Court File and Parties

Court File No.: 452/15 Date: 2016-08-22

Ontario Superior Court of Justice

B E T W E E N:

CYNTHIA MARIE GHENT, Applicant Kamaljit K. Saini, for the Applicant

- and -

NORMAN HARRY BUSSE, Respondent Marilyn Samuels, for the Respondent

Heard: July 25, 2016

Endorsement

Justice M.G. Emery

[1] The applicant Cynthia Marie Ghent and the respondent Norman Harry Busse entered a separation agreement dated January 28, 2011. In that separation agreement, the parties agreed to ongoing child support and the sharing of Section 7 expenses for their youngest child, Hayden Busse, among other things.

[2] Ms. Ghent now seeks an order to compel Mr. Busse to comply with the separation agreement to pay his share of Hayden’s expenses for his post-secondary program at OCAD (University) for the next three years. She also seeks an order to increase the monthly child support Mr. Busse should pay for Hayden based on an increased annual income she asks the court to impute.

[3] Mr. Busse brings a cross-motion seeking two kinds of orders with respect to the ongoing support and the extraordinary expenses he is to pay under the separation agreement. He seeks an order reducing that child support based on a lower annual income he expects to earn now that he has responsibilities to his new wife and family. He states that these responsibilities preclude him from teaching summer school and evening classes to earn the additional income he has earned in previous years.

[4] Mr. Busse also seeks an order that the expenses for Hayden’s post-secondary education should be calculated after taking his reduced income into account, and to credit payments he makes to Ms. Ghent for ongoing support against his share of those expenses. He also raises the issue about the contribution that Hayden Busse should be making to his own education pursuant to Section 3(2) of the (Federal) Child Support Guidelines.

Background Facts

[5] Ms. Ghent and Mr. Busse were married on December 22, 1986. They have two children, Cassel Busse, born on April 26, 1987, and Hayden Busse, born on January 24, 1996. Cassel is now 29 years old and lives independent of each parent. Hayden is currently 20 years old and lives with his mother when he is not attending OCAD University, formerly the Ontario College of Art and Design in Toronto. Hayden completed his first year at OCAD University between September 2015 and April 2016 of a four year program to earn a Bachelor of Fine Arts.

[6] The parties separated on or about August 26, 2009. They entered a separation agreement dated January 28, 2011 that resolved the following issues:

a) The parties agreed to share joint custody of Hayden; b) Hayden would have his primary residence with Ms. Ghent; c) Mr. Busse would pay ongoing child support to Ms. Ghent in the amount of $869 a month, based on the stated annual income of $99,000; d) The parties would disclose their annual income to each other by May 1 each year and child support under the Child Support Guidelines would be adjusted on July 1 of each year; e) Mr. Busse would pay 75 percent and Ms. Ghent would pay 25 percent of Hayden’s Section 7 expenses, defined to include expenses for his post-secondary education; f) The equalization between the net family properties of the parties, including the matrimonial home; and, g) Payment by Mr. Busse of $1,500 a month to Ms. Ghent for ongoing spousal support each month, subject to certain provisions.

[7] The separation agreement contains paragraphs 6.4 and 6.5 with respect to child support for Hayden, which is of particular importance to both motions:

6.4 Norman will contribute 75% and Cindy will contribute 25% to the special and extraordinary expenses for the child, Hayden, which expenses shall be set pursuant to Section 7 of the Child Support Guidelines, to include but not limited to the Pony Club, karate, healthcare, medical and dental expenses that are not covered by a plan of insurance, post-secondary education expenses, and such other expenses as agreed upon by the parties.

6.5 Norman and Cindy agree that Hayden will be deemed to reside with Cindy while temporarily living away from the residence of his mother, Cindy, to attend an educational institution, to pursue summer employment or while on vacation from full-time attendance at an educational institution but continues to maintain a residence with Cindy.

