CITATION: McKale v. McKale, 2016 ONSC 1518
COURT FILE NO.: 430/14
DATE: March 2, 2016
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Stephen Christopher McKale
Applicant
– and –
Patricia Lynn Grace McKale
Respondent
Any Mayer, for the Applicant
Marion E. Jackson, for the Respondent
RULING ON Motion to Change
JOHNSTON, J
[1] The Applicant, Stephen Christopher McKale, commenced a Motion to Change seeking an order of child support initially in the amount of $753.00 per month, now in the amount of $897.00 per month, together with an order that the support be retroactive to the date of the application; May, 2014.
[2] The Respondent, Patricia Lynn Grace McKale, seeks by way of her motion an order she not be required to pay child support to the Applicant, on the grounds of undue hardship, and an order that the Applicant pay to the Respondent retroactive child support based on an offset amount of the parties’ incomes from January 2013 to May 2014 for three children.
Background
[3] The parties were married September 2006 and they cohabited until May 17, 2012. The parties are parents of two sons, Liam Thomas McKale, born February 16, 2002, and Ryan Christopher John McKale, born April 2, 2008. Respondent Mother had two other children, the eldest, Victoria, who left her residence in 2012 and Kaleigh, who finished school in April 2014. She began working 30 hours per week although, according to Ms. McKale’s affidavit of May 19, 2015, she is largely dependent upon her mother for support and is having to pay down student loans and other debt incurred because of schooling.
[4] The parties entered into a Separation Agreement dated November 6, 2013. The agreement provided that Mr. McKale at the time was employed by the National Bank Note Company, Limited as of date of separation and earned $66,524.04 in 2011. He lost his job and in 2013, was hired as the Office Services and Facilities Manager by Gowling, Lefleur, Henderson LLP, in the City of Ottawa, at a salary of $60,000.00 per annum. Ms. McKale, pursuant to the terms of the agreement, stated that she was employed on a full time basis at Mosaid Technology Inc. In 2011, she earned $65,928.00, including bonuses and overtime. Her 2012 income was provided to the Applicant pursuant to the terms of the agreement.
[5] Pursuant to paragraph 7 of the Separation Agreement, the parties acknowledged and agreed that they would share joint parenting of the two children of their relationship, Liam and Ryan.
[6] The child tax benefit shall be divided equally between the parties on six month rotating basis. Pursuant to paragraph 7(s) of the Separation Agreement:
“Due to the fact that the parents approximately equal incomes, neither parent shall pay periodic support to the other. All expenses related to Liam and Ryan are to be shared equally and receipts shall be required to be presented for payment.”
[7] Pursuant to subparagraph (t):
“In the event that the incomes of the parties are no longer relatively equal, both parties reserve the right to request support pursuant to the Federal Child Support Guidelines. If the parties are unable to agree on an appropriate amount of support, the matter may be put before a court of competent jurisdiction.”
[8] Paragraph 11 of the agreement provides that there may be a variation of this agreement by reason of a “material change of circumstance”.
[9] The agreement further stipulated: “No voluntary change in employment shall be considered a change in circumstance for the purposes of reducing the parties’ support obligations.” The agreement further provided: “The parties agree to keep each other informed of any material change in circumstance of either of them, or in the circumstance of their children.”
[10] Ms. McKale is employed at Huawei Technologies and in 2013, her income was $64,100.00 plus benefits and bonuses. In 2014, her income was $68,457.00. Shortly before hearing, it was disclosed that her income is $71,374.00. Mr. McKale’s income in 2013 was disclosed as $95,158.00 and in 2014, $81,028.00 (including RRSP income).
[11] Mr. McKale states that he lost his employment in March 2014 and that he has been unemployed since. On May 6, 2014, Liam left his mother’s residence and has resided primarily with his father since that time. Ryan continues to live in the shared residence of his mother and father.
[12] Mr. McKale deposes in his affidavit that he lost his employment as a result of “shortage of work”. Mr. McKale states that he has actively pursued other employment without success and has filed a number of employment opportunities that he has sought. In August 2014, he states that he was offered an opportunity to retrain through a government-funded program called “Second Career” and was accepted to Willis College in Addictions and Community Service Worker Diploma Program. He states the employment rate in this field of social work is very high and will provide him with ample opportunity for future career advancements and that he graduated in August 2015.
[13] Mr. McKale states that in 2014 his employment income was in the amount of $19,596.27 and EI Benefits total $28,728.00. Mr. McKale states that he was unable to make ends meet and he made withdrawals from an RRSP, totalling $32,707.00. In January 2015, he received his last EI payment and until graduation states that he received benefits through the Second Career program, which are significantly less than EI benefits. Mr. McKale states that he expects that his 2015 income would be $25,000.00.
Position of the Parties
[14] Mr. McKale takes the position that there has been a material change of circumstance:
(1) Liam came to live with him in May 2014; and
(2) He lost his employment.
