CITATION: Kotyck v. Kotyck, 2017 ONSC 7261
COURT FILE NO.: FS-12-380198
DATE: 20171205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TONYA KOTYCK
Applicant
- and -
ALEX KOTYCK
Respondent
Self-represented
Self-represented
HEARD: Oct 16 - 20, 2017
HOOD J.
REASONS FOR DECISION
Overview
[1] The applicant mother (“AM”) and the respondent father (“RF”) married in August, 2000. They lived together for three years prior to marriage. They have three children: Drew, now almost 16 years old, born on November 29, 2001, and twins, Alexandra and Barclay, now 10 years old, born on February 26, 2007. The parties separated on December 27, 2010. Following separation the children lived with the AM. The RF had access with the children. In February, 2015 access changed and since then the children have been staying with each parent on a week about basis.
[2] The trial before me was limited to financial issues.
[3] The issues were retroactive and prospective child support, retroactive and ongoing spousal support and retroactive and prospective s. 7 expenses. At the heart of these issues were the incomes of the AM and RF and whether the AM was underemployed as alleged by the RF. The RF also questioned the AM’s entitlement to any spousal support, either retroactive or ongoing and argued for set-off amounts against retroactive child support and s. 7 expenses.
[4] There is approximately $16,000 US or $20,000 sitting in trust, being held by the Accountant of the Superior Court. This money came from the sale of the parties’ matrimonial home in Houston, Texas and was paid into court in June, 2014. Since then various sums have been paid out. The parties agreed that there are no equalization issues. The AM wants the sum still in court paid out to her as either retroactive child support, retroactive spousal support, or retroactive s. 7 expenses. The RF argues that it should only be used as retroactive child support and any surplus should be paid to him.
Income of the RF
[5] The RF called Mr. David Holmes to give evidence on his income from 2011 to 2016. Mr. Holmes was accepted by me as an expert in accounting, valuation and income determination for support purposes under the Ontario Child Support Guidelines. He reviewed the RH’s Canadian and U.S. tax returns, the financial statements and tax returns for BridgeRock Inc., the RF’s personal corporation, which he used to bill his clients as a financial consultant and other documentation as set out to Appendix B to his report of July 13, 2017, marked as Exhibit D.
[6] He concluded that the RF’s income for support purposes was as follows:
2011 $198,000
2012 $238,000
2013 $237,000 or $296,000
2014 $ 63,000
2015 $251,000
2016 $126,000
[7] The issue with respect to 2013 was whether $57,261 received by the RF from the collapse of his U.S. 401(k), which Mr. Holmes testified is similar to a Canadian RRSP should be included in the RF’s income. As Mr. Holmes put it in evidence, it was within the Court’s discretion whether to include it or not. The AM argued for the higher income and the RF for the lower income although no real basis was provided by either party for these arguments other than the higher or lower figure would assist their respective positions. No case law was provided by either party on this issue.
[8] Mr. Holmes gave evidence that a 401(k) was the same as an RRSP. He did not qualify it. When income is put into an RRSP it is a deduction from income. On Mr. Holmes’ evidence, a 401(k) is the same.
[9] RRSP income is presumptively part of a parent’s income for child support purposes under s. 16 of the Federal Child Support Guidelines, and no special exception for RRSP withdrawals has been provided in Schedule III of the Guidelines: Fraser v. Fraser, 2013 ONCA 715, [2013] O.J. No. 5347, at paras 97 – 103. Nor did the RF demonstrate any unfairness in including this equivalent to an RRSP withdrawal as part of his income. Accordingly, his 2013 income for support purposes is $296,000.
[10] In argument, the AM only took issue with the RF’s income for 2014. She argued that I should find his income to be $82,083 rather than $63,000 as found by Mr. Holmes. The figure of $82,083 was the RF’s line 150 income on his Canadian tax return and this, the AM argued, was the income figure to use. However, according to Mr. Holmes, in 2014 the RF was required to file a U.S. tax return. As a result of losses stemming from his U.S. return his net income was $63,000 in that year.
[11] Mr. Holmes was not truly challenged on his use of the 2014 U.S. tax return or his calculations in arriving at the figure of $63,000. The only expert called was Mr. Holmes. The AM presented no evidence or legal argument as to why Mr. Holmes should ignore the 2014 U.S. tax return of the RF. The AM accepted Mr. Holmes’ use of the U.S. tax returns in 2011 and 2013 together with the Canadian returns as being appropriate. Mr. Holmes was not moved in cross-examination to change his opinion as to the RF’s 2014 income. I find that the RF’s income for 2014 was $63,000.
