Court File and Parties
COURT FILE NO.: 249-2015 DATE: 2016/07/26 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Tina Lalande Moving Party – and – Stéphane Musicka Respondent
Counsel: Self-represented (for Tina Lalande) Catherine Calvert, counsel for the Respondent (Stéphane Musicka)
HEARD: July 22, 2016
RULING ON MOTION TO CHANGE
LALIBERTE, J.
[1] The Court is dealing with a Motion to Change brought by Tina Lalande (hereinafter referred to as T.L.) on November 12, 2015.
[2] She is seeking a retroactive and prospective variation of Stéphane Musicka’s (hereinafter referred to as S.M.) child support for the child Cassandra Musicka who was born on August 19, 1998.
[3] The child support provisions sought to be varied are found in a separation agreement initially signed by the parties on April 11, 2002. The agreement was varied on October 8, 2004 and December 1, 2006.
[4] The separation agreement was filed with the Court pursuant to section 35 of the Family Law Act on November 11, 2015 therefore allowing for this application for variation under section 37 of the said Act.
[5] This motion has raised a number of issues some of which have been resolved on consent. Specifically, the parties have agreed on the following:
- The parents will share a portion of Cassandra’s expenses for a post-secondary education program set to start in September 2016;
- S.M. will provide proof that Cassandra is named as sole beneficiary of a $100,000.00 life insurance policy;
- A retroactive and prospective review of the amount of child support paid by S.M. is warranted in light of the increase in his yearly employment income.
[6] Properly articulated, the issues to be decided by the Court are as follows:
- What is S.M.’s income for the purpose of ongoing/prospective child support (as of August 1, 2016)?
- What is the appropriate start date for the retroactive child support payable by S.M.?
- What is S.M.’s income for the purpose of the retroactive child support (before August 1, 2016)?
- Should the Court award an amount of child support that is lower than what is prescribed in the Child Support Guidelines on the basis of undue hardship under section 10 of the said Guidelines?
- Is S.M. liable to pay retroactive section 7 special or extraordinary expenses as claimed by T.L.?
- Should S.M. be credited for the cell phone expenses paid by him for Cassandra?
1. What is S.M.’s income for the purpose of ongoing/prospective child support (as of August 1, 2016)?
[7] T.L. submits that S.M.’s present income should reflect a $52,299.00 bonus received by him from his employment in 2015. His 2015 notice of assessment shows a line 150 total income of $193,927.00.
[8] A letter dated March 22, 2016 and attached to S.M.’s July 14, 2016 affidavit confirms that the $52,299.00 was a one-time bonus payment from the employer.
[9] T.L.’s position is that S.M.’s 2016 income should be set at a minimum of $167,000.00 to reflect his base annual income and half of the above-noted bonus.
[10] S.M.’s position is that his 2016 income should be set at $137,176.00 based on his year-to-date earnings of $68,536.00 as shown on the June 30, 2016 pay stub attached to his July 14, 2016 affidavit.
[11] In deciding this issue, the Court is guided by the following principles:
- Section 2(3) of the Child Support Guidelines: 2(3) Where, for the purposes of the Child Support Guidelines, any amount is determined on the basis of specified information, the most current information must be used.
- The law is clear that using historical income is inappropriate; the only time that a historical approach may be appropriate is where there is no more current information available to the Court; the Court’s task is to determine present income.
- Whora v. Whora, [2016] O.J. No. 2851;
- Meyer v. Content, 2014 ONSC 6001, [2014] O.J. No. 4992;
- Morrissey v. Morrisey, [2015] P.E.I.J. no. 51.
[12] Applying these principles in this motion, the Court finds that S.M.’s income for ongoing/prospective child support as of August 1, 2016 to be $137,176.00. This finding is reflective of the most current information on the question of how much he will earn in 2016. Specifically, reference is made to the following evidence:
- S.M.’s June 30, 2016 year-to-date earnings;
- The employer’s confirmation that the 2015 $52,299.00 bonus was a one-time bonus.
