PREVOST v. PREVOST, 2017 ONSC 5825

CITATION: PREVOST v. PREVOST, 2017 ONSC 5825

COURT FILE NO.: 12-1003

DATE: September 29, 2017

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

NICOLE PREVOST

– and –

GUY PREVOST

Edward C. Castle, counsel for the Applicant (Responding party)

Warren A. Leroy, counsel for the Respondent (Moving party)

HEARD: August 14, 2017

JUDGEMENT

Desormeau, j.

ISSUES

[1] This matter was heard by way of Motion to Change a Final Order, brought by the Respondent father, Mr. Guy Prevost, pursuant to Rule 15 of the Family Law Rules (“FLR”).

[2] Mr. Prevost is seeking to vary the Final Order of Justice Lafrance Cardinal, dated January 6, 2014 (“Final Order”) with regard to child support and section 7 expenses.

[3] Ms. Nicole Prevost disputes the grounds for the variation request, and asks that the Motion to Change be dismissed. In her response, she seeks her own relief, which includes changing the terms of the access; reimbursement to her for Mr. Prevost’s unpaid contributions toward the RRSP loan; that Mr. Prevost immediately submit to his benefit provider physiotherapy invoices once they have been presented to him, and to deliver the reimbursement cheque immediately to the Applicant upon receipt of same; and costs. At the motion proper, of the above, only the access and costs issues were advanced.

[4] Ultimately, to be determined is whether there has been a material change of circumstances permitting either child support to be readjusted and/ or access to be modified.

BACKGROUND

[5] The parties were married on July 23, 2001, and separated on August 5, 2010. Together, they have two children: Alexa Aline Prevost, born March 23, 2002 (15) and Joel Maurice Prevost, born March 25, 2004 (13).

[6] Following their separation, the parties agreed to a Separation Agreement dated September 6, 2010. That Agreement was filed with the court on August 23, 2012. The Separation Agreement set out the following:

a. The parties have joint custody of the children. The children see their parents on a two-week rotation, which as set out at page two of the Agreement, in an average four weeks, the children are with their father for 14 days, and with their mother for 16 days, broken down as follows:

i. Week one: The children are with their mother from Sunday to Tuesday; with their father Wednesday to Thursday; and return to their mother until the following Tuesday;

ii. Week two: The children are at their father’s home from the Wednesday until the Sunday.

b. The father pays child support to the mother, in the amount of $650.00 per month;

c. The father kept the Matrimonial Home, assumed the mortgage and a list of debts totaling just over $40,000.00, and he paid the mother an equalization payment of $15,000.00.

[7] On October 26, 2012, Ms. Prevost initiated a Motion to Change, requesting sole custody of the children; that Mr. Prevost have reasonable access upon reasonable notice; that Mr. Prevost pay child support; etc. This was resolved by way of Final Minutes of Settlement, signed by both parties in December, 2013. These Minutes were the basis for the Final Order, dated January 6, 2014, and contained the following relevant provisions:

a. The parties have joint shared custody of the children (section 1.1), based on a two-week rotation as follows (section 1.3):

i. Week one: Nicole will have the children in her care from Sunday at 6:00 p.m. until Wednesday at the start of school. Guy will have the children in his care from Wednesday at the start of school until Friday at the start of school. Nicole shall have the children in her care from Friday at the start of school until Wednesday at the start of school;

ii. Week two: Guy shall have the children in his care from Wednesday at the start of school until Sunday at 6:00 p.m.

b. The parties have set out that there was an equal sharing of special holidays (section 1.4), with minor modifications to the regular access schedule. Most modifications are extensions of approximately 24 hour periods to one parent or the other. In the long run, the holiday time is essentially equal. Additionally, both parties have two non-consecutive weeks of vacation time with the children per year.

c. On the issue of child support, the father’s income of $96,417.00 (based on the average for the previous three years - 2010, 2011, and 2012), and the mother’s income of $48,965.00, the set-off amount of child support payable by the father to the mother is $640.00, payable commencing December 1, 2013. Payments are to be made directly to Ms. Prevost by way of postdated cheques, 12 months in advance (sections 2.2, 2.3, and 2.4).

d. Section 2.4 states: “Upon the annual review of child support set out in paragraphs 2.14, 2.15, 2.16, 2.17 and 2.18 below, if the child support amount is amended, Nicole shall return the remaining post-dated cheques to Guy and Guy shall provide Nicole with replacement cheques for child support for the remainder of the year with the amended child support amount.”

e. Section 2.9 and 2.10 specifies that the Special or Extraordinary Expenses are to be shared proportionately by the parties after deducting from the expense the contribution, if any, from the child. Further, the parties are to take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a same. Section 2.11 provided limits to these expenses.

f. Section 2.14 to 2.18 sets out the terms for reviewing child support as follows:

i. 2.14 On June 1^st of each year, the Parties shall review the child support payable by each Party for the previous year and for the review year. To do the review, each Party shall provide each other with a copy of their income tax return, as filed, for the prior calendar year.

ii. 2.15 The Parties shall then determine the appropriate amount of child support for the prior calendar year, in accordance with the Child Support Guidelines. If Guy has underpaid child support for the prior calendar year, he shall provide Nicole with the additional amount owing for the prior calendar year over six (6) months in equal installments together with his child support payments each month. If Guy has overpaid child support for the prior calendar year, he may deduct the overpayment from his current child support payments over six (6) months in equal installments. If the Parties cannot reach an agreement about the adjustment to be made, they shall first attend mediation and in the event they are unable to reach an agreement after attending mediation, either party may apply to the Court.

iii. 2.16 For the year of the review, child support shall be adjusted retroactively to January 1^st of the year of the review based on the Parties’ prior year’s incomes.

iv. 2.17 In the annual review of child support, they shall adjust child support to be the set-off amount of child support pursuant to section 9(a) of the Federal Child Support Guidelines.

v. 2.18 In the annual review of child support, the Parties shall review their proportionate sharing of the Children’s special and extraordinary expenses to take into account any overpayment or underpayment. In the annual review of child support, the Parties shall undergo an accounting to determine whether the amounts paid by each party are in accordance with the Parties’ respective proportionate share of the expenses.

VOIR DIRE

[8] Prior to hearing the motion, a Voir Dire was required in order to determine the admissibility of the calendar attached as Exhibit Q to Ms. Prevost’s affidavit dated August 2, 2017, located at Volume 5, Tab 1.

[9] Counsel for Ms. Prevost: Mr. Castle, initially contended that Exhibit Q was not a record, but a handwritten note, which is normally used to refresh one’s memory. He then stated that the calendar could be considered by me as it was a record of where the children had been spending their time, that it was created by Ms. Prevost, it was in her handwriting, and that the evidence in the calendar about the children’s living arrangements was also in her affidavit. Counsel directed me to the specific paragraphs in Ms. Prevost’s affidavit addressing the time the children were in her, or Mr. Prevost’s, care.

[10] Counsel for Mr. Prevost: Mr. Leroy, challenged that the calendar as it was not made in the ordinary course of business and therefore was not a business record, it failed the necessity test, and did not meet the past recollection recorded test due to reliability issues.

[11] Ms. Prevost, who testified during the Voir Dire, indicated that the calendar was in her handwriting, that she was the only one who wrote on the calendar, and that she had been keeping track of the days and times of where the children were staying, since March 2016. Ms. Prevost stated that she carried her calendar with her to work every day, and she would write down every day, or every second day, when the children went or did not go to their father’s home.

[12] In cross examination, Ms. Prevost was asked about the note on the top of every calendar month, breaking down the total monthly hours for when the children were with their father. Her evidence was that the calculation and breakdown of the total hours were only calculated approximately two weeks prior to giving them all to her counsel. These were not made contemporaneously. She was then questioned about the annotations regarding the time when Alexa was with her father, written down on the calendar for the June 13, 2017 week, which refers to an affidavit served on her counsel on June 30, 2017. She agreed that it was possible that the note on the calendar could have been made after receipt of that affidavit. Ms. Prevost did however affirm that she has an independent recollection of the events set out in the calendar.

[13] In submissions, Mr. Castle’s position, on behalf of his client, was that the calendar should remain as part of the evidence given that it was a record, and not only was it to refresh Ms. Prevost’s memory, but also to substantiate her argument about the children having resided primarily in her care since at least March, 2016. His argument stopped short of addressing the issues raised by Mr. Leroy. He did not provide any case law to support his position.

[14] Mr. Leroy, in response to Mr. Castle’s argument, provided clear argument and case law on why Ms. Prevost’s calendar should not be considered by me. In particular, he pointed out that as some of the notes on the calendar were admittedly not made contemporaneously, the calendar was not reliable, and should be struck.

[15] The law of evidence is clear. Ms. Prevost’s calendar was not made in the ordinary course of business, and is therefore not a business record. Moreover, I find, on a balance, that the calendar is not sufficiently reliable as it was not made contemporaneously. The calendar is also not necessary as Ms. Prevost’s affidavit contains evidence as to her position regarding the times when the children were in her care or with their father.

[16] Given the above, I find that Exhibit Q, attached to Ms. Prevost’s affidavit, is not admissible. It has not been considered by me for the purpose of the Motion.

POSITION OF THE PARTIES

[17] Mr. Prevost’s Motion to Change form dated May 29, 2015 requests a variation of child support payable to Ms. Prevost for the benefit of the two children. He asks that child support be based on his income, pursuant to the Child Support Guidelines. His affidavit, dated May 29, 2015, was not commissioned. I was not provided a commissioned original at the time of the motion. As such, I have restricted myself to the evidence properly before me.

[18] Mr. Prevost, in his Notice of Motion dated June 29, 2017, requests the following variations to the Final Order:

a. Paragraph 1.3 of the Final Order be varied to read:

i. The Applicant shall have primary residency of Joel Maurice Prevost, born March 25, 2004. The Respondent shall have access to Joel in accordance with his wishes;

ii. Alexa Aline Prevost, born March 23, 2002 resides with both parties on an equal 50/50 basis. The parties shall have access to Alexa in accordance with her wishes;

b. Paragraph 2.2 of the Final Order shall be varied as follows: For the purposes of determining child support, the Applicant’s income is $55,990.00 and the Respondent’s income is $41,624.00;

c. Paragraph 2.3 of the Final Order shall be varied as follows: Commencing August 1, 2017 and continuing the first day of each subsequent month, the Respondent shall child support pay to the Applicant in the amount of $99.00 per month for the children: Alexa Aline Prevost, born March 23, 2002 and Joel Maurice Prevost, born March 25, 2004;

d. Paragraph 2.6 of the Final Order shall be varied as follows: The parties shall pay the children’s special or extraordinary expenses in amounts proportionate to their incomes. Based on both parties’ current incomes, the Respondent shall pay 42.5% of the children’s special or extraordinary expenses, and the Applicant shall pay 57.4% of the children’s special or extraordinary expenses;

e. The Applicant’s child support arrears are hereby fixed at $34,178.00 for the period of January 6, 2014 to August 1, 2017. These arrears shall be repaid to the Respondent forthwith;

f. The Applicant’s arrears for the children’s special or extraordinary expenses are hereby fixed at $3,964.22 for the period of January 6, 2014 to August 1, 2017. These arrears shall be repaid to the Respondent;

g. The Applicant shall pay the Respondent’s costs of this motion on a substantial indemnity basis. The costs shall be payable forthwith;

h. Such further and other relief as counsel may advise and this court may deem just.

[19] At the motion, Mr. Leroy suggested that if I determine that it is more appropriate to only fix the child support arrears (overpayment) from the date of issuing the Motion to Change, that amount should be fixed at $14,330.51, inclusive of child support and special and extraordinary expense arrears.

[20] Ms. Prevost’s Response to Motion to Change, dated July 3, 2015, requested the following relief:

a. An Order dismissing the Respondent’s Motion to Change the child support;

b. An Order changing the children’s schedule during week two from Wednesdays at the start of school until Sunday at 6:00p.m., to Thursdays after school until Sunday at 6:00 p.m.;

c. An Order requiring the Respondent to pay to the Applicant $500.00 in respect to the RRSP loan;

d. An Order requiring the Respondent to submit the physiotherapy invoices once they have been presented to him to his benefit provider and to deliver the reimbursement cheque immediately to the Applicant;

e. An Order for costs, on a substantial indemnity basis, including H.S.T. thereon; and

f. Such further and other relief as this Court may deem just.

[21] Though Ms. Prevost did not file a Notice of Motion for the motion, her affidavit dated August 2, 2017 requests the following Orders:

a. That both Alexa and Joel have their primary residence in the Applicant’s home;

b. That the Respondent pay child support for Joel and Alexa, in the amount of $1,037.00 per month on the first day of each month, commencing August 1, 2017, based on an imputed income of $70,000.00 per annum;

c. That the Respondent pay 55.5% of the children’s extraordinary expenses;

d. An Order dismissing the Respondent’s claims for reimbursement of overpayment of child support, extraordinary expenses and costs;

e. An Order that the Respondent pay to the Applicant $9,230.00 for retroactive child support; and

f. An Order for costs, based on a substantial indemnity basis including H.S.T. thereon.

[22] At the outset, counsel for the Respondent father raised the issue that the primary residence request sought by the Applicant mother at this motion was not plead in her Response to the Motion to Change. In her Response, Ms. Prevost was only seeking to change the start day and time for the second week of access.

[23] While there is an agreement regarding Joel’s primary residence, I agree that the relief requested by Ms. Prevost at the motion regarding primary residence of Alexa is not properly before me. As such, this issue will not be addressed in this judgement.