Income of the AM
[12] The RF accepts that the AM’s income for 2011 to 2014 was as follows:
2011 $107,205
2012 $ 90,924
2013 $ 74,134
2014 $101,819
However, for 2015 and forward he argues that the AM’s income should be higher and that she is underemployed. The AM submits that her income for 2015 to 2017 is as follows:
2015 $ 20,985
2016 $ 63,551
2017 $ 68,000
The figure for 2017 is her anticipated income based upon pay stubs and her income from 2016.
[13] In 2015 the AM was working for Totes Isotoner Canada Ltd. She was let go some time in 2015. The AM testified, and I accept, that she was let go due to the number of sick days she took from work along with the friction that developed between her and a Ms. Perry, her supervisor at Totes. She had lost her driver’s license as a result of being convicted of impaired driving and Ms. Perry wanted her to drive.
[14] The AM gave evidence that after being let go by Totes she did not immediately look for work as she was depressed about the conviction, having no car, having no job, and having just changed the access arrangements to one week on and one week off. She also thought her impaired driving conviction would make any potential employer reluctant to hire her. At one point she had 5 interviews for a job with one clothing company. She thought that she was their first place candidate but she did not get the job. She assumed it was because of her impaired driving conviction, although there was no actual evidence of this.
[15] In November, 2015, with encouragement from friends, she decided to look for work more seriously. In December she contacted Hugo Boss Canada Inc., a previous employer. She disclosed the impaired driving conviction to them. She was hired by them to work in a retail capacity, selling clothes.
[16] Her evidence was unclear as to when she actually started with Hugo Boss. In her evidence in-chief she said she was told in January 2016 that she was to start working in February 2016. In her cross-examination the RF put her current resume into evidence. It states that she worked at Totes until April 2015. It states that she started working for her current employer, Hugo Boss, in December 2015 which was inconsistent with her evidence in-chief. She was not asked about this inconsistency, however, and was not asked to explain it.
[17] As to her income for 2015 she did not file her 2015 tax return to put into evidence. However, attached to her financial statement dated September 18, 2017, which was filed as an exhibit, was a notice of assessment for her 2015 tax year which indicated that her line 150 income for 2015 was $20,985.
[18] She gave evidence that she received a $20,000 severance payment from Totes. Apparently, this was the first time that the fact of this payment was disclosed. There was no documentation provided in relation to it. There was no evidence as to when it was paid. When asked by the RF why she had not disclosed this payment prior to trial her answer was that she had used the money to pay her parents for the money they had lent her following the separation. This was not responsive to the question asked. Apparently she did not include it as part of her 2015 income.
[19] Nor did it appear to be part of her 2016 income. A copy of her 2016 tax return was filed as an exhibit. It indicated her line 150 income as being $63,551. No T4s were attached. Based upon her response as to why it was not disclosed I conclude that the $20,000 was not included in her income for 2015 or 2016. Severance payments are to be included in income: Musgrave v. Musgrave, 2014 ONSC 1367, [2014] W.D.F.L. 2264, at para. 4. Since severance is viewed as income replacement and since she was let go from Totes in 2015 this amount should be added to her filed 2015 income, bringing it to $40,985.
[20] The RF seeks to impute income to the AM for 2015, 2016 and 2017. He takes the position that she was underemployed for those years. The onus is on the RF to establish that the AM is intentionally underemployed. He must establish an evidentiary basis upon which this finding can be made: Homsi v. Zaya, 2009 ONCA 322, [2009] W.D.F.L. 2480 at para. 28.
[21] If the court is satisfied that she is intentionally underemployed then the burden shifts to her to provide an explanation why, such as her health or educational requirements.
[22] I find that the RF has not established that the AM is intentionally underemployed. She currently works full time in the retail fashion industry. She has always worked in the fashion industry. She has worked at Armani, Jones of New York, Nygard on two separate occasions, Totes and Hugo Boss previously to her current job there. While all of her other jobs were in the wholesale fashion industry rather than the retail section of the fashion industry, no evidence was called to show that it matters from an income perspective.
[23] At one point she worked in the family business, which is also involved in the fashion industry, for substantially more, $120,000 per year. This I find to be an anomaly as she was only paid this much due to her parents owning the company. She is now estranged from her parents so that no job is available with them.
[24] While she made more money working at Nygard she found the travel demands of the job and being on call all the time to be intolerable. As she put it, Nygard is known within the fashion industry to pay higher because they are difficult to work for and require extensive travel. The travel made it especially difficult for her as at the time she had the three children living with her. Because of the job requirements and all the travel she required a nanny.
