COURT FILE NO.: FS-12-3476-00
DATE: 2015-07-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Christopher Smart
In-person
Applicant
- and -
Deborah Smart
In-person
Respondent
HEARD: February 10-12, 17, 2015
REASONS FOR JUDGMENT
Barnes, J.
OVERVIEW
[1] Mr. Christopher Smart and Ms. Deborah Smart were divorced in April 1999. At this trial, Mr. Smart seeks an order changing the child support order of Herold J. dated December 21, 1999. The order of Herold J. required Mr. Smart to pay child support to Ms. Smart in the amount of $484 per month for two children.
[2] Mr. Smart’s payment history was initially poor but payments became consistent until August 2012, when they stopped. Child support arrears are being collected by the Family Responsibility Office (“FRO”) at a rate of $800 per month.
[3] On July 25, 2014, Price J. dismissed a motion by Mr. Smart seeking to suspend the collection of child support arrears.
[4] Ms. Smart seeks ongoing child support for S.A.S., and Mr. Smart’s proportionate contribution to s. 7 expenses for K.E.S. and S.A.S..
[5] Mr. Smart and Ms. Smart are self-represented.
BACKGROUND FACTS
[6] Mr. Smart and Ms. Smart were once married. They first separated in 1992, reconciled, and finally separated in 1993. They were divorced in 1999. They have two children who are now adults. K.E.S. is 27 years old, and S.A.S. is 21.
[7] K.E.S. lives with her husband Greg in Deep River, Ontario. S.A.S. is a student . S.A.S. lives with Ms. Smart.
[8] On March 12, 1999, Mr. Smart was ordered to pay child support for both children in the amount of $150 per month commencing April 1, 1999.
[9] On December 21, 1999, Herold J. varied the child support order to $484 per month for two children, based on Mr. Smart’s income at the time of $33,380.
[10] Mr. Smart stopped having contact with his children in 1999. Ms. Smart ensured that the children continued to have contact with Mr. Smart’s family, particularly his mother, Edith Smart.
[11] K.E.S. spent an extra year in high school because just after her fourth year and after her high school prom, K.E.S. required surgery to remove a huge ovarian cyst. It took K.E.S. four months to recover.
[12] K.E.S. attended the University of Toronto from 2006 to 2009. K.E.S. lived in campus in the first semester of her first year. In the second semester K.E.S. lived in an apartment off campus.
[13] In 2007, Ms. Smart and her new husband were in a car accident and sustained some injuries. In the summer of 2007, K.E.S. moved back into Ms. Smart’s residence to help the couple.
[14] K.E.S. began her second year in 2007, and finished the year in 2008. She began her third year in the fall of 2008.
[15] At the same time, S.A.S. began high school. S.A.S. was the victim of a serious sexual assault just after she began high school. This event was difficult not only for S.A.S. but also for K.E.S.. Criminal charges were laid and a trial held in 2010.
[16] K.E.S. finished her third year in 2009. That same year K.E.S.’s left arm was seriously injured in a bad car accident. K.E.S. had always worked to support herself and was unable to work because of her injuries. K.E.S. relied on her savings to support herself. When K.E.S. recovered she could not return to school to finish her fourth year because she had no money.
[17] K.E.S. applied to college. She was accepted into three college programs but she could not afford to attend. K.E.S. began working full time in Brampton. In March 2010, K.E.S. moved to Brantford there she lived in her own apartment and lived of her savings until she began working at a call centre in 2010.
[18] After K.E.S.started working at the call centre she met her now husband Greg and they began a relationship in 2011. At the end of March 2011, K.E.S. found out that she had a molar pregnancy. This is pregnancy where due to a mutation the foetus develops into a cancerous tumour instead of a baby. This was a life-threatening event for K.E.S.. She was hospitalised.
[19] After her release from the hospital K.E.S. moved in with Greg. In August 2011, they purchased a house in Deep River, Ontario.
[20] Greg is a member of the Canadian military and on May 2012, K.E.S. began to receive military medical benefits. As of February 2013, K.E.S. began full-time employment in a new job, which she still held at the time of trial.
[21] S.A.S. attended high school for five years. After her 18th birthday she developed a blood clot in her legs. This is a serious and chronic condition. S.A.S. was hospitalized for one week.
[22] In S.A.S.’s first year of high school, grade 9, she was the victim of a serious sex assault. She attended the same high school with the accused’s friends, who taunted her, this was very stressful for S.A.S..
[23] S.A.S. completed high school in 2012. From 2012 to 2013, S.A.S. took courses to become an American Sign Language Interpreter but did not pass a crucial exam and, therefore, decided to become a nurse.
[24] S.A.S. enrolled in and completed a pre-health science program in September 2013. In 2014, S.A.S. began a practical nursing program at George Brown College, Toronto, Ontario.
[25] In 2012, S.A.S. was diagnosed with a chronic medical condition that caused her to throw up frequently and violently. It is called cyclical vomiting syndrome.
[26] S.A.S. has also been diagnosed with Attention Deficit Disorder. She suffers from an anxiety disorder. S.A.S. has tried to obtain employment but bouts of anxiety attacks and her various medical conditions have made it difficult for her to work.
[27] Despite these challenges S.A.S. is continuing her studies at George Brown College. It will take three additional years for S.A.S. to complete her practical nursing program. The expected completion date is in 2017.
[28] On August 30, 2009, Mr. Smart was in a serious motor vehicle accident. He sustained injuries that affected his ability to work. Mr. Smart is currently receiving Income Replacement Benefits (“IRB”) from his accident insurer AVIVA.