[24] I have reviewed Mr. Prevost’s affidavit evidence contained in the continuing record. His evidence can be summarized as follows:

a. The Final Order of January 6, 2014 required Mr. Prevost to pay the set-off table amount of $640.00 for child support, based on an average annual income from his 2010, 2011 and 2012 tax years, being $96,417.00. The Final Minutes of Settlement, which formed the basis for the Final Order, were signed December 19, 2013 by Ms. Prevost, and December 24, 2013 by Mr. Prevost. Ms. Prevost’s gross annual income was $48,965.00. Section 7 expenses were to be determined proportionately, and therefore Mr. Prevost was to pay 66% of the children’s section 7 expenses;

b. In 2010, Mr. Prevost’s income was $97,379.00; in 2011, it was $113,128.00; and in 2012, it was $78,745.00. During those years, he was working as an electrician on tools, as well as a foreman, and general foreman, on large electrical projects;

c. Electrician on tools means that he performed physical, hands-on tasks with electrician’s tools to install and maintain electrical wiring systems, as opposed to working in a supervisory capacity as a foreman or consultant;

d. In 2012, Mr. Prevost’s back began to give him serious problems. At that time, he was a union member of the International Brotherhood of Electrical Workers (“IBEW”). In 2012 Mr. Prevost had considered become a real estate developer. He opened a corporation called Lumen Capital Group for this purpose. He also enrolled into a real estate course. This course never proceeded and the $10,500.00 for the course was reimbursed to him in 2014. Lumen Capital Group has never been active, and never generated any income;

e. In 2013, Mr. Prevost’s income was significantly lower due to a shortage of work and due to his back condition. His back condition was such that he was unable to continue to work on the tools;

f. Mr. Prevost had initially hurt his back in 1995 on the job. The injury became progressively worse, and by 2011, the pain was debilitating. By 2013, Mr. Prevost was no longer able to perform any work on the tools. Mr. Prevost last worked on tools in October and November 2013, and the back pain was unbearable;

g. In the spring of 2014, Mr. Prevost advised the Applicant of his long-standing back issues and how it prevented him from working as an electrician on tools. He requested to readjust child support based on the terms set out in section 2.15 of the Order, which provides for an annual review of child support. The Applicant refused to consent to the variation of child support;

h. In late 2014, Mr. Prevost was diagnosed with spondylolisthesis, where the bones on his lower back have slid together, one on top of the other;

i. Dr. John Burke, Mr. Prevost’s family doctor, stated in Mr. Prevost’s medical record dated March 3, 2015, that Mr. Prevost was “unable to squat, bend his back repeatedly, climb ladders, lift more than 5 kg, and that he should avoid repeated flexion and twisting of his back”;

j. Mr. Prevost also provided a letter from Dr. Wai, his back specialist, who on July 15, 2016 expressed the opinion that Mr. Prevost was unable to perform the activities of an electrician. Dr. Wai indicated that Mr. Prevost has severe low back pain radiating to his legs, due to Isthmic Spondylolisthesis. He also indicated that the pain and associated restrictions are long standing and likely chronic and permanent;

k. As Ms. Prevost did not accept that Mr. Prevost was physically incapable of performing the work of an electrician on tools, in early 2017 he retained TRAC Group Inc. to perform a functional capacity assessment. The report, which was prepared by Ms. Rebecca Steinke, a registered Kinesiologist, states “it is the opinion of the present Evaluator that Mr. Prevost would not meet the demands of an Electrician or Industrial Electrician on a consistent ongoing basis”;

l. Despite his back condition, Mr. Prevost’s evidence is that he has never been unemployed for a prolonged period of time, except for in 2013 when he was no longer able to work as an electrician on tools. During that time, Mr. Prevost collected employment insurance, and accepted worked as an electrical foreman or general foreman. This type of work was limited as companies typically requested a specific person. He provided evidence that there were only two foreman jobs from 2012 to 2015 which were posted to the job line. Though there were six jobs posted to the job line in 2011, he was already working as a general foreman during this time, and the postings were for a project he was working on;

m. In January 2014, Mr. Prevost created Blueprint Authorities Inc. The purpose of the business was to generate additional income through non-union work. Blueprint Authorities Inc. offers electrical estimating and consulting services. This work is less lucrative than work on tools, and as such, his income level decreased significantly. However, it is his evidence that he earned more at Blueprint Authorities Inc. than he would have at IBEW, as he likely would have been unemployed from 2013 to present;

n. Mr. Prevost has provided proof of income since the date of the Final Order, inclusive of Income Tax Returns, Notices of Assessment, and Corporate Tax Returns and Financial Statements. His evidence regarding his income is as follows:

i. In 2013, his income was $33,885.00 (not including RRSP income);

ii. In 2014, he earned $21,131.82. Blueprint Authority Inc.’s revenue ending September 30, 2014 was $28,040.00, with a net loss at year end of $2,297.00. Retained Earnings were negative $2,197.00. On September 30, 2014, Lumen Capital Group had a deficit of $1,859.00;

iii. In 2015, his income was $41,767.00. Blueprint Authority Inc.’s revenue ending on September 30, 2015 was $74,170.00. At year end, there was $32,763.00 in the corporation’s bank account. Blueprint Authority Inc.’s income before income taxes, after expenses, was $10,614.00. The Retained Earnings at end of year were $7,009.00. On September 30, 2015, Lumen Capital Group had a deficit of $1,859.00; and

iv. In 2016, his income was $41,624.00. Blueprint Authority Inc.’s revenue ending on September 30, 2016 was $49,484.00. At year end, there was $24,587.00 in the corporate bank account. Blueprint Authority Inc. had a net loss of $4,740.00 after expenses. The Retained Earnings at end of year were $2,268.00. On September 30, 2016, Lumen Capital Group had a deficit of $100.00;

o. Mr. Prevost indicates that he keeps some cash in the Blueprint Authority Inc. bank account for several reasons, including:

i. In the event there is a slow year (ie: in 2016 Blueprint Authority Inc. grossed $24,686.00 less than in 2015);

ii. To ensure that there is money to pay himself;

iii. To ensure that there is money to pay H.S.T.; and

iv. to fund operating expenses.

p. While there is usually between $10,000.00 and $30,000.00 in the corporate bank account, as of June 29, 2017, there was $11,758.86 in the account.

q. Mr. Prevost is a registered electrician. He doesn’t work as a cash business, and there is no challenge on the documents about cash or undisclosed payments;

r. Mr. Prevost’s position is that the disclosure provided has been comprehensive, has been forthcoming, and has been supplemented regularly since 2015. His position is that at the very latest, the TRAC report should have been dispositive regarding the issue of his medical limitations;

s. Ms. Prevost’s income has been as follows:

i. 2014: $53,856.74;

ii. 2015: $55,663.00; and

iii. 2016: $55,990.14.

t. Mr. Prevost has struggled financially since the date of the Order. However, he has managed to continue to comply with his child support and section 7 obligations;

u. These continued payments have had significant financial strain on him, including increasing his debt, and having to rely on his parents for financial assistance. Lucienne Lamoureux, Mr. Prevost’s mother, provided affidavit evidence indicating that from 2014 to present, she and her husband have provided regular financial assistance to Mr. Prevost, in the amount of $5,000.00 to $6,000.00 per year. These are not regular monthly payments, but provided to Mr. Prevost upon request;

v. Mr. Prevost’s evidence is that his debt has increased by $51,920.75 since January 2014, and his current net worth is negative $9,662.73;

w. Mr. Prevost addresses the allegation made by Ms. Prevost that his lifestyle belies his income, and provides a chart setting out dates and costs of purchases which Ms. Prevost raises as proof of lavish lifestyle. The chart sets out seven purchases, including a fridge and stove for approximately $3,500.00, plus H.S.T., as the most expensive purchase. These have deferred payments until November, 2017;

x. It is acknowledged that Joel has been residing primarily with Ms. Prevost since April, 2016. As such, if actual income is applied for the purpose of calculating child support, the following would be the result:

Year

Nicole Income

Guy Income

Custodial regime

N: Support payable

G: Support Payable

Support Owed

Support paid

Arrears / over-payment

2014

$53,957

$21,131

50/50

$801

$322

$479 N $5,748 N

$7,680 G

$13,428 N

2015

$55,663

$41,767

50/50

$827

$610

$217 N $2,604 N

$7,680 G

$10,284 N

2016 (3 months shared)

$55,990

$41,624

50/50 until Mar 31, 2016 (3 mo’s)

$832

$607

$225 N $675 N

$1,920 G

$2,595 N

2016 (9 months)

$55,990

$41,624

Joel with mom; Alexa shared x 9 mo’s

$508

$607

$99 G $891 G

$5,760 G

$4,869 N

2017 (2016 income for 7 months to motion date)

$55,990

$41,624

J with mom; A shared

$508

$607

$99 G $693 G

$4,480

$3,787 N

y. In total, Mr. Prevost has overpaid child support by $34,963.00, from January 2014 to the hearing date, based on his actual income earned. Mr. Prevost’s calculations are off by two months for the 2016 year, and have been corrected herein.

z. Mr. Prevost has paid all section 7 expenses directly to the Family Responsibility Office. He paid the following:

i. 2014: $1,339.78 (66%). Total expenses were $2,153.87. He should have paid $605.25 based on 28.1%. He also paid for Joel’s 2014 hockey registration of $675.00, without any contribution from Ms. Prevost. He is owed $1,184.54;

ii. In 2015: $852.91 (66%). Total expenses were $1,293.33. He should have paid $636.32 based on 49.2%. He also paid for Joel’s 2015 hockey registration of $675.00, without any contribution from Ms. Prevost. He is owed $540.34;

iii. In 2016: $2,440.18 (66%). Total expenses were $3,698.36. He should have paid $1,039.44 based on 42.6%. He also paid for Joel’s 2016 hockey registration of $675.00, without any contribution from Ms. Prevost. He is owed $1,759.49;

iv. In 2017: $1,353.50 (66%). Total expenses were $2,050.82. He should have paid $873.65 based on 42.6%. As such, he overpaid $479.85;

v. In total, he overpaid and is owed $3,964.22 for section 7 expenses.

aa. All told, inclusive of overpayment of both child support and section 7 expenses, Mr. Prevost overpaid $38,927.22 from January 1, 2014 to July 31, 2017.

bb. Mr. Prevost asserts that on basis of fairness and conduct, primarily because he respected the order of this court and he maintained his payments throughout, it would be dangerous for this court to punish him for doing what the court demands that he should do. To deny his overpayment would be encouraging people to stop paying and wait to be sued;

cc. Ms. Prevost has a house and a good job. If Mr. Prevost is successful, he requests a lump sum repayment, at least to discharge the debt he has incurred, followed by some monthly payments;

dd. Mr. Prevost is mindful of the impact on the children, and does not want to create any hardship to them;

ee. That to award no arrears or overpayment would create a hardship on Mr. Prevost and the unmanageable debt will continue;

ff. If the court were to calculate overpayment from the date of the issuing of the Motion to Change, rather than from January 1, 2014, owed would be $14,330.51;

gg. On the issue of access time with Joel, Mr. Prevost agrees that Joel has been residing full time with his mother since April, 2016. Prior to then, the parties had a shared custodial regime. However, Ms. Prevost’s evidence regarding the children’s residence is contradictory in that it indicates the following:

i. The amount of time that Mr. Prevost spends with the children has been decreasing since 2014 (paragraph 39 of her affidavit);

ii. That Alexa sees her father approximately two days per month since March, 2014 (letter from Mr. Castle to Mr. Leroy, dated June 20, 2017, exhibit H to Mr. Prevost’s affidavit);

iii. that Joel has lived exclusively with Ms. Prevost since June, 2015 (paragraph 43); and

iv. at the motion, Ms. Prevost corrected that Joel has been residing primarily with her since April, 2016.

hh. Mr. Prevost maintains his positon that he has shared custody of Alexa, and she is in his care over 40% of the time. In support of same, he has provided me three affidavits:

i. The affidavit of Keith Gray, who is Mr. Prevost’s cousin, sets out:

1. When Mr. Prevost’s driver’s license was suspended from April to June, 2016, he drove Mr. Prevost and the children regularly;

2. Since February 2017, he acts as a driver for Mr. Prevost;

3. It is common for Mr. Gray to pick up and drop off Alexa;

4. He states he has a reasonable sense of where Alexa spends her time. However, he has only driven Joel a couple of times in the spring of 2016, and not at all in 2017;

5. From April to June, 2016, he recalls that Alexa spent a considerable amount of time at Mr. Prevost’s residence. Though he doesn’t know if she spent over 50% of her time there, he would not be surprised if she was residing with him for half of the time. He states the same about the time period from February, 2017 to present, including for two weeks in June, 2017 (the weeks of June 11^th and June 18^th, 2017).

ii. The affidavit of Erin Carter, who is Mr. Prevost’s neighbour from across the road, states:

1. She is aware that Ms. Prevost claims that Alexa resides full time with her and has since March, 2014. Based on Ms. Carter’s observations, she finds this difficult to believe;

2. She has observed Alexa spend a considerable amount of time at Mr. Prevost’s residence. While she cannot say if Alexa is there 50% of the time, she would not be surprised if that was the case;

3. Her daughter: Emma, and Alexa are good friends and have been for years. They spend a considerable amount of time together at both her home and Mr. Prevost’s home. They sometimes spend overnights together at her home. While she does not see Alexa every week, she sees her most weeks;

4. In the last three years, while she can’t say for certain if Alexa’s time with her father has diminished, she does not believe that the time with her father is significantly less than in 2014. It is her position that Alexa spends a considerable amount of time with Mr. Prevost for the past several years;

5. Ms. Carter states with confidence that Alexa spends a considerable amount of time with Mr. Prevost, however, she cannot confirm if she resides with him for half of the time;

6. Regarding Joel, she doesn’t know how often he visits Mr. Prevost, but she recalls that he stopped going there more frequently sometime in 2016.

iii. The affidavit of Michel Bickerstaff, who is one of Mr. Prevost’s next door neighbours since 2013, states:

1. He finds it difficult to believe Ms. Prevost’s claim that Alexa resides full time with her mother;

2. He has observed Alexa spend a considerable amount of time at her father’s residence since 2013. While he can’t say for certain that she resides there for 50% of the time, he wouldn’t be surprised if that were accurate, or if she spends more than 50% of the time with her father. He states with confidence that he sees Alexa spend a considerable amount of each week with her father, and he believes that Alexa sometimes spends entire weeks with Mr. Prevost without returning to her mother’s home at all;

3. He observes Alexa both catch the bus near Mr. Prevost’s residence, and return to his home after school on many days. He has even picked up Alexa from school one day in the 2016/2017 school year when she was ill;

4. He has frequently observed Alexa playing at Mr. Prevost’s home, especially in the pool during the summer months;

5. He does not see Joel very often, but he believes he spends more time with his father during the summer months. He believes that Joel spent more time with his father when he first moved into his current home (2013), but Joel stopped going over to his father’s as frequently sometime in 2016. He rarely sees Joel at his father’s residence these days.

