Cozzi v. Smith, 2015 ONSC 396

NEWMARKET COURT FILE NO.: FC-04-20255-02

DATE: 20150119

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Peter Brian Cozzi

Applicant

– and –

Miranda Leigh Smith

Respondent

Steven Benmore, for the Applicant

Respondent unrepresented

HEARD: November 20, 21, 22, 26, 27, 28, 29, 30, December 3 and 4, 2012; Child Support heard by written submissions

McDermot J.

Introduction

[1] This completes the final remaining issue in this matter, being ongoing child support payable by the respondent, Ms. Smith to Mr. Cozzi. The trial of this matter was completed on December 4, 2012 and this endorsement is supplementary to my reasons released on June 4, 2013. I then ordered that primary residence of the child, Micalister Cozzi-Smith born November 16, 2001, remain in the care of his father, the applicant, Peter Cozzi. I dismissed the respondent’s application to move with Micalister to Kitimat, British Columbia. I also quantified support arrears owing by Mr. Cozzi to Ms. Smith based upon his actual income during a number of prior years when Micalister was in the care of Ms. Smith.

[2] I did not determine child support payable by Ms. Smith in my June 4 endorsement. I adjourned that issue because my judgment resulted in anticipated access costs to her of about $10,000 per annum, resulting in a potential claim for undue hardship under s. 10 of the Child Support Guidelines.[1] I gave Ms. Smith 20 days to serve and file written submissions in order to claim undue hardship including a cost of living calculation as required by s. 10(3). She failed to make those submissions. I have since ruled that she has therefore effectively abandoned any claim for a reduction of guideline support based upon the hardship provisions in the Child Support Guidelines.[2]

[3] Mr. Cozzi was unhappy with my order to pay arrears of child support. The issue of ongoing child support was delayed while he brought a motion to change my final order pursuant to Rule 24(19) of the Family Law Rules[3] based upon my failure to take into account carrying costs claimed on Mr. Cozzi’s various income tax returns over the years. That motion was originally returnable on September 30, 2013 but could not proceed because the motion served on Ms. Smith by e-mail went into her junk mail folder by mistake.

[4] The parties agreed to adjourn the motion to a date to be heard by me during the November, 2013 sittings. Unfortunately, I did not sit in Newmarket court during those sittings and the motion was not heard by me until nearly a year later in Barrie, on August 21, 2014. On October 24, 2014, I dismissed Mr. Cozzi’s motion to change my order and, as noted above, determined that any claim for hardship had been abandoned by reason of the respondent’s failure to file submissions within 20 days as set out in my original endorsement.

[5] There appear to have been significant changes in circumstances to Ms. Smith since the trial. I am told that she no longer lives with her husband, Ali Al-Hamawandy, in Kitimat, British Columbia, where she had originally wished to move with Micalister. She now lives in Michigan. She obviously no longer works as an environmental technician at Bechtel in Kitimat. Notwithstanding these changes in circumstances, the parties agreed throughout that no post-trial evidence could be referred to or relied upon by me in determining child support. When the Rule 25(19) motion was adjourned to the November, 2013 sittings, the parties agreed that no new evidence would be filed on that motion beyond the evidence led at trial. That principle was re-affirmed at a teleconference held on October 30, 2014; after hearing submissions by Ms. Smith and Mr. Benmore, I endorsed on consent, amongst other things, that the parties could make written submissions regarding child support, those submissions would be no more than three pages in length and, other than evidence led at trial and argument, no further evidence would be referred to in those submissions.

[6] Accordingly, based upon the agreement between the parties, I cannot take into account the fact that Ms. Smith has moved to Michigan or her present financial circumstances. There was no evidence led about that at trial, and I am restricted to the evidence at trial. I note as well that Ms. Smith referred to evidence in her submissions contrary to that agreement. She included in her material pay stubs showing year to date income as of June, 2013, medical letters dated June, 2013 indicating when Ms. Smith was due to give birth and when her last day of work was in 2013 as well as her present financial circumstances. Her submissions were well in excess of the three pages agreed to on October 30, 2014. I agree with Mr. Benmore that this material cannot be relied upon in my child support deliberations; indeed, it is not evidence at all as it was not part of an affidavit or given as oral sworn testimony. Therefore, I specifically decline to consider any part of the respondent’s submissions other than as can be referred back to the evidence given at trial regarding Ms. Smith’s income, both present and anticipated.

