NEWMARKET COURT FILE NO.: FC-13-43384-02 DATE: 20160721 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: David Ralph Barnes, Applicant AND: Lynne Noreen Marlene Barnes (Howe) now known as Lynne Vincent, Respondent
BEFORE: Justice R.T. Bennett
COUNSEL: Applicant – Self-represented Philip Viater, Counsel for the Respondent
HEARD: June 20, 21 and 22, 2016
Reasons for Decision
Relief Sought by Applicant
[1] This decision relates to a trial of a Motion to Change.
[2] The applicant, David Ralph Barnes seeks, through a Motion to Change an Order varying paragraph 5.2 (a) of a Separation Agreement dated November 12, 2008.
[3] Specifically, he seeks to reduce the amount of child support effective August 1, 2010 from $3,500 per month to “an appropriate amount pursuant to the Child Support Guidelines based on the actual number of children for whom child support is payable, with credit for any payments made after August 30, 2010.”
[4] He further seeks an order declaring that as of the date to be determined, child support was payable for four children of the marriage and as of the date to be determined, child support was payable for only three children of the marriage.
[5] He also seeks an order discharging the arrears of support owed by the applicant to the respondent or in the alternative relieving him from the payment of any part of the arrears or any interest due on the arrears from October 1, 2010.
[6] In addition he seeks an order declaring that effective September 1, 2014 child support be in the amount of $959 per month and lastly he seeks costs.
[7] Essentially, the applicant is seeking to change the child support provisions of the Separation Agreement retroactive to October, 2010 and is seeking that child support should be paid since that time based on the Child Support Guidelines and a determination of his income.
Position Taken by Respondent
[8] The respondent essentially takes the position that the Motion to Change should be dismissed in its entirety and that support should continue to be paid by the applicant at the rate of $3,500 per month pursuant to the provisions of the Separation Agreement.
[9] In addition, she seeks the recovery of arrears of support that have accrued pursuant to that Separation Agreement. These arrears in round numbers are approximately $125,000 as of the current date.
[10] According to her evidence, the respondent takes the position that the terms of the Separation Agreement require that the applicant pay child support in the amount of $3,500 per month (to which she refers to as a “lump-sum”) until the last of the children moves from the matrimonial home regardless of what age the child may attain prior to doing so. In her counsel’s closing submissions, he tempered that position somewhat by saying that the respondent’s position is that the $3,500 per month should continue at least until the present and may be subject to some variation at some future time, not necessarily coinciding with the last of the five children moving from the respondent’s home.
Background
[11] Certain factual background is not disputed by the parties.
[12] The applicant is 62 years of age born October 21, 1953.
[13] The respondent is 55 years of age born May 9, 1961.
[14] The parties were married to one another on April 25, 1987.
[15] The parties have five children namely:
Jordan, 27 years of age date of birth September 20, 1988 Jared, 26 years of age date of birth June 28, 1990 Jamilyn, 21 years of age date of birth August 29, 1994 Johannah, 19 years of age date of birth May 7, 1997 Jesse, 16 years of age date of birth September 14, 1999
[16] In addition, the applicant has two older children from two previous relationships.
[17] The applicant has always worked in the “aircraft industry.” He has credentials as a commercial pilot, a helicopter pilot and credentials that allow him to maintain aircraft. He worked for Canadian Aviation Safety Board (CASB) from 1988 to 1996.
[18] In or about 1996 he started a company known as Beacon Field Corp (“Beacon Field”). Essentially, he is an aviation safety and security consultant. In that capacity he investigates accidents or is retained by insurance companies to reinvestigate airline accidents.
[19] The respondent has a university business degree. In addition, she has her commercial helicopter’s licence and her pilot’s licence. During the marriage, the respondent’s “primary occupation” was as a housewife and taking care of the home and the children. In addition to that, she did the bookkeeping for the applicant’s business until a short time after the separation. She also did bookkeeping for her father’s three or four businesses.