ii. Additionally, Mr. Prevost has provided a letter from Alexa’s school dated June 21, 2017, signed by the principal: Danny Conway, indicating that Alexa has both her mother and father’s addresses on file. He has also provided a letter, and confirmation from the Consortium de transport scolaire de l’Est, that Alexa’s bus stop from 2014 to 2017 was at the corner of David and Brown Street, with out of bounds travel. Mr. Prevost resides on David Street in Ingleside.

jj. Ultimately, Mr. Prevost is seeking to change the child support and section 7 terms of the Final Order due to the following material changes in circumstances:

i. Change in financial circumstances;

ii. Chronic back pain;

iii. Career change; and

iv. The children’s residence.

kk. In response to Ms. Prevost’s claims, Mr. Prevost states the following:

i. Though his 2010 Income Tax Return sets out compensation for WSIB, this was not related to his back injury, as he maintains that he never reported that injury. Further, Mr. Prevost states that there was never a time when he was not working and on benefits. He was never permanently disabled and therefor did not claim any disability benefits;

ii. That if Alexa has been residing with her mother full time since 2014, why did she did not request a change of child support in her Response dated July 3, 2015? This is odd if it were true that Alexa was living with her full time;

iii. Information regarding Sega Electric was provided by Mr. Prevost’s previous counsel in correspondence dated October 7, 2015 found at Volume 5, Tab D, attached to Ms. Prevost’s affidavit. Further, it was clarified that Sega Electric is a client of Blueprint Authority Inc., and is listed as same in the Blueprint Authority Inc. financial statements;

iv. Mr. Prevost indicates that despite the allegation of information provided by his former legal counsel as being scant or non-informative, there were no questions asked to his current counsel to complete any unanswered questions. For instance, the questions regarding the gift cards for Sport Chek and Visa of $2000.00 were never put to him until the motion;

v. Mr. Prevost’s debt increased by $50,000.00. This was disclosed in May 2017, and Ms. Prevost never requested clarification. Also, Mr. Prevost’s more “lavish” home is owned by him, and is as a result of the equalization of the parties’ net family properties;

vi. Ms. Prevost’s net asset position as set out in her financial statement does not include the value of her pension, which would increase her net worth significantly;

vii. On the issue of foreseeability, the Final Order incorporated the foresight of the parties, and it contains a review provision to go back to January 1st of each year to review child support;

viii. The emphasis was not the back injury, but the concomitant is that Mr. Prevost did not know his 2013 income when he agreed to a Final Order. To say it was foreseeable that Mr. Prevost’s income would be lower is false. He knew that his income would change, but amount of income was not foreseeable;

ix. The letter from the doctor sets out the diagnosis, and the TRAC report confirms same;

x. The court dates which were adjourned were on consent of both parties;

xi. In 2013, Mr. Prevost worked as a foreman. He also worked on tools until the end of 2013;

xii. In January, 2014, he started Blueprint Authorities Inc.;

xiii. While it is suggested that the cash which was kept in Blueprint Authorities Inc. should be treated as income, the cash is kept in business to have operating capital. The transportation expenses are legitimate as there is a lot of driving involved. Mr. Prevost suggests that he has provided a reasonable explanation of not drawing this money out every year as there have been years with deficits;

xiv. Regarding Ms. Prevost’s section 7 and section 9 adjustments, the record shows that Ms. Prevost has claimed section 7 expenses through the Family Responsibility Office (“FRO”), not just for hockey, but all other expenses. Ms. Prevost has not provided receipts to support her claims for movie outings, sanitary products, etc. That she pays for undisclosed items are simply bald allegations, and therefore these should not be considered; and

xv. Regarding the impaired charge, that issue has already been litigated and questions were never asked as to how Mr. Prevost paid for criminal matter until this motion.

[25] I have also reviewed Ms. Prevost’s affidavit evidence. Briefly summarized, the collective result of Ms. Prevost’s evidence is as follows:

a. The parties separated on August 5, 2010;

b. Upon separation, the parties signed a Separation Agreement dated September 6, 2011. Ms. Prevost states that in retrospect, she should never have signed the Agreement as it did not provide her with sufficient child support. Further, she waived her entitlement to spousal support which she should not have done given the difference in their respective incomes. In 2010, Ms. Prevost states that she earned $38,627 and Mr. Prevost earned $96,936. She was emotionally distraught and was not thinking clearly due to the separation. She signed the separation agreement against legal advice as she states that Mr. Prevost advised her that he would contest any court proceeding commenced by her, and it would financially break her;

c. Ms. Prevost lives with her partner: Gilles Parisien. They have been together since October 2011. Mr. Parisien is employed at the Health Unit, and has two adult children with whom he has a warm and loving relationship. He has a good relation with Alexa and Joel, and has coached some of Joel’s activities;

d. Alexa is 15 years old, is in Grade 10 at St. Joseph’s Secondary School, and works part time at Jean Coutu;

e. Ms. Prevost commenced a Motion to Change in August, 2012 as there were custody and access issues, and due to the inadequacy of child support paid by Mr. Prevost. The Office of the Children’s Lawyer was appointed by the court to investigate the custody and access issues. Ms. Barbara Mitchell provided a report, dated August 21, 2013 and did not recommend any significant changes to the parenting schedule. Family counselling was recommended, but never took place as Mr. Prevost would not agree to attend same;

f. Ms. Prevost states that based on 2011 income, Mr. Prevost should have paid child support in the amount of $1,564.00 per month for two children, or a set off amount of $966.00 per month. Instead, he was paying $650.00 per month, as set out in the Separation Agreement;

g. Ms. Prevost states that following her Motion to Change being brought, Mr. Prevost advised his former legal counsel that he was no longer going to work as an electrician as he had an opportunity to enter the real estate development business. He apparently had a partner, and the plan was to construct expensive homes and sell them. He never mentioned that he was suffering from a back related injury at the time;

h. Mr. Prevost’s Motion to Change was brought on June 2, 2015. The basis for same was that he was no longer able to work as an electrician because of a back injury he had suffered from as early as 1995. Though he states that he did not report this injury to WSIB, his 2010 Income Tax Return sets out that he received worker’s compensation benefits totalling $3,409.24. This leads Ms. Prevost to question Mr. Prevost’s honesty;

i. Despite the allegedly debilitating pain and inability to work on tools, Ms. Prevost states that there was no mention that he was having any difficulty performing as an electrician during the period of August 12, 2012 to January 6, 2014, when her Motion to Change was still alive. She also questions why Mr. Prevost trained to be a Master Electrician if he was having back problems and wanted to leave the trade. She states that Mr. Prevost had ample opportunity to address his injury, but did not. Mr. Prevost spoke of leaving the electrical field to earn much more money in real estate development;

j. Mr. Prevost incorporated Lumen Capital Corp [Lumen Capital Group] (“Lumen”) on February 13, 2013. At or about the same time, he took a real estate course and obtained a real estate developer licence. In June, 2013, he made a video to promote Lumen, where he identifies himself as the President, and promotes the company as a home building company that builds homes in the Ottawa area which would sell for approximately $750,000.00. Mr. Prevost’s goal was to build and sell six homes, in two years, and net $425,000.00 as a profit;

k. During the same time, Mr. Prevost worked for Sega Electric. Ms. Prevost states that Mr. Prevost has not been forthcoming about this business interests. On the Sega Electric’s website, Mr. Prevost is listed as an estimator, and is on the staff listing;

l. Ms. Prevost states that written questions to Mr. Prevost’s former legal counsel was not promptly responded to, and states that the information provided was scant and non-informative;

m. Ms. Prevost’s position is that Mr. Prevost was not forthcoming about his employment with his union, and provided evidence about his past work activity and reporting of his medical condition to the union. The letter provided by IBEW, signed by Angèle Harvey, Office Manager, dated November 25, 2015, Exhibit H, states the following:

i. Mr. Prevost was referred to work for Plan Group as a foreman electrician from January 25, 2011, and laid off due to shortage of work on October 2, 2012;

ii. He was referred to work for HB White Canada Corp on September 23, 2013, as a journeyman electrician, and was laid off due to shortage of work on December 9, 2013;

iii. Mr. Prevost did not take any other jobs between October 3, 2012 and September 23, 2013. During that time, there were jobs available to Mr. Prevost. He has not taken any jobs since December 10, 2013. There were jobs as a journeyman available until approximately July 2014. He also did not leave his name on the job line for any of the calls. He did not leave his name for any jobs in 2012, and only left his name for one job in September, 2013 (HB White), and did not leave his name for any jobs in 2014;

iv. There was work available in the 2013 and 2014 years, until July 2014;

v. Mr. Prevost called the union hall in January, 2015, at which time he mentioned he had a back injury and that he could not return to work and to remove his name from the out of work list;

vi. Under the constitution of the IBEW, it is prohibited to work for any non-union contractor in any capacity, and it can result in charges from the Trial board; and

vii. Mr. Prevost has maintained his union dues to remain in good standing.

n. A letter from James Barry, Business Manager, IBEW, dated May 8, 2013, at Exhibit H, signed by confirms that Mr. Prevost is a member in good standing since August 1, 2001. His designation is journeyman electrician, and his hourly rate is $39.32 plus 10% vacation pay based on 36 hours per week, if available.

o. Ms. Prevost asserts that Mr. Prevost did not make a claim through is union for WSIB or disability because she suggests his medical condition would not support such a claim and because he was pursuing his other business interests. Had he made a claim, his 2013 and 2014 income would have been higher than what is presented;

p. Ms. Prevost provided great detail about Mr. Prevost’s net worth, and directs me to the following evidence in the financial statements:

i. Mr. Prevost did not include any retained earnings and cash of Blueprint Authorities Inc.;

ii. Mr. Prevost did not increase the value of his home, which it is suggested should be increased by 3% (the same amount as her home has been increased her the financial statement). Mr. Prevost lives in a more lavish home than Ms. Prevost. In her affidavit, she attached as exhibits photographs of the homes, and of Mr. Prevost’s renovations in the basement. She questions how he can work on renovations but not be able to work on tools. She questions how he is able to afford the renovation project based on an income of $41,625.00;

iii. Ms. Prevost states that Mr. Prevost’s net worth at May 11, 2017 is really $65,085 when one accounts for the increase in value of his home ($43,200.00) and the asset value of Blueprint Authorities Inc. ($31,548.00); and

iv. She questions how Mr. Prevost can maintain a bank account balance of approximately $6,000.00 from December 18, 2012 to May 11, 2017 given his income.

q. Ms. Prevost states that Mr. Prevost’s lifestyle belies his income level, and he lives like when he earned over $100,000.00 annually. In support of same, she sets out:

i. That he has taken the children on numerous trips, including a week-end getaway in the winter of 2015; on July 4 and 5, 2015; to the Cavalia horse show; to PEI in 2016 which cost $2,200.00; and made numerous purchases including patio furniture, new fridge and television, as well as having his driveway re-sealed;

ii. The children took pictures of $2,000.00 worth of gift cards for Sport Chek and Visa, which are unexplained; and

iii. Due to an impaired driving charge, Mr. Prevost has a driver, but does not set out the cost for same, or the value of the Ford Edge, which has a sign for Sega Electric on it.

r. Regarding the time with the children, Ms. Prevost states that though there is a schedule set out in the Separation Agreement and Final Order, Mr. Prevost deviates from that schedule when his work schedule dictates;

s. She states that the amount of time that Mr. Prevost spends with the children has been decreasing since 2014, and that the children would often return early from their father’s home;

t. Mr. Prevost was charged with impaired driving and failing to stop at the scene of an accident on April 8, 2016, and was convicted of these offences on February 21, 2017. He failed to inform herself or the children of the conviction and sentence, and the children only learned of the charges through friends;

u. Ms. Prevost’s position is that since March 2014, Alexa spends approximately 2 days per week with her father;

v. Ms. Prevost states that there have only been three months since March, 2016 when Alexa spent more than 40% of her time with her father, including August 2016 as the children were on vacation with him, and June 2017. She states that Alexa did spend some more time than usual with her father in the summer of 2017. This was because Ms. Prevost had an issue with Alexa which required discipline, so Alexa went to her father’s home where he has a pool, and he is not home very often;

w. At paragraph 43 of her affidavit, she states that Joel has been residing with her exclusively since June 2015. This was corrected at the motion to April 2016. Joel visits with his father sporadically;

x. The three affidavits provided by Mr. Prevost are useless, and should not be considered as evidence as they have similar language; they are vague and uncertain, and therefore do not in any respect support Mr. Prevost’s assertion that Alexa spends 50% of her time with her father;

y. Ms. Prevost is the parent who attends to the children’s needs, which falls under section 9 criteria, such as paying for haircuts, sanitary products, birthday cards, movie outings, school lunches, and school sports. She also does all of the transportation for Joel’s sports, and pays for his out of town hockey tournaments; and drove Alexa around to drop off resumes and attend interviews. She takes care of the children’s medical and dental appointments, and purchases more than half of their clothing. She provided supporting letters regarding her attendance at medical appointments, hockey and football events;

z. She acknowledges that she has charged Mr. Prevost 64% of the children’s section 7 expenses, as set out in the Final Order, and provides confirmation of same. There is no amount owing by Mr. Prevost for child support. However, he owes $1,632.58 for section 7 expenses. Further, Alexa has a cell phone which costs Ms. Prevost $65.00 per month plus long distance. Mr. Prevost has never been requested to contribute towards these costs, but he encourages Alexa to call him long distance, which adds up;

aa. Ms. Prevost works at the Health Unit and earned $57,115 in 2016, of which $55,990 was employment income;

bb. She provides at Exhibit V her calculations for support based on an imputed income of $70,000.00 to Mr. Prevost from 2014 to present. The calculations are also based on Alexa and Joel residing with her for 60% of the time or more from July 2014 to present. An amended Exhibit V was provided to correct that there was shared custody of Joel until end of March, 2016. Given this, Ms. Prevost suggest that Mr. Prevost owes her child support arrears of $4,778.00, including August, 2017. She also states that if the Order reflects an imputed income of $70,000.00 to Mr. Prevost, while he should have paid less section 7 expenses, there should be no reimbursement to him as this would account for the extra parenting responsibilities Ms. Prevost had to provide due to Mr. Prevost’s lack of involvement with the children, apart from attending some of Joel’s winter hockey games;

cc. Mr. Prevost should not benefit from a change in the Final Order as his medical situation was clearly known to him on January 6, 2014 when the Order was made;

dd. This matter was adjourned on many occasions, which delayed it being concluded. Mr. Prevost’s delay in bringing this matter to its conclusion should not penalize Ms. Prevost;

