C.Y. v. N.Y., 2017 ONSC 6053

CITATION: C.Y. v. N.Y., 2017 ONSC 6053

KINGSTON COURT FILE NO.: 65/17

DATE: 2017-10-12

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: C.Y. (wife), Applicant

AND

N.Y. (husband), Respondent

BEFORE: Mr. Justice Timothy Minnema

COUNSEL: None for the Applicant

Theresa Van Luven, for the Respondent

HEARD: September 14, 2017

ENDORSEMENT ON MOTION TO CHANGE

MINNEMA, J.

[1] This was a Motion to Change by the applicant wife C.Y. seeking to vary a number of provisions in the consent Corollary Relief Order of Justice Campbell of the Supreme Court of Nova Scotia (Family Division) dated July 9, 2012, and in particular section 7 expenses. The respondent husband N.Y. in turn also sought a number of changes, the main one relating to spousal support.

Background Facts and Procedural History

[2] The parties cohabited for about 16 years and married roughly halfway through that relationship. They separated in late 2010. The wife is 47 years old and the husband 41. There are two children of the marriage, a son who is 13 years old and a daughter who recently turned 9.

[3] The husband works for the military, and was so employed throughout much but not all of the relationship. While the wife has a teaching degree, she has had limited employment in that field. The family moved a number of times in support of the husband’s employment/career which included a period at the military college in Kingston. As a result the wife had various employment, but eventually worked part-time for a major bank. While a committed father, the husband’s work resulted in absences from the home from time to time related to training, tours of duty, and postings.

[4] Following the separation the parties resolved their matrimonial differences as reflected in the order they are seeking to vary. While the wife indicates that she felt pressured to agree at that time, she did have legal counsel and there has been no request to set the order aside. She has struggled both financially and at times with her emotional health since then, and remains a single mother employed part-time with the bank. The husband has continued to advance in his military career and is in a new relationship. The husband resides in Nova Scotia but has maintained regular access and contact with the children despite the geographical distance.

Access

[5] As the parties were married, variation of custody and access is governed by section 17 of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.) as amended. Pursuant to section 17(5), before making an order I am to be satisfied that there has been a change in the conditions, means, needs and other circumstances of each child since the making of the last order, and to take into consideration only the best interests of each child as determined by reference to that change. Further, per subsection 17(9), I am to give effect to the principle that the children should have as much contact with each former spouse as is consistent with their best interests.

[6] The parties have had no significant difficulties regarding access. The wife is open to the husband having any time he wants and rues the reality that he does not have the ability to exercise more. There has never been a serious issue of access requested and denied. Indeed, even though the current order says that the husband shall have access for four weeks in the summer, he actually has had five weeks with the wife’s full cooperation. She indicated that the first few times it occurred the long separation from her was difficult for the children but she did not indicate a present concern. So what is the issue?

[7] Having consistently had a fifth week in the summer the husband wants to have that reflected in the new order. The wife would like the existing order to remain unchanged so that the week can be hers to give or keep. She would prefer instead that the husband have the March break every year rather than every other year.

[8] In my view the summer access pattern that the parties themselves have been following is a material change since the making of the last order. That they continue to arrange it by agreement is evidence that it is in the children’s best interests. The extra time is consistent with the maximum contact principle and with the reality that because of distance the husband’s opportunities for access at other times of the year are limited. Order to go as requested by the husband. If the parties wish to deal with the March break they can do so by way of agreement.

Child Support

[9] Although acknowledging that there were no issues regarding child support from 2012 to 2015, the wife had been seeking adjustments for 2016 and ongoing. The difficulties were not with the husband paying – he has always paid the appropriate table amounts – but rather related to implementing the Corollary Relief Order given the way they agreed to have it worded. The parties have now sorted out the past payments and have agreed to adopt an ongoing order that is more in line with the Federal Child Support Guidelines, SOR/86-600 as amended (“CSGs”).