[25] The AM’s evidence was that the fashion industry, whether wholesale or retail, is becoming more difficult to work in. Companies are downsizing and tend to hire more junior employees so they can be paid less. Her evidence on this was unchallenged. The AM also provided some evidence of her continuing job searches. The RF was critical of her efforts and of who she used as a head hunter but offered no evidence as to available jobs in the fashion industry that could earn her more income. Ironically, he was also critical of her applying for a job for which he felt she was not qualified and had no chance of obtaining. She works full time. When she gets home after work she admits she unwinds by watching television. The RF was critical of this and suggested it was evidence of her underemployment and how she was not maintaining her career or income level.
[26] I find it to be nothing of the sort. She has a full time job in the industry she has always worked in. Not having a second job at night is not evidence of underemployment. In any event she gave evidence that her current job involves the occasional night and weekend.
[27] Nor was there any evidence from the RF that the AM should have earned more income in 2015 after being let go by Totes. She did not quit her job at Totes. She was let go. She admitted that she did not start seriously looking for work until later in the year but she did make some efforts as evidenced by her having five interviews with one company. She thought she was going to get the job but she was not hired. As well, her severance payment of $20,000 is part of her income for 2015. While an income of $40,985 is less than what she was making, and is making now, the RF has not established that she was underemployed for 2015 or for 2016 or 2017.
[28] The RF also tried to argue that based upon her bank account and the deposits to her account she was actually making $160,000 per year. The difficulty with this argument was that his calculations and his theory, based upon the deposits, were never put to the AM when she was giving evidence. The RF never confronted her with the various deposits when she was in the witness box, which would have allowed her to attempt to give an explanation. He tried to put in her bank accounts through his own evidence, along with his mathematical calculations and conclusions, when the AM’s case was already closed. I found this to be unfair and did not let his calculations and theory be put forward as part of his case.
[29] The onus to prove underemployment was on the RF. He has not met the onus. Accordingly, I find the AM’s income to be as follows:
2011 $107,205
2012 $ 90,924
2013 $ 74,134
2014 $101,819
2015 $ 40,985
2016 $ 63,551
2017 Income for AM and RF
[30] The AM has provided pay stubs for 2017 and has testified that she anticipates her income to be $68,000. I accept this to be her 2017 income. The AM asks that I find the RF’s 2017 income to be $288,747 based upon his financial statement dated September 15, 2017, where the RF indicates that his monthly income for 2017 is $24,062. It is his sworn statement. Presumably it is accurate. The RF struck me as someone who insists upon being precise with his calculations. The figure also appears to be consistent with his past income, which has fluctuated over the years. Accordingly, I find his 2017 income for support purposes to be $288,747.
Child Support Paid
[31] The parties agree that the RF has paid child support since 2011. The AM also agrees that rent paid by the RF in January & February of 2011 for her apartment, where she lived with the children, can count towards child support. The only outstanding disagreement is with respect to 2014. The RF made some child support payments in January, 2014 then stopped, as he lost his job. On July 10, 2014 Justice Harvison-Young heard a motion brought by the AM for child support. No order as signed and entered appears to have been taken out from her endorsement. All that was put into evidence was a draft order, apparently approved by the RF, which provides that the RF was to pay child support of $2,384 per month until further order or agreement. I am uncertain as to how the figure of $2,384 was arrived at based upon the income figures mentioned in Justice Harvison-Young’s endorsement but the parties have operated on this monthly child support amount since then.
[32] The RF says that he made a payment of $2,384 in July, 2014. The AM says that he did not. She acknowledges that he paid in August, 2014 and every month thereafter. The onus is upon the support payor, in this case the RF, to prove the support payments made as he has the means of providing the evidence. He did not provide any evidence of this payment for July, 2014. Accordingly, I find that for 2014 he paid a total of $17,520.
Outstanding Child Support and Retroactivity
[33] Based upon the income figures for the RF he should have paid child support as follows:
Year
Income
Monthly Support
Annual Support
Actually Paid
Net Difference
2011
$198,000
$ 3,302
$ 39,624
$ 30,216
$ 9,408
2012
$238,000
$ 3,878
$ 46,536
$ 37,200
$ 9,336
2013
$296,000
$ 4,713
$ 56,556
$ 24,500
$ 32,056
2014
$ 63,000
$ 1,225
$ 14,700
$ 17,520
($ 2,820)
[34] In 2015 access changed. In February 2015 the parties had equal access. For January 2015 child support was as follows:
Year
Income
Monthly Support
Annual Support
Actually Paid
Net Difference
2015
$251,000
$ 4,065
$ 2,334
$ 1,681
[35] From February 2015 access was shared equally. Under s. 9 of the Ontario Child Support Guidelines I am to consider the applicable table amounts for each of the parents, the increased costs of shared custody and the condition, means, needs and other circumstances of each parent and the children. This was analyzed in Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 S.C.R. 217 at paras. 40 – 55 and 69 – 70. Under Contino I am to first determine the simple set-off amount. Then I am to consider this amount against the child expense budgets and the apportioning of this between the parents in accordance with their respective incomes, keeping in mind increased expenses for both, considering duplicated costs and any disproportionate spending by one parent. I am also to consider the ability of each parent to bear the increased costs of shared custody with the idea that the children should not experience a significant variation in standard of living between the two households.
