ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 434-2014
DATE: 2015/08/18
BETWEEN:
Michael Joseph Collins
Jennifer Wall, for the applicant
Applicant
- and -
Merle Philomena Collins
B. T. Granger, for the respondent
Respondent
HEARD: June 25, 2015
ASTON J.:
[1] Mr. Collins brings a motion to change his support obligations in a divorce judgment dated October 27, 1997. He asks that child support for the oldest child Aidan be terminated and that child support for his daughter Catherine be reduced. He also asks that the spousal support provision be terminated effective March 1, 2014. Child support for Aidan terminated as of November 1, 2011 according to the terms of the original order, when he turned 23 years of age. That aspect of the change to the original order is not in issue and the Family Responsibility Office records have already been amended to reflect that change. Ms. Collins brings her own motion to change asking that child support and spousal support be increased.
[2] The divorce judgment from October 1997 requires Mr. Collins to pay $600 per month child support for Catherine and $800 per month for spousal support, a total of $2000 monthly. These support provisions are “indexed to the change in the consumer price index for Canada” according to paragraph 13 of the divorce judgment. The monthly amounts have never been changed otherwise by any subsequent order in the 18 years since the judgment was rendered.
[3] The child support provisions in the divorce judgment continue an earlier contractual arrangement pre-dating the introduction of the Child Support Guidelines in the spring of 1997. As a consequence, Mr. Collins has been able to deduct the child support payments he has made for income tax purposes and Ms. Collins has been required to include those payments in her taxable income up to and including the present time.
Background
[4] The parties were married in September 1981 and separated 13 years later in November 1994. They have three children. The divorce judgment granted Mr. Collins custody of the oldest child Kevin (then 15 years of age) and granted Ms. Collins custody of the two younger children, Aidan then nine and Catherine then seven.
[5] Catherine has Down Syndrome. The child support provision for her is to continue “as long as she is a child of the marriage as defined by the Divorce Act”. At the age of 24, Catherine still resides with her mother. There is no real issue about Catherine’s dependency and inability to reside on her own. She continues to be a dependent within the meaning of the Divorce Act. The issue is whether her financial needs are adequately covered by government assistance and subsidies so as to relieve Mr. Collins of his child support obligation in whole or in part.
[6] Mr. Collins was employed as an engineering professor at Fanshawe College. He retired in June 2013 at the age of 62, the event which prompted him to bring this motion to change. He could have retired with an unreduced pension in 2011, but chose to work until 2013. His current income is his pension from the college approximately $1000 per month investment income and approximately $6,000 per year net farming income. Mr. Collins was employed at Fanshawe at the time of the separation and the value of his pension in November 1994 was included in the equalization of net family property.
[7] Ms. Collins was employed as a nurse when the parties separated in 1994 but within a year of the divorce judgment in 1997 she left that employment and has not had any gainful employment since. She testified that she has been out of the work force since 1998 in order to attend to Catherine’s special needs. Mr. Collins played no active role in Catherine’s care and upbringing. I accept his testimony that he would have liked to have been more involved but was shut out of that role by Ms. Collins. Ms. Collins is now 68 years of age and is receiving Old Age Security and Canada Pension benefits. She has an RRSP in the amount of $141,159 which she has not drawn upon. She also has $57,255 in non-registered investments which generate modest income.
The History of Payments under the Order
[8] Before the divorce judgment, the parties had settled the question of spousal and child support at a figure of $2000 per month and Mr. Collins began making his payments through the Family Responsibility Office as of November 1995. Beginning in 1999, the Family Responsibility Office began to include the cost of living adjustment. The monthly payment rose to $2034.13 per month, then the following year to $2080.92 per month, with subsequent similar increases each year. By October 2011, the monthly payment had increased to $2,615.85 monthly. At that point, Aidan was no longer a dependent. Effective November 1, 2011, the monthly amount was reduced to $1832.79 for the combined support of Ms. Collins and Catherine. For some reason not explained in the evidence, the Family Responsibility Office made a further adjustment to the amount payable in 2012 reducing the monthly amount from $1832.79 to $1649.73. This was apparently to reflect the fact that child support should not have been indexed and thus reverted to the basic $600 monthly in the original order. The Family Responsibility Office retroactively credited Mr. Collins with cost of living increases that he had paid on child support all the way back to 2009, resulting in a credit to him of more than $33,000, an adjustment which relieved him of any payments between January 25, 2012 and September 27, 2013.
[9] It is clear that Mr. Collins has made all the payments requested through the Family Responsibility Office in a timely fashion throughout the entirety of the divorce judgment but I am at a loss to understand why or how the Family Responsibility Office could relieve him of a cost of living adjustment he had been ordered to be paid by the court.
[10] It is also quite apparent that Mr. Collins’ income increased steadily and significantly between 1997 and his retirement in 2013. At the time of the divorce judgment, Mr. Collins was earning a salary of approximately $60,000 per year. When he retired from Fanshawe his salary was $101,000. There is no doubt that he would have been required to pay tens of thousands of dollars more in child support had Ms. Collins ever chosen to advance such a claim. Mr. Collins conceded on cross-examination that he was aware of the Child Support Guidelines but never voluntarily adjusted the child support in accordance with his income because he was never asked to pay more.