2. What is the appropriate start date for the retroactive child support payable by S.M.?
[13] T.L. proposes that the review of child support start in 2010. She estimates that the arrears are close to $34,000.00 as shown in tab 5 of her Factum.
[14] Her view is that S.M. is “dragging on the issues of the review…”. She states that “…it has been to his advantage for more than ten (10)years now, he has been able to spare over $44,000.00 of child support…”
[15] For his part, S.M.’s position is that the claim for retroactive support, if granted, should only be retroactive to the date that the Motion to Change was served upon him, namely November 24, 2015. The suggestion is that T.L. deliberately delayed to bring the said Motion so as to increase the potential arrears. Her delay in commencing a claim for retroactive support should be seen in a negative light and lessen the duration of the child support arrears.
[16] In deciding this issue, the Court will apply the analysis found in the Supreme Court of Canada’s decision in S.(D.B.) v. G., 2006 SCC 37, [2006] S.C.J. No. 37. The following factors must be weighed by the Court:
- Reasonable excuse for why support was not sought earlier;
- Conduct of the payor;
- Circumstances of the child;
- Hardship occasioned by a retroactive award.
[17] At paragraph 134, the Court states:
“…Once a Court decides to make a retroactive award, it should generally make the award retroactive to the date when effective notice was given to the payor parent.”
[18] The Court finds that effective notice was given to S.M. on September 11, 2013 through Karen White’s (assistant to T.L.’s counsel) e-mail communication wherein financial disclosure is sought to “…properly calculate the child support and extraordinary expenses to be paid…”.
[19] It is clear from the evidence that S.M. understood that T.L. was seeking to review the amount of child support. He provided the requested notices of assessment within five (5) days. He retained a lawyer as evidenced by a letter from counsel Josée Roy dated November 13, 2013 which offered to increase child support to $560.00 per month.
[20] Having considered all of the circumstances in this matter, the Court is of the view that October 1, 2013, is the appropriate start date for the retroactive child support.
[21] This finding is based on the following considerations:
- There is no evidence before the Court to support T.L.’s suggestion that she had notified S.M. of her intent to seek an increase prior to Karen White’s e-mail of September 11, 2013;
- There is no explanation on the record as to why a variation was not sought before;
- Neither of the parties had provided the other with income tax returns and notices of assessments on a yearly basis as provided for in the April 11, 2002 separation agreement;
- S.M. has historically been paying significantly less than the amounts prescribed by the Guidelines; his yearly income was noted as $37,500.00 in 2002 which translated to $325.00 monthly per the Guidelines; this was increased to $400.00 per month in April 2006 which was lower than the Guidelines but reflective of the costs in exercising access as he now resided in the Hamilton area; other than the cost of a cell phone, this amount has not been varied notwithstanding a significant increase in his yearly income noted as follows:
- 2012: $ 93,914.00
- 2013: $113,037.00
- 2014: $146,249.00
- 2015: $193,927.00
- 2016: $137,176.00
- It was incumbent on S.M. to disclose his yearly income to T.L. pursuant to their domestic contract; the evidence is that he did not do so; such significant changes should have been disclosed;
- There is no evidence before the Court to suggest that this impacted on Cassandra’s circumstances; the evidence does not establish that the child was disadvantaged because S.M. did not historically pay the proper amount of support;
- The Court is mindful that S.M. has since built a new family and that he is caring for two (2) biological children and two (2) step children; the Court has considered this factor in setting the proper start date at October 1, 2013; his obligation to his new family does not relieve him of his obligation towards his daughter Cassandra;
- The payment of the retroactive child support can be structured such as to avoid financial hardship;
- Counsel for S.M. recognized through her assistant’s (Carolyne Chénier) affidavit of May 11, 2016, that November 2013 can be considered to be the date of effective notice; the following is noted at paragraph 25: “25. In the alternative, the Respondent father proposes that child support arrears commence in November 2013, being the alleged date the Applicant mother requested an increase in child support, being what could be considered to be the date of effective notice although the parties negotiated through counsel.”