[36] There was no evidence given to me regarding the increased costs of shared access from either party. There were no child expense budgets from either party. There was no evidence as to how each parent’s actual contribution compares to the Table amounts. For 2015, 2016 and 2017 there were significant income disparities between the parents which would result in a significant variation in the standard of living between the two households. While the AM owned a house, it had a sizeable mortgage and based upon the evidence before me was in need of significant repair, especially to the plumbing and to the garage. The RF lives in a newer apartment. The RF says it is only 1200 square feet and the children share one room with bunk beds. There are, however, 2 bathrooms, while the AM only has one bathroom in her house which needs repairs. In her house the twins share the larger bedroom, she uses the small bedroom and Drew lives in the attic.
[37] For the balance of 2015 the RF owes child support of $4,065 on his income of $251,000 and the AM owes child support of $780 on her income of $40,985. This results in a simple set-off amount of $3,285 per month. For 2016 based upon their respective incomes of $126,000 and $63,551 the simple set-off is $1,017 ($2,253-$1236) and for 2017 based upon respective incomes of $288,747 and $68,000 the simple set-off is $3,289 ($4609-$1320) as confirmed by the Divorcemate calculations filed.
[38] Without any child expense budgets and evidence as to the increased costs associated with shared access and duplication from the payor RF, I am left with the evidence from the AM which points to a difference in the standard of living between the two households. As the recipient parent the AM has legitimate expectations about how much child support will be provided. She also has fixed costs that are there regardless of the support received.
[39] Because of this, while I am prepared to use the set-off amounts for 2015 and 2017, I do not feel that for 2016 the set-off amount is appropriate as it adds to the disparity between the parties’ incomes and the standard of living for the children. For 2016 I believe that the existing child support payment of $2,384 is more appropriate.
[40] The AM was prepared to use the set-off amounts, which for 2016 would have resulted in an overpayment by the RF of $16,404 based upon a simple set-off amount of $1,017 per month versus the actual payments made of $2,384 per month. However, to do so would be to ignore the directions as set out by the court in Contino and the best interest of the children. While mindful that ours is an adversarial system and the court is to be an impartial referee between the parties, this is made more difficult where the parties are self-represented. Despite the lack of argument or analysis on this point by the parties I still have to try to make a decision based upon the law, even if the law was not presented to me.
[41] Using the set-off amounts for 2015 and 2014 and the existing child support for 2016 the child support owing is as follows:
2011 $ 9,408
2012 $ 9,336
2013 $32,056
2014 ($ 2,820)
2015 $ 1,681 + (11 x $3,285)
less $28,608 paid = $ 9,208
2016 $ 0
2017 $ 9,050
Total Owing $ 66,238
[42] The RF argues against any retroactive payments for child support. Children, however, are presumptively entitled to child support. Parents should be aware of their obligations. The RF began to pay support in 2011 following separation. It is not as if he can say he was unaware of his obligations. He was paying child support, he just wasn’t paying enough. Any delay by the AM in seeking a higher amount should not be visited upon the children. Except for a drop in his income in 2014 the RF has earned a substantial income. He continues to do so. There is no evidence that a retroactive award will cause him any hardship. While the RF said he no ability to pay for anything, let alone support, this not reflected in his financial statement.
[43] There is currently approximately $19,832 sitting in court from the proceeds of the sale of the matrimonial home. This amount is to be used towards payment of the outstanding child support. The balance in court is to be paid out to the AM. This will leave approximately $46,406 in outstanding support which is to be paid forthwith. As well, the RF is to continue to pay monthly child support from November, 2017 onwards in the amount of $3,289 until further order or agreement.