[29] Since September 6, 2009, Mr. Smart has received IRB from AVIVA and Long Term Disability Benefits (“LTDB”) from RBC Life. The LTDB was terminated on May 26, 2012. The IRB of $1,600 (non-taxable) per month is ongoing.
[30] When RBC Life stopped paying him LTDB, Mr. Smart retained Mr. Waxman to address the issue of future LTDB. As a result, Mr. Smart obtained a settlement of $207,500 of which he actually received $140,634.30.
[31] On August 10, 2012, Mr. Smart brought this motion to change the child support order of Herold J. dated December 21, 1999, on the basis of a change in his income.
[32] On March 21, 2014, Price J. made a number of orders pertinent to this trial. This included an order that Mr. Smart obtain a written report from his LTDB counsel, Mr. Waxman, on how amounts paid to Mr. Smart as LTDB and IRB were calculated and when these amounts were paid. This was to assist the court in determining Mr. Smart's income post accident. This order was complied with. Mr. Waxman prepared a report (‘Waxman Report”). This is filed as exhibit 11.
[33] Justice Price also ordered that Mr. Waxman was to make no further distribution of the proceeds of the motor vehicle accident, pending further order of this court, on notice to Ms. Smart.
[34] Justice Price ordered Mr. Smart’s financial institutions not to make any distributions of funds from any of his bank accounts other than payments to FRO and a monthly payment of $3,500, to Mr. Smart to cover monthly household expenses and monthly debt servicing. These payments were to begin on April 1, 2014.
[35] Justice Price ordered K.E.S. and S.A.S. to disclose their records of post secondary school enrolment, attendance and marks from the schools they have attended from 2006 to present, and their education expenses on a yearly basis for the same time period.
Issues
[36] The issues in this trial are:
a. Should the child support order of Herold J. dated December 21, 1999, be varied?
b. Are K.E.S. and S.A.S. still “children of the marriage” as defined by s. 2 of the Divorce Act?
c. Should Mr. Smart continue to pay child support and contribute to s. 7 expenses for his adult children?
[37] I have concluded that the child support order of Herold J. shall be varied; K.E.S. is no longer a “child of the marriage” as defined by the Divorce Act; S.A.S. “remains a child of the marriage” and Mr. Smart shall continue to pay ongoing child support for S.A.S. until December 31, 2018, or when she completes her studies in practical nursing whichever is sooner.
[38] Mr. Smart shall pay retroactive s. 7 expenses for K.E.S. with adjustments for contributions from K.E.S. and Ms. Smart. Subject to the conditions I have described below, Mr. Smart shall pay ongoing and retroactive s. 7 expenses for S.A.S..
Should the Order of Herold J. be varied?
[39] I conclude that Mr. Smart’s income has changed and this constitutes a material change in circumstances for the purpose of the Divorce Act.
[40] On December 21, 1999, Herold J. ordered Mr. Smart to pay child support to Ms. Smart in the amount of $484 per month, for two children, based on his income at that time of $33,380.
[41] The parties are unrepresented. In an endorsement dated July 25, 2014, Price J. addressed a number of issues raised by the parties. In that endorsement, Price J. provided the unrepresented parties with a hypothetical calculation of Mr. Smart’s potential child support and s. 7 liabilities. This was to assist the parties and provide them with a road map of some of the required disclosure they may require in preparation for trial.
[42] Justice Price’s hypothetical scenario was based on the record before him. That record showed that Mr. Smart was receiving monthly IRB and LTDB simultaneously. Based on this assumption, Price J. grossed up both of these non-taxable benefits by 25 per cent and calculated Mr. Smart’s total income to be $71,782.85. Based on this figure, Price J. concluded, on a hypothetical basis, that the table child support amount for two children should be $1,061 per month.
[43] Justice Price also conducted a hypothetical calculation of the impacts of child support payable on child support arrears and s. 7 expenses payable. Justice Price applied the six per cent interest rate set by Herold J. in his child support order of December 1999. In the result, Price J. concluded that Mr. Smart would hypothetically have to pay Ms. Smart $66,164.32 as of July 2014.
[44] In recognition of the fact that the evidentiary record before him was insufficient, Price J. ordered Mr. Smart to obtain a report from his lawyer on the LTDB action, explaining the calculations and disbursement of IRB, LTDB and the Long Term Disability Settlement (“LTDS”) to Mr. Smart. The lawyer is Mr. A. Waxman.
[45] I have had the benefit of reviewing the report of Mr. Waxman and, therefore, my calculations have yielded different figures from Justice Prices’ hypothetical calculations.
POSITION OF THE PARTIES
[46] Mr. Smart states that the order of Herold J. should be varied because his income has been reduced significantly due to the August 2009, accident.
[47] Ms. Smart opposes this request. She submits that Mr. Smart was already underpaying child support because he has always failed to provide full disclosure of his financial circumstances; his financial statements indicate that his expenses exceed his reported income. Ms. Smart submits that Mr. Smart is hiding income.
LAW
[48] Section 17(4) of the Divorce Act provides:
17(4) – Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse had occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that into consideration.
[49] The change referred to in s. 17(4) of the Divorce Act must be a material change. A material change means a change, which if known by the court at the time the order was made would have led to a different result: Willick v. Willick, 1994 CanLII 28 (SCC), [1994] S.C.J. No. 94.
[50] A change in income of the person paying child support is a material change in circumstances. Mr. Smart’s income has changed since Herold J. made the child support order. This constitutes a material change in circumstances.
