement to document this loan and the mother did not testify.
[64] The respondent argues that the court should reject the applicant’s evidence that his mother loaned him the money. She says this because there is no loan agreement and the mother did not testify. The respondent wants the court to find that the money deposited into this account was additional income that the applicant earned at some point. In other words, she argues that this is cash income that was not reported.
[65] However, the evidence does not support characterizing the money as income. There is absolutely nothing in the financial disclosure that provides sufficient proof for this argument. Neither expert found any evidence of cash income. The respondent did not seek further evidence about this account. For example, no evidence was offered about the transfers of money in and out of the account.
[66] I accept the applicant’s evidence that he has paid for legal and expert fees during this litigation. Obviously, he has incurred these expenses. I accept that he had to borrow money from his mother. This is a reasonable explanation for the money in this joint account.
[67] The respondent also alleges that the applicant diverted unreported income to his parents by paying them rent when she says he was not living with them. I reject this argument. The applicant moved out of the matrimonial home after separation. He went to live with his parents who are retired and on a fixed income. He paid them $300 a month for the space he used in the basement to set up an office area for BSM. Photographs show this office area in his parents’ home. Since the applicant was living with his parents, he also paid them $700 a month for the room he used. The applicant paid rent with cheques and many of these cheques were produced. The BSM financial statements show the rent he was paying for the office space. If the applicant was not able to live at his parents’ home, he would have had to rent an apartment elsewhere. It likely would have cost him more to rent an apartment than stay with his parents.
[68] The applicant is now moving into his girlfriend’s condominium. He testified that he will be paying rent. The respondent argues that the applicant has been living with his girlfriend, not his parents and for this reason she seems to suggest that rent cheques to his parents are not legitimate. She argues that this is an example of undeclared income that he earned and diverted to his parents. The respondent relies on documents that identify the applicant’s home address to be the girlfriend’s address. There are two pieces of evidence that the respondent relies on. The applicant has an RRSP. His 2012 RRSP receipt from London Life shows his address to be his girlfriend’s address. The applicant’s girlfriend manages his RRSPs. He assumes that she used her address because she took care of his investments. He denies that he was living with her in 2012.
[69] In 2014, the applicant’s girlfriend moved into a condominium that she bought on Park Lawn Road. The condominium has a sports facility and occupants are given a card to gain access to this area. The card shows the girlfriend and the applicant as residents. The applicant says that he was listed on the card so that he can use the facility and take his children there when he has access. However, he was living still with his parents in 2014.
[70] I accept the applicant’s explanation concerning the above evidence. It was reasonable for him to rely on his girlfriend to manage his RRSP and direct mail to her home. Similarly, it is reasonable that she would want him to use the sports facility and, as a result, he had to be shown on the card as a resident. Even if I found he was living with his girlfriend as of 2012, this would not support the respondent’s position that I should impute $83,000 of income to the applicant.
[71] In summary, the respondent has not proven that the applicant was or is intentionally under-employed. There is no evidence that he should be earning $83,000 or any evidence that his income is higher than what he reported either due to alleged cash payments or his alleged lifestyle.
[72] I will now consider the applicant’s reported income and the adjustments to income that are made under the Guidelines.
The Adjustments to Income
[73] The experts adjusted the line 150 income to arrive at an income for determining guideline child support. They identified expenses that were personal in nature. The experts disagreed on the percentage of the expense that was personal. Each expert calculated a tax gross up of the expenses. I do not accept either opinion in its entirety.
[74] With two exceptions, I accept the opinion of Ms. Silver as set out in Schedule 1 of her report (a copy is attached to these reasons and marked as appendix “A”). The two exceptions are as follows: Ms. Silver did not add the RRSP withdrawals into income and she used an average tax rate for the gross up of the expenses. For reasons set out below, I have added the RRSP withdrawals into income and used the marginal tax rate. This is the approach taken by Ms. Russell.
[75] The Kalex Income Report deals with the years 2008 to 2012. The respondent did not retain Kalex to bring this report up to date. Ms. Russell based her opinion on assumptions that the respondent provided. Some of the key assumptions are unreasonable and not supported by the evidence. The key differences on what each expert added back into income are set out below.
[76] The Kalex report adds back to income 100% of the meals and entertainment expense. This is because the respondent told Ms. Russell that the applicant did not entertain customers. The assumption that a self-employed electrician trying to build a business would never entertain customers is unreasonable. The parties separated at the end of 2008 and the respondent has no knowledge of how the applicant was running his business after that date.
