Court File and Parties
Court File No.: FC-11-292-3 Date: 2018/11/01 Superior Court of Justice - Ontario
Re: Gilles Alfred Malboeuf, Applicant -and- Stacey Paula Belter, Respondent
Before: Justice Pam MacEachern
Counsel: Christopher G. Rutherford, for the Applicant Katrina Anders, for the Respondent
Heard: August 7, 2018
Endorsement
[1] This is a Motion to Change the parenting and child support terms of the Final Order of Justice Polowin, dated January 29, 2013 (“the 2013 Order”). The Applicant, Mr. Malboeuf, has brought this motion.
[2] For reasons that follow, I grant Mr. Malboeuf’s motion, with modifications.
Background
[3] The parties were involved in a brief relationship from 2001 to 2002. They never married. They had one child, Christian, born October 25, 2001, now 17 years of age.
[4] Mr. Malboeuf turned 65 years of age in February of 2018. He retired from the federal public service in December, 2017.
[5] Ms. Belter is 52 years of age. She is employed with the federal public service.
[6] The 2013 Order was granted based on Minutes of Settlement signed by the parties. It provides for Mr. Malboeuf to pay child support in the amount of $1,024 per month, based on his annual income of $118,389 and Christian primarily residing with Ms. Belter. The 2013 Order also includes provisions for parenting and life insurance to secure child support.
[7] In the spring of 2017, the parties agreed that Christian would reside with each of them on an equal time sharing schedule. This equal timesharing schedule has been in place since April 1, 2017. I commend both parties for reaching agreement on Christian’s living arrangements, particularly given the challenges in their parenting history.
Issues
[8] There are three main areas where change is being sought, which I address in the following order:
A. Child support; B. Life insurance; and C. Other provisions of the 2013 Order.
A. Child Support
[9] The jurisdiction to vary the child support provisions of the 2013 Order is pursuant to s.37 of the Family Law Act.
[10] The parties agree that the change to an equal timesharing schedule for Christian constitutes a change in circumstances pursuant to s.37(2.1) of the Family Law Act and s.14 of the Child Support Guidelines.
[11] The parties further agree that as of April 1, 2017 child support should be payable pursuant to s.9 of the Child Support Guidelines in an amount that reflects the difference in the table amount of monthly child support payable by Mr. Malboeuf and by Ms. Belter based on their respective incomes for one child, being what is commonly referred to as the “set off” amount.
[12] The Guidelines do not prescribe the set off amount in shared parenting situations. However, parties often agree to the set off amount to simplify the determination and annual adjustments of child support.
[13] I am still required, however, when making an Order varying child support, to do so in accordance with the Child Support Guidelines. Given the evidence before me, including the timesharing arrangement, the costs associated with the timesharing arrangement, the financial circumstances of both parties, and the consent of the parties, I find that in these circumstances the set off amount, calculated below, provides for an appropriate amount of child support under s.9 of the Guidelines. These amounts also constitute reasonable arrangements for the support of Christian under ss. 37(2.5) and (2.6) of the Family Law Act.
[14] At the oral hearing, the parties were in agreement on their respective incomes for child support purposes. The parties also agreed to base child support on their incomes in the previous year, mirroring the annual adjustment methodology in the 2013 Order.
[15] The 2013 Order provides for the annual exchange of income information, annual adjustments based on the previous year’s income and payment of any overpayment or underpayment within 30 days. Ms. Belter’s position is that the only change that should be made to these child support provisions is to change the amount, due to the equal timesharing. I agree and find that the adjustment process set out in the 2013 Order provides for an appropriate and fair method for adjusting child support on an annual basis that should not be interfered with, except for the change due to the equal timesharing.
[16] This means that child support should continue to be adjusted annually, on July 1st of every year “for the year”, based on the party’s income in the previous year. I interpret this wording, and in particular the reference to the adjustment being made “for the year”, to require an adjustment to the child support payable as of January 1st in each year.
[17] Therefore, there are two child support amounts to be determined – one being payable as of April 1, 2017, the date of the change in circumstances due to the equal timesharing schedule, and the second payable as of January 1, 2018 under the annual adjustment process provided for in the 2013 Order.
[18] Based on the evidence before me, adjusting for union dues, and the gross up applied to taxable dividends, I find the parties’ incomes, with the corresponding table amounts, to be as follows:
Mr. Malboeuf (table) Ms. Belter (table) a. 2016 $130,524 ($1,118) $88,107 ($786) b. 2017 $116,385 ($1,039) $96,117 ($880)
[19] I have used the December 31, 2011 tables to determine the table amounts payable as of April 1, 2017. I have used the November 22, 2017 tables to determine the table amounts payable as of January 1, 2018.
