Court File and Parties

Court File No.: D13855/12 Date: 2017/01/17 Ontario Superior Court of Justice

Between: Lori Anne Temple, Applicant And: James Malcolm Temple, Respondent

Before: The Honourable Mr. Justice G. E. Taylor

Counsel: Lori Anne Temple, in person (Applicant) James Malcolm Temple, in person (Respondent) James Battin, for the Respondent (for August 29, 30 and 31, 2016)

Heard: October 14, 15, 16, 2014, March 9, 10, 11, 12, 13, 2015, August 29, 30, 31, 2016

Introduction

[1] The parties were married on June 20, 1998. They separated on November 3, 2008. The applicant was born on August 25, 1976. The respondent was born on August 9, 1972. The parties are the parents of three children: Jameson Cole born October 12, 1999, Trent Thomas born November 21, 2001 and Julia Brooke born July 7, 2005.

[2] Issues relating to custody and access were resolved during the course of the trial.

[3] The issues to be decided are:

a) child support payable going forward including s. 7 expenses;

b) retroactive child support including s. 7 expenses;

c) the applicant’s entitlement to an equalization payment based on the increase in value of the respondent’s pension during the period of the marriage;

d) the applicant’s claim for a trust interest in the home owned by the respondent’s parents where the respondent currently resides; and,

e) costs incurred by the applicant prior to June 13, 2013.

[4] Some of the issues that can be dealt with expeditiously. I will deal with those issues first.

Trust Claim

[5] The parties and the children resided at 7418 Quaker Road in Sparta, Ontario. Prior to 2007, the parties held title to the property as joint tenants. The parties were experiencing financial difficulties. They decided to transfer title to the property the respondent’s parents. The consideration for the transfer was $325,000 which was less than the market value. The respondent’s parents assumed responsibility for a mortgage of $300,000. It was intended that when the financial crisis was resolved, the respondent’s parents would re-convey the property to the parties. That never occurred.

[6] The respondent has continued to reside at 7418 Quaker Road since the date of the separation.

[7] The respondent’s parents are not parties to the present action. It would be wrong to impose a resulting or constructive trust in the property in favour of the applicant without the titled owners being given an opportunity to be heard. For this reason, in my view, the claim for a trust interest in 7418 Quaker Road must be dismissed.

Costs

[8] The applicant seeks an order for costs to be paid to her by the respondent in the amount of $8000 for the period prior to June 21, 2013. Up until this date the applicant was represented by counsel. June 21, 2013 was the date on which the first motion for a temporary order was heard.

[9] On February 25, 2013, a case conference was held. An order was made at the case conference regarding pleadings, production of documents and questioning. The order is silent on the issue of costs. On June 21, 2013 a temporary order for custody, access and child support was made. The order was based on Minutes of Settlement. The order specifically provides that there is to be no order as to costs.

[10] Because no costs were awarded in favour of the applicant in relation to the case conference or the motion for temporary relief, the applicant’s claim for costs for the period predating June 21, 2013 must be dismissed.

Equalization Payment Based on the Respondent’s Pension

[11] At the date of the marriage, the respondent was employed at Sterling Trucks, a division of Daimler-Benz. He was a member of a defined benefit pension plan. His employment with Sterling Trucks was terminated in 2007. The value of his pension was transferred to a LIRA.

[12] At the date of the marriage the value of the respondent’s pension was $30,000. As of the date of separation the value of the LIRA was approximately $111,000.

[13] In February 2008, the respondent was petitioned into bankruptcy. The LIRA did not become part of the bankrupt estate. In November, 2008, shortly after the date of separation, the applicant made an assignment in bankruptcy.

[14] A spouse’s entitlement to an equalization payment is a personal claim against the other spouse. In the event of the bankruptcy of the spouse against whom the claim for equalization is made, the other spouse must make a claim as a creditor in the bankruptcy (Schreyer v. Schreyer, 2011 SCC 35, [2011] 2 S.C.R. 605). The applicant did not make a claim for her equalization entitlement through the respondent’s bankruptcy.

[15] After his discharge from bankruptcy, the respondent was able to withdraw all of the funds from the LIRA. He did not share with the applicant any portion of this asset which did not form part of his bankrupt estate. While it would be fair and equitable, in my view, if an order could be made granting the applicant an equalization payment based on the increase in value of the respondent’s pension during the marriage, I do not believe I can legally make such an order.

[16] Furthermore, the applicant’s entitlement to make a claim for an equalization payment arose on the date of the separation. Her subsequent bankruptcy means that any equalization payment to which she would have been entitled would have vested in her trustee to be available for distribution to her creditors (Green v. Green, 2015 ONCA 541, 2015 O.J. No. 3887).