ANALYSIS
Mr. Smart’s Income
[51] Pursuant to the order of Price J. dated July 23, 2014, Mr. Waxman provided a breakdown of income paid to Mr. Smart since his August 2009, accident. Mr. Waxman prepared a report setting out the benefits received, amounts paid and quantum of the lawsuit settlement. This report is filed as exhibit 11. Some of the salient aspects of this report are discussed in the paragraphs that follow.
[52] Mr. Smart was in a motor vehicle accident on August 30, 2009. He was liable for that accident. He sustained injuries from that accident.
[53] Pursuant to the Insurance Act and the Statutory Accidents Benefits Act (“SABS”) Mr. Smart claimed benefits from his insurer AVIVA Canada Inc. Under SABS Mr. Smart is entitled to receive IRB for up to 80 per cent of his net income to a maximum of $400 per week.
[54] In the Province of Ontario, benefits from all collateral insurers must be exhausted or the benefits denied before benefits can be received from the accident insurer. Examples of benefits from collateral insurers are group health, medical and long term disability benefits. Therefore, Mr. Smart is required to exhaust all his LTDB before he could receive IRB from his accident insurer AVIVA.
[55] Mr. Smart received IRB from AVIVA and LTDB from RBC Life, however, when these payments overlapped the IRB from AVIVA were terminated until RBC Life stopped paying Mr. Smart’s LTDB. An exception to this is a 16-week period in 2010. During that time, AVIVA continued to pay Mr. Smart IRB even though RBC Life had began paying Mr. Smart LTDB.
[56] When RBC Life terminated Mr. Smart’s LTDB payments, Mr. Smart retained Mr. Waxman to sue RBC Life for further LTDB. This action was settled for $207,500, and after disbursements Mr. Smart received $140,634.30.
[57] Mr. Waxman summarised the payments made to Mr. Smart to date. An excerpt of the Waxman report, exhibit 11, is reproduced as follows:
(1) Accident occurred on August 30, 2009;
(2) IRB are not payable for the first seven days following the accident;
(3) IRB should have commenced effective September 6, 2009, and been paid at the weekly rate of $400 per week until December 26, 2009. According to AVIVA payment summary, the total IRB paid for 2009 was $6,400;
(4) From the AVIVA payment summary, AVIVA confirmed that the IRB continued to be paid for 16 weeks during 2010 for a total of $6,400;
(5) RBC Life commenced paying LTDB on March 16, 2010, by issuing a cheque for the period commencing December 27, 2009, (the end of the elimination period);
(6) RBC continued to pay Mr. Smart a monthly LTD benefit of $3,052.19 (non-taxable) from December 27, 2009, to May 26, 2012, (when LTD benefits were terminated);
(7) Subsequent to the termination of LTD benefits, AVIVA should have started to pay benefits at the weekly rate of $400 (non-taxable);
(8) AVIVA did not pay any income replacement benefits for the year 2011;
(9) AVIVA began to pay IRB’s after LTD benefits were terminated in 2012, and paid no more than $10,000, during 2012;
(10) In 2013, AVIVA continue to pay IRB’s at the weekly rate of $400 per week for 52 weeks;
(11) In 2014, AVIVA has continued to pay IRB’s at the weekly rate of $400. Currently, AVIVA continues to pay IRB’s at the weekly rate of $400 (non-taxable);
(12) The LTDB Settlement of $207,500 (of which Mr. Smart netted $140,634.30) did not offset/affect the weekly IRB payments due to the case law. (However, there is a possibility that AVIVA could still try to offset the settlement as against the IRB’s at a later time. In the event that AVIVA tried to offset the LTDB payment as against the IRB’s, I would assume that AVIVA would try to do this by not later than October 31, 2014);
[Other matters to consider regarding IRB]
(13) Although Mr. Smart continues to receive IRB’s at the rate of $400 per week, AVIVA has the right to continue to adjudicate his claim. Accordingly, there is no guarantee that Mr. Smart will continue to receive IRB’s in the future. The IRB’s payments are not indexed for inflation; and
[CPP Disability]
(14) Although we were originally retained by Mr. Smart to pursue Canada Pension Plan Disability Benefits (“CPP Disability Benefits”), Mr. Smart subsequently proceed with the matter on his own. During the time that we were retained, we did not obtain CPP Disability Benefits for Mr. Smart. It is my understanding that the subsequent application for CPP Disability Benefits submitted by Mr. Smart was denied; however, I have no knowledge as to whether or not Mr. Smart was successful in obtaining CPP Disability Benefits thereafter.
[58] LTDB and IRB are non-taxable. These amounts will be grossed up by 25 per cent to reflect this. Mr. Smart’s income since the accident is calculated in the paragraphs that follow.
2009
[59] Mr. Smart’s 2009 returns show an income of $36,487. Mr. Waxman reports that Mr. Smart received IRB from AVIVA to a total of $6,400 and when grossed up by 25 per cent is $8,000. This amount is non-taxable and is not reflected in the reported income of $36,487. The total 2009 income is $36,487 + $8,000 = $38,087.
2010
[60] Mr. Smart reported taxable income of $4,106 for the 2010, taxation year. The Waxman report showed that Mr. Smart received LTDB from RBC Life at $3,052.19 per month for 2010. When grossed up by 25 per cent, this amounts to $3,815.24 per month or $45,782.85 per year.
[61] In addition, in the first 16 weeks of 2010, Mr. Smart received a concurrent payment of IRB from AVIVA to a total of $6,400. This amount grossed up by 25 per cent is $8,000.
[62] The total 2010 income for Mr. Smart is $4,106 + $45,782.85 + $8,000 = $57,888.85.