[22] The end result is that the Court sets October 1, 2013 as the appropriate start date for retroactive child support.
3. What is S.M.’s income for the purpose of the retroactive child support (before August 1, 2016)?
[23] S.M.’s income since 2013 is found to be as follows:
2013 The amount is set at $113,037.00 per the Notice of Assessment filed in the continuing record.
2014 The amount is set at $146,249.00 per the Notice of Assessment filed in the continuing record.
2015
- In determining the proper amount, the Court must consider section 17(1) of the Guidelines by reason of the one-time employment bonus of $52,299.00.
- 17(1): If the Court is of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of that income, the Court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
- The Court rejects S.M.’s argument that the bonus should be excluded from his 2015 income. In doing so, the Court adopts Justice Blishen’s reasoning in Gibson v. Gibson, [2002] O.J. No. 1784 where she states the following: “23. Where, as here, the focus of the inquiry is to determine the fairest actual income for one particular year, as opposed to predicting an income for a future year, the onus to be met to exclude a non-recurring amount of income actually received in that year from the calculation of that year’s income is high. The discretion to do so should be exercised in the context of the objectives of the child support law…” “26. Here, the Applicant, in essence, says that by choosing to reinvest a non-recurring capital gain rather than using the gain as disposable income, she has met the onus of showing that the s. 16 method of income calculation is not the fairest determination. I cannot accept that a pure and simple choice as to how to spend what is income standing alone, could justify the exercise of discretion to exclude that amount. So doing would not meet the objectives of objectivity or consistency and would not fairly reflect the financial means of both parents.”
- While the Court rejects S.M.’s argument that the bonus should be excluded in its entirety, the Court finds that its non-recurring nature makes it such that “fairness and reasonableness” require the Court to consider the actual income over the last three years.
- S.M.’s income for 2015 is set at $151,071.00 which is the average of his income for 2013 ($113,037.00), 2014 ($146,249.00) and 2015 ($193,927.00).
2016
- For the reasons already discussed, the amount is set at $137,176.00.
4. Should the Court award an amount of child support that is lower than what is prescribed in the Child Support Guidelines on the basis of undue hardship under section 10 of the said Guidelines?
[24] S.M. argues that he will suffer undue hardship if the Guideline amounts are imposed by the Court.
[25] He states the following in his July 18, 2016 affidavit:
“8. My wife, Johanne Musicka earns approximately $25,000.00 a year. I find it important to mention that I am worried that following a possible award of the substantive amount of support arrears sought by the Applicant mother, and child support moving forward (both monthly support and my share of post-secondary costs), I will not be in a position to adequately support my wife and 4 other children (2 biological, 2 step-children).”
“9. In fact, I worry that my wife and four other children could potentially be deprived of a reasonable or average standard of living if I am to pay the amounts claimed by the Applicant mother.”
[26] He is also relying on the costs involved in exercising access to Cassandra as a basis for undue hardship.
[27] Counsel for S.M. submits that a comparison of both parties’ financial statement reveals similar net income. It is argued that the fact that S.M. is supporting six (6) individuals serves to establish that T.L. has a higher standard of living since she supports four (4) individuals.
[28] The relevant principles under section 10 of the Child Support Guidelines are as follows:
10(1) …a Court may award an amount of child support that is different from the amount determined….if the Court finds that the spouse making the request,…would otherwise suffer undue hardship.
10(2) Circumstances that may cause a spouse…to suffer undue hardship include the following:
(b) the spouse has unusually high expenses in relation to exercising access to a child; (d) the spouse has a legal duty to support a child, other than a child of the marriage.
