ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS 11-13
DATE: 2015-07-02
BETWEEN:
Steven David Ferguson
Applicant
– and –
Diana Lorraine Ferguson
Respondent
Aubrey D. Hilliard, for the Applicant
Donna Tiqui-Shebib, for the Respondent
HEARD: March 30 & June 12, 2015
G. E. Taylor
Introduction
[1] Steven David Ferguson, the applicant, is the father of Alanna Lee Ferguson. Diana Lorraine Ferguson, the respondent, is Alanna’s mother. Alanna was born on November 27, 1987. The applicant and the respondent separated on January 1, 1995. They executed a separation agreement dated October 19, 1995. Pursuant to the separation agreement, the applicant agreed to pay child support for Alanna in the amount of $600 per month. The applicant continued to pay child support to the respondent in the amount of $600 per month until November, 2005 when Alanna turned 18. Alanna continued with her education after her 18th birthday. When the applicant stopped paying child support, the respondent filed the separation agreement with the court for enforcement by the Family Responsibility Office. By July 2011, the arrears of child support owing by the applicant, as determined by the Family Responsibility Office amounted to $53,820.
[2] This proceeding was commenced in March, 2011 seeking an order for the termination of child support pursuant to the separation agreement and for the elimination of all arrears of child support.
Facts
[3] The separation agreement predated the introduction of the Child Support Guidelines. The agreement provides of that the applicant will continue to pay child support “so long as the child remains a “child of the marriage” within the meaning of the Family Law Act or Divorce Act”. The agreement provides that the quantum of child support is to be increased annually in accordance with the indexing provisions in the Family Law Act. The agreement went on to provide that the applicant would not seek to deduct his child support payments for income tax purposes. Lastly, the agreement provided for a variation based on a material change in circumstances.
[4] The applicant paid child support of $600 per month pursuant to the separation agreement up to and including November 2005 although the respondent testified that the payments were not always regular. The child support payments were not indexed for cost-of-living increases as anticipated in the agreement. There was no evidence that the applicant sought to deduct his child support payments for income tax purposes and therefore I conclude that all payments were tax-free in the hands of the respondent.
[5] In November 2005, Alanna was in her final year of high school. She graduated in June 2006. In September 2006, Alanna enrolled at McMaster University. She was in full-time attendance at McMaster University for the school year 2006 - 2007. Alanna did not attend school for the school year 2007 – 2008. She returned to George Brown College as a full-time student in September 2008 and continued as a full-time student for the school years 2008 – 2009 and 2009 – 2010. In September 2010, Alanna entered the Bachelor of Science in Nursing program at Ryerson University. She continued in this program for the next two school years. In June 2012, Alanna successfully passed the necessary examination to become a registered nurse and has been engaged in that profession since that time.
[6] The applicant is a licensed class C automobile mechanic. This means he is authorized to work on the transmissions of automobiles. At the time of execution of the separation agreement, the applicant owned and operated a Mr. Transmission franchise. The applicant testified that during the marriage he earned approximately $40,000 annually. In 2006 he sold the franchise. No evidence was presented as to the applicant’s income for the years 1995 to 2004. At the time of the execution of the separation agreement, the respondent was employed as a registered nurse and she has continued to be so employed to the present time. No evidence was presented as to her income for the years 1995 to 2005 although in cross-examination she acknowledged that, during the marriage, her income exceeded that of the applicant.
[7] The following is the income of the applicant for the years 2005 to 2012:
2005 $41,053 (including $1322 RRSP income)
2006 $75,606 (including capital gain and RRSP income)
2007 $10,805
2008 $11,518
2009 $5333
2010 $2049
2011 $1468
2012 $20,697.
[8] After selling the Mr. Transmission franchise, the applicant attempted unsuccessfully to establish his own business. Through his counsel, the applicant concedes, for the purpose of calculating child support from 2005 to 2012, in those years when the applicant earned less than $20,000, an income of $20,000 should be imputed to him.
[9] The following is the income of the respondent for the years 2006 to 2012:
2006 unknown
2007 $94,655
2008 $99,228
2009 $98,435
2010 $106,011
2011 $119,345
2012 unknown.