[17] Accordingly, I must dismiss the applicant’s claim of for an equalization payment based on the increase in value in the respondent’s pension during the marriage.

Retroactive Child Support

[18] As I have previously stated, the parties separated on November 3, 2008 although they remained residing 7418 Quaker Road until January 2009 when the applicant and the children moved to a separate residence but not far from the matrimonial home. The respondent therefore should have begun paying child support no later than February 1, 2009.

[19] On July 31, 2009, a court order was made prohibiting the respondent from communicating or contacting the applicant. During the Thanksgiving weekend of 2009, the respondent communicated with the applicant which resulted in him being charged with uttering threats contrary to s. 264(3) of the Criminal Code. The applicant testified that at this time she was terrified of the respondent. In January 2010, the respondent pleaded guilty to the threatening charge and was placed on probation for one year with a term that he not contact the applicant.

[20] In September, 2010, the respondent was charged with breaching the terms of his probation by contacting the applicant.

[21] In February 2011, the applicant obtained employment in Brantford and moved from the St. Thomas area where the respondent lived.

[22] According to the applicant, the respondent provided marginal support for the children in 2009. He paid for some daycare expenses and paid a $300 fuel oil bill. The respondent paid no support in 2010.

[23] In December 2011, the respondent wanted to take the children to Florida but the applicant refused because the respondent had not paid any child support. In December 2011, the applicant formally asked the respondent, for the first time, to begin paying child support. In January and May 2012, the applicant requested the respondent to begin making child support payments.

[24] In August 2012, the applicant commenced court proceedings seeking child support to be paid by the respondent. On June 21, 2013 an order was made on consent which provided for the respondent to begin making child support payments of $790 per month based on an annual income of $42,000.

[25] The respondent does not suggest that he paid anything other than nominal amounts of child support for the period February 1, 2009 to June 21, 2013.

[26] In D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, the Supreme Court of Canada provided extensive direction as to when child support orders should be made retroactively.

[27] The Court made it clear that the date on which the child support obligation arose is not automatically the date from which the order for child support should commence. The Court also held that it was appropriate to consider any blameworthy conduct on the part of the payor parent. I have considered whether to treat the respondent’s failure to comply with court orders that he not communicate with the applicant, coupled with the applicant’s stated fear of the respondent, as blameworthy conduct justifying an award of child support commencing as of February, 2009. However, I have decided that it would not be appropriate to make an order for child support retroactive to that date. The applicant had no hesitation in seeking a court order prohibiting contact by the respondent. Such an order could have been obtained in the context of an application for child support and other corollary relief.

[28] I am satisfied that the applicant gave effective notice to the respondent as of December 2011, that she expected to be paid child support. There can be no justification for a parent denying support to his children simply because the other parent has not commenced a formal court application seeking support.

[29] I therefore find that the applicant should have commenced paying child support as of December 1, 2011.

Quantum of Child Support

[30] This issue requires an analysis of the income earned by the respondent subsequent to the date of the separation.

[31] As previously stated, the respondent made minimal financial contribution to the support of the children from the date of separation to the date of the temporary order in June 2013.

[32] The respondent’s employment with Sterling Truck ended in 2007 when the plant closed. He received severance pay. He then began working for Temple Construction, a company owned and operated by his parents. The respondent continued working for his parents until he obtained employment with MP Agro products earning $15 an hour. In about March 2014, the respondent obtained employment with the County of Oxford, a position which he continues to hold up to the present. He testified that his plan is to remain in his current employment until he retires. Accordingly, the respondent has experienced no significant periods of unemployment.

[33] According to his income tax returns and notices of assessment, the applicant’s income for the years 2011 to 2015 is as follows:

2011 $82,070 2012 $94,380 2013 $39,725 2014 $52,471 2015 $59,836.

[34] In 2011 and 2012, the respondent had RRSP income of $47,214 and $49,466 respectively. This money was withdrawn from the LIRA which was as a result of his employment with Sterling Truck and the severance payment he received upon termination. The withdrawals were based on alleged hardship based on failure to pay rent to the respondent’s parents. In my view, the transfer of the former matrimonial home to the respondent’s parents was a transparent but successful attempt to put the equity in the matrimonial home out of the reach of the parties’ creditors. The respondent has at all times remained in possession of the former matrimonial home and I conclude he will continue to reside there. He has never actually been in a landlord and tenant relationship with his parents. The claim of rental arrears was nothing more than a sham to permit him access to the LIRA. I therefore find that it is appropriate to include the RRSP withdrawals as part of the respondent’s income for calculating his child support obligation.