[44] The RF argued that he had incurred significant expenses in exercising access when he was working in Boston and that these expenses should be offset against any outstanding child support. He provided a list of expenses that he said were incurred for his travel from Boston. I am not satisfied that the list was evidence of this. The items he listed included hotel stays in places other than Toronto, such as Houston, the lease payout on a vehicle he was leasing but could not afford in Boston and storage costs for furniture in Toronto. These were the items he specifically highlighted. How any of these expenses related to access with his children was unclear. It seemed to me that he simply collected all his expenses during the period of time he was in Boston, even if they had nothing to do with visits with his children, and asked that he be given a credit for them. I am not prepared to do so.
Spousal Support
[45] I have determined the incomes of both parties. The issues are entitlement and retroactivity. There is also an issue with respect to the payments out of court to the AM, in the approximate amount of $60,710, from the house sale proceeds and how these payments are to be dealt with.
[46] Under s. 15.2 of the Divorce Act, the court may order a spouse to pay such lump sum or periodic sums that it deems reasonable for the support of the other spouse. Under s. 15.2(4), the court shall take into consideration the condition, means, needs and other circumstances of each spouse including the length of time they cohabited, the functions performed by each during cohabitation and any agreement relating to support of either spouse.
[47] Pursuant to s. 15.2(6) of the Divorce Act, an order should, among other things, recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown, relieve any economic hardship of the spouses arising from the breakdown of the marriage and in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[48] The Family Law Act, R.S.O. 1990 c. F. 3 s. 33 has slightly different wording than what the Divorce Act sets out in terms of spousal support. Section 33(a) states that in determining support, the court shall consider all of the circumstances of the parties. The provision then sets out a list of items to be considered, including each party’s current assets and means.
[49] The parties lived together for thirteen years and were married for ten. When Drew was born the AM stayed home for a year then went back to work. When the twins were born she stayed at home. When they were 1 ½ years old the family moved to Texas. There was an issue between the parties as to whether she was entitled to work while living in Texas. The AM stated that she thought she was able to work in Texas until the RF lost his job and then she wasn’t entitled to do so. The RF suggested that she could still work. There was no evidence called from anyone on Texas or United States employment law and the rights of non-citizens to work. In any event, all of the jobs that the AM could have obtained would have been in retail clothing sales. Moreover, there was no evidence that her failure to work while in Texas had any impact on her jobs or level of income when they returned to Toronto in August, 2010 or after their separation in December, 2010.
[50] Since separation, the AM has worked steadily in a variety of jobs in the fashion industry as she had throughout the marriage, except for 201`5 when she lost her job with Totes.
[51] Pursuant to the case law, there are three grounds for entitlement to spousal support, compensatory support, non-compensatory support and contractual support. In this case the latter does not apply. There is no single basis of support that supersedes the other and many claims involve compensatory and non-compensatory principles. The court does not decide on the basis of support to the exclusion of the other, but rather is called upon to apply relevant factors and to strike the balance that best achieves justice in the particular case (See Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420, at paras. 15, 35, 36, 41 and 42 and Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, at paras. 46, 47, 74 and 120).
[52] Under the compensatory approach the court is to consider the loss of economic opportunity to the AM resulting from the roles adopted during their relationship. As has been commented upon in the Spousal Support Advisory Guidelines (Ottawa: Department of Justice, 2008) by Carol Rogerson and Rollie Thompson at page 7, the compensatory approach is difficult to implement as it requires evidence of earning capacity loss. This can be costly to obtain as it requires expert evidence and is, at the end of the day, hypothetical. There is no evidence of earning capacity loss in this case.
[53] In addition to the lack of expert evidence I see no basis for compensatory support. While the AM spent more time at home with the children and was out of the workforce while in Texas, supporting the RF’s career, and has been the primary caregiver for the children, none of this seems to have impacted upon her current career or job prospects. However, her area of employment, the fashion industry, does not provide high paying jobs, which is a factor in considering non-compensatory support.
[54] There is a disparity between the AM’s needs and means and those of the RF. There is a great income disparity. She runs a monthly deficit on her expenses versus income. The RF runs a monthly surplus on his expenses versus income. While his current partner may have paid for two recent vacations there have been many other vacations that he presumably has paid for. He drives an expensive luxury automobile. She drives an old vehicle that has little or no worth. Since separation her lifestyle has declined dramatically. While his lifestyle may also have declined due to the fact that there has been a separation and now there are two households to run, it has not declined to the same extent. The RF made a large issue over the cost of the refrigerator bought by the AM with the sale proceeds paid out from court pursuant to the order of Justice Horkins. He argued that she should not have spent $3,200 on a refrigerator. While the AM acknowledged that she could probably have bought one for $1,000 there was no evidence before me to suggest that a $3,200 refrigerator was extravagant.