[10] Regarding ongoing support, the following is a general summary of the approach to child support that has been agreed upon. The objective of the CSGs is to determine child support based on current income. It is an annual amount; payments are monthly but the tables are based on annual incomes. The amount of income in the year for the husband is expected to change, hopefully as a result of pay increases, but when and how much is unknown. The challenge is to determine the current annual income as best as possible at the relevant time and then, if necessary, make adjustments at year end. This approach fulfills the objectives of fairness and consistent treatment in keeping with the CSGs. Further, it encourages parents to be as accurate as possible about their income estimates, as there would be no lasting benefit from an artificially low ongoing payment when adjustments will eventually be made.

[11] On consent, there are no child support arrears as of September 14, 2017. The husband shall pay child support commencing October 1, 2017 of $1,334 per month based on his 2017 income of $98,610 using the Nova Scotia tables for two children, which includes his Post Living Differential.

[12] The disclosure of tax information shall continue per paragraph 11 of the Corollary Relief Order. However, that provision shall be varied to make it a mutual exchange, which will allow the parties to also address both section 7 expenses and spousal support.

[13] The parties shall reset the amount of ongoing child support as of July 1 annually. They shall also as of that date adjust by way of a one-time payment the cumulative difference between the child support paid in the previous year and the support that should have been paid per the table amount based on actual income. These latter adjustments shall not be made for the current year 2017.

[14] By way of explanation, the parties have agreed to waive further adjustments for this year (2017) based on the sensible but somewhat unconventional way they have already dealt with a retroactive pay adjustment received by the husband.

Life Insurance

[15] After a discussion during the hearing that touched on the legal path and practical aspects of varying the current life insurance order, this request for relief was abandoned.

Section 7 Expenses

[16] In the course of the hearing the bulk of the issues regarding section 7 expenses were resolved.

[17] On consent, the proportionate sharing of section 7 expenses shall be 80 percent the husband and 20 percent the wife. These percentages are subject to variation each year upon the mutual exchange of tax information.

[18] On consent, order to go that the husband shall continue to pay the cost of flights for exercising his access and the wife shall continue to pay all costs associated with transporting the children to the Ottawa airport, including the children’s baggage fees. These shall not be considered section 7 expenses.

[19] On consent, the following items are reasonable and necessary section 7 expenses:

(a) Uncovered health, medical and dental expenses;

(b) Extracurricular activities, including registration and competition fees, and special uniforms/clothing as may be required, subject to the qualification that while running shoes for the oldest child who is a runner are included, that shared expense is limited to a maximum of two pairs per year costing no more than $175 each;

(c) Driving school/lessons;

(d) School trips that exceed $100;

(e) Summer camps and child care for the youngest child;

(f) A ‘chromebook’ computer for the oldest child required for his education program; and

(g) Post-secondary education costs.

[20] There were two related issues not agreed upon, namely whether the husband should be permitted to have input into the discussion and decisions about new or additional expenses, and whether the expenses should be paid as a monthly amount or on an item by item basis.

[21] Section 7 does not specifically require prior consultation for allowable expenses; the test rather is that the expense must be reasonable and necessary. Section 7(1) of the CSGs says “the court may … provide for an amount”. The relief, as such, is discretionary. It follows that a failure or refusal by a claiming parent to discuss the expense with the other parent in advance could bear on the court’s exercise of its discretion in determining whether the expense is reasonable or, for that matter, whether it is necessary: for example see Luftspring v. Luftspring, [2004] O.J. No. 1538 (Ont. C.A.) at para. 2. I encourage the parties and in particular the wife to have these discussions in advance, and simply caution both parties that how they approach future expenditures could impact whether they would be allowed by the court if contested.

[22] The usual approach to the sharing of section 7 expenses is to order that the proportional contribution be paid forthwith upon the delivery of authenticated statements or receipts. This avoids over or underpayments. However, another way to address the sharing could be for the court or parties to add together all the expenses, designate one party to pay them, and order the other party to contribute his or her yearly share by way of monthly installments to the paying spouse. This is particularly useful if parties are unable to communicate, the expenses are more or less known and not expected to fluctuate, and/or one parent arranges all the activities and services. Further, having fixed monthly amounts could assist support enforcement agencies with collections if payment is an issue.

[23] While the wife arranges all activities and services for the children and there is evidence what the current expenses are, I do not have evidence that these will remain constant. The parties here are able to communicate. There is no evidence of refusals by the husband to pay court ordered support.