[7] That does not mean that, as Mr. Benmore’s submissions suggest, “post-trial events cannot form part of the adjudication of the respondent’s income” for child support purposes. There is a distinction between my relying upon evidence given at trial as to anticipated post-trial events upon which I can make findings in determining child support, and hearing new evidence about events that actually took place after trial. The October 30 agreement between the parties prevents me from relying upon post-trial events about which there was no evidence at trial (such as the respondent’s move to Michigan, which was not mentioned at trial), but it does not prevent me from relying upon the evidence given at trial (such as the respondent’s pregnancy) which would affect her future ability to earn income.

[8] That being said, very little evidence was led by either party regarding child support issues at trial. As I noted in my endorsement issued on October 24, 2014, this was a trial in which mobility and custody issues were at the forefront. Neither party paid much attention to support issues; nor did either party lead detailed evidence regarding income or expenses. I can briefly summarize the trial evidence from Ms. Smith regarding her income as follows:

a. Ms. Smith testified that she had been hired by Bechtel Canada as an environmental technician for their aluminum smelter development in Kitimat, British Columbia. Her hiring letter dated April 30, 2012 stated that her annual income would be $53,460 plus benefits.

b. Ms. Smith began her employment in Kitimat at the Bechtel aluminum smelter project in late June, 2012.

c. Ms. Smith filed three pay stubs as exhibits. Those pay stubs were for pay periods ending October 14, 2012, October 28, 2012 and November 11, 2012. The pay stubs disclosed that beyond her base salary, Ms. Smith was working significant periods of overtime. Ms. Smith testified that she worked both overtime and “premium” time well in excess of her fixed work week of 35 hours. Mr. Benmore calculates that an annual income of $64,000 per annum can be extrapolated from those pay stubs.

d. Ms. Smith also filed as an exhibit her financial statement which was sworn on November 19, 2012, immediately prior to the trial. In that financial statement, she said that her income was $4,400 per month, or $52,800 per year.

e. Ms. Smith testified that she had only recently discovered that she was pregnant. She said that she expected that she would take her entitled maternity leave for a one year period and that she would collect employment insurance (“EI”). She also testified that she might not return to work after her maternity leave and that she would then be totally dependent upon her husband, Mr. Al-Hamawandy; she said that this was because they wished to have more children in the future. She said in testimony that the support payments that she was making up to the date of trial were more than would be allowed under her future income as she would then be making “half” of what she is making now, presumably during her maternity leave.

f. Mr. Al-Hamawandy testified on November 21, 2012 that he and Ms. Smith had only discovered that she was pregnant on the previous Sunday. From that I can assume that Ms. Smith was about one month pregnant on that date. Based upon this evidence, I made an assumption in my reasons issued on June 4, 2013 that Ms. Smith would be taking her maternity leave in June or July of 2013.

[9] Other than as set out above, there was little or no evidence led by either party at trial regarding the issue of ongoing child support.

Analysis

[10] The issues raised by the material filed by the parties are as follows:

a. What is Ms. Smith’s income from employment for child support purposes?

b. Ms. Smith gave evidence at trial that she would be going on maternity leave in June of 2013. Is there sufficient evidence from trial to reduce support based upon Ms. Smith’s anticipated maternity leave after June, 2013?

c. Has Ms. Smith, by becoming pregnant, intentionally reduced her income so that her full income be imputed to her pursuant to s. 19(1)(a) of the Child Support Guidelines?

(a) What is Ms. Smith’s employment income for child support purposes?

[12] As noted above, there were three exhibits filed as to Ms. Smith’s income. The first was the employment letter from Bechtel Canada, which confirmed that Ms. Smith had been hired by that corporation as an environmental technician at a base salary of $53,460. Her commencement date was June 25, 2012. In October, 2012, this was the income that was used by Rogers J. in ordering temporary child support in the amount of $483 per month.