[77] In contrast, the SF report adds 45% of the meals and entertainment back into income. When the applicant testified, he explained that he took clients out for lunches and dinners. He estimates that 45% of the meals and entertainment expenses were personal. Ms. Silver accepted that 45% was a reasonable amount to allocate to income. She discussed this with the applicant and reviewed the general ledgers to support her position. For example, Ms. Silver recognized that expenses on the general ledger that were incurred on the weekend were likely personal.
[78] There was a noticeable decline in the meals and entertainment expense after 2011. At this point, the applicant started to be more careful and avoided allocating personal expenses to the company. Ms. Silver added a flat 45% of meals and expenses back to income for each year. Arguably, less could be added back after 2011 when the applicant was more careful. The fact that a flat 45% is used for all years is again a reasonable approach. It is fair to the respondent and reflects that fact that neither party could afford an exhaustive expensive accounting analysis.
[79] The advertising and promotion expense was minimal. The respondent told Ms. Russell that the applicant did not do any advertising. As a result, the Kalex report added 100% of this expense into income. The applicant’s evidence is consistent with the minimal nature of the expense. He handed out business cards and flyers. Ms. Silver did not add this back to income. This is the more reasonable approach.
[80] The Kalex report added 40% of the van back into income. The SF report added 20% back into income. The applicant has a two-seater van. Pictures of the van and the inside show that he used the van for BSM work. The applicant used the van to pick up supplies and drive to his jobs. Equipment and tools were stored inside. It is admitted that the applicant used the van to travel to and from job sites and that the van was integral to his work at BSM. The applicant used one of his parents’ cars when he was driving the children. The van did not have enough seating for three children. Unlike a car, the van did not easily accommodate the applicant’s personal needs. Therefore I agree with Ms. Silver that 20% is a more reasonable amount to assign to personal use.
[81] Other areas of dispute are less significant. The applicant rented a storage unit after he moved out of the matrimonial home. He used the garage at the matrimonial home for storage before separation. After separation, the applicant needed space to store his electrical equipment. Kalex added 100% back into income because the respondent told Ms. Russell that the applicant did not need storage space in his business. However, she was not involved in the business after separation. She would have no knowledge of the storage needs of BSM post-separation. I accept the applicant’s evidence that he needed storage space. I would expect that running an electrical business requires storage space. It was reasonable for Ms. Silver to allow all of this expense.
[82] In 2010, the applicant bought an ATV for a job that he was lined up to do on an aboriginal reserve called Moose Deer Point in Mac Tier. BSM had worked on phase one of the job that involved construction of a daycare center. The applicant bought the ATV for phase two so it would be easier for him to transport his equipment and material over the rough terrain. After he bought the ATV, the project was put on hold and it did not go ahead.
[83] The applicant kept the ATV and used it for three hunting trips in Thunder Bay with a group of prospective clients that he was trying to get work from. I accept that the applicant bought the ATV for a valid business use and, while it did not work out as he had planned, it would be unreasonable to add the purchase back into income.
[84] In 2011 and 2012, the applicant withdrew monies from his RRSP ($12,500 in 2011 and $597 in 2012). The Kalex report added this into income and the SF income report did not. The applicant argues that these amounts should not be added to his income because equalization was settled on July 18, 2013. As a result, he says it would be unfair to add this amount into income. In effect, he argues that it would allow double dipping. The NFP statement shows that the RRSPs were listed and part of the equalization. Further details were not provided during the trial.
[85] Section 16 of the Guidelines provides that a spouse’s annual income for child support purposes is determined using the sources of income set out under the heading “Total income” on the T1 tax form. RRSP income is included as part of Total income on the T1 tax form. This is subject to ss. 17-20 of the Guidelines. RRSP income received in a particular year is presumptively part of a spouse’s income for child support purposes.
[86] Section 17 of the Guidelines permits a court to depart from the income determination made under s. 16 where it is satisfied that would not be the fairest determination of income. In such a case, 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.”
[87] The fact that the RRSPs have been equalized does not mean it is unfair to include the RRSP monies in income. In Fraser v. Fraser, 2013 ONCA 715 at para. 101-103 the court found the reasoning in Stevens v. Boulerice, 1999 CanLII 14995 (ON SC), [1999] O.J. No. 1568 (S.C.) persuasive:
101 First, she noted that s. 16 of the Guidelines requires that RRSP withdrawals be included as income for child support purposes. Further, Schedule III to the Guidelines, which provides some special rules for adjustments to income for child support purposes in certain cases, does not make any special provision for RRSP income.