[20] The marriage had been deteriorating but, according to the respondent’s evidence, that deterioration accelerated rapidly as a result of the applicant insisting that the respondent go with him on what she was led to believe was a business trip but which she learned after arrival was an intended holiday. This occurred in or about 2006. Ironically, during that trip, given that she did not want to spend time with the applicant, she met her current husband who was then working in a restaurant in the hotel where she and the applicant were staying.
[21] The parties separated on June 9, 2007. Between the date of separation and November 2008, the parties negotiated the terms of a Separation Agreement. The uncontradicted evidence of the applicant is that the first three drafts of the Agreement were prepared by the respondent’s father who was attempting to assist the parties in coming to an amicable resolution.
[22] In total, there were 12 drafts of the Separation Agreement with the twelfth draft being signed November 12, 2008. Each of the parties had, prior to signing the Separation Agreement received independent legal advice from their lawyers. I will comment further on the Separation Agreement subsequently in this decision.
[23] The separation was within the matrimonial home and the applicant continued to reside in the basement of that home during the negotiation of the various drafts of the Separation Agreement.
[24] On December 28, 2008 (about six weeks after the Separation Agreement had been signed) as a result of criminal charges brought against him over an alleged assault of one of the children, the applicant was arrested and removed from the home.
[25] On March 5, 2009, the parties were divorced based on an application brought by the respondent.
[26] Sometime in 2009, the respondent married her current husband, Shinu Jerod Vincent, who is now 35 years old, born December 17, 1980. When immigration matters were completed, her current husband came to Canada and has resided with the respondent in the former matrimonial home since that time.
[27] The applicant has not remarried although there is evidence that he does have a relationship of some permanence with his current girlfriend.
November 12, 2008 Separation Agreement
[28] Attached as Schedule “A” to this decision is a copy of the November 12, 2008 Separation Agreement.
[29] So far as it relates to this Motion to Change, the relevant paragraphs of the Separation Agreement are paragraphs 5, 6, 7, 9, 10, 11 and 14. In particular, the court highlights paragraphs 5, 14.11 and 14.14.
[30] The court finds that pursuant to paragraph 5.2 (a) of the Separation Agreement, the parties agreed that the applicant would pay $3,500 per month to the respondent. It was acknowledged that the “ $3,500 is more than the table amount” owing by the applicant based on his then current line 150 income due to the fact that he was self-employed. The applicant acknowledged that he was to make best efforts to earn a minimum annual income of $90,000. The parties settled on that amount of child support to reflect “these circumstances, including the children’s current section 7 expenses and the cost of maintaining a household for five children.”
[31] Pursuant to paragraph 5.2 (c), the applicant was to continue to be responsible for his basic living expenses while continuing to reside in the matrimonial home. This was to continue until the anticipated closing of the sale of the matrimonial home.
[32] Paragraph 5.3 provided that child support would end for each child when one of the nine enumerated events took place which, in the circumstances that have unfolded would include a child who,
(i) “ceases to be a “child” as defined in the Divorce Act ,”; (ii) “no longer resides with the custodial parent”;
(iii) “ is no longer being in full attendance at an educational institute”; (iv) “turns 19,unless…”; (v) “obtains a post-secondary degree or diploma”; or (vi) “turns 23 years of age.”[33] Paragraph 5.6 provides that,
“if David’s obligation to support a child ends, the parties will determine the support payable for the other children at that time under the Guidelines under section 5.10 and the children’s needs. Lynne and David will use the section of this Agreement entitled “Dispute Resolution” to resolve the issue.”
[34] Paragraph 7 of the Separation Agreement provided for a spousal support release.
[35] Paragraphs 9 through 12 of the Separation Agreement provided that the matrimonial home would be sold and, the following would be paid from the joint proceeds prior to division, namely:
(a) the real estate commission and legal fees; (b) joint TD equity loan; (c) university tuition for Jordan and Jared owing as of that date; (d) repayment of a $1,500 overdraft, and; (e) a $4,500 loan for roof repairs.
[36] The balance of the proceeds would then be divided into two equal shares and from the applicant’s share would be paid to the respondent:
i. $35,000 being an amount owed to her by Beacon Field; ii. any funds owed by the applicant for, “living expenses while living in the matrimonial home after the date of separation”; and iii. $42,000 being the “pre-payment of the $3,500 per month child support for one year.”