[35] The respondent also operates a farming business. According to his income tax returns, the respondent’s gross and net farming income for the years 2011 to 2015 was as follows:

2011 gross nil 2012 gross $117,361 net $16,302 2013 gross $54,184 net $1304 2014 gross $44,626 net $310 2015 gross $58,358 net $437

[36] The respondent’s income tax returns included statements of farming income prepared by the respondent’s account. The exhibits at trial included copies of the accountant’s working papers for the years 2012 to 2015. Neither party called evidence from an accountant to provide an explanation about the calculation of farming income. The evidence is far from satisfactory but it does appear to me that the respondent obtains some personal benefit by expensing certain things through the farming business. For example, in 2012 the respondent expensed rent paid to his father in the amount of $3900. Also in 2012 the respondent purchased a lawnmower for $885 which he said was to cut the grass. In 2013 he expensed $6000 for shop rent which was again paid to his father. It is apparent that the respondent expenses through the farming operation a portion of his home utilities, home telephone and automobile expense.

[37] According to the accountants working papers, the respondent withdrew from the farm operation $4050 in 2012, $7275 in 2013 and $1534 in 2012. In 2015 the respondent withdrew a negative amount.

[38] I find it highly unlikely that the respondent would put in the effort required to maintain the farming operation for the purpose of earning less than $1000 annually, with the exception of 2012 when he earned in excess of $6000. Therefore, I find it appropriate to include in the respondent’s income for the years 2013 to 2015 the sum of $5000 per year in relation to the farming operation.

[39] I therefore calculate the respondent’s income for the purpose of determining his child support obligation the years 2011 to 2015 to be as follows:

2011 $82,070 2012 $94,380 2013 $44,725 2014 $57,471 2015 $64,836.

[40] For the purpose of determining the base amount of child support I have used in the Simplified Federal Child Support Tables for the province of Ontario which came into force on December 31, 2011 with income rounded up or down to the nearest $1000.

[41] Based on the respondent’s income for 2011 his support obligation for the month of December was $1562. Based on the respondent’s income for 2012 his support obligation for the year was $21,000 ($1750 per month). Based on the respondent’s income for 2013 his support obligation for the year was $10,296 ($858 per month). Therefore, I calculate the amount owing by the respondent for child support for the period December 1, 2011 to December 31, 2013 to be $32,858 which is to be reduced by $790 per month from May to December pursuant to the temporary order dated June 21, 2013. This results in the total owing by the respondent for base child support to December 31, 2013 to be $26,538.

[42] By way of an order dated October 21, 2014, custody of Trent was awarded to the respondent. Accordingly, commencing November 1, 2014 an offset calculation is required to determine the appropriate amount of base child support to be paid by the respondent. For the period January 1, 2014 to October 31, 2014 the respondent’s support obligation was $11,000 ($1100 per month). This amount is to be reduced by $7900 ($790 per month). Therefore for the period January 1, 2014 to October 31, 2014, the amount owing by the respondent for base child support is $3100.

[43] According to her income tax returns and notices of assessment, the applicant’s income for the years 2013 to 2015 is as follows:

2013 $71,167 2014 $75,340 2015 $75,378.

[44] Based on the respondent’s income his base child support obligation for November and December 2014 was $1694 ($847 per month) for two children. The applicant’s support obligation for the same period was $1294 ($647 per month) for one child. Therefore, the net amount owing by the respondent for base child support for the months of November and December 2014 is $400. The respondent paid $1580 ($790 per month) in child support for November and December 2014 so he is entitled to a credit of $1180.

[45] Based on the respondent’s income for 2015 his base child support obligation for 2015 was $11,952 ($966 per month) for two children. The applicant’s child support obligation for the same period was $8184 ($682 per month) for one child. The respondent paid $9480 ($790 per month) in child support to 2015. Therefore, the respondent is entitled to a credit for base child support for 2015 of $6072.

[46] To summarize, the amount owing by the respondent for base child support is calculated as follows:

2011 $1562 2012 $21,000 2013 $3976 2014 to October 31 $3100 2014 November and December ($1180) 2015 ($6072) Total $22,386.

Section 7 Expenses

[47] Section 7 of the Child Support Guidelines provides that an order for child support may include an amount for child care expenses, health-related expenses and extraordinary expenses for extracurricular activities. The general rule is that s. 7 expenses are apportioned as between the parents based on their respective incomes. An extraordinary expense will include:

a) expenses that exceed those that the parent or spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that parent’s or spouse’s income and the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, or

b) where clause (a) is not applicable, expenses that the court considers are extraordinary taking into account,

(i) the amount of the expense in relation to the income of the parent or spouse requesting the amount, including the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child,

(iv) the overall cost of the programs and activities, and

(iv) any other similar factors that the court considers relevant.

