Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: GINA OWEN Applicant
AND:
MICHAEL ROBERT SAMUEL OWEN Respondent
BEFORE: CHAPNIK J.
COUNSEL: Teresa Ciccone, for the Applicant Carol Struthers, for the Respondent
HEARD: May 26, 2015
ENDORSEMENT
1The applicant brings this motion for increased child support, retroactive child support, s. 7 expenses and costs. She alleges that the respondent is blameworthy and that he knowingly misrepresented his income to the court. I will deal with each of these issues separately.
background
2The parties commenced cohabiting in and around May 2003 and were married in Scarborough, Ontario on May 1, 2004. They separated about seven years later on September 15, 2011. There is one child born of the marriage, Alessandro Owen, born May 20, 2004, who is now 11 years of age. Alessandro resides with the applicant and attends school in Milton, Ontario.
3The applicant stayed home as a caregiver for Alessandro until he reached the age of seven when she returned to the workforce earning modest wages. She presently works as a part-time cashier at Walmart, earning approximately $17,000 per year.
4The respondent has been employed as a dispatcher for the Toronto Housing Corporation (TCHC) since 2001. His employment was, however, terminated in September 2012 due to persistent absences from work. After filing a grievance, his employment as a dispatcher was reinstated, effective January 31, 2014, without back pay.
5At a case conference held on November 1, 2012, the respondent was unemployed and receiving income from employment insurance (EI). On that basis, the Honourable Mr. Justice Jarvis made an order for child support, on consent, in the sum of $150 per month.
6At a further case conference on March 18, 2015 after the respondent’s reinstatement, the child support order was increased, on consent, to $396 monthly, based on his reported income of $43,000.
7Prior to the next scheduled appearance on April 27, 2015, the respondent produced his financial information, including his income tax returns for the years 2011 to 2014.
8According to the applicant, there were “glaring discrepancies” in what the documentation revealed and what the respondent had presented to the court at the above case conferences.
9It is undisputed that the respondent did not disclose his 2012 and 2013 pension valuation or the existence of his RRSPs at the relevant time.
the position of the parties
10The applicant takes the position that since both the respondent’s pension and RRSPs were likely accumulated throughout the marriage, they would be properly included in his line 150 income for child support purposes. Moreover, the failure of the respondent to disclose these benefits or his withdrawals from them during the relevant period, amounts to “blameworthy” conduct on his part. Specifically, it is submitted that the respondent “grossly underpaid” his child support obligation to the detriment and disadvantage of Alessandro.
11The applicant, therefore, claims arrears in child support from 2011 through to May 2015 in the sum of $22,001.09; and ongoing child support of $713 per month, commencing June 1, 2015, calculated on what the applicant says was the respondent’s 2014 income of $78,576.
12The respondent claims that the pension and RRSP withdrawals should not be included in his line 150 income for these purposes. Accordingly, the proper amount of child support should be the sum of $556 per month, based on his employment income in 2014, which was $58,374, including overtime.
the applicable law
13It is well settled law that parties have an obligation to provide “fulsome disclosure” of their financial circumstances at all times.
14Section 17 of the Child Support Guidelines, O. Reg. 391/97 gives the court discretion to consider an amount other than the quantum of income stated in line 150, if the court is of the opinion that this amount would be a fair determination of the party’s income.
15Section 17 of the Divorce Act, R.S.C. 1985 c. 3 (2nd Supp.) provides that a court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively, a support order or any provision thereof on application by either or both former spouses or by another person.
16The applicant relies on the cases of Werden v. Werden (2005), 2005 CanLII 45741 (ON SC), 24 R.F.L. (6th) 378 (Ont. S.C.) [Werden] and Marchese v. Marchese, 2004 CanLII 34429 (ON SC), [2004] O.J. No. 217 (S.C.) [Marchese] to support its claims and allegations of blameworthy conduct on the part of the respondent.
17In Werden, the settlement of an interim child support order on consent was found to be based on evidence that turned out to be significantly inaccurate, and the court held that in such a case, the court should determine what should have been the appropriate level of child support at the earlier date and order accordingly.
18In Marchese, the court held that the Family Law Rules, O. Reg. 114/99 require immediate and complete disclosure of a change in financial circumstances. In that case, the payor had refused to make continuing disclosure of his pay stubs and unilaterally decided to ignore previous cost orders.
19Clearly, where a payor is found to be deficient in his or her child support obligation, a court may vary an existing order retroactively: see D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. at para. 74.