[37] From her share, the respondent was to discharge a $30,000 joint unsecured TD Bank loan.
[38] Each party was to be responsible for their own credit card debts.
Amending Agreement Dated September 29, 2009
[39] The parties entered into the Amending Agreement (a copy of which is attached to this decision as Schedule “B”) which provided for the transfer by the applicant to the respondent of his interest in the matrimonial home.
[40] In exchange for that transfer, the applicant received $15,000.
[41] In addition, he received a “credit” for $42,000 of child support with the result that child support was deemed to have been paid by him to and including September 1, 2010.
[42] Further, the respondent released her claim to the $35,000 that, pursuant to the Separation Agreement would have been paid to her by Beacon Field.
[43] Each of the parties acknowledged that they had received financial disclosure and that each had received independent legal advice prior to signing the Agreement.
Respondent’s Filing of Agreement
[44] The respondent filed the Separation Agreement and Amending Agreement with the court and with FRO in June 2014. Based on her Statement of Arrears then sworn , she alleges that from the time the first payment was owed (October 2010), the applicant reduced the amount payable for the first three months to $2,100 per month, then increasing it to $2,800 per month until April 2012 and subsequently reducing it thereafter.
[45] The applicant then brought this Motion to Change in 2014 which resulted in this trial.
Setting Aside Separation Agreement
[46] Although the applicant did not specifically in his Motion to Change seek a setting aside of the Separation Agreement, the court will address that issue as it was alluded to during the trial.
[47] Pursuant to section 56 (4) of the Family Law Act , a court may, on application set aside a domestic contract or a provision in it,
(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made; (b) if a party did not understand the nature or consequences of the domestic contract; or (c) otherwise in accordance with the law of contract.
[48] In the Separation Agreement and in the Amending Agreement, there is an acknowledgement that each of the parties was satisfied with the financial disclosure provided by the other party.
[49] The court heard evidence that the respondent was responsible for bookkeeping for Beacon Field prior to the separation. The applicant testified that he did not get involved with finances and relied on the respondent to perform that role during the marriage. There was absolutely no evidence given by the respondent to indicate that she did not have full financial disclosure and, she is not seeking to set aside the Separation Agreement.
[50] There was no evidence led by the applicant that he did not have full financial disclosure at the time of the Agreement and the court finds that there is no evidence before it to lead to a finding that he did not have full financial disclosure at that time.
[51] Further, the Agreement was negotiated over 12 draft agreements and each of the parties had independent legal advice prior to signing the Agreement and the Amending Agreement.
[52] There is nothing to indicate that either party did not understand the nature or consequences of the Agreement.
[53] Further, the court finds that there is no basis for setting aside the Agreement otherwise in accordance with the law of contract.
[54] For all of the above reasons, the court finds that there is no rationale for setting aside the Separation Agreement pursuant to section 56 (4) of the Family Law Act .
Interpretation of Separation Agreement
[55] The court finds that the main issue before it is the interpretation of the Separation Agreement and in particular the interpretation of paragraph 5 thereof.
[56] Even though each party had received independent legal advice from experienced family law counsel prior to signing the Agreement, the court finds that the wording of paragraph 5.2, in particular, results in significant ambiguity as to its intention.
[57] Neither party called as a witness the lawyer who acted on their behalf at the time of the signing of the Separation Agreement (or the Amending Agreement). Therefore, the court did not have the benefit of the lawyers’ intentions as to the meaning of those paragraphs.
[58] The respondent asks the court to interpret paragraph 5.2 (a) to mean that $3,500 per month would be payable to her by the applicant for so long as any of the children continued to reside with her. In particular, she relies on the wording “the parties have settled on the amount of child support in this Agreement to reflect these circumstances, including the children’s current section 7 expenses and the cost of maintaining a household for five children.” (emphasis added). She, however, ignores paragraph 5.3.