[24] Order to go that each parent shall reimburse the other for section 7 expenses within 15 days of a receipt being provided.

[25] The use of scanned receipts and e-Transfers if practicable is encouraged to simplify and expedite the process.

Retroactive Section 7 Expenses

[26] The husband agreed at the case conference to pay $300 per month on account of section 7 expenses effective January of 2017 on a without prejudice basis. The parties now agree that has addressed the expenses since the date of the Motion to Change was brought. The only remaining issue, therefore, is the wife’s claim for retroactive expenses for the years 2015 and 2016.

[27] Per CSG section 7(1), special and extraordinary expenses are part of “a child support order.” Logically then (see also Kase v. Bazinet, 2011 ONCJ 718 at para. 36) the test for entitlement to retroactive child support also applies to section 7 expenses. That test is set out in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, [2006] 2 S.C.R. 231, 2006 SCC 37. Support is the right of the child (paragraphs 60 and 104) and requires flexibility. On the other hand, the payor parent should have the benefit of predictability, and a degree of certainty in managing his/her affairs (para. 74). Delay in seeking support is a factor that gives the courts the opportunity to examine the balance between those two noted principles to determine the most appropriate course of action on the facts (para. 104). The test is further summarized in Gray v. Rizzi, 2016 ONCA 152 at paragraph 45:

In D.B.S., the Supreme Court of Canada extensively canvassed the principles applicable to a request to vary child support payments. The court identified four factors that a court should consider before making a retroactive child support order: (i) the reason why a variation in support was not sought earlier; (ii) the conduct of the payor parent; (iii) the circumstances of the child; and (iv) any hardship occasioned by a retroactive award: paras. 94 to 116. The court also held that, as a general rule, the date of effective notice should serve as the date to which the award should be retroactive: para. 118. Finally, it usually will be inappropriate to make a support award retroactive to a date more than three years before formal notice was given: para. 123.

[28] The consent Corollary Relief Order with respect to section 7 expenses reads as follows:

15. [N.Y.] will be 100% responsible for the uninsured portion of the Children’s prescription, annual dental costs, eyeglasses, not covered by his employment medical or dental plan.

16. The parties will share equally the uninsured portion of any other medical, dental, or eye care expenses which are incurred in regard to the Children. The parties must have advance discussion regarding treatment, costs, and the uninsured cost will not be shared unless there is agreement between the parties that it is necessary for the children.

17. [N.Y.] will not be responsible for any section 7 child care or extraordinary expenses other than those outlined above unless there is agreement between the parties or a court order.

[29] While the Motion to Change itself does not refer to the retroactive claim, it is directly addressed in the contemporaneous Change Information Form 15A filed by the wife. She has calculated that the husband’s proportional share of section 7 expenses for both children is $2,095 in 2015 and $3,145 in 2016. Those numbers were not contested and the wife provided receipts.

[30] The only evidence of communications wherein the wife requested the husband to contribute to certain expenses prior to this application are emails starting in April of 2016 regarding two expenses, namely a summer sailing camp and physiotherapy for their son. The physiotherapy issue resulted in a long exchange of somewhat testy and unpleasant emails.

[31] The wife’s position is that she has struggled to pay the children’s expenses in those years and has been experiencing financial hardship, and the payments would benefit the children by improving the financial circumstances of her/their household. She adds that, particularly compared to her, the husband had the ability to pay. The husband’s position is that these expenses are part and parcel of a settlement wherein he agreed to pay spousal support and was 100 percent responsible for certain expenses while others were shared equally.

[32] The Corollary Relief Order was based on an agreement arrived at between the parties with the benefit of legal counsel. The Supreme Court in D.B.S. noted at paragraph 78:

78. In most circumstances … agreements reached by the parents should be given considerable weight. In so doing, courts should recognize that these agreements were likely considered holistically by the parents, such that a smaller amount of child support may be explained by a larger amount of spousal support for the custodial parent. Therefore, it is often unwise for courts to disrupt the equilibrium achieved by parents. However, as is the case with court orders, where circumstances have changed (or were never as they first appeared) and the actual support obligations of the payor parent have not been met, courts may order a retroactive award so long as the applicable statutory regime permits it: compare C. (S.E.) v. G. (D.C.) (2003), 43 R.F.L. (5th) 41, 2003 BCSC 896.

