Westberg v. Whitfield, 2016 ONSC 1607
CITATION: Westberg v. Whitfield, 2016 ONSC 1607 COURT FILE NO.: 51-2005 DATE: 2016/03/07
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sharon Westberg (Whitfield) Applicant
- and -
W. Dale Whitfield Respondent
COUNSEL: D. Reid, for the Applicant E. Cohen, for the Respondent
HEARD: November 23 2015
Templeton J.
[1] The Respondent seeks to change the final order of Mr. Justice Haines dated October 23 2008[^1] with respect to various aspects of his child support obligation. Among other orders, he seeks reimbursement for "overpayments of child support commencing September 1 2015 to March 1 2015". In October 2008, the children resided primarily with the Applicant.
[2] The Applicant is opposed to the orders sought.
[3] The parties are divorced and therefore the federal legislation applies.
[4] I shall deal with each of the issues raised by the Respondent in turn:
A. Variation of the monthly child support payable
(a) Material Change in circumstances
[5] In the order of Mr. Justice Haines which was granted on the consent of the parties, the Respondent was required to pay $900 per month for the support of his two children. Carly was born on April 2 1994 and Braydon was born on May 13 1996.
[6] The amount he was ordered to pay was actually only 62% of the amount that was recommended in the Federal Child Support Guidelines based on an annual income of $105,000. The amount that would otherwise have been payable @ $1465 per month was apparently reduced to recognize the substantial amount of time that the children spent in his care.
[7] The order was unusual in that it also contained the following limiting and defining provisions:
- variation of this payment would take place only in the event of a material change in circumstances relative to the parties or the children as opposed to an annual review contemplated by the Federal Child Support Guidelines;
- the Respondent was not entitled to deduct any farm losses claimed by him for income tax purposes or otherwise from his income from all other sources in calculating child support properly payable by him;
- the Respondent was not be required to claim any profit realized by him from the operation of his farming activity in calculating the child support properly payable by him;
- these provisions were deemed to be 'special provisions' or a 'special arrangement' under s. 15.1 (5) of the Divorce Act;
- the child support was to continue for so long as the children remained dependents pursuant to the Divorce Act and the Federal Child Support Guidelines; and
- child support would be reviewable for a child at the time that child commenced post-secondary education.
[8] On September 1 2009, the two children began living with each of their parents on a week about basis.
[9] This change in living arrangements constitutes a material change in circumstances with financial impact commencing September 1 2009.
[10] Further, in 2012, Carly commenced her post-secondary education in Toronto and in 2014, Braydon commenced his post-secondary education in Hamilton. Both parents reside in Belgrave, Ontario.
[11] These changes in living and educational arrangements also constitute material changes in circumstances with financial impact commencing September 1 2012 and September 1 2014, respectively.
[12] I am satisfied therefore that the Respondent has met the onus in this regard.
(b) Entitlement to a retroactive adjustment of child support
[13] The Respondent seeks an adjustment of the monthly child support payable by him retroactive to September 1 2009.
[14] The leading case with respect to retroactive adjustment of child support is D.B.S. v. S.R.G.[^2] which was decided in 2006 by the Supreme Court of Canada.
[15] Although the circumstances in D.B.S. involved a payee seeking the benefit of a retroactive support order, I am not persuaded that the principles of law and factors for consideration outlined therein are different in nature or substance when it is the payor who is seeking the benefit of a retroactive adjustment by virtue of the commencement of an obligation to pay by the other party.
[16] In any event, even if I were wrong in this regard, the role of the Respondent in this case is two-fold. He is seeking credit for overpayment of child support as a 'payor' but it is allegedly by virtue of the Applicant's obligation as a payor to pay child support since September 1 2015 that he has acquired that credit. From this perspective, the Respondent has also approached the court therefore as a 'payee' and the principles set out in D.B.S. apply.