[55] And while she may have not complied with the order of Justice Horkins of March 1, 2016, where she was ordered to use the $5,000 paid out of court for essential household expenses, such as Enbridge, Hydro or taxes, neither did the RF comply with the order of Justice Mesbur of June 24, 2014 where she ordered the RF to use the sale proceeds from the sale of the Houston property to pay off all encumbrances on the Houston property. Rather than complying with her order and paying off the construction loan of approximately $130,000, the RF took these funds and used them for his own purposes. Today that loan stands at approximately $99,000 on the RF’s financial statement, creating a negative net family property.
[56] While the RF rents and the AM owns a home, and now has some equity in the home, her monthly expenses for the home are not substantially over the rental expenses of the RF to the extent that one could argue that her unequal lifestyle is self-imposed and a result of her overextending herself and being house poor. Her monthly housing expenses amount to approximately $2,350. Her house, based upon the evidence before me, is in need of multiple repairs that she is unable to carry out with her income. Moreover, she should not have to sell her home in order to support herself.
[57] The AM has satisfied me that she is entitled to non-compensatory support. She has need and has been disadvantaged by the marriage breakdown. The RF has not been disadvantaged and remains a high income earner.
[58] As to duration, I do not accept that spousal support should be indefinite. The SSAGs provide that a 13-year relationship results in 6.5 to 13 years of support from the date of separation, which in this case was December 27, 2010. Spousal support should be paid for 11 years in total from January 2011 with the last spousal support payment on January 2022. In fixing this time limit I have considered among other things the length of the relationship, the AM’s age, the fact that access is shared equally so that each is paying some child support, the AM’s skills, current employment and prospects, the RF’s capacity to pay support, his age, the SSAGs and that there are no property claims or equalization payments being made. I am also mindful of the fact that the children, due to an education trust set up by the RF’s father will have their post-secondary education costs looked after so that both parties will be able to avoid the costs associated with this.
[59] The AM asks for mid-range support under the SSAG. No reason was given why. The RF did not even address the range as he argued no support should be paid at all. In my view the mid-range creates too large of a difference in the net disposable income between the two households and it would be more appropriate to use the low range, which creates a closer net disposable income.
[60] The AM asks for retroactive spousal support. The RF did not address this as he argued no support should be paid at all.
[61] In Bremer v. Bremer, (2005) 3938 (Ont. C.A.) at para. 9, the court set out eight considerations governing retroactive spousal support – past need and the ability to pay, the basis for ongoing support, the reason for retroactive support, the effect on the payor, blameworthy conduct of the payor, notice to seek support, delay and the explanation for it and the appropriateness of the order. In Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241 at para. 76 the court stated that retroactive support should be available when the recipient establishes that “he or she was entitled to a greater amount of interim support, the respondent had the ability to pay, and the imposition of retroactive support would not create undue hardship for the payor.”
[62] The parties separated on December 27, 2010. The AM’s application, wherein she claimed spousal support, was issued on July 27, 2012. No spousal support has ever been paid although unspecified payments have been made to the AM, as well as the RF, from the sale proceeds held in court.
[63] The AM claims that the RF was aware of her claim for spousal support since separation. There was no evidence of this (such as a letter or email from her to the RF). As there is no presumptive entitlement to spousal support, concerns about notice, delay and misconduct of the payor generally carry more weight. While her statement in evidence that the RF knew she wanted spousal support was not denied by him, in my view more is required to establish that he was aware of his obligations to her.
[64] In my view spousal support should commence from August 2012, after the issuance of her application. I have not considered any potential hardship on the RF if a retroactive spousal support order is made. No hardship was argued by the RF. He has a substantial income and has had substantial incomes, for the most part, since 2012.
[65] Based upon the DivorceMate calculations provided to me, the RF owes support as follows. For 2015 the spousal support has been calculated using the income of $40,985 for the AM, as I have already found to be appropriate.
2012 (5 months) $ 908 x 5 = $ 4,540
2013 $ 2,602 x 12 = $31,224
2014 $ 0
2015 $ 2,235 x 12 = $26,820
2016 $ 79 x 12 = $ 948
2017 $ 2,329 x 11 = $25,619
Total Owing $89,151
[66] Against this amount the AM has received payments from the money held in court from the sale of the home, totaling $60,710. This amount was paid out pursuant to the orders of Justice Harvison-Young of July 10, 2014 ($20,000 US or $21,320), Justice Horkins of March 1, 2016 ($5,000 US or $6,700), Justice Moore of April 25, 2016 ($10,000 US or $12,680) and Justice Moore of October 21, 2016 ($15,000 US or $20,010). The conversion rates were given by the RF in his evidence and were not challenged by the AM. The RF testified that when the funds were paid out they were in US funds which would then have to be converted. This was unchallenged by the AM.