[33] While the wife wishes to look at the section 7 expenses in isolation, in my view, it is not obvious that the actual support obligations overall were not being met by the husband.

[34] The first consideration is why the change to the section 7 expenses was not requested or sought earlier by the wife. Although noting that expenses for the children have increased significantly since the Corollary Relief Order, she gives no explanation. However, a Spousal Support Advisory Guidelines (“SSAG”) calculation produced by her from the time of the making of that Order (attached as Schedule “A”) indicates that she was not earning an income. What the parties agreed to was roughly the mid-range. The wife has since been working, and in both the years in question 2015 and 2016 she earned approximately $20,000. The newest SSAG calculation (attached as Schedule “B”) based on their current incomes with the wife still around $20,000 and the husband earning more than he did in those years provides for mid-range monthly spousal support at $528. It would have been considerably less particularly in 2015 even at the high-range, when the husband’s income was less. Despite this, the husband was paying $1,000 per month. The failure by the wife to seek a timely recalculation of section 7 expenses has to be viewed in this context.

[35] The second factor directs the court to consider the conduct of the payor. The child support and spousal support payments were being made as ordered. As seen above there is a basis for a reasonably held belief by the husband that he was over paying spousal support. I am unable to find blameworthy conduct as contemplated in D.B.S. For the third consideration, namely the circumstances of the children, they did not go without and their household may have benefitted from higher than SSAG range spousal support. As to the hardship occasioned by a retroactive award, the fourth factor, this is directed at the payor’s situation and given his income level I see no hardship.

[36] In weighing all the factors, in my view this is not an appropriate case for retroactive section 7 adjustments, and that claim is dismissed.

Spousal Support

Additional Background Facts

[37] From the general summary at paragraph 3 above, I find that the wife had a compensatory spousal support claim. She had the primary responsibility for the day to day operation of the household during the marriage, including the primary care of the children. The family moved with the husband to support his career, and this would have impacted her potential workplace advancements.

The Law – Variation of Spousal Support

[38] As the parties were married, variation of spousal support is governed by the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.) as amended, and in particular section 17. Per subsection 17(4.1), before the court can make a variation order it must be satisfied that there has been a material change in circumstances. Once that has been met, the objectives of a variation order are set out in subsection 17(7) which reads as follows:

17(7) A variation order varying a spousal support order should

(a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;

(b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.

[39] As an overview, the approach to be taken was set out by the Supreme Court of Canada in L.M.P. v. L.S., 2011 SCC 64, at paragraph 50 (citing its decision in Hickey v. Hickey, 1999 691 (SCC), [1999] 2 S.C.R. 518) as follows:

In short, once a material change in circumstances has been established, the variation order should “properly reflec[t] the objectives set out in s. 17(7), . . . [take] account of the material changes in circumstances, [and] conside[r] the existence of the separation agreement and its terms as a relevant factor” (Hickey, at para. 27). A court should limit itself to making the variation which is appropriate in light of the change. The task should not be approached as if it were an initial application for support under s. 15.2 of the Divorce Act.

Issue and Positions

[40] The provisions relating to spousal support in the consent Corollary Relief Order read as follows:

18. [N.Y.] must pay spousal support to [C.Y.] in the amount of $1,000.00 each month for an indefinite period of time.

19. Neither party may apply for a review of spousal support prior to May 31, 2017, unless either party suffers or benefits from an extreme change in circumstances.

[41] The parties have agreed that this proceeding would be determined not as a review but rather as a normal variation application under section 17 of the Divorce Act. The initial consideration therefore is whether there has been a material change in circumstances. The wife in her argument conceded this point. Regardless, I find that there have been material changes relating to spousal support in the circumstances of both former spouses since the making of the Corollary Relief Order. The husband’s income has risen by about $24,400. The wife in turn is working, although part-time, and has been earning around her current annual income of $20,000 for the past several years. I also note that the husband has re-partnered.