102 Second, Aitken J. observed that the equalization was a matter between the parents while the issue before her was a question of child support. She could see no reason why an available source of income to fund child support should be excluded because of dealings between the parents. The child support was not being paid to increase the mother’s lifestyle.
103 I find this reasoning persuasive. The clear wording of the Guidelines includes RRSP withdrawals as income and no special exception for RRSP withdrawals has been provided in Schedule III. Although I would acknowledge the possibility that the facts of a particular equalization could in theory reach the threshold of unfairness, I have no evidence about the specifics of the equalization calculation that occurred in this case and cannot so conclude.
[88] Based on the evidence before me, the applicant has not demonstrated that treating his RRSP withdrawal as income “would not lead to the fairest determination of ... income”. As a result, I add these amounts back into income for the years 2011 and 2012.
[89] The experts do not agree on the tax rate for grossing up the expenses that are added back to income. Ms. Russell used the marginal tax rate and Ms. Silver used the applicant’s average tax rate. In this case, the marginal tax rate is 31%. The average tax rate varied every year from a high of 18.7% to a low of 14%.
[90] The marginal tax rate is the rate on the last dollar of income earned. This is very different from the average tax rate, which is the total tax paid as a percentage of total income earned.
[91] I accept that the marginal tax rate is proper approach in this case. The applicant’s income has been taxed. We are now adding expenses back to income and it makes sense that we should apply the marginal tax rate, which is the rate on the last dollar of income earned. Ms. Russell testified the marginal tax rate of 31% applies for each year.
[92] I also accept that the marginal tax rate is the correct rate to use because it is the rate applied by Divorcemate. This program has a function that allows the user to enter any non-taxable income. Divorcemate will automatically gross up this income for the purposes of child and spousal support. When grossing up, the program uses the marginal rate. Divorcemate states as follows:
Note that the software will automatically gross up this income in the determination of the party's Guidelines Income and child and/or spousal support. In other words, the software will determine how much gross employment income the party would have to earn at his/her current marginal income tax rate (including CPP and EI premiums if specified by you), in order to have this non-taxable income.
[93] In summary, I accept the adjustments to income set out in the SF report with the two exceptions (adding back RRSP withdrawals and using the 31% marginal tax rate.) With these two exceptions, the income for the purpose of determining Guideline child support is as follows:
Year
Applicant’s Adjusted Income
2008
$51,585
2009
$54,855
2010
$49,049
2011
$58,608
2012
$47,344
2013
$44,976
2014
$45,175
2015
$60,000 as of April 1
[94] An explanation is required for 2008 and 2015.
[95] The parties separated on December 9, 2008. There is no child support requested for December 2008 but there is a s. 7 expense that is dealt with below. For that reason, it is necessary to deal with the parties incomes for 2008.
[96] The applicant’s line 150 income in 2008 was $37,800. In 2008, the parties used income splitting and $10,855 was reported by the respondent.
[97] Ms. Russell took the income that was split ($10,855) and assigned $1,000 of this amount to the respondent as actual income earned. This is a fair value for the minimal work that the respondent did for BSM that year. As a result, the respondent’s 2008 line 150 income drops from $25,893 to $16,038.
[98] Ms. Russell added back $9,855 to the applicant’s income for 2008. This brings his income up to $47,655.
[99] Ms. Russell went on to add back expenses into income and, as explained above, I reject her approach because she relied on unproven assumptions from the respondent.
[100] I do not have the benefit of an opinion from Ms. Silver for 2008. Doing the best with the lack of expert evidence for this year, I have arbitrarily chosen to add back expenses of $3,000 for 2008. This is a rough average of grossed up expenses added back to income in the following years. The $3,000 is grossed at a tax rate of 31% ($930). This is added to the applicant’s income of $47,655 for a total 2008 income of $51,585.
[101] In 2015, the applicant stopped earning income through BSM. There is no evidence that the business earned any income in the first three months. Sometime in late February or March, the applicant was hired at SE.
[102] In 2015, the applicant expects to earn $60,000. He proposed that child support going forward in 2015 be fixed on this new income. Guideline child support for three children and an income of $60,000 is $1,168.
[103] Since the applicant did not have the benefit of his new job for the first three months of 2015, I have used the 2014 income for these three months. In my view, this approach is consistent with the Guidelines. I received no submissions from the parties on how to approach child support for this short period of time. As of April 1, 2015 his yearly income is $60,000.
