CITATION: Livingston v. Kenward, 2016 ONSC 7920
COURT FILE NO.: 13-940, 15-351-1
DATE: 2016/12/16
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kelly Kenward-Livingston
Applicant
– and –
Stephen C. Kenward
Respondent
Applicant is self-represented
Respondent is self-represented
HEARD: November 30-December 2, 2016
REASONS FOR Decision
Parfett J.
[1] The Applicant, Kelly Livingston requests an order for child support for the two children of the marriage based on income imputed to the Respondent, Stephen Kenward and retroactive to July 1, 2013. She also requests a retroactive contribution to s. 7 expenses, life insurance to secure the child support payments, and the dismissal of the Respondent’s request for spousal support and occupation rent.
Background
[2] The parties began co-habiting in the fall of 1995 and married on September 18, 1999. There are two children of the marriage: Lauren (DOB July 15, 2002) and Julian (DOB July 25, 2004). The parties separated on August 20, 2012 but continued to live in the matrimonial home until the Applicant left on June 30, 2013.
[3] The parties shared custody of the children from the date of separation until the end of September 2013. The oldest child spent a brief period of time living with her father in September 2013. The Applicant testified that this arrangement only lasted three weeks, after which both children lived with her full-time. The issues of custody and access have been resolved and the parties will once again be sharing custody equally starting on December 3, 2016.
[4] The outstanding issues are primarily financial in nature: child support, spousal support, s. 7 expenses and occupation rent.
Child support
[5] No child support has been paid by either party since the date of separation. The Respondent was ordered to start paying child support on November 1, 2015.
[6] The Applicant alleged that the Respondent is deliberately under-employed. His work history has been varied, although it appears that until recently he has usually been employed full-time. The Applicant testified that it has been difficult to determine the Respondent’s income because he regularly accepts cash payments. She also stated that the Respondent has not been working full-time since shortly after the separation even though he is capable of doing so. Consequently, she asks the court to impute income to the Respondent in accordance with Statistics Canada’s indication of the average income for a registered massage therapist.
[7] The Applicant argued that the Respondent is able to pay child support even though he is currently employed only part-time. She pointed in particular to his cellphone bills, which total $4,675 for 10 months or $467.50/month. The Respondent did not dispute his cellphone bills, but indicated that he pays for three phones; one for himself and one for each of his two children. He stated this was the only reliable way to contact his children when they were in the Applicant’s care. He also stated that internet service at his parents’ residence was not particularly good and consequently, he was paying for a very expensive data usage package for the phones. Regardless of the reasons, the Respondent had money for an exorbitantly expensive cellphone package.
[8] Neither party is claiming child support from August 2012 to June 2013. They also agreed that they shared custody from July 2013 to the end of September 2013. Starting in October 2013 until the end of November 2016, the children’s primary residence has been with the Applicant, while the Respondent saw the children every second weekend.
[9] The determination of retroactive child support will be based on these dates and the offset method will be used for the periods where custody was shared and for ongoing child support.
[10] The Applicant’s income in 2013 was $61,765. The Respondent’s income in 2013 was $7,513, but as noted below he will be imputed income of $12,417. In 2014, the Respondent had no income; he was a full-time student. In 2015, the Respondent’s income from all sources was $9,627 as he was a full-time student until the spring. He worked part-time in the summer as a stone mason’s assistant while he studied for his final exams, and then started working as a registered massage therapist in October.
[11] Based on the imputed income calculations, retroactive and ongoing child support is as follows:
• For 2013, the net calculation of retroactive child support is $2,097 owed by the Applicant to the Respondent;[^1]
• For 2014 - 2015, no child support is payable as the Respondent’s income was below the minimum level set out in the Federal Child Support Guidelines[^2];
• For 2016, the Respondent owes the Applicant $4,852;[^3]
• Starting in January 2017, the Applicant will pay the Respondent $259/month in child support.