20At the same time, and specific to the instant case, our courts have consistently held that “non-recurring” income such as RSP or pension withdrawals should be excluded from the calculation of a payor’s line 150 income, for child support purposes. See, for example, Arnold v. Washburn (2001), 2001 CanLII 21149 (ON CA), 57 O.R. (3d) 287 (C.A.), leave to appeal to S.C.C. refused [2002] S.C.C.A. No. 82; Difede v. Difede, [2007] O.J. No. 622 (S.C.) [Difede]; and Pandya v. Pandya, 2010 ONSC 2026, [2010] O.J. No. 1695 at para. 39.
21In Difede, at para. 11, the court explained the rationale behind the exclusion, as follows:
In the situation of income from cashed in RSPs, there is a compelling reason to exclude this money when calculating income for support purposes. Income tax forms do not show money deducted for purchasing RSPs until line 208; clearly below line 150 of the form. Such deductions are therefore taken into consideration in calculating taxable income but not child support. A payor, or indeed a recipient calculating section seven expenses, has included the money put into an RSP in line 150 in the year it was purchased. It would not be a fair determination of income to include the same money again for calculating guideline support or section seven expenses in a later year when the RSP is cashed in.
analysis
a) Child Support
22The applicant’s claim for a variation of the support orders to increase the amount of child support to $713, commencing June 1, 2015 is based on a calculation of his 2014 annual income as being $78,576. That amount however, is based on his line 150 income that would include his pension and RRSP withdrawals for that year. Given the prevailing law on non-recurrent payments, a more appropriate determination of his income for that year would have to exclude the withdrawn amounts.
23The applicant argues that since the withdrawals from the respondent’s pension and RRSPs took place on three occasions during the relevant years, they should not be viewed as “non-recurring” payments. In Difede, where the applicant had made several withdrawals of his RSPs during his period of unemployment, the court, nevertheless, held that the income therefrom was non-recurring in nature.
24As noted, the crux of the applicant’s argument in this case rests on a finding of misrepresentation or blameworthy conduct on the respondent’s part. I find no such behaviour in the circumstances of this case.
25The respondent acknowledged his child support obligation in consenting to the orders made in November 2012 when he was unemployed, and in March 2015 after his employment was reinstated. He advised the court of his actual income from EI or employment on both occasions. He says he withdrew the money in order to support himself during the years of his unemployment. There is no credible evidence of non-disclosure or misrepresentation, intentional or otherwise.
26In my view, these circumstances merit a deviation from the respondent’s income set out in s. 16 of the Child Support Guidelines. The non-recurring income from his pension and RRSP withdrawals that encroach on capital, shall not be taken into consideration for the calculation of child support for Alessandro.
27The respondent’s employment income for 2014 was $58,374. The proper table amount for ongoing child support would be the sum of $556 per month commencing June 1, 2015.
b) Retroactive Support
28The applicant’s claim for retroactive child support in the sum of $22,001.09 is rooted in her assertion that the respondent’s pension and RRSP withdrawals be included in his line 150 income tax returns for the years 2011-2014. For the above reasons, I find that the applicant is not entitled to retroactive child support, except that which may be consistent with this order, or as agreed between the parties to be outstanding.
c) Section 7 Expenses
29The applicant requests an order that the respondent pay his proportionate share of Alessandro’s “extraordinary” expenses for swimming lessons and math tutoring. Other than an assertion that the tutoring would cost $100 per month, no details were provided to the court to support these claims. Given the time of year when school will be closed for the summer and the lack of any evidence or details, including information as to costs s for either of these expenses, this claim must be denied at this time. Hopefully, the parties can work something out between them, if required, in the future.
d) Other matters
30Prior to this hearing, the parties agreed on a schedule for the respondent to have interim access to Alessandro, and accordingly that matter is not before the court at this time.
31In his motion materials, the respondent sought leave pursuant to Rule 11(3) of the Family Law Rules to amend his Answer to include a claim for custody. If he still wishes to proceed with that request, leave is granted.
conclusion
32As noted, the crux of the applicant’s argument rested on the assertion that the respondent failed to disclose and misrepresented his true income when the temporary and interim child support order was made; and that this warranted the court’s condemnation and an award of retroactive child support.
33I have found no blameworthy conduct on the respondent’s part; and have accepted his submissions on the fair and proper amounts of ongoing child support pursuant to the Child Support Guidelines. In the circumstances, the respondent is entitled to his costs of the motion. Taking into account the criteria as set out in Rule 24 of the Family Law Rules, in my view, a fair and reasonable assessment of costs would be the all-inclusive sum of $1,000.00. This amount may be deducted from the respondent’s support payments which are made through FRO.
34An order shall issue varying the order of Jarvis J. made on March 8, 2015 for child support for Alessandro in the sum of $396 to the sum of $556 per month commencing June 1, 2015. Costs to the respondent in the all-inclusive sum of $1,000.
CHAPNIK J.
Date: June 19, 2015