[59] The applicant on the other hand, by his actions of reducing the payments of child support seems to have taken the position that the $3,500 per month is essentially $700 per month per child and that if one of the children is no longer eligible for child support, the child support would be payable in the amount of $2,800 per month and if two of the children were no longer eligible for child support, then child support would be payable in the amount of $2,100 per month. He ignores the wording of 5.2 (a).
[60] At trial, the applicant took the position that child support should be payable for the number of children who remained eligible according to paragraph 5.3 of the Agreement but that the quantum of child support payable should be based on the Child Support Guidelines and his income as determined by the court.
[61] The court finds that the wording of the Separation Agreement and in particular paragraph 5.2 (a) is far from clear (and is inconsistent with paragraph 5.3) and has led to this trial.
Children’s Situation Since Separation
Jordan
[62] Based on the evidence of both of the parties, it is agreed that Jordan lived with the applicant from September 2013 until March 2016. From the date of separation until August 2013, he lived with the respondent and, as of April 2016, he has returned to live with the respondent.
Jesse
[63] Based on the uncontradicted evidence of the respondent, Jared lived with the respondent from the date of separation until July 2013 when he moved from the respondent’s home and since which time he has continued to reside on his own (or with his girlfriend).
Jamilyn, Johanna and Jesse
[64] Based on the evidence of both parties, all three children resided continuously with the respondent from the date of separation until the current time.
Number of Children “Eligible” for Support Based on Paragraph 5.3 of the Separation Agreement
[65] Attached to his February 6, 2015 affidavit, the applicant affixed a schedule setting out the number of children eligible for support over various periods of time.
[66] He seeks to have the number of children eligible for support reduced from the time when the child support would commence October 1, 2010 but acknowledges that from September, 2011 until April, 2012 - once again there were five children eligible for support.
[67] The respondent takes the position that if there is to be any adjustment of child support, then the earliest possible adjustment would be October, 2011 being three years predating the issuance of the Motion to Change.
[68] The court finds that based on the evidence, the earliest date at which time child support would be adjusted is May, 2012 coinciding with Jordan’s completion of his post-secondary education.
[69] The court further finds that it cannot and should not ignore that during the time between September, 2013 until March, 2016 Jordan was residing with the applicant.
[70] The court further finds that it cannot and should not ignore that since July, 2013 Jared has not resided with the respondent.
[71] The respondent’s evidence is that Jamilyn, who is now almost 22 years of age, has completed four years of post-secondary education and is now planning on two further years at Ryerson and possibly Teacher’s College thereafter. Even though she has completed four years of post-secondary education, the respondent’s evidence is that Jamilyn did not receive a degree because she decided to change courses.
[72] The respondent’s evidence is that Johanna, who is now 19 years of age, is enrolled in a kinesiology program at York University, having completed her first year and intends to possibly go to medical school after completing that degree.
[73] The respondent’s evidence is that Jesse will be starting grade 12 in September, 2016.
[74] Subject to taking into account the respondent’s position that the Separation Agreement provides for child support in the amount of $3,500 until the last child leaves home, but based on a “typical analysis” pursuant to the Child Support Guidelines and that based on the provisions of paragraph 5.3 of the Separation Agreement, child support at this point in time would only be payable for a maximum of three children. The reference to the “maximum of three children” is to take into account an argument that the applicant would have that child support should no longer be payable for Jamilyn given that had she not changed courses, she could have already received a four-year degree based on her current completion of studies.
Benefit Received by Respondent from Amending Agreement
[75] As earlier set out, pursuant to the provisions of the Separation Agreement, the matrimonial home was to have been sold, and subject to the adjustments earlier referred to, the applicant was to receive 50% of the “net proceeds.”
[76] As a result of the Amending Agreement, the court finds that the applicant received the following rather than 50% of the” net proceeds”, namely:
(a) a cash payment of $15,000; (b) a credit of $42,000 being the child support payable from October, 2009 to September, 2010; (c) the foregoing of a $35,000 payment to the respondent which, according to the Separation Agreement would have been payable pursuant to paragraph 10.2 (i) from the applicant’s share of the net proceeds of sale; and (d) An indeterminate amount being the living expenses payable by the applicant pursuant to paragraph 5.2 (c).