• The net amount of retroactive child support owing to the Applicant is $2755.[^4]
Imputation of income
[12] Section 19(1)(a) of the Federal Child Support Guidelines permits a court to impute income to a party. The relevant portions of that section state,
- The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
(a) the spouse is intentionally under-employed, ... other than where the under-employment is required by…the reasonable educational … needs of the spouse;
(f) the spouse has failed to provide income information when under a legal obligation to do so;
(g) the spouse unreasonably deducts expenses from income.
[13] The Applicant argued that all of these sub-sections are applicable in this case and asked the Court to impute income to the Respondent. In her final arguments, the Applicant conceded that the Respondent’s decision to return to school to get his designation as an RMT was reasonable in the circumstances.
[14] In determining an appropriate amount to impute as income, the trial judge has a wide discretion, but the determination must be grounded in the evidence, rationally based and reasonable in the circumstances.[^5]
[15] The Respondent worked in the flooring business he and his father started. The business officially closed in 2010, but the Respondent continued to do some flooring work. At the same time, he worked as a stone mason’s assistant. In 2011, he earned $13,225 and in 2012, he earned $24,404. The Respondent’s income in 2013 was minimal. He explained to the Court that he was working almost full-time on renovations to the home. In addition, he was emotionally exhausted by the separation. In my view, the Respondent failed to understand his responsibility to support his family came first and he ought to have been more fully employed. Consequently, for 2013, I will impute income to the Respondent using the average of his 2011 and 2012 income as the guide and taking into account the fact he started his full-time program in the fall of 2013. For 2013, the Respondent will be imputed income of $12,417.[^6]
[16] In 2014 and part of 2015, the Respondent was a full-time student. The Applicant argued that the Respondent could have worked part-time during his program. However, as the Respondent pointed out, he took an intensive program designed to complete a three-year program in 21 months. As a result, he did not have time to work. I accept his evidence on this point.
[17] The Respondent qualified as a registered massage therapist in the spring of 2015. He had two exams to pass in the summer and started working in October 2015. He started work with a massage therapy firm called Massage Addicts. He also saw clients privately in his home. The Respondent’s total income for 2015 was $9,627.[^7] His projected net income for 2016 is approximately $21,000.[^8]
[18] The Applicant contended that the Respondent is capable of working full-time and consequently, she asked that income be imputed to him. She pointed to the Statistics Canada/Globe & Mail website that suggests the average income for a registered massage therapist is $42,000.[^9] The Registered Massage Therapist Association for Ontario website also indicates that the average income for a RMT in 2012 was $42,770.[^10] This website states that on average a RMT works approximately 21 hours/week directly with clients.^11
[19] The Respondent testified that he is working for three separate massage companies as an independent contractor. The first company is Massage Addicts. He has worked for them on an ad hoc basis since October 2015. He bills the company $32/hour. He started working for another company, Infinity in March 2016. He bills $51/hour to that firm. In the last month, he has also started work at a third firm, Forget the Knots (FTK) and he bills that firm $58/hour. As a consequence of the higher hourly rates he can bill Infinity and FTK, he has been phasing out his work for Massage Addicts.
[20] Although the work with Infinity and FTK is also ad hoc, the Respondent testified that he usually works between 20-25 hours a week directly with clients. The remainder of his time is taken up with paperwork, preparation and clean up. Effectively, however, he is working full-time. The Respondent also indicated that he has his own massage firm. He goes directly to his clients’ homes and provides massage therapy. He charges his private clients either $90/hour or $80/hour depending on whether there is more than one client per home. He stated that he works between two and ten hours/week with private clients or an average of 4 hours/week. These hours form part of the 20-25 hours/week he works. He added that there are expenses associated with his work, such as travel, equipment, professional fees and supplies. He calculated these expenses as approximately $5,600/year.[^12]
[21] The Respondent never prepared a proper financial statement with supporting documentation. What he has provided are estimates and projections of his income. He explained to the Court that despite Court orders, he never really understood what was expected of him. The final spreadsheet provided to the Court during the course of the trial was prepared on the basis of the Respondent’s invoices for 2016 and it was done with the assistance of a bookkeeper.[^13] In my view, this last document (although an unsworn statement) is the most reliable indicator of the Respondent’s 2016 income. This evidence indicated that in 2016, he earned $10,008 from Massage Addict, $7,711 from Infinity (March to November), $1,465 from FTK (month of November only) and $4,130 from his own business. From these numbers, it was possible to determine that between January and October 2016, he billed on average 12 hours/week when the norm for a full-time RMT is 21 hours/week.[^14] This number reflects actual time spent with clients.