10(3) Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the Court if it is of the opinion that the household of the spouse who claims undue hardship would…have a higher standard of living than the household of the other spouse
- The case law establishes that proving undue hardship involves meeting a high threshold standard; hardship must be exceptional, excessive and disproportionate; the burden of proof is on the applicant who must present the Court with cogent evidence of the hardship
- Morrone v. Morrone, [2007] O.J. No. 5341.
[29] The Court finds that S.M. has not met this “high threshold standard” of proof. His evidence does not allow, on balance, for a finding that the prescribed child support amount would create exceptional, excessive and disproportionate hardship.
[30] As already noted, the limited evidence before the Court on this issue is found at paragraphs 8 and 9 of his July 14, 2016 affidavit. This evidence does not satisfy the above-noted high threshold standard. It amounts to S.M. being worried that he may not be able to adequately support his family. It is framed as a “possibility”. He uses the words “I worry that my wife and four other children could potentially be deprived of a reasonable or average standard of living…” This is not the measure of undue hardship under section 10.
[31] Furthermore, the notion of “undue hardship” is not consistent with the financial circumstances set out in S.M.’s July 14, 2016 Financial Statement.
[32] Having come to the conclusion that S.M. has not established undue hardship, the Court is not required to consider the standards of living of the households of both parties.
[33] Therefore, the Court will not award an amount of child support that is lower than the prescribed amount on the basis of undue hardship.
5. Is S.M. liable to pay retroactive section 7 special or extraordinary expenses as claimed by T.L.?
[34] The Court rejects T.L.’s claim for retroactive section 7 special or extraordinary expenses as set out in her materials. The Court’s decision is based on the following considerations:
- Most of the claim is based on expenses incurred before October 1, 2013 which is beyond the period of review allowed by the Court;
- T.L. has not provided the Court with receipts for these expenses;
- T.L. has not established, on balance, that the expenses claimed are special expenses as defined in the Guidelines, or extraordinary expenses and/or that the activities meet the tests of necessity and reasonableness;
- The Court notes that there is some uncertainty as to the amount claimed as raised by S.M. in paragraph 47 of his July 14, 2016; the record shows that the amount claimed as varied as follows:
- $12,349.42 in her November 12, 2015 Motion to Change;
- $14,349.79 in her July 11, 2016 affidavit;
- $4,071.65 in a correspondence from her counsel on June 24, 2014.
[35] Therefore, the Court is not granting T.L.’s claim for retroactive section 7 expenses.
6. Should S.M. be credited for the cell phone expenses paid by him for Cassandra?
[36] The uncontested evidence shows that S.M. has paid Cassandra’s cell phone expenses since 2012.
[37] The amounts paid are noted at paragraph 15 of his July 14, 2016 affidavit. While he states the costs are “now approximately $130.00 per month”, there is no indication as to when these costs increased to $130.00.
[38] On balance, the Court finds that the evidence establishes that S.M. has paid the following cell phone expenses:
- 2012/2013: $60.00 per month
- 2014/2015/2016: $90.00 per month
[39] S.M.’s position is that he should be credited for these cell phone expenses.
[40] T.L. submits that the cell phone was a gift made by S.M. to his daughter and as such, it should not be seen as child support.
[41] In deciding this issue, the Court is guided by the principles set out in Justice Aston in Bale v. Bale, [2001] O.J. No. 4196 at paragraphs 18 and 19:
“18. The question is what credit, if any, Mr. Bale ought to receive as against child support payable by him under the separation agreement. The separation agreement is not a court order, though once it is filed with the court, it may be enforced or varied as if it were a court order. Without varying the obligation to pay itself, parties in any individual case may arrive at their own agreement, express or implied, for some alternative to direct payment to the custodial parent.