2011
[63] Mr. Smart’s 2011, Notice of Assessment does not show taxable income for 2011. The Waxman report indicates that Mr. Smart received LTDB from RBC Life of $3,052.19 per month. When this amount is grossed up by 25 per cent to reflect tax it is $3,815.24 per month or $45,782.85 per year. No IRB were received from AVIVA during that period.
2012
[64] Mr. Smart’s 2012 Notice of Assessment does not show taxable income for that year. The Waxman report shows that Mr. Smart was paid LTDB until May 26, 2012. At exhibit 11, tab 8, is a letter dated March 26, 2014. In this letter counsel for RBC Life, David S. Cherepacha, confirmed that Mr. Smart was paid a total of $12,208.76, of LTDB in 2012. When this amount is grossed up by 25 per cent the amount is $15,260.95. When the LTDB was terminated AVIVA began paying Mr. Smart IRB. The total IRB paid to Mr. Smart for 2012 was $10,000. When grossed up by 25 per cent the total benefit is $12,500.
[65] Mr. Smart’s total income for 2012, is $15,260.95 + $12,500 = $27,760.95.
2013 and 2014
[66] For the years 2013 to 2014, Mr. Smart received IRB from AVIVA at $1,600 per month or $20,800 per year. When this amount is grossed by 25 per cent Mr. Smart’s income for each of 2013 and 2014, is $26,000 per annum.
2015
[67] Mr. Smart continues to receive IRB from AVIVA at $1,600 per month his grossed up annual income for 2015, is projected to be $26,000.
Long Term Disability Settlement
[68] Mr. Smart has received a LTDBS from RBC Life of $207,500. After fees and other payments Mr. Smart is left with $140,634.30. See exhibit 11.
[69] Mr. Smart is not entitled to any further LTDB payments. Mr. Waxman notes that AVIVA may seek to offset Mr. Smart’s IRB against his LTDBS. According to the Waxman report, AVIVA had until October 2014 to do this. At the time of trial there was no indication that AVIVA had chosen to take such action.
[70] In addition, there is no guarantee of how long AVIVA will continue to make future IRB payments and the IRB payments are not indexed for inflation.
Are K.E.S. and S.A.S. still children of the marriage?
[71] I have concluded that K.E.S. ceased to be a child of the marriage as defined by the Divorce Act on January 1, 2011. S.A.S. continues to be a “child of the marriage” as defined by the Divorce Act.
[72] Mr. Smart’s child support payments for S.A.S. shall continue until December 2017, or when she completes her studies in nursing whichever is earlier.
POSITION OF THE PARTIES
[73] Mr. Smart submits that K.E.S. ceased to be “a child of the marriage” when she began living with her husband, Greg, in 2011. Therefore, his child support obligations should have ceased then, and he should receive retroactive credit accordingly.
[74] Mr. Smart also submits that his daughter S.A.S. has not been in school, is an adult, and thus is no longer “a child of the marriage”; therefore his child support obligations for S.A.S. should end.
[75] Ms. Smart submits that K.E.S. ceased to be a child of the marriage in February 2013. Ms. Smart explains that S.A.S. continues to be a child of the marriage because she is still attending school and she has a disability. She submits that Mr. Smart should continue to pay child support and s. 7 expenses for S.A.S. that is commensurate with his income and from proceeds of the LTDBS.
LAW
Child of the marriage
[76] Section 15(1)(1) of the Divorce Act, authorizes a court of competent jurisdiction to make an order requiring a spouse to pay for the support of a “child of the marriage”.
[77] Section 2(1) of the Divorce Act, defines a child of the marriage as:
a child of two spouses or former spouses, who, at the material time,
(a) is under the age of majority and who has not withdrawn from their charge, or
(b) is the age of majority or over and under their charge but unable by reason of illness, disability or other cause to withdraw from their charge or to obtain the necessaries of life.
ANALYSIS
K.E.S.
[78] K.E.S. is currently 27 years old. She is married. It is clear that between 2006 and 2009, she was a student at the University of Toronto. K.E.S. completed three years of undergraduate study despite the impacts of the sexual assault on S.A.S. and her own injuries suffered from a car accident in 2009.
[79] K.E.S. had no contact with her father, Mr. Smart, during this time. K.E.S. and S.A.S. were in contact with Mr. Smart’s mother and members of his family. Mr. Smart’s testimony that members of his family would not give him information about his children rings hollow. His effort to speak to K.E.S. at his mother’s funeral was too little too late.
[80] After his mother, Edith Smart, died Mr. Smart reached out to his daughters K.E.S. and S.A.S.. The timing of this effort led K.E.S. and S.A.S. to believe that he had done this only because of what they were to receive from Mrs. Edith Smart as inheritance.
[81] I am satisfied that Mr. Smart could have made contact with K.E.S. and S.A.S. earlier than this if he had truly wanted to. The daughters were estranged from Mr. Smart through no fault of their own. I listened carefully to the testimony of Ms. Smart, Mr. Smart, S.A.S. and K.E.S.. It is clear that this circumstance has caused all the parties a lot of pain. It is also clear to me that despite the events of the past and the outcome of this trial, should all parties be willing, a sincere and voluntary reconciliation of the relationship between a father and his daughters will be most beneficial to all involved.
[82] K.E.S. remained a child of marriage from 2006, age 19, to 2009, age 22. She was a full time student. She was a first year University of Toronto student from 2006 to 2007. Although she stayed in residence and lived in an apartment in the second semester of her first year, K.E.S.’s permanent address was always Ms. Smart’s address.