[22] When this discrepancy between the number of hours he said he worked and the number of hours it appears he actually worked was pointed out to him, the Respondent simply indicated that he had never done that type of calculation. The Respondent also pointed out that the family litigation has occupied a lot of time and energy over the past year. I note, however, that the Applicant has been equally occupied with the litigation, but has nonetheless maintained full-time employment.
[23] I accept that the Respondent was not being deliberately dishonest concerning the number of hours he worked in 2016. However, it is apparent that he is currently under-employed. At this point, it is hard to say how many hours he will be working for FTK. The Respondent indicated that his first month was unusually high and it would likely be less in the future. Consequently, in establishing the Respondent’s income for 2016, I have not included FTK. If a blended rate is used based on work for Massage Addicts, Infinity and private clients, the Respondent’s income for 2016, ought to be $39,328[^15] before expenses or $33,728 after deductions for business expenses.
[24] Starting in 2017, the Respondent’s income should increase significantly. His average hourly rate for the two new firms is $54.50. His average rate for his private clients is $85/hour. Assuming he is accurate that going forward, he will spend on average 4 hours/week on his private clients and therefore 16 hours/week on the companies’ clients, his annual income should be approximately $58,176.[^16] In 2016, the Respondent is claiming business expenses of $5,600. This number is disputed by the Applicant, but she failed to provide any evidence why she felt the expenses were too high. Therefore, I accept the Respondent’s expense calculation. Consequently, the Respondent’s net income for 2017 should be approximately $52,576.
[25] I find that in 2015, the Respondent’s income was $9,627, in 2016 income of $33,728 will be imputed to him and starting in 2017, income of $52,576 will be imputed to him.
Spousal support
[26] The Respondent indicated to the Court that his claim for spousal support is needs based. He earns less than the Applicant.
[27] Section 15.2(6) of the Divorce Act[^17] sets out the objectives of spousal support. The relevant sub-sections are:
(6) An order made under subsection (1) … that provides for the support of a spouse should …
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[28] This particular sub-section of the Divorce Act is sometimes referred to as non-compensatory or needs-based spousal support. The definition of “need” can take many forms, but will usually involve emotional or physical disability.[^18] In assessing need, the court will take into consideration what, if any, efforts the recipient spouse has made to become self-sufficient.[^19] Finally, a differential in income is not of itself a justification for ordering spousal support.[^20]
[29] The history of the relationship between the parties demonstrates that the Respondent did many different jobs, but he was, for the most part, employed full-time, except in 2013 and when he was attending school. The Applicant was employed part-time for most of the marriage and towards the end of the marriage and after separation, increased her work to almost full-time. She continues to work four days a week presently.
[30] The Applicant stated that she has had to support the children entirely on her own since October 2013 as the Respondent has not paid any child support. She also pointed to the fact the Respondent has lived with various girlfriends over the course of the past four years and has not had many expenses. The Applicant indicated in addition that the Respondent’s under-employment is the main reason he earns less than she does.
[31] The Respondent is currently living with his fiancée. His fiancée is a full-time student at Carleton University. She has four children of her own, all of whom are special needs. She earns only minimal income.
[32] It is incumbent on the Respondent to demonstrate to the Court that as a consequence of the breakdown of the marriage, he found himself in a position where he could not earn income and therefore needed spousal support. The Respondent has failed to meet this burden. The main reason for the Respondent’s lack of full-time employment in 2012-2013 was the failure of the woodworking business he owned in conjunction with his father. This business failed in 2010, although the Respondent continued to do some ad hoc work after that date. In 2013, after the marriage failed, the Respondent decided to go back to school to obtain his RMT training. The Respondent has never been physically or emotionally unable to work. He did not work while attending school, but that was a personal decision.