[67] While the draft order of Justice Harvison-Young states that the payment of $20,000 US is to be treated as payment against retroactive child support her endorsement makes no such attribution. The AM is content that all past payments out of court shall be applied to spousal support. The total amount paid out amounts to $60,710. This leaves a total of $28,441 owing for spousal support. The AM in her evidence and argument acknowledges that this amount should be discounted by 40% to take into account the lack of tax deductibility by the RF for the lump sum spousal support payment of arrears. This discount amounts to $11,376, so that the net amount owing is $17,065 for retroactive spousal support up to and including November, 2017. This amount is to be paid forthwith. As to ongoing support, commencing December 1, 2017, the RF is to pay spousal support of $2,329 per month on the first day of each month in accordance with these reasons until further court order or agreement.
Section 7 Expenses
[68] The AM also seeks payment from the RF towards the s. 7 expenses incurred by her. She claims that she is owed $41,795 on account of s. 7 expenses, based upon nanny expenses in 2013 and 2014 and dental and orthodontic expenses for the children from 2012 to 2017.
[69] The RF’s position as to these s. 7 expenses was not clear to the court. He did not really argue that these were inappropriate expenses, other than perhaps suggesting that the nanny expenses were not necessary. He mainly argued that he too had s. 7 expenses, which should offset the expenses claimed by the AM. I did not allow these alleged s. 7 expenses of the RF to be submitted in evidence for a number of reasons. They were not part of Justice Kiteley’s endorsement made at the trial management conference on August 23, 2017 which listed the issues for trial. On August 23, 2017 Justice Kiteley stated that the AM’s claim for s. 7 expenses was an issue for trial. There was no mention of the RF’s s. 7 expenses being an issue for trial. Secondly, the RF only produced his list of s. 7 expenses along with his purported evidence halfway through the trial. This was much too late and was unfair to the AM. Justice Kiteley had made it clear to both parties that they had to make timely production and had to serve and file document briefs containing all of the documents they intended to rely upon at trial prior to trial. The RF did not do so. Finally, the RF’s s. 7 expenses, as submitted to me during argument on the admissibility of the documents, consisted of expenses incurred by the RF for things such as enrollment or membership or lessons for the children at the Royal Canadian Yacht Club or Craigleith Ski Club. While the RF was free to pay for these items if he so desired, I do not believe in the circumstances of this particular family, that the AM should be expected to pay for these items or to have her expenses offset by the RF’s payments. I fail to see how the RF’s expenses for items such as these could be considered to be reasonable, affordable and necessary in relation to the parties’ means and that the AM should, in effect, be asked to contribute to them. If the RF wishes to pay for these expenses that is up to him but the AM should not have to do so.
[70] The AM has provided account statements from Royal York Orthodontics, Dr. Jackson and Dr. Choo, all related to dental services for the children from 2011 to 2017. I am satisfied based upon the statements that the amounts were paid for by the AM. She claims that the accounts do not reflect an additional $900 paid to Royal York Orthodontics. Without any evidence of this additional payment beyond the AM’s testimony I am not prepared to accept that this amount was paid. I find these dental expenses, as listed on the accounts, to be proper s.7 expenses which the RF should contribute towards, in accordance with his income.
[71] With respect to the nanny expenses I am satisfied based upon the evidence from the AM and the tax returns filed that the AM paid $13,000 to the nanny in both 2013 and 2014. During that time the AM had the children living with her and she testified that because of her job requirements and considering the age of the children she needed a nanny. She claimed that she had a nanny for other years but had no evidence of what she paid in those years.
[72] While the RF questioned the need for and expense of a nanny I find this expense to be a proper s. 7 expense. I also find the amount claimed to be reasonable. There was no evidence from the RF that any alternative arrangement would have cost less or that the cost as claimed was unreasonable.
[73] The AM also submitted that a tax payment made by her on behalf of the nanny in the amount of $1,123.91 should also be accepted as a s. 7 expense. As evidence she tendered a CRA notice dated October 6, 2016 for this amount and addressed to her. I am not satisfied on the basis of the notice alone, in conjunction with her testimony, that this was an expense associated with the nanny. Nor was there any evidence that this amount was paid. The AM’s claim for this to be included in her s. 7 expenses is dismissed.
[74] The AM asks that she be paid for the totality of her s. 7 expenses in a lump sum. Based upon what I have allowed this amounts to $39,930. However, s. 7 expenses should be shared proportionately to the parties’ respective incomes taking into account spousal support.