[48] The evidence presented with respect to s. 7 expenses was far from satisfactory. Based on the evidence I conclude that the applicant incurred an expense of $3160 for child care and camp fees in 2012. In 2013 the applicant paid $2439 for child care and camp fees. In 2014 the applicant’s expense for daycare and camp fees was $450. In 2015 the applicant’s daycare expense was $285.

[49] Jameson is a competitive football player. I am satisfied that by 2013 he was engaged in football training over and above what would be considered normal. The applicant spent $705 for special training for Jameson and $875 for participation in spring and fall football leagues in 2013. I am therefore satisfied that $1580 qualifies as an extraordinary expenditure. I do not allow the $165 paid for Jameson to play high school football in 2013 as an extraordinary expense. Similarly, I find that the sum of $240 paid for dance lessons for Julia in 2013 does not qualify as an extraordinary expense.

[50] By 2014, Julia was engaged a competitive dance program. I therefore think that dance expenses incurred for Julia in the amount of $1360 are an extraordinary expense. Jameson’s football expenses in 2014 which I consider to be extraordinary total $1542. I do not allow the expenditure to play high school football in the amount of $255 as an extraordinary expense.

[51] In 2015, the applicant’s expense for Jameson’s football was $777 and the expense for Julia’s dance was $258. I find these expenses to be extraordinary.

[52] The respondent did not contribute to the daycare and camp expenses incurred by the applicant from 2012 forward nor did he contribute to the expenses for Jameson’s football and Julia’s dance which I have found to be extraordinary expenses.

[53] I therefore find that the s. 7 expenses incurred by the applicant and to which the respondent should make contribution are as follows:

2012 $3160 2013 $4019 2014 $3352 2015 $1320 Total $11,851

[54] The applicant’s total income for the years 2012 to 2015 was $289,152. The respondent’s total income for the same period was $261,412. For simplicity, I propose to use the parties’ total income for the period in question for the purpose of calculating the respondent’s required contribution to the s. 7 expenses. The respondent’s income was 39 percent of the parties’ combined incomes. Accordingly, respondent will be required to contribute 39 percent of the s. 7 expenses in the amount of $4622.

[55] The respondent sought contribution from the applicant to the expenses in relation to Trent’s dirt biking but he did not produce any receipts. I therefore decline to make an order that the applicant contribute a portion of such expense.

Child Support for 2016

[56] Although the parties presented some evidence regarding income for 2016, the actual amount of the parties’ incomes will not be determined until their income tax returns are filed. It is likely that some adjustment would be required to any order made by me. It is my hope that, with the benefit of these Reasons, the parties will be able to determine the appropriate amount for child support for 2016, once final income information is available.

Summary and Conclusions

[57] There will be an order for custody, as set out in the Final Consent Regarding Custody Access and Ancillary Matters signed by the parties August 28, 2016.

[58] Subject to further adjustment once the parties have filed their income tax returns for 2016 and have completed appropriate financial disclosure, there will be in order that the respondent pay to the applicant child support of $284 per month (this being the offset amount based on 2015 incomes) plus 39 percent of s. 7 expenses.

[59] There will be an order that the respondent pay to the applicant as arrears of child support the amount of $38,068.

[60] There will be an order that the parties exchange any and all documentation needed to determine their respective annual incomes including but not limited to income tax teturns together with all attachments and notices of assessment. A party’s income tax return is to be provided to the other party within 15 days of filing and a party’s notice of assessment is to be provided to the other party within 15 days of receipt. Also, within 15 days of filing his income tax return, the respondent is to provide to the applicant a complete copy of his accountant’s working papers in relation to the determination of farm income.

[61] The applicant’s claims for a declaration of trust in her favour in relation to 7418 Quaker Road, Sparta, Ontario, an award of costs for the period prior to June 21, 2013 and equalization of the respondent’s pension are dismissed.

[62] My inclination is to make no orders to costs. Success was divided and with the exception of the last three days of the trial, the parties were self-represented. However, I am unaware if offers to settle were made which could have a bearing on the issue of costs.

[63] If the parties wish to make submissions about costs, if there are concerns about the arithmetic calculations as set out in these Reasons and/or if the parties are unable to agree on the appropriate amount for child support going forward, arrangements can be made through the trial coordinator to appear before me to make further submissions. Brief written submissions of the parties’ respective positions on the unresolved issues are to be filed at least five days before the hearing.

G. E. Taylor J. Released: January 17, 2017