[10] For the years 2007 to 2011, Alanna earned between $9422 and $19,811 annually. The respondent’s position is that Alanna should contribute six percent of the expenses related to her post-secondary school education. The applicant’s original position was that Alanna should be expected to contribute 10 percent to the cost of her post-secondary school education expenses. During the course of oral submissions, the applicant amended his position and asserted that Alanna’s contribution to her post-secondary school education expenses should be between 6.3 percent and 9 percent with the exception of the year 2008 when it should be fixed at 14 percent. In my view, it would be appropriate for Alanna to make a contribution to her post-secondary school education expenses considerably in excess of 10 percent. However, in light of the position of the applicant and for the sake of simplicity, I will use 10 percent as the amount of Alanna’s contribution.
[11] In 1999, the applicant retained counsel with a view to reducing his monthly child support payments. The respondent’s lawyer requested a financial statement from the applicant before responding to the request for a variation in child support. Nothing further was heard from counsel for the applicant and the respondent chose not to take any steps to review the amount being paid for child support although the Guidelines were in place.
[12] The applicant testified that he received a telephone call from the respondent in November 2005. He said the respondent asked him if he was going to continue paying support for Alanna now that she had turned 18. He said he told the respondent that he would continue paying support if he was told what Alanna was doing. He also testified that he told the respondent that he would contribute to Alanna’s post-secondary school expenses if he received information about her schooling and the expenses.
[13] The respondent has a different version of this telephone call. She testified that the applicant would regularly fall into arrears on his support payments. She would have to call him and he would then give her a cheque for however many months he was behind. Accordingly, she did not think it unusual when she did not receive support for November or December 2005. By the end of January 2006, when she had not received a support payment for that month, she called the applicant. She said she told him that Alanna was repeating her final year in high school and would be going to university in September. She said the applicant’s response was to tell her she could sue him. She did not do that but she took steps to file of the separation agreement for enforcement, which she did in June 2006.
[14] The applicant and Alanna have had no contact with one another from well before November 2005. The applicant has not paid any child support voluntarily since November 2005. As a result of the filing of the separation agreement for enforcement, the applicant has had tax refunds totaling $5209 seized and applied towards his child support obligations. The respondent did not request contribution from the applicant to Alanna’s post-secondary school education expenses or provide details of such expenses until after the commencement of this proceeding.
Positions of the Parties
[15] The applicant’s position is that his obligation to pay base Guideline child support post November 2005 should be for those periods when Alanna was attending university and residing at the home of the respondent. The applicant says that he should contribute proportionately, in accordance with his income, to Alanna’s post-secondary school education expenses but his contribution to Alanna’s rental expense should be limited to those periods when she was not residing with the respondent.
[16] The respondent’s position is that the applicant ought to be held to paying child support in accordance with the separation agreement until May 2008 and thereafter in accordance with the Child Support Guidelines including contribution to Alanna’s post-secondary school education expenses.
Alanna’s Expenses
[17] There is agreement between the parties about many of the expenses for Alanna’s post-secondary school education to which the applicant should contribute.
[18] Alanna’s total tuition expenses are agreed at $27,059. (There is a minor discrepancy for 2011 but I am satisfied that the correct amount for tuition for that year is $6000.75) The respondent includes as a tuition expense the $565 that it cost Alanna to write her examination to become a registered nurse. I have not included this amount as a tuition expense because, in my view, it is in relation to employment as opposed to education.
[19] There is substantial agreement about book expenses. I accept the respondent’s calculation for the cost of books in 2007 at $794.69. I was able to locate receipts for books for 2011 totaling $214.04. The applicant agrees with this amount. For 2012, the applicant accepts an expenditure for books totaling $26.99. In addition, there are receipts for other book expenses including a new computer of $580.25 which brings the total expense for books to $641.13. Therefore the total book expense is $3212.
[20] The respondent requests that the applicant contribute to Alanna’s automobile expenses including parking, gas, insurance, repairs, licensing and the purchase of a new vehicle which total $22,585. In addition, the respondent seeks a contribution from the applicant for Alanna’s public transit expenses in the amount of $3691.
[21] For some of the years Alanna was attending university she resided away from the respondent’s residence and incurred rental expense. The parties agree that the total of Alanna’s rental expense while attending university is $11,900.