The Guideline Child Support
[104] Based on the income I have allocated to the applicant, the following Guideline child support was owed:
Year
Applicant’s Income
Guideline child support per month
Total Guideline child support per year
2009
$54,855
$ 1,078/month
$12,936/year
2010
$49,049
$966/month
$11,592/year
2011
$58,608
$1,151/month
$13,812/year
2012
$47,344
$ 905/month
$10,860/year
2103
$44,976
$ 856/month
$10,272/year
2014
$45,175
$ 860/month
$10,320/year
2015
$45,175
$ 860/month
Jan-March = $2,580
Grand Total
$72,372
[105] In summary, based on the past adjusted income the applicant owed $72,372 in child support for the years 2009 through to March 31 2015. This is less than what he did pay.
[106] As of the date of trial, the applicant had paid child support from 2009 through to the end of March 2015. It is agreed that the applicant paid a total of $88,023.47 in child support. This is $15,651.47 more than what was owed according to the adjusted income.
[107] The child support was paid in the following manner. The applicant paid the first and second mortgage payments plus the mortgage insurance. He also made another payment directly to the respondent. When the mortgages were paid in full, the applicant took the monthly amount that he had been paying for the mortgages and paid it to the respondent. For most of this time frame, he was paying $1,210/month (either directly to the respondent and/or to the mortgages).
[108] Initially, the respondent took the position that the applicant should not receive a child support credit for payments on the second mortgage. However, during the trial she withdrew her argument that she was coerced into signing the second mortgage. As a result, it is agreed that the applicant paid $88,023.47 for table child support for the years 2009 through to March 31, 2015. The total payment includes January through March 2015 at $1,210 a month ($3,630).
[109] I find that the applicant overpaid child support for this period of time by $15,651.47. Since the applicant overpaid child support, he says that he is entitled to recovery of the overpayment ($15,651.47). I will address the applicant’s request for reimbursement below.
Section 7 expenses
[110] I will now determine if the applicant owes any past s. 7 expenses.
[111] From 2008 through 2014, the respondent paid $19,646.37 for various expenses for the children. It is agreed that some are proper s.7 expenses. Others are disputed. She seeks an order requiring the applicant to pay his proportionate share of these expenses.
[112] The respondent prepared a detail chart setting out the categories of expenses and the total that she paid in each year. I will deal first with the expenses that are disputed.
Section 7 Expenses in Dispute
[113] The respondent incurred expenses for extracurricular activities, school uniforms and a cell phone. These are the disputed expenses.
[114] When considering whether to award s. 7 special and extraordinary expenses, the court is guided by the direction in Titova v. Titov, 2012 ONCA 864 at para. 23:
23 In awarding s. 7 special and extraordinary expenses, the trial judge calculates each party's income for child support purposes, determines whether the claimed expenses fall within one of the enumerated categories of s. 7 of the Guidelines, determines whether the claimed expenses are necessary "in relation to the child's best interests" and are reasonable "in relation to the means of the spouses and those of the child and to the family's spending pattern prior to the separation." If the expenses fall under s. 7(1)(d) or (f) of the Guidelines, the trial judge determines whether the expenses are "extraordinary". Finally, the court considers what amount, if any, the child should reasonably contribute to the payment of these expenses and then applies any tax deductions or credits.
[115] Section 7(1.1) of the Guidelines defines "extraordinary expenses" as follows:
(1.1) For the purposes of clauses (1) (d) and (f), "extraordinary expenses" means
(a) expenses that exceed those that the parent or spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that parent's or spouse's income and the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, or
(b) where clause (a) is not applicable, expenses that the court considers are extraordinary taking into account,
(i) the amount of the expense in relation to the income of the parent or spouse requesting the amount, including the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,
(ii) the nature and number of the educational programs and extracurricular activities,
(iii) any special needs and talents of the child,
(iv) the overall cost of the programs and activities, and
(v) any other similar factors that the court considers relevant.
[116] An extraordinary expense is one that given the combined income of the parties would not be incurred for the children as a matter of course (see Celotti v Celotti, [2007] O.J. No. 2538 (S.C.); Park v Thompson, 2005 CanLII 14132 (ON CA), [2005] O.J. No. 1695 (C.A.)).
[117] The applicant states that he was not consulted about the s. 7 expenses before they were incurred and the disputed expenses are not proper s. 7 expenses.
School Uniforms
[118] The children attend a public catholic school that requires them to wear a uniform consisting of blue pants and blue or white tops. The clothing is not crested. The respondent is very frugal. She buys blue and white clothes and spends as little as possible. After school, the children wear their regular clothing.
[119] Subsection 7(1)(d) is the only enumerated category under s. 7 that could apply. This category covers “extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs”.