[13] Secondly, Ms. Smith filed a financial statement indicating her annual income to be $52,000.

[14] There was no supporting documentation attached to that financial statement. However, at trial, Ms. Smith filed three pay stubs as noted above. That was the third exhibit directed towards Ms. Smith’s income. It was her evidence in cross-examination that she worked significant periods of overtime over and above her basic 35 hours per week. The pay stubs showed that she worked between 50 and 60 hours per week. Taking the three pay stubs as filed at trial, if they were an accurate reflection of the hour worked by Ms. Smith on average, Mr. Benmore submits that she would be earning about $64,000 per annum.

[15] Another way to look at this is to calculate Ms. Smith’s year to date income from the pay stubs. Based upon her commencement date of June 25, 2012, by the date of the last pay stub filed at trial, November 11, 2012, she had worked 19 weeks and made gross income of $25,676.14. That works out to income of $1,351.38 per week, or $70,271.54 per year.[4]

[16] Either way, it is clear that Ms. Smith was earning income well in excess of her base salary. Her evidence was that she was content to work overtime hours so long as Micalister was not living with her; once Micalister moved in with her, she said she would no longer be working 10 hours per day. As such, she stated that her income should be discounted once Micalister came to live with her. She said that her human resources department had agreed to this.

[17] I assume the same reduction in hours would occur once she returned to work after the birth of her new baby. The income that she had up to the date of the trial may very well not be representative of her earning capacity both as her pregnancy progressed, or after she returns to work after her maternity leave.

[18] Accordingly, I find that Ms. Smith’s income from employment for support purposes would be $62,000 per annum. That would give rise to base guideline child support of $576 per month (based upon her residency in British Columbia).

(b) Is there sufficient evidence from trial to reduce child support based upon Ms. Smith’s anticipated maternity leave after June, 2013?

[19] Ms. Smith gave evidence at trial about her plans arising from her pregnancy, which was discovered only the weekend prior to her testifying at trial.

[20] Ms. Smith said that she intended on going on maternity leave in June or July of 2013. Based upon her evidence, and the recently discovered pregnancy, I assume that Ms. Smith’s due date would be about eight months hence, or in July of 2013.

[21] Ms. Smith said that she would be taking all maternity benefits that were available to her. She testified that she did not think that there would be any top up from her employment and that she would be reliant upon EI benefits. She did not have any idea of what her income would be during that time.

[22] Mr. Benmore suggests that I cannot take any anticipated maternity leave into account based upon the agreement of the parties not to permit post-trial evidence to be led for child support purposes. As noted, I disagree with this assertion. There was sufficient evidence at trial for me to infer that Ms. Smith was going to carry her unborn child to term and that she would be taking a maternity leave assuming she was eligible. Excluding any post-trial evidence, there was sufficient evidence given at trial to allow me to make this finding.

[23] Accordingly, I find that Ms. Smith will take a maternity leave commencing July 1, 2013. Under legislation in force in British Columbia, Ms. Smith is entitled to a 17 week maternity leave (only paid for 15 weeks) followed by a 35 week parental leave as provided for under sections 50 and 51 of British Colombia’s Employment Standards Act.[5] She could do this upon completing 600 hours of work at a minimum; it is clear that she had completed this by the time of trial. Ms. Smith would therefore be entitled to 50 weeks of EI benefits as provided for under the Employment Insurance Act.[6] Based upon the fact that it would be rational for her to maximize her EI benefits, I find that the maternity leave would come to an end in June, 2014 and that her return to work would be in July, 2014. I note that she could divide the parental leave with her husband; however, at trial there was substantial evidence of the financial hardship that Mr. Al-Hamawandy found himself in. I would find it highly unlikely that he would have left his high paying position to take a portion of the parental leave instead of Ms. Smith. Accordingly, it is logical that Ms. Smith would take the entire parental leave.