[11] Although Mr. Collins’ pension was equalized at the time of separation, the greater share of his present payments was earned after the separation. When his pension was equalized in 1995, the valuation assumed Mr. Collins would receive a pension of $767 monthly to age 65 and $606 monthly after age 65. Because of his subsequent participation in the pension plan he now receives $4753 monthly to age 65; $3968 thereafter. On the equalization of property Ms. Collins received $132,000 which is by and large the funding source for her current RRSP of $141,159. Mr. Collins purchased his wife’s interest in the farm property when they separated. The value of the farm has increased dramatically and is now valued at $1.2 million.
[12] Child support is still accruing at $600 monthly. With indexing the spousal support has grown from $800 monthly to $1098.
Catherine’s circumstances
[13] With extra help at school and with some delay, Catherine has completed Grade 9. She will never be able to live independently. She can look after her basic hygiene needs and dress herself, but apart from a simple task like making a sandwich cannot prepare her own meals, look after her own money, or shop on her own. She also has difficulty standing or walking for an extended time. Catherine has had a support worker since she was about 16, but there is no doubt that Ms. Collins has assumed a very significant burden in attending to Catherine’s needs on a day-to-day basis throughout Catherine’s life. Ms. Collins has made the commitment that Catherine will never be put into institutionalized care so long as Ms. Collins can take care of her in her own home.
[14] In 1997 or 1998, Ms. Collins had a “memory flashback” triggered by a news report of a date rape drug. She believed that Mr. Collins had used such a drug with her during their courtship. She terminated his weekend access immediately and with the exception of a short visit at Christmas 2013, Mr. Collins has not had any time with his daughter since that incident.
[15] Catherine began receiving Ontario Disability Support Plan (ODSP) payments in 2008. She currently receives $841 per month. The amount is not taxable. The money is paid to Ms. Collins who controls all of Catherine’s finances.
[16] In addition Catherine is eligible for funding through the Passport Program to the extent of $5280 per annum. This program funds community activities and various educational and social expenses. The reimbursement of such expenses up to the eligible maximum is not taxable. It includes a mileage allowance for Ms. Collins to chauffeur Catherine to activities in the community. See Tab P of Exhibit 1. Ms. Collins mileage reimbursement amounted to $1289 in the period from July 2014 to May 2015.
[17] In addition to the $5280 for eligible expense reimbursement under the Passport Program, the program provides for up to $4500 for “caregiver respite”. The respite care and some other eligible expenses are paid directly to third parties.
Merle Collins
[18] Ms. Collins obtained her nursing diploma in the early 1970’s and was gainfully employed as a nurse in Windsor, Toronto and London, with some time off when the children were born. She never applied for any job after the divorce in 1997 though she did keep up her RN qualifications by payment of annual dues until 2013. I accept her evidence that had she wished to return to nursing she would have had to undertake retraining and that her paper qualifications would not have been enough to re-enter the work force as a nurse after a long absence. With some difficulty she was able to manage financially until child support for Aidan ended in 2012. Since then she has incurred MasterCard debt and has taken out a $75,000 mortgage on her home to finance repairs as well as her day-to-day living expenses and the purchase of a car.
[19] Ms. Collins first began to receive Old Age Security and CPP benefits in 2012 when she turned 65. The current amount from these two income sources is $1,040.49 per month. With the most recent cost-of-living adjustment to the spousal support, she now receives $1,108.55 per month plus the $600 monthly for Catherine.
[20] Ms. Collins 2014 tax return is at Tab B 1 of Exhibit 4. She gets CPP ($5914), Old Age Security ($6572), a HST rebate ($112) and earns nominal investment income, a total of $14,032, plus the support Mr. Collins pays.
[21] Ms. Collins is aware that she must cash in her RRSP in the year she turns 71, three years from now, but she wishes to delay this as long as possible.
[22] Ms. Collins prepared a budget for Catherine in which she tries to segregate Catherine’s living costs from her own. See Tab 6 of the Trial Record. Catherine started receiving ODSP in 2008 but some of what she received was “clawed back” until the fall of 2013. The amount improperly clawed back was refunded to Ms. Collins. Her 2013 income spiked to reflect that repayment.
[23] In the past year, the Passport Program funding was not used completely. About $300 was not used.
[24] Of the $2,099.22 per month paid for mileage, $1,288.51 was paid to Ms. Collins and $654.36 to third parties in the 12-month period May 2014 to April 2015.
Analysis
[25] Although Catherine lives with her mother, the appropriate approach under the Child Support Guidelines is to apply s. 3(2)(b) because the state has assumed some responsibility for her financial needs through ODSP and other subsidies and assistance. The proper approach is to determine what Catherine’s reasonable financial needs amount to and whether there is a shortfall from the resources earmarked for her, then to apportion that shortfall according to the incomes of the father and mother.
[26] There is no doubt that the threshold test of a material change in circumstances has been met with respect to Catherine. She became an adult, stopped going to school and became eligible for government assistance. Quite apart from that the introduction of the Child Support Guidelines is in and of itself the required change in circumstances that opens the door to a review of the quantum payable.