[120] I accept that the uniforms are necessary. They are required by the school and so the expense is in the best interests of the children. The expense is reasonable given the incomes of the parties. The respondent purchased blue and white pants and tops that were on sale. The applicant does not dispute the fact that the cost of this clothing is very reasonable. He takes the position that the cost of the uniforms is not an extraordinary expense under 7. (1)(d). I agree.
[121] The respondent offered no evidence to show that the uniforms have caused her to spend anything more than what she would normally spend on their clothing needs. As a result, it is not an extraordinary expense that given the combined income of the parties would not be incurred for the children as a matter of course. I reject the uniform expense claim.
Cell Phone
[122] In 2012, the respondent gave her eldest child a cell phone. The cell phone expense is about $50 a month. The respondent says that her children need this cell phone because it is the only way they can communicate with her in private when they are with the applicant. As well, the eldest child who is 14 years old will be attending high school this fall and after school activities. The respondent wants her to have a cell phone for safety reasons.
[123] I do not accept that the children need a cell phone to call their mother when they are with their father. This use of a cell phone does not fall within any subsection of s. 7. Nevertheless, the applicant must make sure that the children have the use of a phone in private when they wish to call the respondent.
[124] Going forward, I agree that it is in the best interests of the eldest child to have a cell phone while she travels to high school and attends after school activities. It is a necessity from a safety perspective.
[125] The applicant did not address the issue of the cell phone in his evidence. He simply takes the position that it is not a s. 7 expense.
[126] The cell phone expense only qualifies if it is an extraordinary expense under s. 7(1)(d). Given the respondent’s limited income, I find that a cell phone expense for the eldest child exceeds what the respondent can reasonably cover with her income. This is a s.7 expense that will be incurred as of September 2015 when the eldest child starts high school.
Extracurricular Activities
[127] The respondent enrolled the children in various extracurricular activities. She chose activities that the children had an interest in and found reasonably priced programs often through the school or Parks and Recreation. The amount that she spent for three children was modest as follows:
Year
Amount
2009
$ 681.11
2010
$ 775.45
2011
$ 811.00
2012
$ 883.50
2013
$ 875.22
2014
$1,022.00
Total
$5,048.28
[128] The respondent states that these are “extraordinary expenses for extracurricular activities” pursuant to s. 7(1)(f). She wants the applicant to pay his proportionate share of these expenses. In total, the respondent spent $5,048.28 over six years. On average, this was $841.38 a year and $280.46 per child per year.
[129] The respondent kept records of these expenses and produced the receipts. She sent frequent emails to the applicant to try and secure his willingness to contribute his share. Often she asked for the applicant’s contribution after the expense was incurred. Many emails were sent to the applicant and he usually did not reply. There is no evidence that the applicant ever disputed these expenses.
[130] In an email dated February 10, 2014, the applicant told the respondent that “expenses will be paid once the courts declare my share with the 60K in trust … until then please concentrate on bringing this process to an end and settling the bigger issues.”
[131] The applicant also enrolled the children in some activities: summer day camp and soccer. He paid for this expense. In total, he paid $3,785 over the six year period. He is not requesting the respondent to pay her proportionate share.
[132] The parent who seeks a contribution should obtain the payor’s consent before the expense is incurred. This did not occur. However, the applicant knew that the respondent was incurring regular expenses for extracurricular activities and he never expressed any disagreement. To the contrary, his silence and/or February email signaled to the respondent that he was prepared to pay his share.
[133] I find that all of these extracurricular activities were necessary because they were in the best interests of the children. The amounts incurred were reasonable. The children were involved in extracurricular activities during the marriage and this pattern of activity continued after separation. The expenses are extraordinary given the parties’ incomes. As a result, they should be shared on a proportionate basis.
Proportional Sharing of s.7 Expenses
[134] The s. 7 expenses that I have allowed from 2008 to 2014 total $15,975.70 and are set out in the chart below. The applicant must pay the respondent his proportionate share of $15,975.70.
[135] Daycare is the only s. 7 expense that is claimed in 2008. The respondent paid $805.23 for daycare. For the purpose of this judgment, I assume that the respondent incurred this daycare expense post separation. The applicant did not contest this expense.
[136] The uniforms and past cell phone expenses are not allowed. However, I order that the parties shall share the cost of the cell phone effective September 2015.