[8] Ms. Ghent submits that the separation agreement expressly provides, or implicitly makes room for an increase in the amount Mr. Busse should pay each month for ongoing child support. Ms. Ghent relies upon the deeming provision in paragraph 6.5 of the separation agreement and sections 14 and 19 of the (Federal) Child Support Guidelines as the legal basis to seek this increase. It is her view that Mr. Busse has made at least $104,000 a year based on his salary as a teacher with the Halton District School Board when he has supplemented that income in the past by teaching summer school and evening classes as well as the sale of artwork. Ms. Ghent argues that Mr. Busse could earn up to $115,000 a year. She argues that Mr. Busse is intentionally under-employed because he no longer teaches summer school or evening classes, and because he refuses to admit that he earns income from selling art.

[9] Mr. Busse has married again. He and his wife have twins born in 2012 who are now three years old. Mr. Busse submits that his family responsibilities preclude him from teaching summer school or evening classes. His wife has also started a business of her own and Mr. Busse helps with the children to allow her time to grow that business. Mr. Busse now devotes the time he would spend to earn extra income in past years to care for the twins.

[10] Mr. Busse also states that he has never made $5,000 a year through selling his artwork, and any particular sale of art he has made is not a regular occurrence. He states in his material that his annual income of $95,000 a year is his true income based on full time employment as a teacher.

[11] Ms. Ghent is employed by the Upper Grand District School Board and by Tim Horton’s where she works part-time in Fergus, Ontario. She earns $19,015 from those two sources. She also receives $18,000 a year in spousal support payments. Therefore, her total income in 2015 was $37,015.

[12] Ms. Ghent takes the position that the separation agreement clearly defines the respective obligations of the parties to fund Hayden’s expense for his post-secondary education. Ms. Ghent has given an estimate in her affidavit that Hayden’s post-secondary education expenses for the school year 2016 to 2017 will be $19,082.

[13] Neither party could tell me if the separation agreement has been filed under Section 35 of the Family Law Act for enforcement purposes. There was no evidence in the motion material with respect to filing the separation agreement with the Ontario Court of Justice. Section 35 sets out the proper procedure to follow for the enforcement of a domestic contract.

[14] At a case conference on August 11, 2015, the parties settled the issue of retroactive child support and made various adjustments that were incorporated into an order made by Justice Le May dated August 11, 2015. This order was characterized as a without prejudice order, and provided the following terms which have prevailed for Hayden’s school year between September 2015 and April 2016:

THIS COURT ORDERS ON A WITHOUT PREJUDICE BASIS THAT:

1. The Respondent, Norman Harry Busse (hereinafter referred to as “the Respondent”), shall pay to the Applicant, Cynthia Marie Ghent (hereinafter referred to as “the Applicant”), the sum of $2,957.00 towards the arrears of child support for the child, Hayden Busse, born January 24, 1006 on or before September 30, 2015.

2. The Respondent shall pay to the Applicant ongoing child support for the child, Hayden Busse, born January 24, 1996 in the sum of $906.00 per month commencing September 1, 2015 and each month thereafter based on an income of $103,444.00.

3. The Respondent shall pay the sum of $7,500.00 towards Haden Busse’s post-secondary education costs associated with OCAD (University).

4. The Respondent will pay the full tuition costs directly to OCAD (University) on behalf of the child, Hayden Busse, born January 24, 1996 prior to September 1, 2015.

5. The Respondent will provide confirmation and receipt of the payment to OCAD (University) on September 1, 2015, with the Respondent to provide a certified cheque or money order or trust cheque for the difference between the tuition costs paid for Hayden and the $7,500.00 referenced in above paragraph directly to the Applicant.

6. The Respondent shall be able to claim the tuition he paid for the child, Hayden’s post-secondary education for the current year on his tax return.

7. If the child, Hayden Busse, born January 24, 1996 does not complete his current year, the Respondent will receive any unused tuition.

Analysis

[15] Neither party seeks an order to change or vary the terms of the separation agreement in their respective motions. Even though Mr. Busse seeks a downward adjustment for any amount he is required to pay for ongoing child support or for his contribution towards Hayden’s expenses for his post-secondary education, Ms. Samuel has advised the court that any change would be based on an interpretation of the separation agreement, and not by seeking a variation of any term.