[42] The remaining issue, then, is what the level of ongoing spousal support should be. The husband relied on the fresh SSAG calculation (Schedule “B”) seeking to reduce the spousal support to the mid-range. The wife’s position is that the spousal support should remain as is, citing the compensatory nature of her entitlement, her current needs, and the husband’s current ability to pay.

Analysis

[43] The SSAGs are a useful tool in assessing spousal support on a variation application: see Schulstad v. Schulstad, 2017 ONCA 95 at paragraph 52. Along with the factors as set out in the above quote from L.M.P., I have also on this variation application considered the factors in the SSAGs for determining the quantum of support within the ranges: see Schulstad at paragraph 53. These are: the strength of the compensatory claim; the recipient’s needs; the age, number, needs and standards of living of the children; the needs and ability to pay of the payor; work incentives for the payor; property division and debts; and self-sufficiency incentives. They clearly draw from and overlap the Divorce Act section 17 objectives.

[44] I have reviewed the parties’ Financial Statements. The husband as noted lives with a partner who earns a similar income. They have no dependants. She pays 65 percent of the household expenses. He indicates that his yearly expenses are $152,541, which I find to be quite high even appreciating that his automatic pay deductions approach close to a third. The wife’s expenses include her and the children. She indicates that they total $76,512 per year. However, she has obtained relief above for children’s activities and special clothing. Still, even with the spousal support at $1,000 per month and including her Child Tax Benefits/Tax Rebates, her total annual income is $45,034.

[45] Given the wife’s health situation, work history, and compensatory claim, at this point this is not a strong case to limit support based on self-sufficiency incentives. At the hearing the husband was no longer asking that I impute income to the wife, although he did ask that I take note that she is only working part-time.

[46] The SSAG calculation made in 2012 (Schedule “A”) and the SSAG calculation based on current incomes (Schedule “B”) are both “with child support” formulas. The husband’s increased child support obligation as a result of his increased earnings impacts the ranges (see Example 14.5 in the SSAGs themselves). In comparing the two calculations I note, in support of the wife’s concern, that the mid-range support of $528 in the new SSAG would cut the existing spousal support payments to her almost in half. However, I also note in support of the husband’s position that the parties’ respective Net Disposable Income (“NDI”) percentages for 2012 and 2017 are almost the same at the mid-ranges.

[47] The law referenced above directs me to make a variation that is appropriate in light of the changed circumstances. I do not accept that the wife’s situation is so unusual or unfair that it calls for an award over and above the calculated ranges. The SSAGs are designed to cover the majority of situations, and leaving the support at $1,000 per month when the high range in the SSAG calculation is $827 per month would require the court to ignore her increased earnings and the husband’s increased table and section 7 child support obligations. On the other hand, her compensatory claim, her needs, and the husband’s level of income, which remains tied to his employment during the marriage, along with his shared living arrangements, are important factors. In my view all factors considered, the new spousal support award should fall somewhere between the mid and high formula range in Schedule “B”, closer to the upper end. I set the support at $800 per month.

Decision

[48] For the reasons stated above the Corollary Relief Order dated July 9, 2012 shall be changed as follows:

1. Paragraph 6(f) (re summer access) is varied by deleting “four (4) consecutive weeks” and substituting “five (5) consecutive weeks”.

2. Paragraphs 7, 8, and 10 (re child support) are deleted and replaced with paragraphs 11 and 13 above.

3. Paragraph 11 (re disclosure) is varied by deleting on the first line “[N.Y.] must provide [C.Y.]” and replacing it with “each party shall provide the other”, and by deleting on the second line “his” and substituting “his and her”. Paragraph 20 is deleted as repetitious.

4. Paragraphs 15, 16, and 17 (section 7 expenses) are deleted, and replaced with paragraphs 17, 18, 19, and 24 above.

5. Paragraph 18, 19, and 21 (spousal support) are deleted and replaced with “[N.Y.] shall pay spousal support to [C.Y.] in the amount of $800 per month commencing October 1, 2017, until a court orders otherwise.”

[49] The success on these motions appears to be divided. However, if the parties still wish to address me on costs I will accept brief written submissions within twenty days. They are also permitted to make a two page reply within five days after receiving the other party’s submissions.

Mr. Justice Timothy Minnema

Date: October 12, 2017