[17] In D.B.S., the Court held as follows:
In determining whether to make a retroactive award, a court should strive for a holistic view of the matter and decide each case on the basis of its particular facts. The payor parent's interest in certainty must be balanced with the need for fairness to the child and for flexibility. In doing this, the court should consider the reason for the recipient parent's delay in seeking child support, the conduct of the payor parent, the past and present circumstances of the child, including the child's needs at the time the support should have been paid, and whether the retroactive award might entail hardship. Once the court determines that a retroactive child support award should be ordered, the award should as a general rule be retroactive to the date of effective notice by the recipient parent that child support should be paid or increased, but to no more than three years in the past. Effective notice does not require the recipient parent to take legal action; all that is required is that the topic be broached. Once that has occurred, the payor parent can no longer assume that the status quo is fair. However, where the payor parent has engaged in blameworthy conduct, the date when the circumstances changed materially will be the presumptive start date of the award. Finally, the court must ensure not only that the quantum of a retroactive support award is consistent with the statutory scheme under which it is operating, but also that it fits the circumstances
[18] There is evidence in this case that as early as January 2010, the Respondent instructed counsel to seek an adjustment to the quantum of monthly child support payable. The difficulty, however, was that not only was he seeking to pay a lower amount by virtue of the fact that the children had started to live with him every second week but he was also intent on calculating the amount he would be required to pay to the Applicant based on his income after a deduction for farming losses, a formula he had specifically rejected with his consent to the former order.
[19] Within a week of the notice, the Applicant's counsel replied and indicated her consent to a lower amount based on the change in residence circumstances but disagreed to an even lower adjustment based on a lower income for the Respondent. She offered to settle for a differential quantum of monthly child support based on her income and the Respondent's income excluding the farming loss which he continued to seek.
[20] The evidence indicates that there was no formal follow-up between the parties but they did exchange emails in 2011 and in February 2012 the Respondent again raised the issue by email to the Applicant. The Applicant responded on February 28 2012 but did not hear back from the Respondent until she contacted him again on April 23 2014 regarding the children's university expenses.
[21] The Respondent has deposed that he did not formally pursue the issue regarding the appropriate quantum payable due to the costs of litigation. He continued to pay $900 per month in accordance with the order of Mr. Justice Haines.
[22] On the basis of all of the evidence before me, I find that as of January 2010, the Respondent put the Applicant on effective notice that the quantum of monthly child support he was obligated to pay pursuant to the order should be decreased by virtue of the Applicant's obligation to also pay child support to him in accordance with her income.
[23] I also find, however, that should retroactive support be ordered, the effective date of the adjustment should be fixed as March 23 2012, three years prior to the date the Respondent commenced this motion. I am and would not be not prepared to require the Applicant to pay retroactive any amount of support prior to March 23 2012 given the Respondent's intentional lack of engagement in the process of negotiation.
[24] In summary, I have fixed this date because the Respondent's delay in attempting to achieve resolution has not been adequately explained since the parties were communicating directly with each other in 2011 and thereafter.
[25] In my view, where a party (as payor or payee) is seeking a retrospective financial benefit with respect to child support and there is probative evidence that he/she has been intentionally silent after a course of negotiation regarding the issue, has deliberately refused to engage in the negotiating process offered by the other party, or, has failed to take legal steps that are known to be available such silence, refusal or failure cannot be used as a disguise to accumulate a credit for overpayment or underpayment of child support for which that party seeks complete redemption from the court years later. For this reason, the three year limitation is reasonable in the factual circumstances of this case.
[26] This determination is particularly reasonable given the admitted fact that the Respondent had not been paying the Guideline amount of monthly support for two children in any event when they were living with her and the Applicant does not receive a credit for the decrease she previously accepted.
[27] But before retroactive support is awarded at all, there are other factors to be considered. In D.B.S., the Court wrote,
It will not always be appropriate for a retroactive award to be ordered. Retroactive awards will not always resonate with the purposes behind the child support regime; this will be so where the child would get no discernible benefit from the award. Retroactive awards may also cause hardship to a payor parent in ways that a prospective award would not. In short, while a free-standing obligation to support one's children must be recognized, it will not always be appropriate for a court to enforce this obligation once the relevant time period has passed.