[83] In the summer of 2007, K.E.S. moved back home to live with Ms. Smart to help Ms. Smart and her new husband while they recovered from motor vehicle injuries. Ms. Smart’s residence remained K.E.S.’s permanent residence until 2009. During this time K.E.S. was a full time student at the University of Toronto.
[84] K.E.S. relocated to Brantford in 2010, where she got her own apartment. By March 2011, she had already met Greg and was living with him. A good argument can be made that K.E.S. ceased to be a child of the marriage as early as 2010. Mr. Smart seeks to have this declaration commence in 2011. I conclude that K.E.S. ceased to be a “child of the marriage” on January 1, 2011.
S.A.S.
[85] S.A.S., like her sister K.E.S., is a symbol of perseverance and resilience. S.A.S. has been diagnosed with Attention Deficit Disorder and a learning disability. She was the victim of a serious sexual assault. S.A.S. suffers from anxiety attacks. She has a serious and chronic vein disease, which requires her to wear compression stockings. S.A.S. has been diagnosed with cyclical vomiting syndrome.
[86] As a result of all these physiological and psychological conditions, S.A.S. has been unable to work. S.A.S. was able to complete high school. She made a valiant attempt to become an American Sign Language interpreter and is currently enrolled in a four-year practical nursing program scheduled to be completed in 2017.
[87] S.A.S. has always lived with her mother, Ms. Smart, who has borne the brunt of the expenses associated with her up keep and education. Despite her age of 21, S.A.S. remains a child under the charge of her parents due to her chronic illnesses and her disabilities. I determine that she is a “child of the marriage” under s. 2 of the Divorce Act.
Should Mr. Smart pay child support and contribute to s. 7 expenses for the adult children?
[88] I have concluded that Mr. Smart’s child support payments should be varied retroactively to reflect the change in his income and the fact that K.E.S. ceased to be entitled to child support as of January 1, 2011. Mr. Smart is entitled to a credit on the basis of the change in his income.
[89] Mr. Smart shall make retroactive contributions to s. 7 expenses for K.E.S. from 2006 to January 1, 2011. Any child support credit due to Mr. Smart is cancelled out by s. 7 arrears due for K.E.S..
[90] Therefore, the arrears currently being collected by FRO shall continue. This does not preclude Mr. Smart from making another arrangement with FRO to satisfy the outstanding child support arrears. He shall continue to make child support and s. 7 expense contributions for S.A.S..
POSITION OF THE PARTIES
[91] Mr. Smart submits that K.E.S. ceased to be “a child of the marriage” in 2011. Therefore, he did not have to pay any child support or contribute to s. 7 expenses for K.E.S. as of 2011. Mr. Smart also submits that his daughter S.A.S. is an adult. She is no longer in school, and therefore his child support obligations for her should end. Mr. Smart argued that he should receive retroactive credit accordingly.
[92] Ms. Smart submits that K.E.S. ceased to be a child of the marriage in February 2013, and Mr. Smart should pay child support and contribute to s. 7 expenses for her up to that date. S.A.S. is in school and has a disability, therefore, Mr. Smart’s child support payments and contributions to s. 7 expenses should continue.
LAW
Child support
[93] The Court may order child support: Section 15.1(1) of the Divorce Act provides:
A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to pay for the support of any or all children of the marriage.
[94] Child support should be ordered in accordance with the C… S… G… (“the Guidelines”), plus the appropriate s. 7 expenses apportioned to the parties respective of their relative incomes. See s. 3(2)(a) of the Guidelines.
[95] In circumstances where this approach is not appropriate, the Court may make the appropriate order taking into account certain factors described in s. 3(2)(b) of the Guidelines
[96] Section 3(2) of the C… S… G… provide as follows:
3(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.
Section 7 Expenses
[97] The calculation of extraordinary expenses is described in s. 7 of the Guidelines: s. 7(1) of the C… S… G… provides:
- (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:
(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses …
(e) expenses for post-secondary education …
[98] The effect of ss. 3(1)(a) and 7(1) of the C… S… G… is that these expenses will be apportioned between the parents in accordance with their means, minus contributions from their children. See Bertram v. Murdock, 2006 ONCJ 69.
[99] The approach under s. 3(2)(b) is more discretionary. The s. 3(1)(a) approach is the presumptive approach and the s. 3(2)(b) approach is the exception. See Lewi v. Lewi, 2006 CanLII 15446 (ON CA), [2006] O.J. No. 1847 (C.A.). The Court of Appeal in Lewi observed that the s. 3(2)(b) approach should be utilised as an exception to the presumptive approach where it will not be appropriate, in all the circumstances, to rely on s. 3(2)(a).
The presumptive approach or the discretionary approach?
[100] In this case, I have concluded that it is not appropriate in all the circumstances to rely on s. 3(2)(a) of the Guidelines to calculate Mr. Smart’s child support and s. 7 obligations.
[101] Ms. Smart’s projected income for 2015 is approximately $23,000. She is now receiving disability benefits because of a medical condition. Ms. Smart has been the parent who has had charge of the children and who has contributed to their s. 7 expenses. In the case of S.A.S., Ms. Smart has borne these expenses all on her own. K.E.S. has worked throughout her education and made contributions to the expenses.
[102] Mr. Smart’s current annual income is $26,000 from IRB. His income is slightly higher than Ms. Smart’s, however, both parent’s incomes are low and their ability to make meaningful contributions to s. 7 expenses is minimal.