ee. There is no evidence of the verbal notice made to Ms. Prevost in the spring of 2014;

ff. Section 37(3) FLA states that no adjustment to child support shall be made until six months after the order is made;

gg. If anything, the date I should consider for effective notice is the date the Motion to Change was issued;

hh. As an inconsistency, I am directed to Mr. Provost’s affidavit evidence states that the settlement, which resulted in January 2014 order, was agreed to before he filed his 2013 taxes. That 2013 income was significantly lower because of shortage of work. However, in another paragraph, Mr. Prevost states that he couldn’t work on tools since 2013;

ii. The affidavit evidence provides disclosure of the injury which existed prior to the signing of the 2013 Minutes of Settlement. The case law states that if change had been known at the time, it cannot be relied upon for change or variation;

jj. Disclosure regarding Mr. Prevost’s medical condition was not provided to Ms. Prevost until February 2017, by way of TRAC report, and Dr. Wai’s letter dated June 16, 2016 was not received until June 2017;

kk. The purpose of the TRAC report is to provide an objective evaluation of Ms. Prevost’s functional ability. The testing was in the summer of 2016, not from 2011 or 2012 when he said complained of back injury;

ll. Mr. Prevost, as a support payor, has an obligation to maximize his income;

mm. It is unfathomable that Mr. Prevost did not pursue WSIB or disability and instead let his income drop significantly. Mr. Prevost is a malingerer;

nn. The medical information doesn’t say that Mr. Prevost cannot work at all. It’s just he can’t do repetitive work. It doesn’t say he cannot work for something more remunerative;

oo. Mr. Prevost is currently self-employed as an electrical estimator. He owns two companies: Blueprint Authorities Inc. and Lumen Capital Corp. [Lumen Capital Group];

pp. Mr. Prevost’s pre-tax corporate earnings and travel expenses should be added back into his income. Further, though 2016 travel expenses were much lower, it was suggested by Ms. Prevost that another $10,000.00 should be added back in to Mr. Prevost’s travel expenses. I am directed specifically to the pre-tax corporate income as well as travel expenses by Mr. Castle in his analysis of monies available:

i. In 2014, Blueprint Authority Inc.’s revenue ending September 30, 2014 was $28,040.00, with a net loss at year end of $2,297.00. $13,213.00 was deducted for travel expenses;

ii. In 2015, Blueprint Authority Inc.’s revenue ending on September 30, 2015 was $74,170.00. Blueprint Authority Inc.’s income before income taxes, after expenses, was $10,614.00. $10,282.00 was deducted for travel expenses;

iii. In 2016, Blueprint Authority Inc.’s revenue ending on September 30, 2016 was $49,484.00. Blueprint Authority Inc. had a net loss of $4,740.00 after expenses. $243.00 was deducted for travel expenses. The Retained Earnings, at end of year were $2,268.00;

qq. That Mr. Prevost’s asset position is equal to, or higher than Ms. Prevost’s if the court determines it is appropriate to increase the value of Mr. Prevost’s home by 3%, which has been done with Ms. Prevost’s home;

rr. That I should not look at bare income and determine support. That after looking at the time spent, if I conclude that Alexa spent more than 40% of her time with her father, then I need to consider subsections 9(b) and 9(c) of the Guidelines and look at who is doing the parenting. The amount should reflect the extras paid for by Ms. Prevost. I should not apply a straight set off amount for child support;

ss. That I should consider both parties’ net asset position when determining support and arrears;

tt. That if I order arrears to be repaid by Ms. Prevost, this will cause a hardship to her. Ms. Prevost lives pay cheque to pay cheque. She was off for 3.5 months (December 2016 to April 2017) for medical reasons. Her salary went down to 70% of what she would normally earn. She states she will be off work for medical reasons commencing September 8, 2017, and will be receiving short term disability payments which will amount to 70% of her current salary; and

uu. Ms. Prevost’s position is that if an overpayment is ordered repayable by her, which she does not believe is accurate, she will not be able to pay any amount and still provide for the children, who are now teenagers and eat constantly. Further, the children’s social lives are expensive and she is the one who provides for them. Her house is falling apart, and she does not have money to fix everything. She is struggling to make ends meet, while Mr. Prevost seems to have the money for everything including resealing his driver annually at an approximate cost of $250.00.

VARATION

[26] In deciding this matter, I have considered the applicable legislation, the relevant case law, as well as the documents filed by the parties and their submissions. In the initial Motion to Change, the parties did not seek a divorce. As such, this Final Order falls under the auspices of the Family Law Act (“FLA”).

[27] Section 37 of the deals with FLA variation proceedings. Section 37 states:

37 (1) An application to the court for variation of an order made or confirmed under this Part may be made by,

(a) a dependant or respondent named in the order;

(b) a parent of a dependant referred to in clause (a);

(c) the personal representative of a respondent referred to in clause (a); or

(d) an agency referred to in subsection 33 (3).

Limitation on applications for variation

(3) No application for variation shall be made within six months after the making of the order for support or the disposition of another application for variation in respect of the same order, except by leave of the court. R.S.O. 1990, c. F.3, s. 37 (3).

[28] The decision of Supreme Court of Canada decision of Gordon v. Goertz, 1996 191 (SCC), [1996] 2 S.C.R. 27 (S.C.C.), is applied in a request to vary a custody or access order.

[29] On any application to vary a final custody order, I must accept the prior Order, that of Justice Lafrance Cardinal dated January 6, 2014, was correct at the time it was made. The onus is on the person seeking to change an order to establish that the circumstances have changed since the making of the prior order, to such an extent that the existing childcare arrangements are no longer in the best interests of the child: Gordon v. Goertz, supra; Crawford v. Dixon, 2001 28121 (ON SC), [2001] O.J. No. 466, 14 R.F.L. (5^th) 267 (Ont. S.C.J.), at para. 10.

[30] In Gordon v. Goertz, supra, at paragraph 49, Justice McLauchlin stated the following:

49 The law can be summarized as follows:

1. The parent applying for a change in the custody or access order must meet the threshold requirement of demonstrating a material change in the circumstances affecting the child.

2. If the threshold is met, the judge on the application must embark on a fresh inquiry into what is in the best interests of the child, having regard to all the relevant circumstances relating to the child’s needs and the ability of the respective parents to satisfy them.

3. This inquiry is based on the findings of the judge who made the previous order and evidence of the new circumstances.

4. The inquiry does not begin with a legal presumption in favour of the custodial parent, although the custodial parent’s views are entitled to great respect.

5. Each case turns on its own unique circumstances. The only issue is the best interest of the child in the particular circumstances of the case.

6. The focus is on the best interests of the child, not the interests and rights of the parents.

[31] If the Applicant is unable to show the existence of a material change, then the inquiry can go no farther: Gordon v. Goertz, supra, at para. 10; Wilson v. Grassick (1994), 1994 4709 (SK CA), 2 R.F.L. (4th) 291 (Sask. C.A.).

[32] “Material change” means a change, such that, if known at the time, would likely have resulted in different terms in the order. If the issue which is relied on as constituting a change was known at the relevant time, it cannot be relied on as the basis for variation. The change itself could not have been foreseen or reasonably contemplated by the judge who made the initial order. The onus of proof lies on the applicant and the standard of proof is “on the balance of probabilities”: Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670; G.(L.) v. (B.)(G.) (1995) 1995 65 (SCC), 15 R.F.L. (4th) 201 (S.C.C.); Gordon v. Goertz, supra, at para. 13.

[33] The second stage of the analysis involves an assessment of the best interests of the child. The Supreme Court of Canada has held that these interests must be ascertained from the perspective of the child rather than from the parents' perspective; parental preferences and rights do not play a role in the analysis except to the extent that they are necessary to ensure the best interests of the child: Favero v. Favero, 2013 ONSC 4216, at para. 40.

[34] As set out in Bubis v. Jones, 2000 22571 (ON SC), 2000 CarswellOnt 1243, the fresh inquiry necessitates adherence to section the provisions of section 24 of the Children’s Law Reform Act, which sets out the best interest of a child test:

24 (1) The merits of an application under this Part in respect of custody of or access to a child shall be determined on the basis of the best interests of the child, in accordance with subsections (2), (3) and (4). 2006, c. 1, s. 3 (1).

Best interests of child

(2) The court shall consider all the child's needs and circumstances, including,

(a) the love, affection and emotional ties between the child and,

(i) each person, including a parent or grandparent, entitled to or claiming custody of or access to the child,

(ii) other members of the child's family who reside with the child, and

(iii) persons involved in the child's care and upbringing;

(b) the child's views and preferences, if they can reasonably be ascertained;

(c) the length of time the child has lived in a stable home environment;

(d) the ability and willingness of each person applying for custody of the child to provide the child with guidance and education, the necessaries of life and any special needs of the child;

(e) the plan proposed by each person applying for custody of or access to the child for the child's care and upbringing;

(f) the permanence and stability of the family unit with which it is proposed that the child will live;

(g) the ability of each person applying for custody of or access to the child to act as a parent; and

(h) any familial relationship between the child and each person who is a party to the application.

Past conduct

(3) A person's past conduct shall be considered only,

(a) in accordance with subsection (4); or

(b) if the court is satisfied that the conduct is otherwise relevant to the person's ability to act as a parent.

Violence and abuse

(4) In assessing a person's ability to act as a parent, the court shall consider whether the person has at any time committed violence or abuse against,

(a) his or her spouse;

(b) a parent of the child to whom the application relates;

(c) a member of the person's household; or

(d) any child.

(5) For the purposes of subsection (4), anything done in self-defence or to protect another person shall not be considered violence or abuse.

Section 24 Children’s Law Reform Act

ACCESS ANALYSIS

[35] Both parties now agree that Joel’s primary place of residence has been with the Applicant mother since April, 2016.

[36] I have considered the evidence presented by the parties about the time-sharing regarding Alexa. There is a factual dispute regarding when Alexa has been with her father, and if she has been adhering to the joint shared custody schedule which provides that she would ordinarily spend over 40% of her time with him.

[37] It is Mr. Prevost’s evidence that Alexa is with him over 40% of the time. His evidence is bolstered by three separate affidavits that corroborate that Alexa is with her father a considerable amount of time. All three affiants state that they would not be surprised if she resided there half the time, or 50% of the time. Two affiants: Ms. Carter and Mr. Bickerstaff, two of Mr. Prevost’s neighbours, find it difficult to believe, or do not believe, that Alexa resides full time with Ms. Prevost. Ms. Carter states that she does not believe Alexa’s time with her father is significantly less than in 2014, and that Alexa spends considerable time with her father.

[38] Ms. Prevost on the other hand states that Alexa spends significantly less time with her father than what is provided for in the Final Order. Ms. Prevost states at paragraph 43 of her affidavit that Alexa is with her father two days per week from March, 2014 onward. At paragraph 62, she indicates that she has prepared calculations for child support arrears on the basis that both Alexa and Joel have resided with her for 60% of the time or more from July, 2014. Yet in her Response, she only asks to change of one day of access. Her evidence regarding the amount of time Joel spends with his father has been equivocal. She initially stated that Joel has been with her exclusively since June 2015, then corrected it to be April, 2016. I am unable to reconcile this evidence.

[39] The relief sought by Ms. Prevost in her Response dated July 3, 2015 was that access be changed on the second access week, such that the children would not attend their father’s home on Wednesday mornings, and would instead attend their father’s home on Thursday nights. Ms. Prevost’s position at that time was that the children did not wish to attend their father’s home on the Wednesday nights.

[40] I find, based on the evidence before me, that on a balance of probabilities, Alexa spends a significant amount of time with her father. While Ms. Prevost invites me to disbelieve the affidavit evidence of three other people as they sound similar, this is not sufficient to persuade me to disregard same.

[41] I recognize that Alexa is 15 years old. She works part time at Jean Coutu. At her age, any access schedule needs fluidity. Both parties have provided Alexa with the fluidity required for a child of her age. Such was demonstrated when Alexa spent an extended access period with her father in late June, 2017.

[42] As set out in Willick v. Willick, “There can be a material change in the relation of the factors if one of them undergoes a significant change because the relationship between them is altered”. Willick v. Willick, 1994 28 (SCC), 1994 CarswellSask 48, at para. 22

[43] On the evidence before me, the change regarding Joel’s access time with his father is a significant change. However, the evidence does not support the same assertion regarding Alexa’s time with her father.

[44] I have not been persuaded, by Ms. Prevost, that Alexa spends over 60% of the time with her. Her evidence on this issue is inconsistent, and unreliable. I have not been persuaded that there is any reason to change this regularized access regime. Ms. Prevost has not met the threshold test.

[45] Further, I have not been convinced that a change in one overnight per two weeks is sufficiently significant to constitute a material change in circumstances.

[46] I find that it continues to be in Alexa’s best interest to have quality time with both of her parents pursuant to the shared custodial regime. This has been the status quo since the Final Order. I am not persuaded that any change to the schedule is warranted, taking into consideration the flexibility provided to the schedule by the parents in order to continue to meet Alexa’s needs.

CHILD SUPPORT – MATERIAL CHANGE

[47] Subsection 37 (2.1) of the Family Law Act provides that a court may vary an order for support if it is satisfied that there has been a material change in circumstances within the meaning of the child support guidelines. It states the following:

Powers of court: child support

(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and

(c) make any other order for the support of a child that the court could make on an application under section 33.

Application of child support guidelines

(2.2) A court making an order under subsection (2.1) shall do so in accordance with the child support guidelines.

[48] A number of considerations apply when a party requests child support, or upward adjustments of child support, on a retroactive basis. The Supreme Court of Canada comprehensively addressed how retroactive child support claims should be handled in S.(D.B.) v. G. (S.R.), 2006 SCC 37, [2006] S.C.J. No. 37, Cole v. Freiwald, 2011 ONCJ 395, at para. 81.

[49] The powers of the court on an application to change a child support order or adjust outstanding arrears of child support under subsection 37(2.1) are broad. The court can change the terms of the order, either prospectively or retroactively, but can also suspend or discharge the order, either in whole or in part and on either a prospective or retroactive basis. The court's authority with respect to arrears is similarly broad and includes the power to rescind the arrears and interest either entirely or in part, or to reduce the amount of arrears payable: Cole v. Freiwald, supra, at para. 86.