[77] There was no evidence put forward by either party of any appraisals of the matrimonial home in 2009 when the Amending Agreement was signed. However, based on the evidence of the applicant and the respondent, the court finds that in round numbers the home then had a fair market value of $600,000 and was subject to a line of credit/mortgage which had a balance outstanding of approximately $300,000 based on the January 2008 statement and the fact that the credit limit was $300,000.
[78] In round numbers, assuming that the home had been sold and the provisions of the Separation Agreement had been followed, the applicant would have notionally received $150,000. From that amount, he would have paid the respondent $42,000 for one year’s child support, $35,000 being the amount owed to her by Beacon Field, $2,250 being one half of the “roof loan”, $750 for one half of the overdraft on the TD bank account, and the basic living expenses for approximately one month from the date the Separation Agreement was signed until he was removed from the home in December, 2008.
[79] In round numbers, the applicant would have received approximately $70,000 rather than the $15,000 that he actually received.
[80] In considering the provisions of the Separation Agreement and the issues relating to this Motion to Change, the court takes into account that the respondent received approximately an “extra” $55,000, being the amount that was not paid to the applicant based on the provisions of the Amending Agreement rather than the Separation Agreement.
[81] The respondent advises that the current fair market value of the home is approximately one million dollars.
Applicant’s Income
[82] The applicant works as a consultant through a company known as Beacon Field.
[83] The court has in evidence the Financial Statements for Beacon Field from 2004 to and including 2015 with the company year-end being April 30.
[84] In addition to the evidence given by the applicant, the court heard evidence from Paul Carroll, a chartered accountant who has prepared the Beacon Field Financial Statements and the applicant’s Income Tax Return for the relevant period of time.
[85] Mr. Carroll testified that he did not do any review of the information provided to him and merely prepared the Financial Statements and Income Tax Returns based on the information provided to him by the applicant and his bookkeeper.
[86] The court notes, of course, that until the date of separation, that information would have been compiled by the respondent and that subsequent to the date of separation the information has been compiled by a bookkeeper retained by the applicant.
[87] The court further notes that Mr. Carroll is not only the accountant for the applicant, but is also the accountant for the respondent and apparently for her father and his companies.
[88] Attached as Schedule “C” to this decision is a chart, which the court has prepared, setting out the revenue of Beacon Field each year, the auto/travel expense claimed each year on its Financial Statements, the net income of Beacon Field and the management fees shown on each year’s Financial Statements. In addition, on that chart, the court has included the line 150 income shown by the applicant on his Income Tax Returns for the relevant years.
[89] The court will comment subsequently on the issues of disclosure and the lack of evidence as to any forensic income determination for the applicant.
[90] The court takes into account that income determination for family law purposes is different from income determination for income tax purposes.
[91] Based on the evidence of the applicant, there are some expenses that are claimed for income tax purposes as being business expenses which, quite properly for family Law income determination purposes would be added back to the applicant’s income.
[92] As was set out in the respondent’s original Response to the Motion to Change (done by her previous counsel), if the applicant had an income of $149,500 per annum, the table amount of child support for five children would be $3,500.
[93] That, however, is somewhat irrelevant given that the provisions of paragraph 5.2 of the Separation Agreement do not indicate that the $3,500 is based on an income of $149,500. In fact, those provisions indicate that the applicant will make best efforts to earn $90,000 per year.
[94] One of the problems with the Agreement is that it is ambiguous and does not indicate that the $3,500 per month support is even based on an income of $90,000 per year but that the applicant will make efforts to earn that level of income.
[95] To further complicate matters, the $3,500 per month in the Agreement is said to include section 7 expenses and the cost of maintaining the household for five children.
[96] As a result of all of the above, the court finds that a more appropriate analysis of the applicant’s income is to compare his income subsequent to the signing of the Separation Agreement to the income that he was earning at the time and prior to the signing of the Separation Agreement.
[97] The court finds that the most relevant periods of time are the period up to and including the year which ended April 30, 2009 (being the last fiscal year end prior to the separation) and from 2010 to 2015.