[28] In this case, I must therefore determine whether the children would receive a discernible benefit from the award the Respondent seeks and/or whether a retroactive award would cause the Applicant hardship.
[29] I will do so in consideration of the other factors referred to below.
(c) The monthly quantum payable by the Respondent and the Applicant
[30] For each of the years following the initial material change in circumstances in September 2009, I find that the Respondent's income was and that the resulting monthly child support obligation for those years would have been as follows:
[31] Income Support payable # of children (a) 2009: $118,691 $1629 two (b) 2010: $123,778 $1688 two (c) 2011: $119,759 $1642 two (d) 2012: $123,762 $1706/$1066 two/one as of Sept. (e) 2013: $139,644 (imputed) $1184 one (f) 2014: $160,210 $1338 one until Sept.
[32] The income for the year 2013 has been imputed because the Respondent has not produced a copy of his Income Tax Return for the calendar year 2013.
[33] In his submissions, the Respondent seeks to rely on his income for 2013 as defined in his Notice of Assessment which indicates that his Line 150 income that year was $131,480. However, this amount is the balance of his income after a deduction for farm losses which, pursuant to the order, is not permitted. It is clear therefore that his income for child support purposes was higher than the amount he now seeks to rely on.
[34] In 2011, the Respondent generated a farming loss of $6425; in 2012, he generated a farming loss of $7335; in 2014, he generated a farming loss of $9772. The average of these three amounts is $7884. In the absence of evidence to the contrary, I therefore impute an annual income of $139,364 ($131,480 + $7884) to the Respondent for the year 2013.
[35] There is no probative evidence with respect to why the formula prescribed in the order and to which the Respondent consented for calculating his income ought to be changed. Even if I were wrong in continuing to apply the formula set out in the order, I find as follows.
[36] For further clarity with respect to the issue of determining Respondent's income for child support purposes, I note that in subsequent negotiations (referred to above), the Respondent repeatedly sought to deduct his farming losses from his employment income. Deductions from income are dealt with in sections 15 and following of the Federal Child Support Guidelines.
[37] In this case, I make the following observations. Firstly, the annual deduction sought by the Respondent for a farming loss appears to be entirely unrelated to his employment income which is generated through his employment at Bruce Power. Secondly, the income to which the farming loss relates is not included, in any event, in the total income of the Respondent based on which the amount of child support payable is calculated. Thirdly, it appears that a substantial portion of this loss relates to the cost of borrowing funds to purchase the farm rather than the business of the operating the farm itself. This cost has nothing to do with the children or the maintenance of employment.
[38] For all of these reasons, I would disallow the deduction for farming losses and/or farming expenses in order to ensure that an the amount of income on which the Respondent's support obligation is based, is appropriate. This expense or 'loss' although acceptable to the Canada Revenue Agency is and would be unreasonable in the context of child support.
[39] I find that the Applicant's income was and the resulting monthly child support obligation for those same years would have been
Income Support payable # of children (a) 2009: $64,607 $966 two as of Sept. (b) 2010: $69,161 $1031 two (c) 2011: $70,302 $1046 two (d) 2012: $78,067 $1148/$710 two/one as of Sept. (e) 2013: $79,627 $722 one (f) 2014: $84,124 $755 one until Sept.
[40] A strict application of the set-off provisions would have resulted in the following monthly child support obligation for the Respondent :
(a) 2009: $663 per month commencing September 1; (b) 2010: $657 per month; (c) 2011: $596 per month; (d) 2012: $558 per month until September; then $356 per month thereafter; (e) 2013: $462 per month (f) 2014: $583 per month until September.