[24] I have already commented on the fact that the parties agreed that evidence arising after the trial cannot be referred to in dealing with child support issues. This means that I cannot have reference to the EI information set out in Ms. Smith’s submissions. That does not, however, prevent me from taking judicial notice of what her income would be from EI if she took her maternity leave.

[25] I can take judicial notice of any fact that is “capable of immediate and accurate demonstration by resort to readily accessible sources of indisputable accuracy”: see R. v. Find, 2001 SCC 32, [2001] S.C.J. No. 34 at paragraph 48. It appears that this can be extended to a calculation of EI benefits; once I can determine the income of the claimant, EI benefits are relatively easy to determine from having reference to the government website. This was done by F. Graham J. in Pinto v. Pinto, 2011 ONSC 7403. In that case, a spousal support claimant had recently lost her job. F. Graham J. noted that there was no evidence of the amount that the claimant expected to receive from EI. However, he determined that, “that judicial notice can be taken of the official government website concerning EI at www.servicecanada.gc.ca/eng/ei which states that regular benefits are 55 percent of insurable income up to a maximum or $45,900 per annum.” He used that government website to determine the claimant’s income from EI for spousal support purposes.

[26] I intend to do the same. It is clear to me that Ms. Smith’s income was well above the maximum amount of income under the EI regulations. Based upon my findings as to Ms. Smith’s income noted above, her employment earnings would have exceeded the maximum insurable yearly insurable earnings of $47,400.[7] This amount divided by 52 weeks in a year results in a maximum insurable benefit of $911.54 per week. Under section 14(1) of the Employment Insurance Act, the weekly benefits payable would be 55% of these maximum insurable weekly earnings resulting $501.35 in EI earnings per week. Over 50 weeks (the first two weeks are not payable during the “waiting period” under s. 13) Ms. Smith would therefore receive 50 payments of $501.35 for a total of $25,067.31. This gives rise to child support (based again on Ms. Smith’s British Columbia residency) in the amount of $214 per month for the duration of her maternity leave.

(c) Has Ms. Smith, by becoming pregnant, intentionally reduced her income so that her full income be imputed to her pursuant to s. 19(1)(a) of the Child Support Guidelines?

[27] A final issue raised by Mr. Benmore’s materials is whether income should be imputed to Ms. Smith because her first family should take precedence over her second. Mr. Benmore relies upon D.R.D. v. J.M., 2004 ABCA 380, [2004] A.J. No. 1331 (C.A.), Daley v. Ivey, 2011 ONCJ 351, 5 R.F.L. (7th) 478 (C.J.) and Hoeg v. Buckler, 2011 CarswellNS 499 (S.C.) to submit that a “non-custodial parent who stays at home to care for a subsequently born child will not absolve that parent from paying child support on an income imputed based on her past earnings.”

[28] Under s. 19(1)(a) of the Child Support Guidelines, the court may impute income where a party is intentionally underemployed, unless reasonably required to care for a child under the age of majority:

19. (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:

(a) the spouse is intentionally underemployed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;

[29] In the present case, Ms. Smith gave evidence that she intended to take a paid maternity leave of one year for her unborn child. She also gave evidence that she may not return to work once that maternity leave came to an end because she and her husband, Mr. Al-Hamawandy were intent upon having more children.

[30] To impute income under s. 19(1)(a), all that is required is a voluntary act. That act need not be taken with the express intention of avoiding child support; nor does there have to be evidence of bad faith: see Drygali v. Pauli, [2002] O.J. No. 711 (C.A.). I agree that the decision to take a one year maternity leave is a voluntary act. The issue is therefore whether Ms. Smith taking that maternity leave is “required” by a “child under the age of majority” which would include her unborn child.

[31] In Hearn v. Bacque¸ 2006 CanLII 19944 (ON SC), [2006] O.J. No. 2385, (S.C.J.) M.A.J. Scott J. determined that the issue is whether the parent’s decision to care for the child it is “fair and reasonable” under all of the circumstances. She suggested that:

When a court has the discretion such as provided by section 19 of

the Guidelines, what the court must weigh - not as counsel for the applicant father suggested, as to how to treat all the children the same - but, in the absence of clear necessity, to balance the needs of each child, whatever their stage of development, to determine what is fair and reasonable, given all the parental resources in the case.