[103] Mr. Smart’s IRB is not indexed for inflation. No date has been set for the expiration of his IRB but they are not indefinite benefits. Mr. Smart is not entitled to any additional LTDB. Unlike Ms. Smart, he has access to a lump sum LTDBS. This source of income is finite and will run out at some point, however, at the current time, this represents additional income. In practical terms he has access to more income than Ms. Smart.
[104] Based on his means, the table amount of child support will be minimal and his ability to make proportionate contributions to s. 7 expenses is virtually non-existent, absent some contributions from his LTDBS.
[105] In the case of Ms. Smart, her ability to make any meaningful s. 7 expense contribution is virtually non-existent. Ms. Smart and Mr. Smart have both suffered significant drops in their incomes over the years due to disability.
[106] S.A.S. has a disability that prevents her from working and she is receiving a monthly disability benefit. S.A.S. resides with Ms. Smart and, based on his income, the amount of monthly child support from Mr. Smart will be minimal.
[107] Ms. Smart’s income is also low, therefore, S.A.S.’s disability benefit will be consumed by day-to-day living costs. This will render her ability to make day-to-day contributions to her s. 7 expenses virtually non-existent.
[108] For all the forgoing reasons, I conclude that the presumptive approach, as described in s. 3(2)(a) of the Guidelines, is inappropriate in all these circumstances. The discretionary approach described in s. 3(2)(b) of the Guidelines is more appropriate. I will now consider the issue of child support.
Child Support
[109] Mr. Smart sustained injuries from the motor accident on August 30, 2009. Mr. Smart’s income changed due to this accident. Based on his income, the child support payable by Mr. Smart for the period from September 2009 to 2015, is described in the paragraphs that follow.
2009
[110] Mr. Smart’s 2009 Income was $38,087. Guideline Child Support amount for two children is $546 per month. Total child support for September to December 2009 is $546 x 4 = $2,184.
2010
[111] His 2010 Income was $57,888.85. Guideline child support amount for two children is $859 per month. Annual amount is $859 x 12 =$10,308.
2011
[112] Mr. Smart’s 2011 Income was $45,782.85. Guideline child support amount for one child is $413. K.E.S. ceased to be a “child of the marriage” as off January 1, 2011. Therefore, Mr. Smart was obligated to pay child support for only S.A.S. in 2011. The annual support payable for one child in 2011 was $413 x 12 = $4,956.
2012
[113] Mr. Smart’s 2012 Income was $27,760.95. Guideline child support amount for one child is $225 per month. The annual child support payable is $2,700.
2013 to 2015
[114] Mr. Smart’s income for 2013 and 2014 was $26,000. Guideline child support amount is $210 per month. Annual total for 2013 is $210 x 12 = $2,520. Annual total for 2014 is also $2,520.
[115] His projected income for 2015 is $26,000. Guideline child support is $210 per month. Monthly child support to be paid on an ongoing basis commencing August 1, 2015 is $210. Retroactive child support from January 1, 2015 to July 1, 2015 is $210 x 5 = $1,250.
[116] Based on Order of Herold J. dated December 21, 1999, Mr. Smart was to pay $484 for two children based on an income of $33,380. The period from September 2009 to July 2015 is 71 months. The total child support payable over this period is $484 x 71 = $34,364.
[117] As a result of the variation in the order of Herold J. the total support payable by Mr. Smart from September 2009 to July 2015, is $2,184 + $10,308 + $4,950 + $2,700 + $2,520 + $1,250 = $23,918.
[118] On the assumption that Mr. Smart is up to date in his child support payments, this represents an over payment in child support in the amount of $10,446. Mr. Smart is not up to date and the Family Responsibility Office is currently collecting child support arrears from Mr. Smart. I address the issue of child support arrears in the paragraphs that follow.
Section 7 expenses
[119] Ms. Smart seeks retroactive contribution to s. 7 expenses for K.E.S. and retroactive and prospective contributions to s. 7 expenses for S.A.S.. I have concluded that Mr. Smart shall make some contributions to the s. 7 expenses for K.E.S. and S.A.S..
POSITION OF THE PARTIES
[120] Mr. Smart submits that K.E.S. and S.A.S. are adults. They are to receive $60,000, each in inheritance money from the estate of Mr. Smart’s mother Edith Smart. K.E.S. has received her inheritance. S.A.S.’s is still pending. Mr. Smart argues that his children are both old enough to finance their own education through work and loans.
[121] Ms. Smart explains that both K.E.S. and S.A.S. are adults who have suffered from illness and disability while in school. She says that K.E.S. and S.A.S. have remained in her charge while pursuing full time post-secondary education. Therefore, they have remained “children of the marriage” as defined by the Divorce Act. Under all these circumstances Mr. Smart should pay his proportionate share of s. 7 expenses.
[122] Section 7 expenses claimed by Ms. Smart are a combination of medical and post-secondary expenses for K.E.S. and S.A.S..
ANALYSIS
Retroactive Section 7 Expenses
[123] Ms. Smart seeks contributions to s. 7 expenses on a retroactive basis. She has kept in touch with Mr. Smart’s family over several years. She could have found out his whereabouts if she had wanted to. It was open to her to have commenced this motion for s. 7 expenses earlier.
[124] I do not accept Mr. Smart’s testimony that he did not know where to find Ms. Smart and the children. They were in frequent touch with his mother and other members of his family. Despite this, he did not contribute to Ms. Smart’s delay in bringing this motion for s. 7 expenses.
[125] Given Mr. Smart’s current income I am satisfied that retroactive s. 7 expense will cause him some financial difficulty based on his income alone, however, any award made can be paid from his LTDBS.