- In my view, the court also has a limited discretion to give credit, even absent the recipient’s agreement. This discretion must be exercised very cautiously and only in exceptional circumstances. See, for example, Ontario (Family Support Plan, Director) v. Kopyto, [1996] O.J. No. 2095. Although this case only dealt with enforcement, not variation, of a support obligation, it highlights the ability to consider equitable relief. In Del Pozo v. Del Pozo (1992), 7 O.R. (3d) 591, also an enforcement proceeding, James Prov. Div. J. (as he then was) reviewed the relevant authorities on “set-off” and concluded
- support payments are generally an exception to the ordinary right of set-off in s. 111 of the Courts of Justice Act
- the payor cannot make full or part payments to a third party, even though for the payee’s benefit, without later risking a court’s finding that he had not complied with the court order, adopting the conclusion in Webb v. Webb (1984), 42 R.F.L. (2d) 422
- express agreement or acquiescence by the payee is a well-recognized exception to this judge-made principle
- another exception can be made for payments to the children, or on their behalf, which are “reasonable and unextravagant expenditures that the mother in the ordering way would surely have made to and for her children”.
[42] The Court is of the view that S.M. should be credited for the above-noted cell phone expenses. This conclusion is based on the following considerations:
- T.L. was aware that these expenses were being paid;
- By express agreement or by acquiescence, T.L. consented to these being paid for Cassandra’s benefit;
- These expenses were reasonable and unextravagant expenditures that T.L. in the ordinary way would surely have made for Cassandra.
CONCLUSION
[43] Based on the Court’s findings in this ruling, the retrospective child support payable by S.M. is calculated as follows:
1. 2013 (October, November, December)
- Income: $113,037.00
- Guidelines: $ 2,946.00 (3 X $982.00)
- Amount paid: $ 1,380.00 (3 X $460.00)
- Retroactive: $ 1,566.00
2. 2014
- Income: $146,249.00
- Guidelines: $ 14,796.00 (12 X $1,233.00)
- Amount paid: $ 5,880.00 (12 X $490.00)
- Retroactive: $ 8,916.00
3. 2015
- Income: $151,071.00
- Guidelines: $ 15,300.00 (12 X $1,275.00)
- Amount paid: $ 5,880.00 (12 X $490.00)
- Retroactive: $ 9,420.00
4. 2016
- Income: $137,176.00
- Guidelines: $ 8,162.00 (7 X $1,166.00)
- Amount paid: $ 3,430.00 (7 X $490.00)
- Retroactive: $ 4,732.00
[44] Therefore, the retroactive child support payable by S.M. to T.L. for the period of October 1, 2013 to the end of July 2016 is set at $24,634.00. S.M. is given a period of four (4) months to pay same.
[45] The Court makes the following final order:
- Starting August 1, 2016, and on the 1st day of each subsequent month, Stéphane Musicka shall pay Tina Lalande monthly child support for the child Cassandra Musicka who was born on August 19, 1998. This amount is based on a yearly income of $137,176.00 and reflects the Child Support Guidelines;
- On or before November 30, 2016, Stéphane Musicka shall pay Tina Lalande retroactive child support for the said child for the period of October 1, 2013 to July 30, 2016 in the amount of $24,634.00;
- On consent, Stéphane Musicka shall pay his proportionate share of 70% of the post-secondary education program which the said child is set to start in September 2016. It is understood that the other 30% is to be paid by Cassandra;
- On consent, Stéphane Musicka shall ensure that the said child is named as sole beneficiary of a $100,000.00 life insurance policy. Proof of this is to be provided to Tina Lalande on or before August 31, 2016;
- A Support Deduction Order is issued;
- Unless the order is withdrawn from the Director’s office, it shall be enforced by the Director and that amounts owing under the order shall be paid to the Director, who shall pay them to the person to whom they are owed.
[46] The parties are asked to resolve the question of costs for these proceedings. If unable to do so, they may file brief written submissions (maximum three (3) pages) for the Court’s consideration. These should be filed on or before August 15, 2016.
Justice Ronald M. Laliberte Jr.