[98] The average of the revenue for the six years preceding the date of separation is $127,587, while, the average for the six years subsequent to the date of separation is $119,587.
[99] In fact, it could be argued that the average since 2010 should be less than that given that there was a $53,253 bad debt in that year.
[100] Given that there is only an $8,000 per year difference in the averages of the revenue for the six years preceding and the six years following the date of separation, the court finds that there has been no material change in the applicant’s income from the date of the Amending Agreement to the present time.
Respondent’s Claimed Expenses
[101] The respondent submitted a spreadsheet (tab 58 of Exhibit 12) setting out the expenses that she claims she has incurred on an annual basis principally on behalf of the children. These claimed expenses average approximately $112,000 per year from 2010 to 2015 inclusive or $672,000 in total over that six year period.
[102] In 2009, being the year in which the Amending Agreement was signed, those expenses according to the respondent were approximately $105,000.
[103] The respondent in her evidence-in-chief said that these expenses were financed through her line of credit.
[104] However, the evidence discloses that the current outstanding balance on her line of credit in round numbers is about $400,000 and at the time of the Separation Agreement (and presumably at the time of the Amending Agreement) was approximately $300,000.
[105] Based on her response to questions from the court, it seems that what the respondent actually meant was that the expenses were paid through the line of credit not that the balance of all of the expenses had been financed through an increase in the line of credit.
[106] Commencing in October 2010, if the applicant had paid child support in the amount of $3,500 per month, he would have paid a total of $241,500 from October 2010 to June 2016 inclusive.
[107] According to the respondent, the current balance of arrears of child support outstanding based on FRO calculation is $125,000 and therefore the applicant has paid approximately $116,500 between October, 2010 and June, 2016 ($241,500 minus $125,000).
[108] The respondent claims that she has spent $45,000 in the first five months of 2016 on children’s expenses. Adding this to the $672,000 over the period of time from 2010 to 2015 results in a total alleged expenditure of $718,000 to date.
[109] Deducting the $116,500 that has been received from the applicant leaves a balance of approximately $600,000 in round numbers. Deducting further the $100,000 increase in the line of credit results in a balance of approximately $500,000. This amount reflects the respondent’s evidence of the total expenses that she claims she has incurred on behalf of the children since the Separation Agreement was signed, less the amount she has received in child support from the applicant and less the amount in round numbers that her line of credit has increased during that period of time.
[110] Since the respondent’s evidence is that she had virtually no income of her own during this period of time, that left the court with the question as to how she financed this $500,000 deficit over a period of six years.
[111] Her evidence is that she receives monies from her parents which her counsel characterized as “an advance on her inheritance” given that her evidence is that whenever her parents give her money they also give equal amounts to each of her two sisters.
[112] The applicant acknowledged that included in those amounts which she characterized as children’s expenses would also be some expenses on her behalf.
[113] Based on the Exhibits filed on behalf of the respondent and in particular her income tax summaries, it appears that her current husband, who has resided with her during this entire time has had little or no income and therefore would not have contributed to any of those expenses.
[114] Not only did her current husband not contribute to those expenses, but the respondent’s evidence is that she lent money to her current husband to start up a business which may only at this stage become profitable.
Analysis
[115] The applicant essentially seeks to have the court find that child support should be based on the number of children eligible for support pursuant to paragraph 5.3 of the Separation Agreement and based on his management fees taken from Beacon Field, together with any net profit earned by Beacon Field and with the addition of $12,000 per annum being an amount to that he says a forensic accountant recommended be added back to his income for family law purposes.
[116] There are a number of difficulties with this approach.
[117] There was no expert evidence put forward on behalf of the applicant to support that income calculation.
[118] Further, the court finds that it would not be appropriate to find that there should be no accounting for section 7 expenses, nor to ignore the clear wording of the Agreement which addresses the respondent’s need to maintain a household for five children.
[119] On the other hand, the respondent takes the position that the wording of the Agreement entitles her to $3,500 per month in child support even if only one of the children remained living at home and even if that child no longer qualified for support according to the criteria set out in paragraph 5.3 of the Separation Agreement.