[50] As set out in Charron v. Carrière, in determining whether there has been a material change of circumstances, the Court must determine if the parties’ respective financial positions have changed since the date of the agreement. Charron v. Carrière, 2016 ONSC 4719, at para. 36.

[51] Where the payor has been unable for relatively short periods of time in the past to make child support payments as they come due, this does not constitute a change in circumstances that meets the threshold for initiating a variation proceeding: Corcios v. Burgos, 2011 ONSC 3326, at para. 33.

[52] In Charron v. Carrière, Justice Doyle determined that a change of employment from being a sales representative to becoming self-employed with a significant reduction of income is a material change of circumstances which entitles the Court to review the quantum of support payable. Charron v. Carrière, supra, at para. 40.

[53] As set out in Gray v. Rizzi, citing P. (L.M.) “to ascertain whether a change in circumstances has occurred, a court must consider whether the change advanced was "material" — meaning a change that, "if known at the time, would likely have resulted in different terms" — and a change with some degree of continuity, and not merely a temporary set of circumstances”: P. (L.M.), at paras. 32 and 35: L.M.P. v. L.S., 2011 SCC 64; Gray v. Rizzi, 2016 ONCA 152, at para. 39.

[54] Section 14 of the Guidelines states that a material change in the payor’s income or means would be grounds for a variation of child support:

Circumstances for variation

14. For the purposes of subsection 37 (2.2) of the Act and subsection 17 (4) of the Divorce Act (Canada), any one of the following constitutes a change of circumstances that gives rise to the making of a variation order:

15. In the case where the amount of child support includes a determination made in accordance with the table, any change in circumstances that would result in a different order for the support of a child or any provision thereof.

16. In the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either parent or spouse or of any child who is entitled to support.

17. In the case of an order made under the Divorce Act (Canada) before May 1, 1997, the coming into force of section 15.1 of that Act, enacted by section 2 of chapter 1 of the Statutes of Canada, (1997).

18. In the case of an order made under the Act, the coming into force of subsection 33 (11) of the Act. O. Reg. 391/97, s. 14; O. Reg. 446/01, s. 3.

See also Gray v. Rizzi, supra, at para. 39.

ANALYSIS – MATERIAL CHANGE

[55] I find that Mr. Prevost’s reduction of income has been significant and long lasting. Mr. Prevost went from working as an electrician on tools, to becoming an employee of his own corporation, the equivalent of being self-employed. Further, the parties’ financial positions have changed since the date of the Final Order. The Final Order set out that child support was based on Mr. Prevost’s averaged annual income of $96,416.00, and Ms. Prevost’s income of $48,965.00. The evidence since that Order is that Mr. Prevost’s income was $33,885.00 for 2013; $21,131.82 for 2014; $41,767.00 for 2015 and $41,624.00 for 2016. Ms. Prevost’s 2014 to 2016 income was between $53,000.00 and $55,900.00.

[56] Ultimately, I find, on a balance of probabilities, Mr. Prevost has met his onus and has demonstrated that there has been a material change in circumstances. I base this finding on Mr. Prevost’s change in financial circumstances, his health issues, as well as his career change.

[57] The question now becomes what is Mr. Prevost’s income.

INCOME

[58] Mr. Prevost’s evidence is that he had to stop working on the tools. He suggests that his decision to start his business was reasonable. This business has provided him with a steady income.

[59] Ms. Prevost disagrees with the representations, and submits that Mr. Prevost is willfully underemployed and is a malingerer. She argues that income be imputed to him at $70,000.00 per annum, commencing in 2014.

[60] As set out in Charron v. Carrière:

The purpose of the Guidelines is to establish a fair standard of support that ensures that children continue to benefit from the financial means of both spouses after separation, using a methodology that strives to achieve objectivity, efficiency and consistency: Obodoechina v. Ayetor, 2013 ONCJ 738 (Ont. C.J.)., Charron v. Carrière, supra, at para. 52.

[61] Section 3 of the Child Support Guidelines (hereinafter Guidelines) sets out the presumptive rule:

3. (1) Unless otherwise provided under these guidelines, the amount of an order for the support of a child for children under the age of majority is,

(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the parent or spouse against whom the order is sought; and

(b) the amount, if any, determined under section 7. O. Reg. 391/97, s. 3 (1).

[62] The starting point for how one is to determine income is set out section 16 of the Guidelines, which states:

Subject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.

[63] Section 17 of the Guidelines sets out:

Pattern of income

17. (1) If the court is of the opinion that the determination of a parent’s or spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the parent’s or 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. O. Reg. 446/01, s. 5.

Non-recurring losses

(2) Where a parent or spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the parent’s or spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate. O. Reg. 391/97, s. 17 (2).

(A) PRE-TAX CORPORATE EARNINGS / INCOME

[64] Hand in hand with Ms. Prevost’s request that income be imputed to Mr. Prevost, she asks that Mr. Prevost’s income be grossed up to take into consideration the pre-tax corporate earnings. In considering same, the court is directed to section 18 of the Guidelines, which states:

Shareholder, director or officer

18. (1) Where a parent or spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the parent’s or spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the parent or spouse for the payment of child support, the court may consider the situations described in section 17 and determine the parent’s or spouse’s annual income to include,

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) an amount commensurate with the services that the parent or spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income. O. Reg. 391/97, s. 18 (1).

Adjustment to corporation’s pre-tax income

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the parent or spouse establishes that the payments were reasonable in the circumstances. O. Reg. 391/97, s. 18 (2).

[65] As stated in Mason v. Mason, section 18 of the Guidelines focuses on pre-tax corporate income in assessing whether any portion of corporate profits should be added to a payor’s income: Mason v. Mason, 2016 ONCA 725, at para. 132.

[66] The Court of Appeal stated: “I conclude that a proper interpretation of s. 17 of the Guidelines permits a court to consider a payor’s income “over the last three years” to determine an income that “is fair and reasonable” and that, in that context, the payor’s income over the last three years includes amounts of pre-tax corporate income that the court considers appropriate to add to the payor’s income under s. 18 of the Guidelines for each such year.”: Mason v. Mason, supra, at para. 151.

[67] However, the interpretation of the Guidelines’ provisions regarding adding pre-tax corporate income to a payor shareholder’s income is unsettled: Mason v. Mason, supra, at para. 153.

[68] In Mason v. Mason, the Court also stated:

“In my view, the scheme of these provisions is that s. 18 permits a court to take an annual snapshot of a spouse’s income – and include in it pre-tax corporate income from the most recent taxation year. If the corporation suffered a loss in the most recent taxation year, no amount of pre-tax corporate income may be included. Under s. 17 however, the court may determine an amount that is fair and reasonable having regard to the spouse’s income over the last three years in light of, among other things, any pattern of, or fluctuations in, income over the three-year period. And “income” for that purpose may include amounts of pre-tax corporate income added to line 150 income under s. 18 for each of those years.” (at para. 163)

“[I]t would make little sense to permit consideration of a spouse’s income over the three-year period without permitting consideration of the spouse’s access to pre-tax corporate income in each year of the three-year period.” (at para. 164)

“In attributing pre-tax corporate income to a payor for any particular year, it will be incumbent on the court to have regard to the status of the corporation as a distinct legal personality as well as to legitimate corporate interests in retaining pre-tax corporate income and the degree of the payor’s involvement in the corporation. See Brophy v. Brophy, (2002), 2002 76706 (ON SC), 32 R.F.L. (5th) 1 (Ont. S.C.J.), aff’d (2004), 2004 25419 (ON CA), 180 O.A.C. 389 (Ont. C.A.), at para. 36, and Thompson v. Thompson, 2013 ONSC 5500, at para. 92, where the courts highlight the relevant considerations.” (at para. 169)

Mason v. Mason, supra, at para.’s 163, 164, and169

[69] In Thompson v. Thompson, the argument was made that pre-tax income should be attributed to one of the parties. The evidence of quantum attributable was presented by an income analysis report from an expert. Thompson v. Thompson, 2013 ONSC 5500.

[70] Ultimately, in Thomson v. Thompson, the court determined that it was appropriate to include the following to income:

a. Income for the tax year;

b. Benefit of vehicle available for personal use;

c. Income Tax Gross up on vehicle benefit; and

d. Total income.

Thomson v. Thompson, supra, at para. 119

[71] The Ontario Court of Appeal stated in Wildman v. Wildmanthat the purpose of section 18 is "to enable the courts to conduct a fair accounting of the money available for the payment of child support." In Kowalewich v. Kowalewich, the British Columbia Court of Appeal noted that section 18 requires "that a payor spouse's allocation of pre-tax corporate income between business and family purposes be assessed for fairness by an impartial tribunal..." In Koester v. Koester, Stayshyn, J. elaborated upon the purpose of section 18, explaining that the section is in part "designed to address the unfairness which would result if a spouse was to artificially manipulate his income through a corporate structure for the purpose of avoiding child support obligations." While manipulation of corporate income may provide a basis for invoking section 18, evidence of manipulation, bad faith or intentional avoidance of support obligations is not a prerequisite to relying on the section: Thompson v. Thompson, supra, at para 88; Wildman v. Wildman, 2006 33540 (ON CA), [2006] O.J. No. 3966 (Ont. C.A.); Kowalewich v. Kowalewich, 2001 BCCA 450 (B.C. C.A.); Koester v. Koester, 2003 2150 (ON SC), [2003] O.J. No. 5406 (Ont. S.C.J.).

[72] It is important to emphasize that section 18(1) refers to the corporation's "pre-tax income" for the most recent year only, and not to the company's "retained earnings." As MacDonald, J. highlighted in Bembridge v. Bembridge, this is a very important distinction. Retained earnings are the cumulative net earnings of the corporation since the inception of the company less dividends paid out to shareholders since that time.They are the shareholders' equity in the company, and do not necessarily represent cash in the bank that shareholders can take out as income. In some circumstances, the accumulation of retained earnings in a company may result in the court imputing income to a party pursuant to section 19 of the Guidelines, on the basis that the party is not properly using their property to generate income by failing to declare dividends from the company: Thompson v. Thompson, supra, at para 89; Bembridge v. Bembridge, 2009 CarswellNS 450 (N.S. S.C.); Trueman v. Trueman, 2000 ABQB 780 (Alta. Q.B.).

[73] As the court emphasized in Bembridge v. Bembridge, it is critical for a court dealing with a section 18 argument to have a clear understanding of where and how additional money can be found from a corporation's pre-tax income so as to increase a party's income for the purpose of support calculations. To use the words of MacDonald, J. in that case, failure to properly understand this issue "can lead to an incorrect result and ultimately, if the parent cannot find the expected additional money, may undermine the operation of the corporation and eventually kill the goose that lays the golden egg": Thompson v. Thompson, supra, at para. 90; Bembridge v. Bembridge, supra, at para. 37.

[74] The party proposing that corporate pre-tax income be attributed to the other party has the onus of demonstrating some basis upon which section 18 should be engaged. The fact that retained earnings remain in the corporation does not in and of itself require the party with the interest in the company to justify the business reasons for not withdrawing corporate pre-tax income or retained earnings. Once the party advancing the section 18 argument has met this onus, the party who has the interest in the corporation has the onus of explaining why the decision to add the corporate pre-tax income to the company's retained earnings rather than withdrawing a portion of the earnings was reasonable from a business perspective. The rationale for this is that the shareowner will in all likelihood have a much greater appreciation of the workings and needs of the company, or will be best able to identify individuals who can be called as witnesses to address the issue: Thompson v. Thompson, supra, at para 91; Evitts v. Henry, 2010 CarswellOnt 7110 (Ont. S.C.J.); Ramsay v. Mackintosh, 2013 CarswellAlta 303 (Alta. Q.B.).

[75] Justice Chappel in Thompson v. Thompson summarized the case-law relating to section 18. The courts have considered the following factors in determining whether all or a portion of a corporation's pre-tax income should be included in a party's income:

a) The historical pattern of the corporation for retained earnings.

b) The restrictions on the corporation's business, including the amount and cost of capital equipment that the company requires.

c) The type of industry the corporation is involved in, and the environment in which it operates.

d) The potential for business growth or contraction.

e) Whether the company is still in its early development stage and needs to establish a capital structure to survive and growth.

f) Whether there are plans for expansion and growth, and whether the company has in the past funded such expansion by means of retained earnings or through financing.

g) The level of the company's debt.

h) How the company obtains it financing and whether there are banking or financing restrictions.

i) The degree of control exercised by the party over the corporation, and the extent if any to which the availability of access to pre-tax corporate income is restricted by the ownership structure.

j) Whether the company's pre-tax corporate income and retained earnings levels are a reflection of the fact that it is sustained primarily by contributions from another related company.

k) Whether the amounts taken out of the company by way of salary or otherwise are commensurate with industry standards.

l) Whether there are legitimate business reasons for retaining earnings in the company. Monies which are required to maintain the value of the business as a going concern will not be considered available for support purposes. Examples of business reasons which the courts have accepted as legitimate include the following:

(i) The need to acquire or replace inventory;

(ii) Debt-financing requirements;

(iii) Carrying accounts receivable for a significant period of time;

(iv) Cyclical peaks or valleys in cash flow;

(v) Allowances for bad debts;

(vi) Allowances for anticipated business losses or extraordinary expenditures; and

(vii) Capital acquisitions.

Thompson v. Thompson, supra, at para 92

[76] If the court determines that it is appropriate to attribute a portion of corporate pre-tax earnings to a party, the question arises as to what portion of that income should be attributed. In deciding this question, one of the factors to consider is the nature of the party's interest in the corporation. It has been found to be unreasonable to attribute and amount of income that is disproportionate with the payor party's ownership interest in the company: Thompson v. Thompson, supra, para 93.

ANALYSIS OF PRE-TAX CORPORATE INCOME

[77] I preface my analysis by confirming that though I am reviewing sections 18 and 19 of the Guidelines separately, I am mindful that they are "inextricably linked, designed to work in tandem, and are not mutually exclusive means of ascertaining [that] income.” Thompson v. Thompson, supra,at para 95.

[78] I acknowledge that I have the discretion to determine, pursuant to section 16 of the Guidelines that Mr. Prevost’s “total income” in his T1 General is not the fairest determination of income, and this permits me to look at sections 17 to 20 of the Guidelines to determine an amount of income that is fair and reasonable in light of the pattern of income and other factors.