[16] The amount for Mr. Busse to pay in ongoing child support each month and the appropriate amounts Ms. Ghent, Mr. Busse and perhaps Hayden are to pay toward Hayden’s post-secondary education each year are questions common to both motions. Those questions require a determination as a matter of contract, not as issues of first instance. The determination of those questions will essentially address other issues raised on the motions, which are essentially subsidiary issues. I now turn to those larger questions.

Ongoing Child Support, Payable Monthly

[17] Ms. Ghent argues that Mr. Busse is capable of earning as much as $115,000 a year if he teaches summer school and evening classes and makes periodic sales of his artwork to supplement his annual salary as a teacher. Ms. Ghent submits that by choosing not to earn this supplementary income, Mr. Busse is intentionally under-employed.

[18] Mr. Busse states that his base salary is $95,000 a year as a teacher. He has given evidence that the summer school and evening classes he has taught in the past would be difficult for him to continue in view of his responsibilities to his new wife and their young children.

[19] When the parties entered the separation agreement dated January 28, 2011, they agreed that Mr. Busse would pay monthly child support for Hayden in the sum of $869 a month based on an annual income of $99,000 for 2010. This monthly child support commenced on March 1, 2011 and was payable on the first day of each and every month thereafter.

[20] Under paragraph 6.3 of the separation agreement, Mr. Busse is obligated to provide financial disclosure including income tax returns, notices of assessment and a current pay statement by May 1 of each year. The parties agreed to consent to a variation of child support based on that information in accordance with the Child Support Guidelines by July 1 each year thereafter.

[21] Mr. Busse’s line 150 income on his tax return for 2014 and related notice of assessment showed an income of $104,973. In 2015, he reported income of $95,166, which reflects his base income from the Halton District School Board.

[22] Whether Mr. Busse is intentionally under-employed and whether Ms. Ghent is justified in seeking an adjustment to the ongoing support Mr. Busse must pay for Hayden while he remains in school are questions that must be considered under the terms of the separation agreement, and the evidence given on the motion under Section 19 of the (Federal) Child Support Guidelines.

[23] In making this determination, the court must apply upon the test developed under Section 19 in Drygala v. Pauli, [2002] O.J. 3731. In Drygala, the Court of Appeal directed a trial judge to consider the following questions:

1. Is the spouse intentionally under-employed or unemployed?
2. If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
3. If the answer to question number two is negative, what income is appropriately imputed in the circumstances?

[24] The evidentiary record indicates that Mr. Busse earned additional income from teaching summer school and evening courses as extra work. The act of not enrolling to teach summer school and evening classes is an intentional act. However, it is an act that can be justified if there is good reason given in the evidence to discontinue that additional work.

[25] In my view, discontinuing extra work for a good reason does not qualify as being intentionally under-employed. When making this determination, the court must take a contextual approach to make these factual determinations in order to reach the proper legal conclusion. In Mr. Busse’s case, discontinuing the additional work of teaching summer school and evening classes is understandable given his responsibilities to the new family he has started with his wife. By not taking on additional work, he has simply reverted to earning income from his full-time employment as a teacher.

[26] This was not a situation where Mr. Busse is under-employed as a result of a planned and deliberate act for some ulterior reason, as in Olah v. Olah (2000), 7 R.F.L. (5th) 173 (S.C.J.).

[27] The Court of Appeal for British Columbia in Koch v. Koch, 2012 BCCA 378 upheld the decision of the chambers judge who was not satisfied on the evidence that it was necessary for the appellant to stay home on a full time basis with his child, and imputed an income to him for support purposes. That case is different than the circumstances before this court. Here, the parties are governed by the terms of a separation agreement, and Mr. Busse is not absenting himself entirely from a workplace.