[32] It appears to me that societal norms as reflected by legislation can be referred to in determining the issue. As noted above, Ms. Smith has an entitlement of a 52 week maternity leave under British Columbia’s Employment Standards Act. The federal government has provided for up to of 50 weeks of paid EI benefits under the Employment Insurance Act. Those legislative provisions recognize both the benefits and the necessity for parental care for a child during his or her first year of life. I can do nothing other than to offer the same recognition that both levels of government have given to a newborn child’s need for parental care.

[33] I note that Mr. Benmore has cited several cases in support of his position. I firstly note that in both Daley and Hoeg, the payor spouses appeared to actually have income which was not being declared for child support purposes. In Daley, there was evidence that the payor father had been receiving cash income; in Hoeg, the payor mother had significant investments that made it unnecessary for her to work. Furthermore, neither of those cases considered the issue of paid parental leave under employment standards legislation; in neither of those cases was the payor receiving EI benefits.

[34] I would secondly note that the Alberta Court of Appeal in D.R.D. decided not to impute income as they determined that the payor’s decision to stay at home with her new family was not done with the specific intention to avoid child support.[8] That case specifically supports the respondent’s position that income should be reduced during her paid parental leave. The court further confirmed at para. 19, as I have, that s. 19(1)(a) should be interpreted in light of legislatively mandated parental rights:

No affidavit evidence is needed to prove the trite fact that children aged two and four months need constant care, and that they cannot be left alone while their parents pursue employment. Even if support for the suggestion of dependency for children of that age were required, it could be found in federal and provincial legislation which grants new parents periods of leave from employment, acknowledging the emotional and physical health needs of both mother and child during the periods surrounding childbirth.

[35] Accordingly, I find that Ms. Smith’s maternity leave is “required” for the care of a child under the age of majority, and as such income shall not be imputed during that parental leave.

[36] D.R.D. confirms, however, that the maternity leave exception to imputation of income under s. 19(1)(a) is not indefinite. The court, in that case, followed both Lachapelle v. Vezina (2000), 2000 CanLII 22446 (ON SC), 11 R.F.L. (5th) 328 (Ont. S.C.J.), and Zieglgansberger v. Venyige (2003), 240 Sask. R. 109, 2003 SKQB 512 (Sask. Q.B.) in stating that the imputation exception may very well come to an end at the end of the period for which benefits were payable for parental leave. That is especially so where the payor has the ability to earn a substantial income which would make daycare cost-effective: see Daley v. Ivey, supra at para. 12. In the present case, as I have found Ms. Smith’s income to be $62,000 per annum immediately prior to her maternity leave, daycare would be similarly cost-effective. As such, were Ms. Smith to decide not to return to work after her maternity leave (as she testified at trial was a distinct possibility), that would be considered intentional underemployment, and income would be imputed to her after that date based upon her income immediately prior to taking her parental leave had she remained in Kitimat.

[37] I note that Ms. Smith led evidence which was intended to prove that her situation in Kitimat was extremely stable and that, were she to choose to return to Bechtel after her leave, the job was available. When cross examined by Mr. Benmore, she stated that she and Mr. Al-Hamawandy intended to stay in Kitimat for at least the next eight years. In fact, it is obvious that her supposed stability was illusory and it is also obvious that she did not return to her job at Bechtel. Her reasons for leaving Kitimat and that employment remain unknown and, because I am not permitted to review evidence arising subsequent to the trial, I cannot and will not speculate on whether Ms. Smith’s actions were defensible. My hands are also tied respecting any sort of assessment of Ms. Smith’s present income; however, it may be patently unfair to continue child support based upon her income prior to June of 2012 if she is not presently making that income. My decision has to allow for a change in circumstances, which has obviously already taken place.