[79] Ms. Prevost has the onus of demonstrating why section 18 of the Guidelines should be engaged. In reviewing her arguments, the Guidelines, and the case law above, I find that there is a basis upon which section 18 should be engaged, and as such, Ms. Prevost has met her onus.

[80] However, I do not find it is appropriate to attribute any pre-tax corporate income to Mr. Prevost for the following reasons:

a. Blueprint Authorities Inc. suffered losses for both the 2014 and 2016 years. As such, no pre-tax corporate income can be included to Mr. Prevost’s income. In 2015, the corporation had $10,614.00 in pre-tax corporate income;

b. There is no established pattern of income for the corporation. The 2014 to 2016 income has fluctuated between $20,000.00 and $48,000.00;

c. I have considered that pursuant to Thompson v. Thompson, supra, I have the discretion to include the benefit of a vehicle available for personal use and Income Tax Gross up on vehicle benefits to Mr. Prevost’s total income. The evidence shows a clear drop in the transportation costs in the 2016 year, which would coincide with Mr. Prevost’s ability to drive given his criminal charges at that time. In the circumstances, I have not been persuaded on the evidence before me that the figures used in the corporate returns are not substantiated or accurate;

d. After having reviewed Bembridge v. Bembridge, supra, I am also not inclined to include any retained earnings to Mr. Prevost’s income. In particular, this is based on these earnings being used to ensure that the corporation remains viable, as in the past three years, there have been two years where the corporation has suffered losses; and

e. The corporation is still in its early stages of development, and there is a requirement for operating capital to survive and grow. Mr. Prevost has advanced legitimate business reasons for retaining earnings in the corporation: in the event there is a slow year, to ensure that there is money there to pay himself and pay H.S.T., and to fund operating expenses.

(B) IMPUTATION OF INCOME

[81] The court’s discretion for imputation of income arises from section 19 of the Guidelines:

19. (1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

(b) the parent or spouse is exempt from paying federal or provincial income tax;

(c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;

(e) the parent’s or spouse’s property is not reasonably utilized to generate income;

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;

(g) the parent or spouse unreasonably deducts expenses from income;

(h) the parent or spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and

(i) the parent or spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. O. Reg. 391/97, s. 19 (1); O. Reg. 446/01, s. 6.

Reasonableness of expenses

(2) For the purpose of clause (1) (g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act (Canada). O. Reg. 391/97, s. 19 (2).

[82] While Ms. Prevost did not in her Response plead that income be imputed, she does indicate that she disagrees with the variation of child support sought by Mr. Prevost. In allowing this argument to be advanced, I have relied on Gogas v. Gogas, which states:

Subsection 19(1)(a) of the Guidelines gives the court jurisdiction to impute income as it considers appropriate in the circumstances, which courts routinely do once a finding is made that the requirements of that section are met. This imputation is often necessary to meet the obligations of both the Guidelines and to create spousal support orders that meet the objectives of the Divorce Act, the starting point for which is now commonly accepted to be a calculation of income based on the provisions of section 15 to 19 of the Guidelines. If courts restricted themselves to applying section 19(1)(a) of the Guidelines only where a specific request was made in the pleading for income imputation, unfair and unreasonable orders could result: Gogas v. Gogas, 2011 ONSC 4571, at para. 15.

[83] The leading case on imputation of income for the purpose of child support is Drygala v. Pauli. In that case, the court imputed income to the father due to him being intentionally underemployed, and based this determination due to a number of factors, including:

a. The father quit his job as a tool and die maker, where he was working over 40 hours per week, when he was asked to work overtime;

b. the father chose not to pursue being a tool and die maker because he didn't like the trade and was not good at it;

c. The father decided to go back to school to become a teacher;

d. The father admitted that he had not looked for any employment, either part time or full time, for two-and-a-half years;

e. The father put his personal self-interest and satisfaction ahead of the child's needs with no clear prospect that his decision would have any long-term benefit to the child;

f. All of the father’s living expenses were paid by his mother, or from money from his stepfather's company; and

g. The father had made no voluntary child-support payments.

Drygala v. Pauli, 2002 41868 (ON CA), 2002 CarswellOnt 3228

[84] The Court of Appeal set out the following principles in Drygala:

a. there is no need to find a specific intent to evade child support obligations before income can be imputed (at para. 25);

b. "intentionally" means a voluntary act. The parent required to pay is intentionally underemployed if that parent chooses to earn less than he or she is capable of earning. That parent is intentionally unemployed when he or she chooses not to work when capable of earning an income (at para. 28);

c. there is no requirement of bad faith for income to be imputed (at para. 29);

d. a court cannot arbitrarily impute an amount of income. There must be some factual basis in the evidence for the amount imputed. If the parent does not provide evidence on types of jobs available, hourly rates, and available hours of employment, a court may impute a percentage of what the person had been earning (at para.’s 44 and 46);

e. a parent who changed jobs to increase career satisfaction is not intentionally underemployed;

f. The Guidelines depend on full disclosure to determine support. A payor who fails to make full disclosure cannot complain if a court draws an adverse inference against him or her on the basis of the available facts;

g. Section 1 of the Guidelines stipulates that one of its objectives is to establish a fair standard of support for children to ensure that they benefit from the financial means of both parents after separation. Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning (at para.’s 31 and 32);

h. There is a duty to seek employment in a case where a parent is healthy. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income. Thus, once it has been established hay a spouse is intentionally unemployed or under-employed, the burden shifts to that spouse to establish what is required by virtue of his or her reasonable educational needs. A spouse is not to be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations (at para.'s 38 and 39);

i. When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered are: age, education, experience, skills, health; availability of job opportunities; the number of hours that could be worked in light of the parent’s overall obligations; and the hourly rate one could reasonably be expected to obtain (at para. 45);

j. The purpose of child support is to assist the custodial parent in meeting the day-to-day expenses of raising children. A party seeking retroactive child support must provide evidence that the child suffered from a lack of financial support during the period in question. Ability to pay, as well as need, must be considered by the trial judge in the exercise of his or her discretion (at para. 53); and

k. The court has the discretion to award retroactive child support that is fit and just in the circumstances (at para. 54).

[85] In most cases, a court is required to decide whether a change from one job to another results in underemployment. So far, the courts have consistently held that a person who changed jobs because of health problems is not intentionally underemployed: Gregg v. Zentner, 2000 CarswellSask 239 (Sask. Q.B.); Heston v. Brinkhurst, 2000 CarswellOnt 1187 (Ont. S.C.J.); Burger v. Reykdal, 2000 CarswellBC 330 (B.C. S.C.).

[86] There is a duty on the part of the payor to actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their dependants: Thompson v. Thompson, supra; Charron v. Carrière, supra, at para. 54.

[87] Where a party chooses to pursue self-employment, the Court will examine whether this choice is a reasonable one in all the circumstances: Smith v. Smith, 2012 ONSC 1116 (Ont. S.C.J.); Charron v. Carrière, supra, at para. 61.

[88] The principle of reasonableness is the theme when parents decide to take jobs which generate less income or when deciding to start a business in which he has no experience: Charron v. Carrière, supra, at para.’s 57, 58 and 59.

[89] Parents are required to act responsibly when making financial decisions that may affect the level of child support available. They must not arrange their financial affairs so as to prefer their own interests over those of their children: Stewart v. Turner, 2014 ONCJ 464 (Ont. C.J.); Charron v. Carrière, supra, at para. 59.

[90] Where the recipient alleges the payor should have been able to find substitute employment if they had looked hard enough, a contextual analysis is required. The payor’s situation, options, and opportunities must be considered in the context of other individuals — or in the case of mass plant closures, groups of individuals — facing similar circumstances. The Court must be mindful of employment rates and trends, and economic conditions as a whole. The analysis cannot be done in the abstract: Gee v. McGraw, 2014 ONCJ 87 (Ont. C.J.); Miller v. Volk (2009), 2009 41356 (ON SC), 74 R.F.L. (6th) 61 (Ont. S.C.J.); Charron v. Carrière, supra, at para. 60.

[91] The Court will not excuse the payer from the support obligations where the party has persisted in un-remunerative employment or pursued unrealistic and unproductive career aspirations: Tillmanns v. Tillmanns, 2014 ONSC 6773, at paras. 61-62; L. (N.) v. P. (B.) (2000), 2000 22516 (ON SC), 7 R.F.L. (5th) 335 (Ont. S.C.J.); Charron v. Carrière, supra, at para. 62

[92] The Court must have a rational and solid evidentiary basis to justify an imputation. The onus is on the person requesting an imputation of income to establish this evidentiary basis: Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17 (Ont. C.A.); Charron v. Carrière, supra, at para 64; Sullivan v. Sullivan, 2014 ONSC 390, at para. 21.

[93] The determination to impute income is discretionary, as the court considers appropriate in the circumstances. Therefore, the court may decide not to impute income where the payor establishes the reasonableness of his or her decision or his or her situation. Cole v. Freiwald, supra, at para. 122.

[94] Suspicions of bad faith are easy to have, but this is not enough. Such things as reductions in income that arise from market forces, or legitimate health issues will not quality as voluntary reductions in income. Cole v. Freiwald, supra, at para. 124.

[95] Under s. 19 of the Guidelines, the court may impute to a parent’s income such amounts as it considers appropriate, where it concludes that unreasonable deductions have been made from income for expenses. In Sobczak v. Evraire, the request was that the payor’s income should be grossed up for her employer’s automobile allowance, automobile expense deductions, employer’s contribution to her RRSP, and for improper deductions for legal fees, among others. Sobczak v. Evraire, 2013 ONSC 1249.

[96] The parent against whom the imputation of income is sought must make full and complete financial disclosure to ensure that the information required to make a decision on the issue is before the Court: Mansoor v. Mansoor, 2012 BCSC 602 (B.C. S.C.); Szitas v. Szitas, 2012 ONSC 1548 (Ont. S.C.J.); Charron v. Carrière, supra, at para 66.

[97] Once a party seeking the imputation of income presents the evidentiary basis suggesting a prima facie case, the onus shifts to the individual seeking to defend the income position he is taking: Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344 (Ont. S.C.J.); Charron v. Carrière, supra, at para 66.

[98] A payor alleging inability to work for medical reasons must obviously provide a sufficient evidentiary basis to support his or her claim. See Whelan v. O'Connor, 2006 13554, Whelan v. O'Connor (2006), [2006] O.J. No. 1660, 2006 CarswellOnt 2581 (Ont. S.C.J.); and Gobin v. Gobin (2009), 2009 ONCJ 245, 71 R.F.L. (6th) 202, [2009] O.J. No. 2191, 2009 CarswellOnt 3007 (Ont. C.J.); Cole v. Freiwald, supra, at para. 125.

[99] In Charron v. Carrière, the court determined that the father was underemployed. The court went on to determine that it was reasonable for the father to leave his employment due to stress and aggravation of repeated short term contracts. However, it did not find that the father’s decision to start a business rather than look for other positions which would have provided more secure income was reasonable. In that case, the court determined that the father did not have any experience in running a business, and in particular, he lacked experience in running daycares and children’s play centers. The business figures were dismal, financially precarious, the business itself was financially supported by a silent business partner. The father’s income was an estimated $28,000.00, or $14.00 per hour, down from his prior income of $73,000.00 per annum at the time of the signing of the separation agreement.

[100] One principle that I must consider, as set out in Favero v. Favero, is the concept of a “grace period”:

When a parent experiences a change in their income, they may be given a “grace period” to adjust to the change and seek out employment in their field at a comparable remuneration before income will be imputed to them. However, if they have been unable to secure comparable employment within a reasonable time frame, they will be required to accept other less remunerative opportunities or options outside of the area of their expertise in order to satisfy their obligation to contribute to the support of their children: Favero v. Favero, 2013 ONSC 4216, [2013] O.J. No. 2882 (Ont. S.C.J.), at para. 102.

[101] Regardless of the basis upon which income is imputed, the amount of income that the court imputes to a party is a matter of discretion. The only limitation on the discretion of the court in this regard is that there must be some basis in the evidence for the amount that the court has chosen to impute: Thompson v. Thompson, supra, at para 96; Korwin v. Potworowski, 2007 CarswellOnt 6852 (Ont. C.A.).

ANALYSIS OF IMPUTING INCOME

[102] Ms. Prevost argues that income of $70,000.00 should be imputed to Mr. Prevost.

[103] I have considered Mr. Prevost’s age, education, skills, health, availability of job opportunities, as well as his earning history.

[104] I have also considered that section 19 of the Guidelines is not exhaustive, and is linked to section 18 of the Guidelines.

[105] I have considered the letter from Ms. Harvey at IBEW that Mr. Prevost was employed as a journeyman electrician from September 23, 2013 to December 9, 2013. This coincides with time frame that Mr. Prevost stated he last worked as an electrician on tools, being October and November, 2013. I am unable to distinguish the difference between being an electrician on tools and being a journeyman electrician as that evidence was not provided to me in a clear fashion. However, given the time frames provided, I conclude that there are significant similarities to permit me to determine that these types employments overlap, if they are not identical. Ms. Harvey’s letter sets out that work as a journeyman electrician was available until July, 2014. There is no evidence past that time frame

[106] The onus is on Ms. Prevost to establish a rational and solid evidentiary basis to justify imputation of income. I find that this onus has not been met, for the reasons set out below.

[107] It is submitted that Mr. Prevost's decision to stop working on the tools was due to a medical inability to continue working in that regard. I find that the medical limitations on Mr. Prevost are not one that he chose.

[108] Mr. Prevost’s evidence was that there was little work available as a foreman. In support of same, he provided a chart, created by Angèle Harvey at IBEW, confirming that in 2014 there was only one “regular call” available, and in 2015 there were none. Due to these limitations, Mr. Prevost chose to start a Blueprint Authorities Inc..

[109] Mr. Prevost was previously employed as an electrician on tools, as a journeyman electrician, and a foreman electrician. I accept that there was little work available to Mr. Prevost as a foreman, and that he was unable to continue to work as an electrician on tools.

[110] Blueprint Authorities Inc. is a corporation where Mr. Prevost provides electrical estimating and consulting services. The corporation falls in line with Mr. Prevost’s previous skill set. Therefore, I cannot find that this is an unrealistic or unproductive career aspiration. I find that Mr. Prevost’s decision to open Blueprint Authorities Inc., despite the substantially lower income, coupled with a reasonable grace period, is a reasonable one, particularly given his health issues, which are substantiated by a number of medical reports.