[75] I have reviewed the s. 7 expenses and the breakdown is as follows. The calculations are my own.
2011 Dr. Choo $ 841
2012 Dr. Choo $ 158
Dr. Jackson $ 790
Orthodontics $ 2,600
$ 3,548
2013 Dr. Choo $ 110
Orthodontics $ 200
Nanny $13,000
$13,310
2014 Dr. Choo $ 1,170
Orthodontics $ 3,200
Nanny $13,000
$17,370
2015 Dr. Choo $ 437
Orthodontics $ 3,600
$ 4,037
2016 Dr. Choo $ 388
2017 Dr. Choo $ 436
[76] The next calculation is the income of the RF, taking spousal support into account and the percentage of the parties’ total income earned by the RF. This is as follows:
Year
Incomes & Total
Less Spousal Support
RF Net Income
RF % of Income
2011
AM $107,205 RF $198,000 $305,205
0
$198,000
65
2012
AM $ 90,924 RF $238,000 $328,924
$4,540
$233,460
71
2013
AM $ 74,134 RF $296,000 $370,134
$31,224
$264,776
72
2014
AM $101,819 RF $ 63,000 $164,819
0
$ 63,000
38
2015
AM $ 40,985 RF $251,000 $291,985
$ 26,820
$224,180
77
2016
AM $ 63,551 RF $126,000 $189,551
$ 948
$125,052
66
2017
AM $ 68,000 RF $288,747 $356,747
$ 27,948
$260,799
73
[77] The amounts owing as calculated by me are as follows:
2011 $ 841 x 65% = $ 547
2012 $ 3,548 x 71% = $ 2,519
2013 $13,310 x 72% = $ 9,583
2014 $17,370 x 38% = $ 6,601
2015 $ 4,037 x 77% = $ 3,108
2016 $ 388 x 66% = $ 256
2017 $ 436 x 73% = $ 318
Total Owing $22,932
[78] The RF is to pay this amount forthwith to the AM.
[79] I had no evidence as to any ongoing s. 7 expenses or activities that the children might be involved in. Going forward, if the AM expects to be paid for any future activities or other s. 7 expenses other than dental expenses which are to be paid by the RF, she is to obtain the RF’s written consent for the activities or other s.7 expenses and provide him with receipts or proof of payment. He is to pay for 73% of these expenses.
Conclusion
[80] Based upon the foregoing, I order as follows:
The RF shall forthwith pay retroactive child support to the AM from 2011 up to and including October 2017 in the amount of $66,238.
The balance of the funds presently sitting in court to the credit of this action shall be paid out to the AM and shall be credited against the retroactive child support ordered to be paid.
The RF shall pay the AM child support commencing November 1, 2017 and on the first day of each month thereafter in the amount of $3,289 per month.
The RF shall forthwith pay the AM retroactive spousal support from August 2012 up to and including November 2017 in the amount of $17,065.
The RF shall pay the AM spousal support commencing December 1, 2017 and on the first day of each month thereafter, up to an including January 1, 2022 in the amount of $2,329 per month.
The RF shall forthwith pay the AM $22,932 for his share of the section 7 expenses incurred by the AM from 2011 to 2017 inclusive.
The RF shall pay to the AM for his 73% proportionate share of all future section 7 expenses incurred by the AM, consented to by him, upon the provision of receipts or proof of payment from the AM. Dental expenses for the children do not have to be consented to by the RF. Receipts and proof of payment must still be provided.
This order will accrue interest at the post-judgment interest rate set pursuant to the Courts of Justice Act, RSO 1990 c. C.43 on any payment or payments in respect of which there is a default, from the date of the default.
Unless this order is withdrawn by the Director of the Family Responsibility Office, it shall be enforced by the Director, and amounts owing under the order shall be paid to the Director, who shall pay them to the person to whom they are owed.
The parties shall attempt to reach an agreement on costs. If unable to do so, the AM may file brief submissions, not to exceed two typed double-spaced pages, together with a Bill of Costs, and any necessary documents, such as offers to settle, on or before December 21, 2017. Any responding submissions from the RF, subject to the same directions, are to be filed, on or before January 8, 2018. There shall be no reply submissions.
HOOD J.
Released: December 5, 2017
CITATION: Kotyck v. Kotyck, 2017 ONSC 7261
COURT FILE NO.: FS-12-380198
DATE: 20171205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TONYA KOTYCK
Applicant
- and -
ALEX KOTYCK
Respondent
REASONS FOR DECISION
HOOD J.
Released: December 5, 2017