[28] I also mention Koch because the court quotes from McCaffrey v. Paleolog, 2011 BCCA 378 as follows:

[58] In summary in a case like this:

1. income may be imputed to a parent who is intentionally under-employed or unemployed unless the parent establishes under s. 19(1)(a) of the Federal Child Support Guidelines that the needs of a child require the parent to remain at home;
2. it is recognized that generally a newborn child or a child of very young age is a child who needs care at home in the context of s. 19(1)(a), but
3. childbirth does not provide an automatic relief from a parent’s child support obligations;
4. the circumstances of each situation must be evaluated using all of the criteria articulated in Donovan v. Donovan (2000), 2000 MBCA 80, 190 D.L.R. (4th) 696 (Man. C.A.) as adopted by this Court in Watts v. Willie, 2004 BCCA 600;
5. any period of non-support must be reasonable in the circumstances.

[59] In my view, the circumstances to be considered include a consideration of the financial condition of the payor parent’s present family. It is the needs of the child of that relationship that are in issue. In some situations the financial circumstances of the first family may be relevant: for example, where the second family is very affluent and the first family is destitute. The circumstances may compel an almost immediate return to work or may provide for full or part-time in-home assistance. Assisted care or day-care may not be available readily or be available only on a limited basis. In considering the applicability of s. 19(1)(a), the court should be given every assistance by the parties so as to take into account all relevant factors that bear upon the reasonableness of a period of relief from child support, always recognizing that in a case like this the burden is on the parent who seeks an hiatus from the obligation to provide child support to prove that a period of underemployment or unemployment is required by the needs of a child.

[29] If Mr. Busse had placed better evidence before the court about the financial circumstances of his younger family, the quotation from McCaffrey may have been persuasive authority to support Mr. Busse’s position that his child care responsibilities should be considered on the issue of whether extra income should be imputed to him. The fact that Mr. Busse and his wife have three year old twins is a reality. However, the level of disclosure necessary to make the financial condition of his present family a factor to make this determination was not met. As compelling an argument as it might seem, I have not relied upon the comments made by the courts in Koch or in McCaffrey about the parenting requirements of one family over another to reach my decision.

[30] As for imputing income for the sale of art, I find that Ms. Ghent has provided insufficient evidence of the art sales that she alleges Mr. Busse is capable of making for extra income. In my view, if Mr. Busse made art sales in a previous year, there was no reasonable prospect of repeating those sales in the future. I can reach no other conclusion when her evidence is compared to the conflicting evidence given by Mr. Busse.

[31] In view of Mr. Busse’s evidence that he earned income of $95,166 in 2015, he will likely receive an upgrade to his annual income at the Halton District School Board for the 2016/2017 school year. Although that evidence was not before me, I find that prospect to be a sufficient basis to hold the parties to their contractual intent expressed in the language of the separation agreement. Mr. Busse shall therefore continue to pay ongoing support for Hayden at the rate of $869 per month based on an annual income of $99,000 a year.

Paragraph 6.4 Responsibilities for Hayden’s Post-Secondary Expenses

[32] The separation agreement contains the contractual intentions of the parties to make their respective contributions towards what would otherwise be Section 7 expenses for Hayden. This would include contributions by each parent toward the expenses for his post-secondary education. The parties have essentially agreed upon a private section 7 regime by defining the extraordinary expenses to be paid, and fixing the respective contributions each party shall make to those expenses.

[33] The separation agreement clearly creates two distinct child support obligations for Mr. Busse: to pay monthly ongoing support while Hayden remains a child of the marriage under paragraph 6.1, and the requirement to contribute to extraordinary expenses for Hayden under paragraph 6.4. The extraordinary expenses that Ms. Ghent has put in issue on her motion are the expenses for Hayden’s post-secondary education. The separation agreement does not provide for an adjustment of the proportionate share of those expenses that each of the parties must pay. Since neither party has requested relief to change the terms of the separation agreement between them, they are contractually bound to contribute towards Hayden’s post-secondary education expenses in those proportions.

[34] The question then becomes what post-secondary education expenses are payable in those proportions. This question must be addressed in order to determine the annual amounts each party should pay. Ms. Ghent has provided some evidence that the following expenses will be incurred for the eight month school year between September 2016 and April 2017:

a.) Tuition cost, $7,298.56; b.) Rental costs, $4,800 ($600 x 8 months); c.) Books and art supplies, $1,700; d.) Transportation, food, laundry, etc., $ 5,282.40; Total: $19,082.96

[35] Ms. Ghent has provided very little in the way of detailed evidence to support these projected expenses. However, taking them at face value, I can accept all but $4,800 for rent and $5,282 for transportation, food and housing (together, “living expenses”) that the parties should contribute towards under their contractual obligations. The living expenses projected for the school year that starts in September 2016 should not be considered part of the amount that Mr. Busse should pay in addition to the ongoing support he pays each month to Ms. Ghent.