[41] Throughout this time period, the Respondent continued to pay $900 per month. Therefore, for the sake of completion of with respect to the Respondent's claims in the Motion, I find that the Respondent would be otherwise entitled to recover:
(a) 2009: $237 ($900 - $663) x 4 (months) = $948 (b) 2010: $243 ($900 - $657) x 12 (months) = $2916 (c) 2011: $304 ($900 - $596) x 12 (months) = $3648 (d) 2012: $342 ($900 - $558) x 8 (months) = $2736 $544 ($900 - $356) x 4 (months) = $2716 (e) 2013: $438 ($900 - $462) x 12 (months) = $5256 (f) 2014: $317 ($900 - $583) x 8 (months) = $2536 Total: $20 756
[42] For the reasons given, however, I have determined that if the Respondent is entitled to a retroactive claim, his claim is limited to three years prior to the commencement of this Motion, namely, March 23 2012.
[43] This total is therefore adjusted to $12218 ($1710 (2012) + $2716 (2012) + $5256 (2013) + $2536 (2014)) to reflect the three year limitation.
[44] Under the circumstances, however, the claims of the Respondent are further subject to:
(a) whether the child(ren) receive a discernible benefit from a retroactive award (D.B.S.); (b) whether the quantum of a retroactive support award fits the circumstances (D.B.S.); (c) the conduct of the Applicant, the past and present circumstances of the child(ren), including the child(ren)'s needs at the time the support should have been paid, and whether the retroactive award might entail hardship (D.B.S.); (a) a set-off arising from the Applicant's obligation to also pay child support (s. 9(a) of the Federal Child Support Guidelines); (b) a comparison of childcare and household budgets to determine the actual cash flows of each household (s. 9(b)); and, (c) a comparison of each party's standard of living (s. 9(c)).
[45] The Supreme Court of Canada has declared that the specific language of s. 9 "warrants emphasis on flexibility and fairness to ensure that the economic reality and particular circumstances of each family are properly accounted for"[^3].
[46] I have reviewed all of the evidence in light of these factors.
[47] The children are now both pursuing post-secondary education. Their costs have therefore increased dramatically. Their financial ability to remain in school on a fulltime basis must not be jeopardized and must take priority over any adjustment claimed by either of the parents as against each other.
[48] There is evidence before me that between January 2010 and May 2013, the Applicant gave $375 per month to each of the children who have used these funds to pay for recreation, vacation, clothing, technology and personal expenses. This evidence has not been undermined with respect to its credibility or reliability. I therefore find that the funds provided by the Respondent that exceed that which he might otherwise have been required to pay, substantially enured to the benefit of the children
[49] I have reviewed the most recent sworn Financial Statements of both parties which is the only evidence before the Court that provides any insight into the cash flow of each party and their relative standards of living. I note that the Applicant has no rent or mortgage expense whereas the costs incurred by the Respondent in the regard amount to over $2500 per month. Their "household expenses" are roughly equivalent even though the Applicant earns less than the Respondent. The Respondent's transportation costs are over double the expenses incurred by the Applicant. The Applicant has no debts (notwithstanding a declared monthly shortfall of $3000) and has a net worth of approximately $500,000. The Respondent, on the other hand has no asset position primarily due to a mortgage he has taken on in the amount of over $500,000.
[50] I find on the basis of the Affidavit evidence and the financial documentation filed by the parties, that the Applicant is in a position to pay to the Respondent a portion of the child support she ought to have been paying to the Applicant. It was her choice to provide the children with cell phones. Neither party has lead any evidence with respect to the income of these children but given the fact that they have been employed and are clearly capable and intelligent young adults, it is reasonable to infer that the expense of a cellphone is an expense they themselves could well have paid.
[51] The Applicant was on notice that the amount she was receiving every month from the Respondent was incorrect. She knew as early as January 2010 when she started having the children for only one-half of the time and again in September 2012 when Carly left home to attend school on a fulltime basis, that the payment of $900 per month was not appropriate. She should and could have taken steps to ensure that any adjustment could be satisfied. She has not provided a reasonable explanation with respect to why she kept accepting the support when it is clear that she also knew had an obligation to pay child support.