[126] Ms. Smart did not commence the motion for s. 7 expenses until Mr. Smart brought his motion seeking a reduction in child support. Mr. Smart’s motion to vary triggered Ms. Smart’s s. 7 claims.
[127] Mr. Smart suffered his accident and the resultant injuries on August 30, 2009. He did not bring the motion to vary the order of Herold J. until August 2012. I have concluded that Mr. Smart did not bring this motion in a timely manner. Ms. Smart did not contribute to that delay. In addition, any child support credit Mr. Smart will receive will cause Ms. Smart some hardship given her current income level.
[128] Without an ability to seek a retroactive award for s. 7 expenses it will be difficult for Ms. Smart to absorb any credit Mr. Smart receives for child support payments. Under all these circumstances Ms. Smart is permitted to seek an award for retroactive s. 7 expenses.
Section 7 expenses – K.E.S.
[129] I have concluded that K.E.S. was in full time post-secondary study from 2006 to 2009.
[130] K.E.S. testified that the annual cost of her tuition was $6,000 to $8,000 per year. The total amount of receipts provided for medical and post-secondary expenses for the period from 2006 to 2009 is $36,512.20.
[131] In 2006, K.E.S. received $1,300 in grants. This amount will be deducted from the $36,512.21, leaving $35,212.21 in eligible s. 7 expenses. This figure includes a total of $6,169, in student loans for her post-secondary education.
[132] During her studies, K.E.S. was employed. In 2009, K.E.S.’s income was $11,633.02. In 2010, it was $1,867.95. K.E.S. has also received an inheritance from her grandmother Edith Smart in the amount of $60,000. She testified that she used some of this amount as a down payment for her house and to pay some of her post-secondary education costs.
[133] While there is an expectation that an adult child, with resources, will contribute to her post-secondary education costs, there is no expectation that she will fund these costs solely from loans or exhaust all other sources, such as an inheritance, before her parents contribute to her education: See Lewi v. Lewi.
[134] The means of the parents are an important consideration. Mr. Smart’s current annual income $26,000 and Ms. Smart income is projected to be about $23,000. Given the lower income of both parents, an apportionment of proportionate contribution to these expenses on the basis of income alone is inappropriate. Mr. Smart’s ability to pay any amount is entirely dependent on his access to his lump sum LTDBS.
[135] In this case, I will apportion contributions to K.E.S.’s s. 7 expenses at 29.67 per cent each for Mr. Smart and Ms. Smart in the amount of $10,446, each. Leaving the balance of $14,320.21, as K.E.S.’s contribution.
[136] I have varied the child support order of Herold J. On that basis, I have concluded that Mr. Smart has made a child support over payment of $10,446 from September 1, 2009, to July 2015. Mr. Smart’s credit of $10,446 is applied against his outstanding balance of $10,446 towards K.E.S.’s s. 7 expenses leaving him with a balance of zero dollars. There shall be no order for any further contributions to s. 7 expenses incurred by K.E.S..
Section 7 expenses – S.A.S.
[137] S.A.S. has always resided with her mother and has always been enrolled in post-secondary education since 2012. S.A.S. has been unable to work due to her disability and chronic illnesses. S.A.S. has relied solely on her mother, Ms. Smart, for support.
[138] It is unclear when S.A.S. will receive the inheritance of $60,000, from the estate of Edith Smart.
[139] S.A.S. is in a practical nursing program. She has three years left in her program and is projected to complete the program by December 2017. The three years includes a one-year bridging program and two year registered nursing program.
[140] Absent contributions from her disability grants, S.A.S. is unable to make any financial contribution from employment income at this time. The incomes of Mr. Smart and Ms. Smart have plummeted in the last several years due to illness and disability.
[141] Mr. Smart is not receiving IRB in addition to LTDB as was Ms. Smart expectation when the parties appeared before Price J. in March 2014.
[142] Section 7 expenses claimed for S.A.S. cover the period from 2011 to 2014. These expenses are medical and post-secondary expenses. The total amount for which receipts have been provided is $23,604.37.
[143] S.A.S. has received $5,706, in disability payments during that period. The eligible s. 7 expense for 2011 to 2014 is $23,604.37 - $5,706 = $17,898.37.
[144] Mr. Smart’s current income is $26,000. Ms. Smart’s income is $23,000. Mr. Smart’s proportionate share of these expenses is $26,000 + $23,000 = $49,000. $26,000 ÷ $49,000 x 100 = 53.1 per cent. Therefore, his share of $17,898.37 is $9497.10.
[145] At an annual income of $26,000, Mr. Smart will find it very difficult to make any meaningful contributions to the past, current and future s. 7 expenses for S.A.S. absent payment from the proceeds of the LTDBS funds.
[146] Ms. Smart has developed medical issues of her own. Her projected disability income is $23,000. Ms. Smart is in the same position as Mr. Smart; her ability to contribute to S.A.S.’s s. 7 expenses is also limited.
[147] Prior to her disability Ms. Smart’s income was above $23,000, and she was the sole contributor to S.A.S.’s s. 7 expenses.
[148] S.A.S. is chronically ill. She has a disability and is currently unable to work, however, going forward she will have to find alternatives to funding her education as it is unlikely that both parents at current income levels will be in a position to provide adequate assistance.
[149] According to the Last Will and Testament of Edith Smart, S.A.S. is to receive an inheritance, which presumably should have been paid to her by now. Pending any legal impediment unknown to me, the executors of the estate of Edith Smart are encouraged to comply with the terms of Edith Smart’s Will and give S.A.S. her inheritance. She is definitely going to need it.