[111] I have not been persuaded that Mr. Prevost is intentionally underemployed, or that he is not earning what his is capable of earning, in particular, taking into consideration a reasonable grace period for his corporation to get off the ground.

[112] I am not persuaded that Mr. Prevost preferred his own financial interests ahead of the children. I have considered that despite a significant decrease in his income, Mr. Prevost has not attempted to avoid his child support obligation. In fact, despite his decrease in income, he has continued to pay child support pursuant to the Final Order, pending final determination of the issues.

[113] I find that Mr. Prevost has provided continuous, and fulsome financial and medical disclosure.

[114] While Mr. Prevost agreed to pay child support based on his last three years of income, there was a review clause that provided that the parties would readjust support annually, going back to January 1^st.

[115] I am mindful that section 37(3) of the Family Law Act, states that one cannot bring a variation application within six months of the Order being made.

[116] I am also mindful however that the test for review is lower than that of a material change in circumstances, as set out in Sappier v. Francis, 2004 NBCA 70.

[117] I have not been persuaded that Mr. Prevost is not working at full capacity. He made a decision to commence his own business, which has provided him income of over $40,000.00 for the past two years.

[118] Despite submissions, again, I am not persuaded that the automobile expenses should be added back to Mr. Prevost’s income.

[119] Finally, Ms. Prevost advances, as grounds to impute income, that Mr. Prevost has significantly more net worth than Ms. Prevost. The onus is on Ms. Prevost to provide fulsome disclosure if I am to consider this argument. However, she has not disclosed the value of her pension in any of her financial statements, which would necessarily affect her net worth. Given the lack of disclosure by Ms. Prevost, this argument cannot be considered.

RETROACTIVITY

[120] The key case in dealing with the issue of retroactivity of child support is S. (D.B.) v. G. (S.R.), supra, decided by the Supreme Court of Canada. The court was called on in four appeal cases to clarify when “retroactive” child support orders should be made and what should be the starting point for any retroactive order. In its analysis, the court provided a clear definition of the important terms used, such as blameworthy conduct and effective notice:

Blameworthy Conduct:

Courts should not hesitate to take into account a payor parent’s blameworthy conduct in considering the propriety of a retroactive award. Further, I believe courts should take an expansive view of what constitutes blameworthy conduct in this context. I would characterize as blameworthy conduct anything that privileges the payor parent’s own interests over his/her children’s right to an appropriate amount of support.

Effective Notice:

By “effective notice” [to the payor parent, in determining the date to which a child support order should be retroactive], I am referring to any indication by the recipient parent that child support should be paid, or if it already is, that the current amount of child support needs to be re-negotiated. Thus, effective notice does not require the recipient parent to take any legal action; all that is required is that the topic be broached.

[121] In exercising their discretion to order retroactive support, courts must balance the payor’s interest in certainty with the need for fairness and flexibility. In doing so, a court should consider the reasonableness of the delay in seeking support, the conduct of the payor, the circumstances of the child, and the hardship occasioned by a retroactive award: S. (D.B.) v. G. (S.R.), supra.

[122] As stated in Cole v. Freiwald, supra, the conduct of the child support payor, including whether he or she:

• has made any voluntary payments on account of arrears,

• has cooperated with enforcement agencies in addressing the issue of child support,

• has kept the recipient fully apprised of the changes in his or her circumstances over time as these changes occurred,

• has complied with obligations and requests for financial disclosure to the child support recipient in an effort to address the child support issue,

and any evidence respecting his or her willingness to support the child or alternatively, to avoid his or her child support obligation is a consideration. Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission of or reduction of arrears: Cole v. Freiwald, supra, at para. 128.

[123] No child support analysis should ever lose sight of the fact that support is the right of the child: Richardson, at p. 869: S. (D.B.) v. G. (S.R.), supra, at para. 60

[124] Fairness is the Holy Grail in family law: S. (D.B.) v. G. (S.R.), supra, at para. 167.

[125] In determining whether to retroactively vary a child support, as set out in Gray v. Rizzi: one must always keep in mind the ultimate issue: namely, the best interests of the child: DiFrancesco, at para. 24. As Chappel J. stated, "Ultimately, the goal in addressing child support issues is to ensure that children benefit from the support they are owed when they are owed it, and any incentives for payor parents to be deficient in meeting their child support obligations should be eliminated." See DiFrancesco v. Coutu, 2001 8613 (ON CA), 2001 CarswellOnt 3858 (Ont. C.A.); Gray v. Rizzi, supra, at para. 56.

[126] There are three separate situations in which it may be appropriate for a court to order that a retroactive award be paid: where there has already been a court order for child support to be paid which now needs to be readjusted; where there has been a previous agreement between the parents; and where there has not already been a court order for child support to be paid. In the third situation, child support is not being paid: S. (D.B.) v. G. (S.R.), supra. In this matter, we are dealing with the first situation presented.

[127] The court in S. (D.B.) v. G. (S.R.), lists specific factors to consider when determining whether retroactive support is appropriate in certain circumstances, none of which are decisive. The factors include

a. any reasonable excuse for why support was not sought earlier;

b. conduct of the payor parent (ie: blameworthy conduct);

c. circumstances of the child; and

d. hardship occasioned by a retroactive award.

[128] Having established that a retroactive award is due, a court will have four choices for the date to which the award should be retroactive: the date when an application was made to a court; the date when formal notice was given to the payor parent; the date when effective notice was given to the payor parent; and the date when the amount of child support should have increased. Justice Bastarache adopts the date of effective notice as a general rule: S. (D.B.) v. G. (S.R.), supra, at para. 118.

[129] If parents are to be encouraged to resolve child support matters efficiently, courts must ensure that parents are not penalized for treating judicial recourse as a last resort. Accordingly, the first two start dates for retroactive awards — i.e., the date of application to court and the date of formal notice — ought not be used. So long as the enforcement of child support obligations is triggered by formal legal measures, a perverse incentive is created for recipient parents to avoid the informal resolution of their disputes: MacNeal v. MacNeal (1993), 1993 9310 (ON SC), 50 R.F.L. (3d) 235 (Ont. Gen. Div.); Steinhuebl v. Steinhuebl, 1970 411 (ON CA), [1970] 2 O.R. 683 (Ont. C.A.). A recipient parent should not have to sacrifice his/her claim for support (or increased support) during the months when (s)he engages in informal negotiation: Chrintz; see Dickie v. Dickie (2001), 2001 28140 (ON SC), 20 R.F.L. (5th) 343 (Ont. S.C.J.): S. (D.B.) v. G. (S.R.), supra, at para. 120.

[130] The award should generally be retroactive to the date when effective notice was given to the payor. Effective notice refers to any indication by the recipient that support should be paid or that the current amount of support needs to be renegotiated. It will usually be inappropriate to make a support award retroactive to a date more than three years before notice was given. However, blameworthy conduct by the payor moves the presumptive date of retroactivity back to the time when increased support should have been paid: (S. (D.B.) v. G. (S.R.), supra.

[131] Effective notice can be in any form since the court only requires that it be “broached”. Thus, a documented phone call, e-mail, fax, letter, lawyer’s demand, and the like may all constitute “effective notice” and generally start the clock running with respect to a change in support: (S. (D.B.) v. G. (S.R.), supra.

[132] Effective notice does not require the recipient parent to take any legal action; all that is required is that the topic be broached. S. (D.B.) v. G. (S.R.), supra, at para. 121

[133] Accordingly, by awarding child support from the date of effective notice, a fair balance between certainty, predictability, and the need for fairness and flexibility is maintained. S. (D.B.) v. G. (S.R.), supra.

[134] However, in the case of retroactive child support reduction or rescission claims, the payor is the party who has the information to support the claim and therefore effective notice in these cases also entails providing reasonable proof to support the claim for a change to the order, so that the recipient can independently assess the situation in a meaningful way and respond appropriately. A child support recipient is entitled to expect that the existing order will be complied with and to arrange his or her financial affairs respecting his or her children accordingly, unless he or she is in receipt of reasonable proof that a relevant change in the payor's circumstances has occurred. The absence of a disclosure requirement on the payor in these cases would unfairly impose a burden on the support recipient to attempt to confirm the alleged change in circumstances in order to decide how to respond to the payor's claim for an adjustment”: Cole v. Freiwald, supra, at para. 131; Corcios v. Burgos, 2011 ONSC 3326 (Ont. S.C.J.); Gray v. Rizzi, supra, at para. 62.

[135] This obligation to disclose and negotiate with the recipient parent is ongoing, so that the recipient can assess and react to changes in the payor's financial situation. A payor's failure to comply with his continuing notice and financial disclosure obligations most likely will impact the remedy which the court crafts: Gray v. Rizzi, supra, at para. 63.

[136] Once a court determines that a retroactive child support award should be ordered, it must decide the amount of that award. There are two elements to this decision: first, the court must decide the date to which the award should be retroactive, and second, the court must decide the amount of support that would adequately quantify the payor parent’s deficient obligations during that time: S. (D.B.) v. G. (S.R.), supra, at para. 117

[137] Even where an order does not provide for automatic disclosure, variation or review, parents must understand that it is based upon a specific snapshot of circumstances which existed at the time the order was made. For this reason, there is always the possibility that orders may be varied when these underlying circumstances change: S. (D.B.) v. G. (S.R.), supra, at para. 64.

[138] The Guidelines must be followed to determine quantum of child support. However, the quantum of the award, certainly in divorce act case, must also fit the circumstances (S. (D.B.) v. G. (S.R.), supra, para. 127, 128). Discretion is given to the court pursuant to the Guidelines.

ANALYSIS REGARDING RETROACTIVITY

[139] The question to determine is when Mr. Prevost gave effective notice to Ms. Prevost about his change in circumstances.

[140] I have considered that in December, 2013, the parties agreed by way of Minutes of Settlement to a set off amount of child support payable by Mr. Prevost. The basis for the income determination for the 2013 year was an average of the 2010 to 2012 tax years. While I find that while Mr. Prevost was suffering some health issues prior to the making of the order, he agreed to the terms set out in the Order. I have also considered that a clause in the Order allowed for a yearly review of child support.

[141] I find that the fact scenario set out in Gray v. Rizzi, supra, where the trial judge relied on circumstances that pre-date the order, is distinguishable in this case. In particular, in Gray v. Rizzi, income was imputed to the father, which despite Mr. Prevost’s affidavit at paragraph 8, is not the case in the 2014 Final Order of Justice Lafrance Cardinal. Further, I am not reviewing the correctness of the Final Order, nor am I going behind the dates of the Order to adjust support payable.

[142] Mr. Prevost’s evidence is that he first broached the issue with Ms. Prevost in the spring of 2014. Ms. Prevost states that there is no evidence of this verbal notice. Even if that discussion did take place, reasonable proof is required to support the change in the Order, so that Ms. Prevost could independently assess the situation in a meaningful way and respond appropriately. There is no evidence that any proof was provided with Mr. Prevost first broached the topic.

[143] The law does not require that effective notice be in the form of an affidavit. There is sufficient evidence before me to confirm that Ms. Prevost received documentation in June, 2015 which would enable her to assess whether the variation request was reasonable.

[144] Mr. Prevost continued throughout the proceedings to provide proof of not only his change in income, but his medical condition. Mr. Prevost provided a report from Dr. Burke from March 3, 2015; a letter from Mr. Wai, his back specialist, dated July 15, 2016, and of particular significance, in early 2017, Mr. Prevost underwent an independent assessment through TRAC Group Inc.. That report stated that Mr. Prevost would not meet the demands of an Electrician or Industrial Electrician on a consistent ongoing basis.

[145] In weighing a number of factors, including but not limited to: fairness, effective notice, conduct, circumstances of the children, and any potential hardship occasioned by a retroactive award, I find that the appropriate date for effective notice, in these circumstances, is when the Motion to Change was served on Ms. Prevost, which was June 2, 2015.

SHARED CUSTODY AND CHILD SUPPORT

[146] In shared custodial situations, Section 9 of the Guidelines applies, and states:

9. Where a parent or spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the order for the support of a child must be determined by taking into account,

(a) the amounts set out in the applicable tables for each of the parents or spouses;

(b) the increased costs of shared custody arrangements; and

(c) the condition, means, needs and other circumstances of each parent or spouse and of any child for whom support is sought. O. Reg. 391/97, s. 9.

[147] Section 9 of the Guidelines sets out a two-step process. The first is to determine if the parents share time with the child, in accordance with the terms above. If so, what amount of child support should be paid based on this section.

[148] In Froom v. Froom, the Ontario Court of Appeal held that there is no universally accepted method of deciding the 40% threshold issue, and that rigid calculations of time are not necessarily appropriate: Froom v. Froom, 2005 CarswellOnt 545 (Ont. C.A.); Favero v. Favero, 2013 ONSC 4216, at para 85; Nderitu v. Kamoji, 2017 ONSC 2617, at para 82.

[149] The court should avoid rigid calculations and instead look at whether physical custody of the children is truly shared: Froom v. Froom, supra, at para. 2; Nderitu v. Kamoji, supra, para. 82.

[150] The overwhelming weight of authority in Ontario and other provinces support calculating the 40% threshold on an hourly basis. When calculating time in hours, the 40% threshold is met if the parent has the child in their care for 3504 hours in a year: Khairzad v. McFarlane, 2015 ONSC 7148, supra, at para. 68; Nderitu v. Kamoji, supra, at para 82.

[151] As set out in Claxton v. Jones, it was agreed that the amount of time the child spends with the parents is a calculation based on hours over the course of the entire year. It was determined that there are 8760 hours per year. 3504 hours per year is the equivalent of 40% of the time with the child: Claxton v. Jones, 1999 CarswellBC 2128, at para’s 3, 8 and 10; Nderitu v. Kamoji, supra, at para 85.

[152] In Contino v. Leonelli-Contino, the Supreme Court of Canada provided a step-by-step method of calculation of child support in shared custody arrangements. The principles of Contino are as follows:

(a) All three factors in subsections (a), (b), and (c) of section 9 of the Guidelines must be given equal weight;

(b) It is not appropriate to apply any form of fixed mathematical formula to calculate child support in shared custody cases;

(c) The starting point is the set-off described in section 9(a) of the Guidelines;

(d) Appropriate evidence must be provided to the court to enable the consideration of subsection 9(b) and 9(c); and

(e) There is no presumption that the quantum of child support in a shared custody case should be more or less than the table amount of child support payable by the payor.

Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 S.C.R. 217 (S.C.C.), Nderitu v. Kamoji, supra, at para 92.

[153] In Contino v. Leonelli-Contino, at para. 39, the Supreme Court of Canada reaffirmed the trial court’s wide discretion in the application of s. 9 as follows:

The specific language of s. 9 warrants emphasis on flexibility and fairness. The discretion bestowed on courts to determine the child support amount in shared custody arrangement calls for the acknowledgment of the overall situation of the parents (conditions and means) and the needs of the children. The weight of each factor under s. 9 will vary according to the particular facts of each case. Contino v. Leonelli-Contino, supra; Sobczak v. Evraire, supra, at para 43.

[154] The Supreme Court of Canada further emphasized that section 9 of the Guidelines was directed primarily at a comparative analysis of the standard of living of the children. The court elaborated on this point, at para. 51 of Contino v. Leonelli-Contino:

The court retains the discretion to modify the set-off amount where, considering the financial realities of the parents, it would lead to a significant variation in the standard of living experienced by the children as they move from one household to another, something that Parliament did not intend. As I said in Francis v. Baker, one of the overall objectives of the Guidelines is, to the extent possible, to avoid great disparities between households. It is also necessary to compare the situation of the parents while living under one roof with the situation that avails for each of them when the order pursuant to s. 9 is sought. As far as possible, the child should not suffer a noticeable decline in his or her standard of living. Sobczak v. Evraire, supra, at para 44.

[155] One factor when determining the ability of each parent to assume any increased costs of shared custody, is the parties’ net worth in addition to the disparity in income levels. Contino v. Leonelli-Contino, supra; Sobczak v. Evraire, supra, at para 58 and 59.

ANALYSIS OF SHARED CUSTODY AND CHILD SUPPORT

[156] On the issue of net worth of the parties, I have already addressed the issues regarding the lack of disclosure of Ms. Prevost’s pension, which confines my ability assess same.

[157] Mr. Prevost’s evidence is that until April, 2016, he had both children, and since then, only Alexa in his care and custody on a two-week rotation. For week one, access is from Wednesday at the start of school until Friday at the start of school (48 hours); and week two access is from Wednesday at the start of school to Sunday at 6pm (approximately 106 hours). While Mr. Prevost’s calculation indicates that this is 3504 hours per year, he calculated 8 hours, instead of 16 hours for the week one Wednesday access. By my calculation, Mr. Prevost’s current access schedule provides him with 4004 hours per year (48 hours plus 106 hours, times 26 weeks). Also having reviewed the holiday schedule, I find that there is an almost equal sharing of days between the parents with regards to these special times.

[158] I have also considered that Alexa will continue to be in the joint shared custody of both parents, while Joel will reside primarily with Ms. Prevost. I find that Mr. Prevost meets the first hurdle, and Alexa is with him over 40% of the time. Based on this, I must now determine what child support is payable by either party.

[159] I have considered the table amount of child support payable. I have also considered the factors set out at 9(b) and (c) of the Guidelines, which speak to the increased cost of shared custody and the conditions, means, needs and other circumstances of each parent and child.

[160] I accept that Ms. Prevost is the primary parent for the purpose of the children’s medical and dental appointments. I also accept that she has taken Alexa to drop off résumés and for interviews, as well as bringing Joel to a great majority of his hockey and football activities.

[161] I am cognizant of Ms. Prevost’s submissions regarding her parenting role, and the increased costs incurred by her on behalf of the children. She provides a list at paragraph 47 of her affidavit of what she is responsible for as the parent who attends to the children’s needs. I also appreciate Mr. Prevost’s argument that there are no receipts regarding movie outings, sanitary products, etc. presented to me at this motion for consideration. In contemplating this issue, have reviewed the Final Order regarding section 7 expenses, and note that they are limited in nature. Despite this, after examining the FRO Statements of Arrears, I see that Ms. Prevost has submitted to FRO, and has been reimbursed for, a number of expenses which do not fall within the parameters of the Guidelines, nor do they fall within the terms of the Agreement, such as haircuts, head lice medication, lunches, and Alexa’s cellular telephone for seven months in 2016. Somehow, FRO has been enforcing these expenses, and Mr. Prevost has paid for these expenses, despite them being beyond the parameters of the Final Order, or within the confines of section 7 expenses pursuant to the Guidelines. As such, Ms. Prevost’s argument regarding the increased cost to her regarding these types of expenses, due to her parenting role, is not tenable.

[162] I note that neither party provided me with the children’s budget, which would itemize all of the children’s expenses related to the relevant factors in section 9. I have not been provided any concrete evidence regarding any increased cost to shared custody, with the exception of Alexa’s cell phone. Over and above what has already been claimed as an expense, I am unable to determine what ought to have been paid by the parents versus what has actually been paid by the parents. I am restricted to the argument presented by counsel for each party.

[163] Mr. Prevost advises that based on actual income, he overpaid on section 7 expenses by $3,964.22. Ms. Prevost advances that if I were to impute income at $70,000.00, then Mr. Prevost would have overpaid section 7 expenses by 8.5%, but that this amount should be offset by her parenting responsibilities she provides the children. She also indicates that there is still $1,632.58 owing for the last two section 7 expense claims which have been submitted to FRO for enforcement.

[164] I am also aware that Ms. Prevost will shortly be receiving disability income for the next few weeks, which is 70% of her normal income. However, this income is usually grossed up for tax purposes as typically disability income is tax free.

[165] I have considered the Net Disposable Income (“NDI”) of both parties, as well as the increased cost of shared custody to determine a fair amount of child support payable.

[166] If I were to apply a straight set off based on actual income, and shared custody for both children for 2015, the NDI for Mr. Prevost is 49.3%, and for Ms. Prevost is 50.7%. In this circumstance, Ms. Prevost would pay a set-off amount of child support to Mr. Prevost of $217.00 per month. Section 7 apportioning would be 42.9% for Mr. Prevost, and 57.1% for Ms. Prevost.

[167] For the first three months of 2016, when Joel was still in both parent’s shared custody, and based on the same factors, the NDI for Mr. Prevost is 49.2%, and for Ms. Prevost is 50.8%. In this circumstance, Ms. Prevost would pay a set-off amount of child support to Mr. Prevost of $225.00 per month. Section 7 apportioning would be 42.6% for Mr. Prevost, and 57.4% for Ms. Prevost.

[168] For the last nine months of 2016, and for the 2017 year, when Joel is in Ms. Prevost’s primary care, and Alexa continues to be in the joint share custody of both parents, the NDI for Mr. Prevost is 41%, and for Ms. Prevost is 59%. In this circumstance, Mr. Prevost would pay a set-off amount of child support to Ms. Prevost of $99.00 per month. Section 7 apportioning would be 42.6% for Mr. Prevost, and 57.4% for Ms. Prevost.

[169] In considering NDI, and Sobczak v. Evraire, where the recipient spouse would be in the range between 44 percent and 50 per cent of the parent’s NDI, I find that for 2015 and 2016, Mr. Prevost’s NDI is within the proper range. For the end of 2016 and all of 2017, Ms. Prevost has a higher NDI while being a recipient spouse, which is more favourable than what the case law suggests is reasonable.

[170] I have considered Ms. Prevost’s argument that to award child support as requested by Mr. Prevost, based on actual income, would create an overpayment made by him and would create an economic hardship to her. I have weighed this argument against the evidence presented by Mr. Prevost, which was that in good faith, despite economic hardships to him, he has complied with the terms of the Final Order, and should not be punished for having complied with the Order.

[171] While Ms. Prevost argues that Mr. Prevost was the sole cause of the delay in this matter not proceeding in a timely fashion, I am mindful that this matter was motion ready as of August 18, 2015. Based on the endorsement record, the adjournments thereafter all occurred on consent of both parties.

[172] After reviewing all of the considerations, and in particular, the needs, means and other circumstances of the parents and children, I find that it is reasonable to apply a straight set off of child support, retroactive to June 2, 2015.

[173] Therefore, in fixing the overpayment of child support, I have calculated as follows:

a. 2015: Mr. Prevost paid $640.00 per month for child support, from June 1, 2015 to December 31 (7 months). Based on his 2015 income of $41,767.00 and Ms. Prevost’s 2015 income of $55,663.00, and both children in a shared custodial regime, the set off amount payable by Ms. Prevost is $217.00 per month, which results in an overpayment by Mr. Prevost of $5999.00.

b. 2016: January 1, 2016 to March 31, 2016: Mr. Prevost paid $640.00 per month for child support, from January 1, 2016 to March 31 (3 months). Based on his 2016 income of $41,624.00 and Ms. Prevost’s 2016 income of $55,990.00, Ms. Prevost would pay a set-off amount of child support to Mr. Prevost of $225.00 per month, which results in an overpayment by Mr. Prevost of $2,595.00.

c. 2016 and 2017: From April 1, 2016 until September 30, 2017, when it is agreed that Joel is in Ms. Prevost’s primary care, and I have determined that Alexa continues to be in the joint share custody of both parents, Mr. Prevost would have paid $640.00 per month for child support. I am presuming that he has paid for August and September, 2017 given his history. If this is not accurate, this point can be modified. Based on Mr. Prevost’s 2016 income of $41,624.00 and Ms. Prevost’s 2016 income of $55,990.00, Mr. Prevost would pay a set-off amount of child support to Ms. Prevost of $99.00 per month. This results in an overpayment by him of $9,738.00.

[174] In total, the overpayment made by Mr. Prevost to Ms. Prevost is $18,332.00. On the evidence before me, Ms. Prevost does not have the financial resources to make a lump payment. I am mindful that Mr. Prevost complied with the Final Order despite financial hardships. I am also aware that Mr. Prevost has an ongoing obligation to pay Ms. Prevost, based on a set off amount, of $99.00 per month for child support. I have considered the potential hardship on the children that an award for a lump sum payment by Ms. Prevost could have. I find it is fair, in the circumstances, to offset the arrears with the child support payable for the next 18 months. As such, the order below will set out the total child support arrears, which will be reduced by what Mr. Prevost would have had to pay for the next 18 months, $1,782.00, which leads to a net total of $16,550.00 owed by Ms. Prevost. The arrears shall be paid off by March 31, 2019. Effective April 1, 2019, child support will again become payable by Mr. Prevost to Ms. Prevost.

[175] I am unable to determine when all of the 2015 special and extraordinary expenses were calculated. I recognize that Mr. Prevost suggests he has overpaid these expenses by $540.34 in 2015. In determining overpayment for these section 7 expenses, I have also considered the expenses claimed by Ms. Prevost. In keeping in mind all of the competing arguments, I will only fix section 7 arrears / overpayment for 2016 and 2017 years, which were advanced by Mr. Prevost as being $1,759.49 for 2016; and $479.85 for 2017.

[176] In closing, I echo the words from the Supreme Court of Canada, who stated that fairness is the Holy Grail in family law. Mr. Prevost complied with the Final Order, despite his significant decline of income. He is commended for having continued to pay full child support until this matter was decided, as that was in the children’s best interest.

DISPOSITION

[177] For reasons stated above, the following Order shall issue:

1. The Final Order of Justice Lafrance-Cardinal, dated January 6, 2014, is hereby amended as follows:

a. Paragraph 1.3 of the Final Order shall be varied as follows:

i. The Applicant shall have primary residency of Joel Maurice Prevost, born March 25, 2004. The Respondent shall have access to Joel in accordance with his wishes;

ii. Alexa Aline Prevost, born March 23, 2002 resides with both parties on an equal 50/50 basis. The parties shall have access to Alexa in accordance with her wishes;

b. Paragraph 2.2 of the Final Order shall be varied as follows: For the purposes of determining child support, the Applicant’s 2016 income is $55,990.00 and the Respondent’s income 2016 is $41,624.00;

c. Paragraph 2.3 of the Final Order shall be varied as follows: Commencing April 1, 2019 and continuing the first day of each subsequent month, based on both parties’ 2016 income, the Respondent shall child support pay to the Applicant in the amount of $607.00 per month, and the Applicant shall pay to the Respondent $508.00 per month, leading to a set off amount of $99.00 per month payable by the Respondent to the Applicant, for the benefit of both children: Alexa Aline Prevost, born March 23, 2002 and Joel Maurice Prevost, born March 25, 2004. The payment of child support is deferred until April 1, 2019 to adjust for the overpayment of child support made by the Respondent;

d. Paragraph 2.6 of the Final Order shall be varied as follows: Effective August 1, 2017, the parties shall pay the children’s special and extraordinary expenses in amounts proportionate to their incomes. Based on both parties’ current incomes, the Respondent shall pay 42.6% of the children’s special or extraordinary expenses, and the Applicant shall pay 57.4% of the children’s special or extraordinary expenses. The children’s special and extraordinary expenses are limited to the ones set out at Section 2.11 of the January 6, 2014 Final Order.

e. The Applicant’s child support arrears (overpayment) are hereby fixed at $16,550.00 for the period of June 1, 2015 to September 30, 2017. Effective October 1, 2017, and on the first day of the month, the Applicant mother shall pay child support arrears to the Respondent father in the amount of $919.44 per month, until the arrears are paid in full.

f. The Applicant’s arrears for the children’s special or extraordinary expenses are hereby fixed at $2,239.34 for the period of January 1, 2016 to August 1, 2017. Should any section 7 arrears which were quantified at $1,632.58 on August 14, 2017, owed by the Respondent to the Applicant, which were being enforced by FRO, still be outstanding, those arrears shall be offset in kind by the arrears owed by the Applicant to the Respondent. Effective October 1, 2017, and every first of the month thereafter, the Applicant shall pay $50.00 per month towards payment of the arrears, until paid in full.

[178] The parties are invited to discuss costs for the motion. Failing agreement, both parties are to serve and file cost submissions, no greater than 3 pages in length, by November 1, 2017.

[179] Any terms of Justice Lafrance Cardinal’s Final Order dated January 4, 2014 not addressed herein shall remain in full force and effect.

Justice Hélène C. Desormeau

Released: September 29, 2017

PREVOST v. PREVOST, 2017 ONSC 5825

COURT FILE NO.: 12-1003

DATE: September 29, 2017

ONTARIO

SUPERIOR COURT OF JUSTICE

NICOLE PREVOST

– and –

GUY PREVOST

Ruling on motion

Justice Hélène C. Desormeau

Released: September 29, 2017