[52] On the other hand, there is little, if any probative evidence before me that the children will receive a discernible benefit from a retroactive payment to the Respondent and I am satisfied that given the current post-secondary costs she is assisting the children to pay, to require the Applicant to pay retroactive child support to the Respondent at this time would create financial hardship for her.
[53] In all of the circumstances therefore, taking into account the factors set out above, I am fixing the amount of retroactive adjustment on the basis of what is reasonable and fair in all of the circumstances; an amount that ensures that neither of the children will currently bear the brunt of the conduct of their parents.
[54] For all of these reasons, the retroactive adjustment is fixed at $6000 as of September 1 2014 payable by the Applicant to the Respondent at a rate of $100 per month until it is paid in full, commencing the first day of the first month following Braydon's graduation from university with his first degree or August 1 2018 whichever is earlier.
B. SECTION 7 EXPENSES
(a) Apportionment of liability
[55] The parties will note that I have not referred to an obligation on either party to pay child support to the other in accordance with the Guidelines once each child has started his/her post-secondary education. This is because that child is not living at home during the academic year. But for the minimal expense of maintaining a room for the child, the costs for which child support is intended are no longer incurred by the payee parent. I shall deal with the summer months below.
[56] With respect to s. 7 expenses, the order provides that the Applicant would be responsible for 40% of all special and extraordinary expenses and the Respondent would be responsible for 60%. The definition of those expenses included post-secondary education costs.
[57] The provision regarding the extent of the proportionate share for each party is reviewable only in the event of a material change of circumstances affecting the children or the parties.
[58] The Applicant asks that if an order is granted in favour of the Respondent with respect to retroactive child support, the extent of the obligation of each parent to meet the s. 7 expenses ought to also be retroactively adjusted.
[59] I do not agree. Firstly, the apportionment of liability for s. 7 expenses is based solely on the incomes of the parties. The percentage of liability is not affected by where or with whom the children live. Only the identity of the payor is affected.
[60] Secondly, this provision in the order is subject to a 'material change in circumstances" test. There is no evidence before me that there has been a material change in circumstances with respect to the incomes of the parties such that there ought to be a change with respect to the apportionment of liability.
[61] Finally, even if I were wrong in this regard, I note that for the three years in question concerning retroactive child support (2012 to and including 2014), the Applicant was liable at the least for 35% of the s. 7 expenses in 2014 and up to 39% of the expenses in 2012. I am not persuaded therefore that an adjustment is required in all of the circumstances.
(b) Limitation of contribution to s. 7 expenses
[62] The Applicant seeks an order that the obligation of the parties to contribute to the post-secondary costs of the children continue until the completion of at least a second or third post-graduate university degree.
[63] The entitlement to child support for a second or third post-secondary program depends on the circumstances of the case. As noted by the Court in Albert v Albert[^4], "Considerations to be taken into account include: (i) the financial circumstances of the family; (ii) the child's educational and career plans; (iii) the child's age; (iv) the child's academic performance; (v) the family's educational expectations; (vi) the parents' involvement in the decision-making process; (vi) the extent to which the program prepares the child to become financially independent."
[64] In this case there is no probative evidence with respect to what efforts the children have made or will make to (a) contribute to the costs themselves through their own employment during the summer months; (b) contribute to the costs themselves through their own employment during the academic year by way of teaching assistantships or other employment; (c) or, seek financial assistance through grants, bursaries, scholarships and/or student loans. Their income tax returns for the years they have been attending university have not been filed so there is no credible information as to whether they even need assistance from their parents or are able to meet their own expenses.
[65] The goal to have children graduate from any and all post-secondary programs is laudable but it also may well be entirely unrealistic in the circumstances. In the absence of the evidence referred to above, I am not prepared to extend the obligation of either parent to contribute to the s. 7 expenses of post-secondary education for either child beyond the acquisition of a first degree or diploma.