[15] Mr. McKale seeks child support retroactive to the date of commencement of this application and seeks setoff child support in the amount of $897.00 for support of the two children in his care, Liam on a primary basis and Ryan on a shared basis, with the child’s mother.
[16] Ms. McKale argues pursuant to either or both of Sections 9 and 10 of the Child Support Guidelines that a strict guideline setoff ought not to apply. She recognizes the fact she has a support obligation, but argues she has no ability to pay and therefore the amount should be set at zero, for this time. In the alternative, she seeks a reduced amount from what the setoff in the Guidelines would otherwise produce. Ms. McKale also argues that income ought to be imputed to Mr. McKale on a basis that he is under employed.
Analysis
[17] I conclude there has been a material change in circumstance. The parties, at the time of the Separation Agreement, contemplated they would share custody and therefore expenses in relation to their two biological children, Liam and Ryan. While Ms. McKale is not happy, she agrees that Liam has been and continues to reside with his father, since May 2014. I find this is a material change in circumstance. I question whether Mr. McKale’s change in employment constitutes a material change in circumstance. Mr. McKale filed a letter from his employer (Ethical Solution Providers Inc.) at Exhibit ‘B’ of his affidavit dated March 5th, 2015. The letter states, “This will confirm our conversation today, wherein you were advised that your employment with Ethical Solution Providers Inc. is being terminated effective March 27, 2014 (date of this letter). The reasons for which have been discussed with you.” The letter goes on to state that Mr. McKale will be paid one additional week of pay up to April 3rd, 2014 and an additional pay to April 10, 2014. The parties agreed in their Separation Agreement that voluntary change in employment would not constitute a material change in circumstance. The reason and nature of the Applicant’s change in employment is information solely within the control of Mr. McKale. By the terms of the Separation Agreement, Mr. McKale has an obligation to establish that his change in employment was not voluntary. The evidence provided is less than convincing. He could easily have adduced evidence that the change was beyond his control.
[18] The father’s position is that ongoing child support ought to be calculated in accordance with Section 9(a) of the Child Support Guidelines, namely on an offsetting basis. For purposes of child support calculations, the Applicant attributes income to himself in the amount of $20,000.00 per annum and mother’s income is $71,374.00. The following calculations are in accordance with the Child Support Guidelines:
Mother to provide child support for the two children in the amount of $1,057.00 and father support for Ryan to mother in the amount of $160.00. Accordingly, the offset amount would require mother to pay to father child support for the two children in the amount of $897.00 per month.
Shared Custody
[19] Section 9 of the Child Support Guidelines provides that a court must consider the following:
- Where a parent or spouse exercises a right of access to, or has physical custody of a child for not less than forty percent of the time over the course of a year, the amount of the order for the support of a child must be determined by taking into account,
(a) the amount set out in the applicable tables for each of the parents;
(b) the increased cost of shared custody arrangements; and
(c) the conditions, means, needs and other circumstances of each party and of any child for whom support is sought.
[20] First, I begin with analysis of the applicable Child Support Tables for each parent.
[21] It is agreed that mother’s income is $71,374.00. Accordingly, child support for two children pursuant to the Child Support Guidelines is $1,057.00. The next issue is, what is the Applicant’s income. Mr. McKale changed his employment from a job where he was earning roughly equivalent income to the Respondent and, in fact, in 2013, his income was greater. His income in 2014 was also greater than the Respondents, when taking into account his RRSP income. Mr. McKale has undertaken retraining, which may well be reasonable under the circumstances, however, his income expectation is less than half of what he had been earning since the separation. Mr. McKale indicates that he felt that retraining as a social worker was a responsible thing for him to do as a parent, as there is a high likelihood of employment upon graduation. Accordingly, in all of the circumstances, I find that it is fair and reasonable to impute income in the amount of $32,000.00 per year starting in 2015 (based upon the Applicant’s evidence that this is his likely wage and that there is a high prospect of employment in the field and the aforesaid terms of the Separation Agreement). Accordingly, the Guidelines provide that father pay to mother for support of Ryan in the amount of $269 based on his income of $32,000.00 per year. Accordingly, the offset amount would be $1,057.00 the $269; resulting in an obligation of $788.00.
[22] Second, 9(b) of the Guidelines provides the Court must consider the increased cost of shared custody arrangements.
[23] This consideration involves review of the respective financial statements of the parties. Such a review reveals that mother is in difficult financial circumstances and has struggled. Father also has experienced financial difficulties and has relied upon his RRSPs to assist him. Mother has fixed housing costs for herself and children, including mortgage of $1,118.00 per month, property taxes of $300.00 and property insurance of $135.00. In addition, she has utility, heat, telephone, internet expenses totalling $500.00 per month. I find that many of these expenses are necessary for her and the children and to maintain quality of life for the children, equal to the household of the father. Mother has fallen in arrears on her mortgage and there was a threat that the bank may take action against her at one point. She was able to re-pay that amount. It is also a consideration at this stage that the Respondent had certain fixed costs associated with the children in her care notwithstanding there is a reduction of some amount due to Liam not residing half time. Liam continues to visit, Ryan continues to reside with mother half time and Kayleigh is at home. The parties agreed to no child support and mother structured her loan\debt repayments from the breakdown of the relationship accordingly.