[38] Rule 2(3) of the Family Law Rules mandates that court resources be utilized proportionately to the issues at hand, taking into account the need to be fair to all parties. It would be patently unfair to automatically impose a support obligation which would prevent a just result considering Ms. Smith’s present circumstances. The interests of justice require a process whereby Ms. Smith can present those changes before the court in an expeditious fashion in order to allow consideration of whether her present, or her past income be used to determine ongoing child support. Accordingly, I am going to order that Ms. Smith be given an opportunity to commence a motion to change child support within 60 days of the date of release of this decision. In support of her motion to change, she shall file a Change Information Form, Affidavit and Financial Statement. As I am familiar with this file and the history between the parties, I shall be seized with the motion to change and the parties shall set a hearing down before me without the need for either a first appearance or a dispute resolution hearing. The matter shall be commenced in Newmarket, but may be scheduled before me either in Barrie or Newmarket. Should either of the parties wish, a settlement conference may be scheduled in Newmarket before another judge.

[39] Pending the filing of the Motion to Change, child support shall continue at the rate of $214 per month. However, should Ms. Smith not file her motion to change within the time limited, I must then revert to the evidence given at trial, and find that Ms. Smith’s income returned to her previous amount of $62,000 upon the completion of her maternity leave.

[40] The applicant seeks child support commencing July 1, 2013, the date my stay came into force and the month following my trial endorsement. Prior to that date, child support under the interim order would continue. Accordingly, based upon the evidence at trial, I make the following findings as to Ms. Smith’s income for child support purposes:

a. From July 1, 2013 to June 30, 2014, I find Ms. Smith’s income to be $25,067.31;

b. Thereafter, I find that Ms. Smith had income of $62,000, in the event that Ms. Smith fails to commence her motion to change on the terms set out above.

[41] The stay of enforcement of child support made by me shall be lifted. Arrears of child support under this order and under the interim order of Rogers J. shall be set off against the support arrears owing by Mr. Cozzi under my order at trial.

Order

[42] Therefore, there shall be a final order to go as follows:

a. The stay of enforcement of child support payable by Ms. Smith contained in my order of June 4, 2013 shall terminate;

b. Ms. Smith shall pay Mr. Cozzi base guideline child support from July 1, 2013 in respect of Micalister in the amount of $214 per month based upon her employment insurance income which is found to be $25,067 per annum;

c. Ms. Smith shall commence a motion to change child support on the following terms:

i. She shall commence her motion to change in Newmarket within 60 days of the date of release of this endorsement;

ii. She shall file, in support of the motion to change, a Change Information Form, a Financial Statement and an affidavit explaining the changes in circumstances which have occurred since trial;

iii. I am seized with this matter, and once pleadings are filed, the parties may schedule a hearing in front of me in either Barrie or Newmarket on a date to be set by the trial coordinator without the need for a first appearance or dispute resolution date. At the hearing, I shall determine whether the matter may proceed by way of argument or whether there are credibility issues requiring oral evidence;

iv. Either party may set a settlement conference before a judge other than myself.

d. Pending resolution of this motion to change, child support shall continue to be paid in the amount of $214 per month. However, if the motion to change is not filed within 60 days of this endorsement, from July 1, 2014 Ms. Smith shall pay ongoing child support in the amount of $576 per month based upon her income from her Bechtel employment which is found to be $62,000 per annum.

e. Any arrears of support arising under this order or the interim order of Rogers J. shall be set off against the award for retroactive support against Mr. Cozzi set under my order of June 4, 2013.

[43] Costs of the trial including the Rule 25(19) motion and the parties’ arguments for child support may now be dealt with through written argument as provided for in my endorsement of October 30, 2014.

McDERMOT J.

Released: January 19, 2015

[1] O. Reg. 391/97.

[2] See my endorsement dated October 24, 2014.

[3] O. Reg. 114/99

[4] 52 weeks @ $1,351.38 per week

[5] R.S.B.C. 1996, c. 113

[6] S.C. 1996, c. 23

[7] See http://www.esdc.gc.ca/eng/jobs/ei/reports/mie2013.shtml for the maximum insurable earnings for 2013.

[8] But see Drygali v.Pauli, supra which confirms that, in Ontario at least, there is no requirement of specific intention to avoid child support to impute income under s. 19(1)(a) of the Guidelines.