C. ONGOING CHILD SUPPORT
[66] Where a child is 18 years or older and is entitled to support as a "child of the marriage", there are two possibilities with respect to the "table amount" portion of support: either the table amount is to be paid or, if the table amount is inappropriate, an amount is to be paid that the court considers appropriate. In determining what is appropriate, the court needs to consider the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute.[^5]
[67] In this case, both children left home and started attending university in other cities. They continue to live and attend university in other cities. In these circumstances, it is my view, that the Guideline amount of support payable by either party to the other is no longer appropriate. Housing, food, transportation and other costs fall within the s. 7 post-secondary education expense regime and are covered by the proportionate contributions of the parties.
[68] This is why I have provided above that the monthly Guideline amount child support obligations of both the Applicant and the Respondent ends for each child as that child leaves home to attend school in another city.
[69] On the other hand, children need the option and frequently do return home to visit with one or the other parent from time to time throughout the academic year and for holidays. For this reason, it is appropriate that some child support be paid during the months the child is away to maintain a room for that child. In this regard, I find that $150 per month is appropriate. This amount covers the cost of heat and hydro, for example.
[70] In the factual circumstances of this case, it is therefore fair and reasonable that from September 1 to May 1 of each academic year commencing September 1 2012 which is when Carly went away to study, the Respondent pay to the Applicant $150 per month as child support for the ongoing cost of maintaining rooms for the children. This amount is to be paid by the Respondent notwithstanding that one or both children may stay with him from time to time given the income difference between the parties. It is only to be paid, however, on the condition that at least one of the two children is in attendance at an educational institution on a fulltime basis in another city and until both children have obtained at least one undergraduate degree or diploma.
[71] The circumstances are different, however, for the summer months between May 1 and September 1 each year:
(a) If a child chooses not to return to a parental home and to continue studying on a fulltime basis throughout these four months (or part of them) in another city, then the regime established for parental contribution to s. 7 expenses continues to apply. (b) If a child chooses not to return to a parental home and chooses to live and work in another city, no support is payable by either party to the other. (c) If a child is unable to return to a parental home due to lack of employment opportunity and is required to live and work in another city, the s. 7 regime applies save and except that 50% of the child's employment income will be included in any calculation before the liability for the child's costs is apportioned between the parents. (d) If a child chooses to return to a parental home and live with a parent, then the Guideline amount is payable to the parent in whose home the child is living.
[72] With respect to the child Carly, the parties will be required to apply the above noted formula commencing May 1 2013 and for each summer thereafter as defined above until she has obtained her first degree or diploma.
[73] With respect to the child Braydon, the parties will be required to apply the above noted formula commencing May 1 2015 and for each summer thereafter as defined above until he has obtained his first degree or diploma.
[74] Should the Respondent have continued to pay monthly support in accordance with the order since September 1 2014, he will be entitled to a credit to the extent that those payments exceed the monthly amount referred to herein. Any credit, however, shall be applied to his obligation to pay a proportionate share of the s. 7 post-secondary expenses of the children and is not to be considered or enforced as a "refund" to the Applicant.
ORDER
[75] An order shall issue in accordance with these Reasons.
COSTS
[76] Unless I am persuaded that the success of the parties in this case is not divided, no costs are payable by either party to the other. The parties may make brief written submissions with respect to this issue with in the next 30 days.
Justice L. Templeton
Templeton J.
Released: March 7, 2016
[^1]: Neither the Respondent nor the Applicant filed a copy of the final order as issued and entered. Instead, the order relied on by both parties in their evidence and their submissions, is neither signed nor issued. For expediency, I shall rely on the same copy but clearly this practice is entirely unacceptable and cannot be permitted by the Court in the future. [^2]: D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231 [^3]: Contino v. Leonelli‑Contino, 2005 SCC 63, [2005] 3 S.C.R. 217 [^4]: 2007 29972 (ON SC), [2007] O.J. No. 2964 [^5]: Albert, supra