[36] Paragraph 6.5 of the separation agreement provides that Hayden will be deemed to reside with Ms. Ghent while temporarily living away from the residence of his mother to attend an educational institution. Ms. Ghent makes the argument that paragraph 6.5 should be read to mean that in addition to paying monthly support, Mr. Busse should pay his proportionate share towards Hayden’s living expenses. However, it is my view that the general principles of contractual interpretation require that paragraphs 6.4 and 6.5 be read together and within the context of all other provisions of the separation agreement relating to child support.

[37] I read paragraph 6.5 to mean that the amount for ongoing support Mr. Busse is paying Ms. Ghent shall be deemed to be what he is paying for Hayden’s lodging regardless of whether he is living at home or he is living away at school, as long as he continues to maintain a residence with his mother. Based on this interpretation of paragraphs 6.4 and 6.5 when read together, I conclude that the total amount of the expenses for Hayden’s post-secondary education for the coming year is not $19,082.96, but $9,000 after deducting $10,082 for living expenses.

[38] I have also considered whether the contract requires that Hayden should be making a contribution towards his own education. There is evidence in the motion materials that Hayden earned $4,117.23 before taxes in 2015, which he used towards his post-secondary education. Unfortunately, there was no evidence in the motion material of what Hayden has earned over the summer of 2016. Assuming his summer income to be the same as 2015, the court would expect him to apply $2,000 towards his own educational expenses: Section 3(2) of the (Federal) Child Support Guidelines and Lewi v. Lewi, [2006] O.J. 1847 (Ont.C.A.).

[39] I am exercising my discretion to determine what contribution a child over the age of 18 years should make by declining to deduct any contribution at all to the paragraph 6.4 payments for two reasons. First, Hayden is not a party to the separation agreement. There is no contractual term permitting the parties to deduct his contribution from the extraordinary expenses his parents are to share. Second, he may need to contribute his own funds to meet his living expenses while at school.

Conclusion

[40] The parties shall therefore make their respective contributions towards Hayden’s post-secondary education for the coming year based on $9,000, with Ms. Ghent to contribute $2,250 for her 25 percent share and Mr. Busse to contribute 75 percent in the amount of $6,750. Mr. Busse is ordered to pay this amount on account of Hayden’s tuition directly to OCAD University by September 1, 2016, and terms 4 to 7 of Justice LeMay’s order shall apply with respect to that payment on a “with prejudice” basis.

[41] Ms. Ghent is ordered to pay Hayden’s monthly rent each month to Hayden’s landlord pursuant to the rental agreement attached as Exhibit “I” to her affidavit sworn on July 11, 2016, or to such other landlord he may rent from over the coming school year. Ms. Ghent is further ordered to provide Hayden with an allowance each month from September 1, 2016 to April 30, 2017 from the ongoing support she receives from Mr. Busse for his transportation, food and laundry.

[42] The balance of each motion is dismissed without prejudice to bring those motions again after May 31, 2017. Mr. Busse should provide the financial disclosure required under the separation agreement before that date for either party to seek an adjustment to the amount he is to pay for ongoing monthly support. A motion may also be brought at the same time to determine the monetary amounts each party is to pay for Hayden’s school year commencing in September 2017.

[43] If either party seeks costs on this motion, they may file written submissions consisting of no more than three pages by August 31, 2016. The other party shall then have until September 9, 2016 to file responding materials limited to the same extent. There will be no reply submissions without leave of the court. All written materials may be sent by fax to my judicial assistant, Mr. Christopher Charles, at 905-456-4834. If no written submissions are received by March 11, 2016, the parties shall be deemed to have resolved the issue of costs between them.

Justice M.G. Emery Released: August 22, 2016