[33] The Applicant also raised the issue of a domestic contract signed prior to the parties’ marriage. She stated that this contract provided that no spousal support should be paid upon dissolution of the marriage. Given my previous finding that the Respondent is not eligible for spousal support, I do not intend to deal with this issue.
[34] The claim for spousal support is dismissed.
Section 7 expenses
[35] The Applicant has provided receipts for the children’s s. 7 expenses for the past year. The Respondent does not dispute the quantum, but complained he had no input into the decisions to incur many of these expenses.
[36] The s. 7 expenses include orthodontic expenses, music lessons, purchase of musical instruments and extracurricular sports or other activities. The total expense for 2015 and 2016 is $4,610. This total was not broken down by year, with the exception of the orthodontic expense. As a consequence, with the exception of that expense, half the total expenses will be assumed to have been incurred in each year.
[37] For 2015, the total expenses are $1,700. In this year, the Respondent earned $9,627 and the Applicant earned $74,000. The Applicant will pay 91% of the s. 7 expenses for 2015 or $1,547 and the Respondent will pay 9% or $153.
[38] For 2016, the total expenses are $2,910. In this year, the Respondent’s income is imputed at $33,700 and the Applicant earned $70,190. Consequently, the Applicant will pay 68% of the expenses or $1,978 and the Respondent will pay 32% or $932.
[39] In 2017, the proportion will change again. The Applicant will pay 57% of all s.7 expenses and the Respondent will pay 43%.
[40] Extracurricular activities are the mutual decision of both parties. Agreement should not be unreasonably or capriciously withheld. However, should one party enrol a child in an activity that the other party has reasonably refused to agree to, the first party will bear the entire cost. In addition, the other party will ensure the child attends the activity should it be their week with the child.
Life insurance
[41] The Applicant demonstrated that she has life insurance to secure her portion of child support and asked the Court to order the Respondent to do the same. The Respondent should obtain $140,000 in life insurance to secure his portion of child support and the Applicant is to be named the irrevocable beneficiary. The insurance may be reduced and ultimately cancelled when both children are no longer children of the marriage.
Occupation rent
[42] The Respondent alleges that the Applicant should pay occupation rent for the period she continued to live in the matrimonial home after separation.
[43] The Applicant contended that she should not have to pay occupation rent. She testified that she paid significant amounts of hydro, which covered not only the matrimonial home but also the business premises used by the Respondent and his father.
[44] She testified there was no mortgage on the house. However, according to the Respondent, there was a mortgage on the property that was originally paid out of the business income, but when the business began to do poorly, he and his father stopped paying the mortgage. From 2008 to the present, nothing was paid on the mortgage. Property taxes and house insurance were both paid by the Respondent’s father.
[45] The Applicant also stated the house was in poor shape; the well dried up leaving them without running water and her bedroom did not have a door. Finally, the Applicant indicated to the court that she has renounced any interest in the equity of the matrimonial home. As the Respondent pointed out, there is no equity in the matrimonial home as the mortgage has not been paid for several years. The entire property is for sale, but the current asking price is less than the outstanding balance on the mortgage.
[46] Two conclusions can be drawn from this evidence: first, the Respondent paid none of the expenses associated with the matrimonial home and second, the Applicant paid the hydro for, not only the matrimonial home, but also for the business. In the circumstances, no occupation rent is payable. The Respondent’s desire to see his father repaid for the sums he expended on the matrimonial home is laudable, but it is not within this Court’s mandate.
[47] The claim for occupation rent is dismissed.
Conclusion
[48] The following orders will be made:
The Respondent will pay the Applicant retroactive child support in the amount of $2755;
Starting January 1, 2017, the Applicant will pay the Respondent $259/month in child support based on the Applicant’s 2016 income of $70,188 and the Respondent’s projected 2017 income of $52,576.