Year
Daycare
Dental
Medical
Extra-Curricular
Trips/
Workshop
Total
2008
805.23
805.23
2009
2,265.64
19.37
681.11
30.00
2,996.12
2010
397.85
82.04
775.45
128.35
1,383.69
2011
25.00
867.00
245.66
811.00
390.02
2,338.68
2012
100.00
375.00
22.75
883.50
247.39
1,628.64
2013
816.00
648.93
875.22
98.00
2,438.15
2014
405.00
2,728.00
1,022.00
230.19
4,385.19
Total
$3,195.87
$2,860.85
$3,746.75
5,048.28
$1,123.95
$15,975.70
[137] The proportional sharing is based on the applicant’s adjusted income and the respondent’s line 150 income. The applicant accepted the respondent’s line 150 income and did not seek to add back any of her expenses into income. The incomes and proportional shares are set out below:
Year
Respondent’s line 150 income
Applicant’s adjusted income
Proportional shares between respondent & applicant
2008
$16,038
$51,585
24%/76%
2009
$13,156
$54,855
19%/81%
2010
$19,358
$49,049
28%/72%
2011
$20,025
$58,608
25%/75%
2012
$23,240
$47,344
33%/67%
2013
$27,429
$44,976
38%/62%
2014
$29,976
$45,175
40%/60%
[138] The applicant’s proportionate share of the s. 7 expenses is $11,144.96. The breakdown is set out in the following chart:
Year
Calculation of Proportional sharing of s. 7 expenses
Total
2008
76% of $805.23
$611.97
2009
81% of $2,996.12
$ 2,426.86
2010
72% of $1,383.69
$ 996.26
2011
75% of $2338.68
$ 1,754.01
2012
67% of $1628.64
$ 1,091.19
2013
62% of $2438.15
$ 1,633.56
2014
60% of $4,385.19
$ 2,631.11
Applicant’s Proportional Share
$11,144.96
The spousal support claim
[139] The respondent seeks spousal support. Her position on duration of the spousal support varied during the trial. Ultimately, she stated that she is only seeking spousal support for 2009 and 2010.
[140] Initially the applicant took the position that no spousal support should be awarded. He argued that income should be imputed to the respondent and disputed her entitlement. During the trial, he agreed to withdraw his request to impute income.
[141] Section 15.2(1) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) authorizes the court to make an order to require a spouse to secure or pay such lump sum or periodic sums, "as the Court thinks reasonable for the support of the other spouse".
[142] The factors and objectives that govern an interim or final order for spousal support are set out in ss. 15.2(4) and (6) of the Divorce Act. These sections provide:
15.2 ….
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(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.
[143] Both parties presented Divorcemate calculations (also called Spousal Support Advisory Guidelines “SSAG”). The SSAG is a “useful tool” and non-binding (Fisher v. Fisher, 2008 ONCA 11, [2008] O.J. No. 38 (C.A.)). It does not usurp the discretion of the trial judge or the relevant considerations in the statutes and existing case law.
[144] The respondent’s SSAG were prepared using an imputed income of $83,000. I have rejected this income as explained above. Using this imputed income, spousal support in 2009 ranges from a low of zero, a mid-point of $190 and a high of $393. The duration runs from 4.25 to 10 years. In 2010, the low is zero, the mid-point is $47 and the high is $281.
[145] The applicant’s SSAGs assigned $55,000 in income to the applicant and $13,156 to the respondent. The result is that no spousal support is owed for these years.
[146] The evidence demonstrates entitlement to spousal support. The respondent’s career was interrupted during the birth of the three children. She has a two year diploma in general business from Seneca. She worked sporadically from 2001 until April 2007 when she returned to work part-time. Since separation, she has been primarily responsible for the children. During this time, the applicant was free to pursue his career as a licensed technician.
[147] After April 2007, the respondent gradually returned to work full time. She is self-employed and provides various clerical and office services for real estate agents. Her line 150 income increased each year.
[148] During final argument, the applicant stated that he would pay the respondent $2,800 in full satisfaction of all spousal support. While he disagrees with the respondent’s SSAG, he made this concession as a compromise and to move the matter forward. The amount of $2,800 is based on the mid-range of spousal support for the years 2009 and 2010. He requests that the money be taken from the funds being held in trust.
[149] The SSAG reflect that spousal support is owed only if $83,000 of income is imputed to the respondent. As explained, I have rejected the respondent’s request to impute this income. In 2009 and 2010, the applicant was running BSM and there is no basis in the evidence to justify imputing this higher income. There is nevertheless a concern that the respondent’s child care responsibilities interfered with her ability to build her career. The applicant has agreed to pay spousal support for 2009 and 2010 using the mid-point of the respondent’s SSAG. This is a fair result. The $2,800 in spousal support shall be paid to the respondent from the money that is held in trust.
miscellaneous Issues
Return of Children’s Money
[150] After separation, the parties each took money that belonged to the children. Their obligation to repay the money was resolved during the trial on consent.