[27] In reviewing Ms. Collins proposed budget for Catherine, I make the following findings and observations:
• the $109.50 per month for public transit, taxis, gas and oil is reimbursed through the Passport Program;
• the $120 per month for medicine, drugs and physiotherapy is not supported by any evidence and ought to be covered through the health care coverage Mr. Collins still maintains for Catherine if Ms. Collins chooses to take advantage of that coverage;
• shelter costs based 50% of the total costs for Ms. Collins’ home is on the high side. Virtually all of those costs would be incurred whether or not Catherine lived with Ms. Collins. In particular, it is not appropriate to include half the home renovation cost; a non-recurring capital expense also duplicated in the mortgage payment for the funds taken out to finance those repairs and renovation. A more reasonable approximation of shelter or accommodation costs would be somewhat less, perhaps $800 per month in total.
• activities and camp amounting to $485 a month are reimbursed through the Passport Program as are computers, certain computer repairs and stationery.
[28] With these adjustments I find that the realistic expenses for Catherine, over and above those that are reimbursed, is approximately $1200 to $1300 per month. Subtracting her ODSP income of $841 monthly there is a shortfall of approximately $350 to $450 monthly.
[29] Having regard to the respective incomes of the parents, Mr. Collin is ordered to pay child support of $350 monthly.
[30] I decline to backdate the effective date of the change in child support because Mr. Collins has had the benefit of deducting his $600 child support payment up to now. On an after-tax basis, the new nondeductible payment of $350 is not significantly different from a deductible $600 payment.
[31] With respect to spousal support there is a threshold issue of whether there has been a material change in circumstances. The fact that Mr. Collins has been paying spousal support for approximately 21 years after a 13 year period of cohabitation is irrelevant. When the parties settled their affairs in 1995, with that agreement then incorporated into the divorce judgment in 1997, it is inconceivable that a court would have made a time limited spousal support order. It is only at about the time of the introduction of the Spousal Support Advisory Guidelines that Ontario courts began to order time limited spousal support for marriages lasting as long as this one did. Mr. Collins’ retirement was foreseeable but foreseeability does not mean his retirement is not relevant.
[32] Ms. Collins has a RRSP which could be converted to a regular source of income but the question is whether she should be compelled to do so, or whether income should be imputed to her for not doing so, at this time. She will have to convert it to an income stream in the year she turns 71 but the only reason to say she should do so now is to relieve Mr. Collins of an obligation that does not create any real economic hardship for him. His capital resources are at least eight times what Ms. Collins has in the way of capital resources.
[33] The most significant change in circumstances perhaps is that Ms. Collins now gets old age security and Canada pension payments totaling $1040 per month.
[34] However, she has proven she needs financial assistance from Mr. Collins. She has run up credit card debt and has had to take out a $75,000 mortgage on her home.
[35] Mr. Collins under-paid his child support obligation for the last 15 years or more, particularly considering that he has been able to deduct the child support for tax purposes rather than submitting to the regime under the child support guidelines.
[36] One of the factors to consider in any spousal support order under the Divorce Act or any variation of spousal support is the goal of promoting self-sufficiency “where reasonably practicable”. Perhaps Ms. Collins should have done more over the years since 1997 to re-enter the work force, even on a part-time basis given her qualifications and skills, but it is far too late now to think in terms of what she could or should have done. On the other hand, this factor together with the reasoning in paragraphs 56 - 58 of the Boston case point towards an obligation to use her capital reasonably to generate income. If she chooses not to access her RRSP, income can be attributed to her. I would be inclined to do so if it were not for the fact Mr. Collins is not generating reasonable income with his capital. His farm, worth not less than $1.2 million, generates a net income of $5700 per year. He has an RRSP of his own worth $162,281 that he chooses not to draw upon. In 2014, he deposited an additional $2755 to his RRSP.
[37] The factors set out in the Divorce Act also include recognition of the assumption of child care responsibilities over and above those that are covered by a child support order. In this case, it is necessary to take into account the sacrifices of caring for a disabled child and the fact that Ms. Collins will continue to shoulder that responsibility exclusively and indefinitely.
[38] In my view, it is doubtful Mr. Collins has satisfied the threshold burden of proving a material change in circumstances with respect to spousal support when all the various changes are taken into account and placed on each side of the scale.
[39] Even assuming he has met that burden, a re-evaluation of the quantum of spousal support does not lead to the conclusion the present amount ought to be varied.
[40] A tax deductible payment of $1100 monthly on an income of more than $6000 monthly is not an onerous burden when he has no other dependents except Catherine.
[41] The motion to change spousal support is dismissed.
[42] If counsel are unable to agree on costs, they may arrange a time for oral submissions though the trial coordinator.
“Justice D. R. Aston”
Justice D. R. Aston
Released: August 18, 2015
COURT FILE NO.: F434-2014
DATE: 2015/08/18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Michael Joseph Collins
Applicant
- and -
Merle Philomena Collins
Respondent
REASONS FOR JUDGMENT
ASTON J.
Released: August 18, 2015