Income will be imputed to the Respondent as follows;
(a) 2013 - $12,417;
(b) 2016 - $33,728;
(c) 2017 - $52,576.
- Section 7 expenses are payable as follows;
(a) For 2015, the Applicant will pay 91% of the s. 7 expenses or $1547 and the Respondent will pay 9% or $153;
(b) For 2016, the Applicant will pay 68% of the expenses or $$1978 and the Respondent will pay 32% or $932;
(c) For 2017, the Applicant will pay 57% of all s.7 expenses and the Respondent will pay 43%. The parties must both agree to any s.7 expense, such agreement not to be unreasonably withheld. Any expense that is reasonably refused may be paid in its entirety by the party wishing to incur the expense.
The Respondent will obtain $140,000 in life insurance to secure his portion of child support and will make the Applicant the irrevocable beneficiary of this life insurance. The insurance may be reduced and ultimately cancelled when both children are no longer children of the marriage;
Any monies owed by the Respondent to the Applicant may be deducted from the child support payable to the Respondent at a rate of no greater than $150/month.
Madam Justice Julianne Parfett
Released: December 16, 2016
APPENDIX A
Calculations from 2013-2017
RETROACTIVE PAYMENT TO MOTHER
Year
Month Range
Mother Pays
Father Pays
Party Owing
Monthly
Total
Monthly
Total
2013
July - September
808
2424
Mother
2097
October - December
109
327
2014
Ongoing
0
0
0
0
0
2015
Ongoing
0
0
0
0
0
2016
January - November
0
0
491
5401
Father
4852
December
549
549
0
0
FATHER PAYS MOTHER
2755
2017 PAYMENTS
Mother Pays
Father Pays
Monthly
Total
Monthly
Total
2017
Ongoing
259
3108
0
0
CITATION: Livingston v. Kenward, 2016 ONSC 7920
COURT FILE NO.: 13-940, 15-351-1
DATE: 2016/12/16
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kelly Kenward-Livingston
Applicant
– and –
Stephen C. Kenward
Respondent
REASONS FOR Decision
Parfett J.
Released: December 16, 2016
[^1]: January to June – no child support. July to September – shared custody offset amount is $808/month x 3 months = $2424 owed by A to R. October to December – primary residence with A. Child support payable by R to A is $109/month x 3 months = $327. Net owing is $2097.
[^2]: SOR/86-600, as amended.
[^3]: Based on an annual income of $33,728 the child support payable by the Respondent is $491/month or $5401 for 11 months. The offset amount for December payable by the Applicant is $549. The total owed to the Applicant is $4,852.
[^4]: See Table in Appendix A.
[^5]: Drygala. V. Pauli, 2002 41868 (ON CA), [2002] O.J. No. 3731 (CA) at para. 44.
[^6]: 13,225 + 24,404 = 37,629/2 = 18,814 x .66 = $12,417.
[^7]: See tab 1 of Exhibit #5.
[^8]: See Exhibit #8.
[^9]: Exhibit #1, tab 1 at p. 8
[^10]: Exhibit #1, tab 1 at p. 10.
[^12]: Exhibit #8.
[^13]: Exhibit #8.
[^14]: Massage Addict- 28.4 hours/month, Self-4.4 hours/month, Infinity- 16.8 hours/month. Total per week average = 12 hours.
[^15]: $21,849 x 1.8 = $39,328.
[^16]: $54.50/hour x 16 hours x 48 weeks = $41,856; $85/hour x 4 hours x 48 weeks = $16,320.
[^17]: R.S.C. 1985, c. 3 as amended.
[^18]: See commentary to s. 15.2 of Divorce Act.
[^19]: See for example, Sullivan v. Sullivan, [1999] O.J. No. 4826 (SCJ)
[^20]: Reaney v. Reaney (1990), 1990 8062 (ON SC), 28 R.F.L. (3d) 52 (H.C.J.)