[151] The parties agree that the respondent shall establish a guaranteed investment certificate with a five year closed term for each child of the marriage, to be funded as follows. The parties shall each deposit $3,665.50 in a guaranteed investment certificate for Brianna Bordin. The parties shall each deposit $2,100 in a guaranteed investment certificate for Sonia Bordin. The parties shall each deposit $2,518.78 in a guaranteed investment certificate for Marcus Bordin. The creation and funding of these guaranteed investment certificates shall be completed on or before July 31, 2015.
Life Insurance
[152] The applicant is required to pay child support and he shall secure it with life insurance for as long as child support is payable. The applicant shall provide the respondent with proof of the life insurance that designates the respondent as a beneficiary.
Medical and Dental Insurance
[153] The applicant has medical and dental insurance through a plan that his new partner has available. As well, once he finishes the probationary period of his current job, he will have medical and dental coverage. This will be primary to his partner’s secondary policy.
[154] The parties have had difficulty organizing coverage for the children in a manner that is fair to the respondent. The applicant registered his children at a dental office and a pharmacy of his choice. The respondent needs a card from the insurer (“coverage card”) confirming coverage so she can register the coverage at a pharmacy and dental clinic that she chooses. The respondent should not be restricted in her ability to access this coverage for the children. For example, the respondent could be away from Toronto with the children and require the card to buy them prescription medication.
[155] The applicant shall maintain medical and dental insurance for the children at his expense. The applicant shall provide the respondent with a coverage card confirming all policies that provide coverage to the children for medical dental and/or travel needs.
[156] If the insurer requires claims to be submitted, the applicant shall sign all claim forms and submit them to the insurer within two weeks of receiving the request and supporting expense documents from the respondent. Upon receiving payment from the insurer, the applicant shall reimburse the respondent within 7 days. If 100% of the claim is not paid, the applicant shall submit the unpaid amount for payment under any other plan that provides such coverage to the children.
[157] If a submitted medical or dental claim is rejected, the expense shall be shared by the parties on a proportionate basis pursuant to s. 7(1)(c) of the Guidelines.
Second Mortgage Issue
[158] At the start of trial, the respondent was advancing a claim that the consent order of Justice Archibald be set aside. This order dealt with equalization. The respondent paid the applicant his interest in the matrimonial home and she kept the home. The respondent was required to pay the cost of discharging the second mortgage. The respondent did not comply with her agreement to discharge the second mortgage. As a result, the applicant paid $12,179.44 to secure the discharge. He seeks a credit for this amount from the remaining funds that are held in trust.
[159] The respondent testified that she was coerced into placing a second mortgage on the property. The mortgage money was used to pay off a line of credit that the parties used to make an investment that failed. After testifying about this issue, the respondent withdrew this claim. The applicant is entitled to a reimbursement of $12,179.44 from the respondent.
Distribution of the Money in Trust
[160] After the parties equalized their property, they left money in trust with a real estate lawyer, Massimo D. Rolle. The court was told that Mr. Rolle has been charging the parties a monthly fee to hold the monies in trust pending resolution of the dispute. The total fee charged is not known. Apparently the parties agreed to this monthly charge. As of April 27, 2015, there is $59,476.35 left in the trust account.
[161] Mr. Rolle’s letter states that he will not continue to charge for holding the fees in trust given that the trial is over. He states that he will be charging a fee for the legal work required to disburse the trust funds as directed. He does not reveal what he will charge. It is unclear what legal work could be required since this judgment specifically directs to whom the money shall be released. It is surprising that the fees already paid would not cover the minimal effort that will be required to release the money to the parties as ordered.
[162] I am directing that the 100% of the money in trust be released as directed. If there is a final account to be paid, it should not be paid from the trust money. The parties can attend to payment of any final account, if one is rendered.
[163] Based on the decisions I have made, each party owes the other money. What they owe shall be paid from their share of the trust money. In my view, this is the fairest way to finalize this matter.
[164] The money in trust is an uneven amount. I allocate $29,738.17 to the applicant and $29,738.18 to the respondent.
[165] The respondent owes the applicant $27,830.91 and the applicant owes the respondent $13,944.96. The particulars are below:
• The respondent owes the applicant $12,179.44. This is what the applicant paid to discharge the second mortgage.