[150] Mr. Smart’s ability to make meaningful contributions to S.A.S.’s further s. 7 expenses will be non – existent once his LTDBS runs out.
[151] The total post-secondary expenses including transportation for 2013, was $7,506.19. Receipts provided for 2014 and 2015 accounted for only a fraction of that figure. I estimate future annual post-secondary and related transportation to be $7,600.
[152] S.A.S. received $1,938, in disability grants in 2013, and $1,384, in 2014. Therefore, future disability grants are estimated to be $1,500. S.A.S.’s inability to work and her parents’ low income suggests that these monthly disability grant payments will be consumed by the requirements of day-to-day living expenses. In practical terms, S.A.S.’s ability to contribute her disability grants towards her education is at best minimal, if not non-existent.
[153] As previously noted, Ms. Smart’s annual income is projected to be $23,000. Mr. Smart income of $26,000. is in addition to the lump LTDBS. Mr. Smart currently has the means to contribute to S.A.S.’s post secondary education expenses. Ms. Smart does not.
[154] For all the foregoing reasons, Mr. Smart shall make contributions to S.A.S.’s post secondary education as follows: for the school year 2014 to 2015 - $7,600; for the school year 2015 to 2016 – $7,700; for the school year 2016 to 2017 – $7,800. These contributions shall be paid from his LTDBS.
CONCLUDING ORDERS
[155] Paragraph 1 of the Order of Herold J. dated December 21, 1999, is varied as follows:
Paragraph 1 is deleted and replaced with the following:
(i) Mr. Smart shall pay child support for the children of the marriage, namely, K.E.S. born […], 1987 and S.A.S. born […], 1993, commencing January 1, 2009, and ending December 31, 2009, in the amount of $546 per month;
(ii) Commencing January 1, 2010, and ending December 31, 2010, in the amount of $859 per month;
(iii) K.E.S. born […], 1987, shall cease to be a child of the marriage as defined in s. 2 of the Divorce Act on January 1, 2011;
(iv) Mr. Smart shall pay child support for S.A.S. born […], 1993, commencing January 1, 2011, and ending December 31, 2011, child support in the amount of $413 per month;
(v) Commencing January 1, 2012, and ending December 31, 2012, Mr. Smart shall pay child support for S.A.S. born […], 1993, in the amount of $225 per month; and
(vi) Commencing January 1, 2013, and ongoing until S.A.S. completes her Practical Nursing studies or until December 31, 2018, which ever event occurs first, Mr. Smart shall pay child support for S.A.S. born […], 1993, in the amount of $210 per month.
[156] Mr. Smart is entitled to child support credit of $10,446, and shall make a contribution of $10,446, to s. 7 expenses of K.E.S. for the period 2006 to 2009. This shall result in net credit and payment of $0.00.
[157] Mr. Smart’s current child support arrears currently with the Family Responsibility Office remains unchanged and the applicable garnishment order against Mr. Smart remains unchanged.
[158] Mr. Smart shall make contributions to S.A.S.’s post secondary education as follows: for the school years; 2014 to 2015 - $7,600; 2015 to 2016 – $7,700; 2016 to 2017 – $7,800. These contributions shall be made until December 31, 2017, or until S.A.S. completes her practical nursing program whichever event occurs earlier.
[159] Mr. Smart’s contributions to S.A.S.’s post-secondary education shall be paid from his Long Term Disability Benefits Settlement Funds. These disbursements shall only be made if S.A.S. satisfies the reporting condition described below to the satisfaction of the Court.
[160] The March 21, 2014, Order of Price J. is varied as follows:
i. The financial institutions with custody of the bank accounts where Mr. Smart’s Long Term Disability Benefits Settlement proceeds are currently held shall pay $9,494 forthwith to S.A.S.;
ii. The financial institutions with custody of the bank accounts where Mr. Smart’s Long Term Disability Benefits Settlement funds are currently held shall retain $25,000 in the bank account to satisfy Mr. Smart’s contributions to S.A.S.’s ongoing s. 7 expenses. The said banks shall only disburse the $25,000 according to an order of this Court;
iii. The issue of Mr. Smart’s ongoing contributions to S.A.S.’s s. 7 expenses is adjourned sine die;
iv. By September 1, 2015, and thereafter by July 1 of each year S.A.S. shall provide to Mr. Smart and the Court a current transcript of her previous year’s school marks, a statement of her academic progress i.e. which year she has completed, her plans for the next academic year and proof that she is registered for the upcoming academic year;
v. Once the Court has reviewed the material and is satisfied that S.A.S. is still involved in post secondary study, the Court shall issue an order for a release of the funds designated for the upcoming academic year. The Court’s review shall take place in the form of a basket motion;
vi. The financial institutions with custody of the bank accounts where Mr. Smart’s Long Term Disability Benefits Settlement funds are currently held shall disburse the reminder of the funds to Mr. Smart for his own use only after paying S.A.S. $9,494, plus interest forthwith and withholding $25,000, in accordance with this order; and
vii. Neither Mr. Smart nor the financial institution where the Long Term Disability Benefits Settlement funds are currently held, shall close the bank account, in which the said funds are situated, without an order of this Court.
[161] All monetary awards shall bear post judgement interest of 6 per cent per annum from their due date.
[162] The parties shall bear their own costs.
Barnes, J.
Released: July 17, 2015
COURT FILE NO.: FS-12-3476-00
DATE: 2015-07-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Christopher Smart
Applicant
- and –
Deborah Smart
Respondent
REASONS FOR JUDGMENT
Barnes, J.
Released: July 17, 2015