[22] In February 2012, Alanna underwent emergency dental surgery at a cost of $1778.
Discussion
[23] Two competing principles are engaged in the present case. On the one hand, the applicant should not be rewarded for unilaterally terminating the payment of child support when Alanna turned 18. If the applicant was of the view that his obligation to pay child support had come to an end he could and should have consulted with the respondent in a meaningful way and if a resolution could not be reached, court proceedings should have been initiated. On the other hand, child support is for the benefit of the child. The time for contribution to post-secondary school education expenses is when they are being incurred. It is now three years since Alanna became a Registered Nurse. Payment of arrears of child support should not become, in effect, a transfer of wealth between parents.
[24] Based on the 2006 Child Support Guidelines, the applicant would have had to earn approximately $65,000 annually in order to be obligated to pay child support of $600 monthly. Only in 2006 did his income even approach this amount. On the basis of the applicant’s testimony that he earned an annual income of approximately $40,000 during the course of the marriage, base Guideline support would have amounted to approximately $350 a month. Based on the imputed income of $20,000, the applicant should have paid monthly child support of $172.
[25] The separation agreement entered into by the parties predated the introduction of the Child Support Guidelines. Assuming the applicant earned approximately $40,000 annually from the date of the agreement until November 2005, I conclude that he paid more than he would have been obliged to pay had he sought a variation of the agreement to have in his child support obligation governed by the Guidelines. However, I also conclude that both parties were content that child support continue to be paid at the rate of $600 per month notwithstanding the introduction of the Guidelines.
[26] Both parties obtained legal advice in 1999. I am satisfied that they were both advised of their legal rights which included the ability to opt into the Guideline regime. They chose not to. It is reasonable to conclude that both parties were content with the present arrangement which I find also included that there be no cost-of-living adjustments.
[27] Circumstances changed when Alanna turned 18 years of age. In my view, the applicant should not have simply stopped paying support. On the other hand, the respondent should have notified the applicant that she intended to seek ongoing child support including a contribution to the expenses related to Alanna’s post-secondary school education. Had either party taken steps in November 2005, the award of child support would have been made in accordance with the Child Support Guidelines. After considerable reflection, I have decided that the fairest way to approach the issue of support for Alanna once she reached the age of majority is to apply the Guidelines retroactively.
[28] Support for a child over the age of majority is governed by section 3(2) of the Child Support Guidelines which provides as follows:
(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is
(a) the amount determined by applying these Guidelines as if the child were under the age of majority; or
(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.
[29] In Caterini v. Zaccaria, 2010 ONSC 6473, [2010] O.J. No. 5291, Pazaratz J. endorsed the three stage analysis of the Manitoba Court of Appeal in Rebenchuk v. Rebenchuk (2007), 2007 MBCA 22, 35 R.F.L. 6th 239 when dealing with the issue of support for adult children as follows:
Step 1: Is the person for whom support is sought a "child of the marriage"?
Step 2: Is the table amount in the Guidelines "inappropriate"? If not, then the Guidelines amount should be awarded.
Step 3: If the answer to Step 2 is "yes," what level of support is "appropriate"?
[30] From November 2005 until April 2007, Alanna was in full-time attendance at high school and university. I am satisfied that she remained a child of the marriage during that period. She did not attend school for the school year 2007 - 2008 but it was not suggested that this was other than a temporary interruption of her schooling. She returned to full-time attendance at university in September 2008 and continued until she completed her nursing program in April 2012. Accordingly, I am also satisfied that Alanna was a child of the marriage from September 2008 to April 2012.
[31] There will be a suspension of the applicant’s obligation to pay support for the period September 2007 to August 2008.
[32] The second step in the analysis is to determine whether the table amount in the Guidelines is appropriate. In Merritt v. Merritt, [1999] O.J. No. 1732, Heeney J. stated at paragraph 73:
Where, however, a child is residing in another residence for the bulk of the year, it seems inappropriate to apply tables that are not designed with that living arrangement in mind. Furthermore, the table approach assumes that the recipient parent discharges her obligation by being physically in the same household and providing the family home and other amenities for the child. Where a child is at college, this assumption does not hold true. It therefore seems more appropriate to calculate the actual costs of providing for the needs of the child in his other residence, factoring in a contribution toward the cost of maintaining the family home to return to on weekends and school breaks where appropriate, and apportion that between the spouses on a Paras approach after considering the child's own ability to contribute.