[120] She further takes the position that there should be a “spousal support component” to the child support payable to her since in the Agreement, she waived any entitlement to spousal support after a more than 20 year traditional marriage.
[121] This position of course ignores a number of factors including the provisions of the Agreement which specifically provide for a spousal support waiver, the fact that she benefited from the Amending Agreement wherein the applicant received far less than his entitlement in the former matrimonial home based on the provisions of the Separation Agreement. In addition the respondent does not take into account the fact that within four months of the Separation Agreement being signed she had been granted her divorce and a few months later had remarried. Nowhere in her evidence or submissions, did she even suggest that her current husband had an obligation to contribute at least to his own support if not to the expenses of the household.
[122] The court finds that neither position is reasonable based on the provisions of the Separation Agreement, the Amending Agreement and the Divorce Act or Family Law Act .
[123] The respondent put forward that an adverse inference should be drawn against the applicant due to a lack of disclosure. In support of that position, she alleges that the applicant failed to provide originals of all his receipts and the background documentation to support the general ledgers of the company that were provided. She further submits that by failing to provide an expert income valuation, an adverse interest inference should be drawn against him.
[124] The applicant takes the position that he made available his records for inspection by the respondent and her counsel and that he was not in an economic position to pay for the cost of duplicating hard copies of those records nor the costs of the time that would be spent in scanning and providing an electronic copy of those records. He further submits that he simply did not have the resources to retain an expert to do an income analysis.
[125] The respondent takes the position through her counsel that questioning could not proceed because the applicant had not provided the disclosure requested by the respondent’s counsel.
[126] While it is trite law that financial disclosure is a cornerstone of family law, the court finds that in this case, the alleged failure of disclosure does not materially impact on the decision of this court and that there are at least plausible explanations from the applicant as to why he could not comply with the requested disclosure.
[127] The applicant claims impecuniosity as a result of his debt load. To some extent this is corroborated by the respondent who portrays the applicant as somewhat of a spendthrift.
[128] The court is left with the task of making a decision based on the backdrop of the evidence that is before it including the ambiguity in the Separation Agreement. The court finds that not only is there ambiguity but when paragraph 5.2 of the Separation Agreement is analysed, alongside paragraph 5.3 of the Separation Agreement, there is inconsistency.
[129] The court finds that as of May 1, 2012, in accordance with paragraph 5.3 of the Separation Agreement, there were four children for whom child support would be payable.
[130] The court further finds that as of May 1, 2013, once again in accordance with paragraph 5.3 of the Separation Agreement, there were three children for whom child support would be payable.
[131] It is not the legal obligation of the maternal grandparents to pay for their grandchildren’s education. Based on the evidence before the court, however, the court finds that the grandparents have not only paid for the grandchildren’s education by way of monies advanced to their daughter, but have in fact been subsidizing their daughter, her current husband and their grandchildren.
[132] The court notes that based on the applicant’s average revenue earned since 2010, being $119,500 per year, the table amount of child support for three children would be $2,150 per month and for four children $2,558 per month. That of course is based on revenue and not based on the applicant’s actual income.
[133] The court has found that there has been no material change in the respondent’s average revenues for the six years preceding the Amending Agreement and the six years following the Amending Agreement.
[134] Therefore the court finds that it is reasonable for the court to impute an income of $90,000 per annum to the applicant since, based on the information available as of the date of the Separation Agreement, the parties agreed that the child support provisions were not based on the applicant’s then current income and further the Agreement contained a provision that “David acknowledges that he will make his best efforts to earn a minimum annual income of $90,000.” This is not an acknowledgement that the applicant was making $90,000 per year at that time, but certainly is a benchmark on which the child support provisions of the Agreement were based.
[135] The court does not accept the respondent’s analysis that there should be an “unchanged premium of $1,222 per month added to the table amount for $90,000 in order to arrive at the rationale for the $3,500 per month original figure.
[136] However, the court does find that the analysis done by the respondent’s counsel in his alternative argument is of some utility.