[24] Third, the court must consider the condition, means, needs and other circumstances of each parent and the child for whom support is sought.
[25] Ms. McKale provides support for her daughter, Kayleigh, who is 18 years of age and working. However, Kayleigh, like many young people after finishing school, is underemployed and not able to be self-sufficient on her own. Kayleigh had been receiving financial support from her biological father when she was under the age of 18, however, that ceased.
[26] I reject the mother’s argument that Mr. McKale had a duty to provide support for Kayleigh, either while she was going to school or and since then. The Separation Agreement entered into by the parties excluded Kayleigh from support, no doubt on the basis that biological father was paying support. However, the reality is that Ms. McKale does have some expenses that are related to her daughter residing with her. While perhaps Ms. McKale has no legal obligation to support Kayleigh, Kayleigh has limited ability to support herself. There is a difficult question of balancing Ryan’s right of child support from mother and mother’s obligations to her other children.
[27] Next, I consider the respective debts of the Applicant and the Respondent. It is fair to say that both parties are under financial strain, however, I find that the Respondent is in fact struggling more. Ms. McKale’s financial struggles are and no doubt will impact her children, including Ryan.
[28] The Applicant has been less than forthcoming in disclosure of his finances. Mr. McKale did not disclose his significant increase in income in 2013 and made late disclosure before this hearing. I have previously commented upon his lack of adequate explanation for the loss of employment and dramatic decrease in ability to pay child support.
[29] In all the circumstances of this case, including the Applicant’s alleged loss of employment through no fault of his own, the fact he collected public assistance, together with the Respondent’s bleak financial situation; I conclude that the default position of a simply set off in accordance with section 9 (a) of the CSG’s is not appropriate. The CSG’s for one child provide that the Respondent at her current income pay $650.00 per month. The Respondent must contribute the guideline amount for one child and something towards support of Ryan, because the child requires support. Notwithstanding the fact the father has not provided a satisfactory explanation for the loss of his income and explanation as to whether it was voluntarily, Ryan needs support.
[30] I conclude that the Respondent shall pay to the Applicant child support for both children in the amount of $750.00 per month, commencing January 1, 2015 and the 1st day of each month thereafter on the basis the payor’s income is $71,374.00 per annum.
[31] I have considered and rejected the Respondent’s claim pursuant to Section 10 of the CSG’s. While I have taken into consideration the Respondent’s financial circumstance and debt load under Section 9 of the Guidelines, I cannot find there is undue hardship under Section 10. The actual income of the Applicant compared to the Respondent itself leads to a rejection of the claim.
Retroactive Support
[32] The parties agreed in argument that the Applicant should have disclosed his increase in income and ability to pay support in 2013 and 2014 and it is now appropriate to calculate arrears he owes to the Respondent. The parties agree and I Order the Applicant to pay child support to the Respondent from January 1, 2013 to and including December 2013 in the amount of $404.00 per month; from January 1, 2014 to and including May 1, 2014 the amount of $168.00 per month. The Applicant requests the Respondent begin payments May 1st; however I decline. Liam went to his father’s residence after the first day of the month and it was uncertain if he would remain. He started the month living with Mother half the time.
[33] The calculations of both parties submitted agree that for the balance of 2014 the Respondent owed to the Applicant child support in the amount of $285.00 per month: June to December 2014. Accordingly, at the commencement of 2015, the Applicant owed to the Respondent $2,853.00. Pursuant to my findings and Order herein, the Respondent owed to the Applicant child support in the amount of $750.00 per month, January to December 2015, and the first three months of 2016; a total of $10,500.00. Accordingly, the Respondent owes child support arrears of $7,647.00 as of March 1, 2016. Given the Respondent’s financial predicament counterbalanced by the need of the children for support, I order that $3000.00 of these arrears be paid within 45 days and the balance at a minimum rate of $150.00 per month.
[34] In the event that I have made an error in calculations herein, either counsel may address me in writing with respect to such error, upon serving the opposing party.
[35] In the event the parties cannot resolve the issue of costs, each side shall submit a bill of costs, together with written submissions, limited to three pages. The Applicant to serve and file submissions within 21 days, the Respondent to reply within 14 days.
The Honourable Mr. Justice J. M. Johnston
Released: March 2, 2016
CITATION: McKale v. McKale, 2016 ONSC 1518
COURT FILE NO.: 430-14
DATE: March 2, 2016
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Stephen Christopher McKale
Applicant
– and –
Patricia Lynn Grace McKale
Respondent
RULING ON MOTION TO CHANGE
Johnston, J.
Released: March 2, 2016