[33] As I appreciate the evidence, Alanna resided with the respondent while attending McMaster University in 2006 and 2007. She also resided with the respondent and commuted to university in Toronto from September 2010 until she graduated. I therefore find it is appropriate for the applicant to pay support in accordance with the Guidelines for these periods. The applicant is also responsible for contributing to Alanna’s post-secondary school education expenses. For the school years 2008 - 2009 and 2009 - 2010 when Alanna was renting accommodation in Toronto, I find that Guideline support is inappropriate. For practical purposes, the only difference that such a finding makes is that the applicant will be required to contribute to Alanna’s rental expense as opposed to paying basic Guideline support. He will still be required to contribute towards the expenses for university.
[34] I am satisfied that expenses for Alanna’s tuition, books, rent and dental surgery are either extraordinary expenses pursuant to section 7 of the Child Support Guidelines or amounts to which the applicant should contribute pursuant to section 3(2)(b) of the Guidelines. The applicant’s contribution should be calculated on the basis of his income as a percentage of the total income of the parties. I am not convinced that all of Alanna’s automobile and travel expenses were incurred in relation to her post-secondary school education. However, I am satisfied that some automobile and transportation expense ought to be considered for the periods when Alanna was residing with the respondent and commuting to University. I arbitrarily fix that amount at $7500.
Calculation of Amount Owing
[35] Based on the applicant’s income I calculate that he should have paid base Guideline support as follows:
2005(December) $354
2006 (4 months at $610) $2440
2006 (8 months at $685) $5480
2007 (8 months at $172) $1376
2010 (8 months at $172) $1376
2011 (12 months at $172) $2064
2012 (4 months at $165) $660
Total $13,750.
[36] For ease of calculation, I propose to use the total incomes earned by the parties over the period in question and apply their respective contributions to the total of Alanna’s expenses.
[37] The applicant’s total income including imputed income for the years 2006 two 2012 was $196,303. The respondent’s total income over the same period was $697,673. There was no evidence as to the respondent’s income in 2006 or 2012 so I used the figure of $90,000 annually as proposed by the applicant. The applicant is therefore responsible to contribute 22 percent of the amount of Alanna’s post-secondary school education expenses.
[38] Alanna’s post-secondary school education expenses which I have determined are:
Tuition $27,059
Books $3212
Automobile and the Travel $7500
Rent $11,900
Dental $1778
Total $51,449
Of this amount Alanna will be required to contribute 10 percent leaving a net amount of $46,304. The applicant’s contribution to these expenses therefore amounts to $10,187.
[39] I therefore find that the applicant owes to the respondent for child support the sum of $23,937. From this amount I deduct the sum of $5209 which was seized from the applicant’s tax refunds. Accordingly, the amount of child support arrears owing by the applicant to the respondent is $18,728.
Conclusion
[40] For the foregoing reasons, there will be an order that child support payable by the applicant to the respondent for Alanna Lee Ferguson born November 27, 1987 be terminated effective April 30, 2012. It is further ordered that the arrears of child support owing by the applicant to the respondent are fixed at $18,728.
[41] If counsel are unable to agree on the appropriate disposition as to costs they may make written submissions. The written submissions on behalf of a party seeking costs are to be delivered to my office within 14 days of the release of these Reasons, not to exceed three pages in length exclusive of a Bill of Costs and Costs Outline. Responding submissions are to be delivered to my office within 28 days of the release of this these Reasons, not to exceed three pages in length. Counsel are directed to file electronic copies of their cost submissions at Kitchener.Superior.Court@ontario.ca to my attention.
G. E. Taylor, J.
Released: July 2, 2015
COURT FILE NO.: FS 11-13
DATE: 2015-07-02
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Steven David Ferguson
Applicant
– and –
Diana Lorraine Ferguson
Respondent
REASONS FOR JUDGMENT
G. E. Taylor
Released: July 2, 2015