[137] If we assume that the original $3,500 per month was based on an income of $90,000 per annum and take note that the table amount for that level of income for five children is $2,278 then, based on five children there was a “premium” of $1,222 per month.
[138] Since the court has found that it is reasonable to impute an income of $90,000 per annum to the applicant, the court finds as well that it is reasonable to conclude that the appropriate quantum of child support for four children should be the table amount of $2,010 per month, plus 4/5 of the $1,122 “premium” or an additional $897.60 for a total of $2,907.60 per month.
[139] On a similar analysis, when child support is payable for three children, the court finds that the appropriate amount is the table amount of $1,687 per month plus 3/5 of the $1,122 per month “premium” or an additional $673.20 for a total of $2,360.20 per month.
[140] The court notes that in her affidavit sworn November 21, 2014, the respondent adopted the time frame with respect to the number of children based on the time frames set out by the applicant in his material.
[141] There is no “exact science” available to the court as to when to commence arrears calculations. However, the court finds that it is reasonable to commence these calculations as of May 1, 2013 which coincides with the date both parties agree child support would have been payable for three children (based on the respondent’s November 21, 2014 affidavit).
[142] This analysis results in the applicant owing child support in the amount of $2,360.20 per month commencing May 1, 2013.
[143] For the period of time from September, 2013 until May, 2016, Jared was living with the applicant. Based on the parties’ rationale that a household needed to be maintained for the children, even if child support technically was not payable for Jared during this period of time, the court finds it reasonable to offset some child support to take into account the fact that the applicant was maintaining a household for Jared.
[144] The court finds that given the ages of the children, and the obvious business acumen of the respondent, it is reasonable to impute some income to her for this period of time and to find that there should be some offset for the amount of support payable by the applicant taking into account that three children were residing with the respondent and one child was residing with the applicant.
[145] The court finds in the circumstances that it is not unreasonable to impute an income of $30,000 to the respondent and to offset $245 per month being the table amount of support for one child based on that income against the quantum otherwise payable by the applicant to the respondent.
[146] Therefore, for the period from September 1, 2013 to May 1, 2016, the child support owing by the applicant to the respondent shall be $2,360.20 per month less the offset of $245 per month for an amount payable $2,115.20 per month.
[147] Since Jared is no longer living with at the applicant, the amount of support payable by the applicant commencing June 1, 2016 shall be $2,360.20 per month.
[148] Jamilyn has completed four years of post-secondary education, and an argument could have been made that if she had not changed courses, she would have had a post-secondary degree at this time and therefore she would no longer be eligible for support. However, no such argument was made and therefore, given her age pursuant to the provisions of the Separation Agreement, child support would continue for her until she attains the age of 23 years which will be August 29, 2017.
[149] In order to avoid the parties having to return to court, the court finds that based on the current circumstances, commencing September 1, 2017, child support would then only be payable for two children and based on the finding of $90,000 per annum, income for the applicant and the analysis of the table amount plus a “premium” child support will then be payable in the amount of table amount of $1,292 per month plus 2/5 of $1,122 per month “premium” or a total amount of $1,740.80 per month.
Order to Go
[150] In light of all of the above, there shall be an Order that:
- Commencing May 1, 2013 to and including August 1, 2013 the applicant shall pay to the respondent child support in the amount of $2,360.20 per month.
- Commencing September 1, 2013 and on the first day of each month to and including May 1, 2016 the applicant shall pay to the respondent child support in the amount of $2,115.20 per month.
- Commencing June 1, 2016 to and including August 1, 2017 the applicant shall pay to the respondent child support in the amount of $2,360.20 per month.
- Commencing September 1, 2017 and on the first day of each month thereafter the applicant shall pay to the respondent child support in the amount of $1,740.80 per month.
- All of the above amounts are inclusive of any section 7 expense claims for the children.
[151] The parties are invited to make costs submissions which shall not exceed three pages in length not including any relevant Offers to Settle. The applicant shall serve and file his submissions by August 15, 2016, the respondent by August 31, 2015 and the applicant any reply submissions by September 10, 2016. Costs submissions are to be filed in the Continuing Record.
Justice R.T. Bennett Date: July 21, 2016