• The respondent owes the applicant $15,651.47 for overpayment of child support from 2009 through to March 31, 2015.
• The applicant owes the respondent $2,800 for past spousal support.
• The applicant owes the respondent $11,144.96. This is his share of past s. 7 expenses.
[166] When the amounts owed are set off against what each owes the other, the respondent owes the applicant $13,855.95. I deduct this from her share of the trust monies and add it to what the applicant receives. As a result, the trust monies $59,476.35 shall be divided between the parties and paid out to them as follows:
• The applicant shall receive $43,624.12
• The respondent shall receive $15,852.23
[167] I add that during the trial, the applicant’s position was very clear: he overpaid child support and was seeking an order that he be reimbursed. The applicant successfully proved that he overpaid child support. He was paying child support pursuant to an interim without prejudice court order. He is entitled to recover the overpayment. The respondent did not argue otherwise.
Divorce
[168] On consent a divorce order is issued.
conclusion
[169] The following orders are made:
(1) The applicant shall pay the respondent $2,800 in full satisfaction of spousal support for the years 2009 and 2010.
(2) The applicant shall pay the respondent $11,460.77 for s. 7 expenses incurred from 2008 to 2014.
(3) The respondent shall pay the applicant $12,179.44, representing what the applicant paid to discharge the second mortgage.
(4) The respondent shall pay the applicant $15,651.47 for overpayment of child support from 2009 through to March 31, 2015.
(5) The amounts owed in paras. 1, 2 3 and 4 shall be paid using the trust money as directed in para. (6).
(6) The amount of $59,476.35 that is held in trust by Massimo D. Rolle shall be paid to the parties as follows: $15,852.23 to the respondent Elice Bordin and $43,624.12 to the applicant Vico Bordin.
(7) The parties agree that the respondent shall establish a guaranteed investment certificate with a five year closed term for each child of the marriage, to be funded as follows. The parties shall each deposit $3,665.50 in a guaranteed investment certificate for Brianna Bordin. The parties shall each deposit $2,100 in a guaranteed investment certificate for Sonia Bordin. The parties shall each deposit $2,518.78 in a guaranteed investment certificate for Marcus Bordin. The creation and funding of these guaranteed investment certificates shall be completed on or before July 31, 2015.
(8) The respondent owes child support for Brianna Bordin born March 4, 2001 Sonia Bordin born June 4, 2004 and Marcus Bordin born September 18, 2005. Child support is payable on the first day of every month. Effective April 1, 2015 he shall pay child support based on an income of $60,000 or $1,168 a month.
(9) If the applicant has paid child support for April, May and June 2015 and has paid an amount other than $1,168, the parties shall make the necessary adjustment.
(10) Every year no later than June 1, the parties shall exchange income tax returns and notices of assessment for the purpose of adjusting Guideline child support and their proportionate shares of s. 7 expenses if required.
(11) A support deduction order is issued.
(12) The applicant shall maintain life insurance coverage to secure his obligation to pay child support. Such insurance shall be maintained for as long as child support is payable. The applicant shall provide the respondent with proof of the life insurance that designates the respondent as a beneficiary.
(13) The applicant shall maintain medical and dental insurance for the children at his expense
(14) The applicant shall provide the respondent with a coverage card confirming all policies that provide coverage to the children for medical dental and/or travel needs.
(15) If the insurer requires claims to be submitted, the applicant shall sign all claim forms and submit them to the insurer within two weeks of receiving the request and supporting expense documents from the respondent. Upon receiving payment from the insurer, the applicant shall reimburse the respondent within 7 days. If 100% of the claim is not paid, the applicant shall submit the unpaid amount for payment under any other plan that provides such coverage to the children.
(16) If a submitted medical or dental claim is rejected, the expense shall be shared on a proportionate basis pursuant to s. 7(1)(c) of the Guidelines.
(17) Commencing September 1, 2015, the expense of a cell phone for the eldest child shall be considered a s. 7 expense and the cost shall be shared by the parties on a proportionate basis.
(18) A divorce is granted and will take effect in 31 days from the date of this judgment.
(19) If either party is seeking costs they shall exchange brief written submission and deliver them to the court by July 31, 2015.
___________________________ C. Horkins J.
Released: June 12, 2015
Appendix A
CITATION: Bordin v. Bordin, 2015 ONSC 3730
COURT FILE NO.: FS-11-374574
DATE: 201506012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
vico bordin
Applicant
– and –
elice bordin
Respondent
REASONS FOR JUDGMENT
C. Horkins J.
Released: June 12, 2015