[20] Accordingly, paragraph 12 of the 2013 Order is changed to provide that:
a) commencing April 1, 2017, and on the first day of each subsequent month until and including December 1, 2017, Ms. Belter will pay child support to Mr. Malboeuf in the amount of $786 per month and Mr. Malboeuf will pay child support to Ms. Belter in the amount of $1,118 per month, for a net set off payment of $332 per month. This child support is payable for Christian Belter-Malboeuf, born October 25, 2001. These amounts are based on Ms. Belter’s 2016 income for child support purposes being $88,107 and Mr. Malboeuf’s 2016 income for child support purposes being $130,524; and
b) commencing January 1, 2018, and on the first day of each subsequent month until varied by written agreement or court order, Ms. Belter will pay child support to Mr. Malboeuf in the amount of $880 per month and Mr. Malboeuf will pay child support to Ms. Belter in the amount of $1,039 per month, for a net set off payment of $159 per month. This child support is payable for Christian Belter-Malboeuf, born October 25, 2001. These amounts are based on Ms. Belter’s 2017 income for child support purposes being $96,117 and Mr. Malboeuf’s 2017 income for child support purposes being $116,385.
[21] The 2013 Order also provides for an annual adjustment to the parties’ proportionate shares of Christian’s s.7 expenses. Mr. Malboeuf provided calculations based on comparing the parties’ income before adjusting for the payment of child support. Although the Court has discretion under s.7 of the Child Support Guidelines to award a different sharing of these expenses, which in some circumstances may be appropriate in shared parenting situations, given Mr. Malboeuf’s position I adopt his calculations. Accordingly, paragraph 13 of the 2013 Order is changed to provide that the parties’ percentage shares are as follows:
a) commencing April 1, 2017, through to December 31, 2017, Ms. Belter’s share of Christian’s s.7 expenses is 40% and Mr. Malboeuf’s is 60% (based on 2016 incomes); and
b) commencing January 1, 2018, through to December 31, 2018, and continuing thereafter until varied by written agreement between the parties or court order, Ms. Belter’s share of Christian’s s.7 expenses is 45% and Mr. Malboeuf’s is 55% (based on 2017 incomes).
[22] Mr. Malboeuf brought an earlier Motion to Change in 2015 (FC-11-292-2), which is still outstanding. That Motion to Change involves child support and s.7 expenses dating back to July 1, 2013, and includes Ms. Belter’s request for reimbursement for s.7 expenses. That Motion to Change was stalled until Mr. Malboeuf began this new Motion to Change. Both parties agree that the 2015 Motion to Change is not before me. Accordingly, these reasons do not address what variation of child support, if any, is warranted nor what contributions towards s.7 expenses are payable for the period prior to April 1, 2017.
[23] At the motion before me, Ms. Belter advised that it is her intention to pursue a resolution of the 2015 Motion to Change to address the child support and s.7 expenses prior to April 1, 2017. Although it would have been more efficient for both motions to be determined together, to the extent required, I grant leave under s.37(3) of the Family Law Act for the 2015 Motion to Change to be determined.
B. Life Insurance
[24] The 2013 Order requires Mr. Malboeuf to designate Ms. Belter as the irrevocable beneficiary in trust for Christian of $176,000 in life insurance coverage for so long as he has an obligation to pay child support. The 2013 Order does not impose any requirement on Ms. Belter to maintain life insurance to secure her child support obligation.
[25] Mr. Malboeuf seeks to reduce his coverage to $85,000. Mr. Malboeuf argues that this amount is more than sufficient because it is approximately equal to seven years of full monthly table child support. He argues that seven years of child support is sufficient given Christian is now 17 years of age. Mr. Malboeuf acknowledges that this calculation does not take into account the cost of s.7 expenses, including post-secondary expenses.
[26] Mr. Malboeuf also seeks an order requiring Ms. Belter to designate him as the irrevocable beneficiary of life insurance to secure her child support obligation, primarily on the basis that she should have a similar obligation as he has.
[27] Mr. Malboeuf’s position is that there has been a change in circumstances that warrants varying the life insurance provisions of the 2013 Order, based on the change to the equal timesharing arrangement and Christian’s age such that Mr. Malboeuf’s future child support obligation is less than what it was in 2013.
[28] Ms. Belter’s position is that there has not been a change in circumstances that warrants a variation of the life insurance clauses. She argues that the equal timesharing arrangement is not a change that affects the life insurance, given that if Mr. Malboeuf passed away, the equal timesharing would no longer be in place. She also argues that the life insurance terms in the 2013 Order contemplated Christian growing older.
[29] Ms. Belter objects to being required to designate Mr. Malboeuf as the beneficiary of life insurance on her life given previous threats that he made against her, which date back to before the 2013 Order. She argues that she has significant resources in her estate, including an RESP, which more than adequately secure her child support obligation.
[30] Mr. Malboeuf counters that Ms. Belter’s assets, including the RESP, do not provide the same level of security as a life insurance policy, which would be exempt from creditors on her death. He also argues that he has similar assets, yet he is required to maintain life insurance - Ms. Belter should be required to do the same, on the same basis.
[31] The life insurance provided under the 2013 Order is an incident of child support. Under s.34(1) of the Family Law Act, the Court has jurisdiction in an application for support to:
a) require a spouse who has a policy of life insurance as defined under the Insurance Act to designate the other spouse or a child as the beneficiary irrevocably (s.34(1)(i)), and
b) require a spouse who has an interest in a pension plan or other benefit plan to designate the other spouse or a child as beneficiary under the plan and not change that designation (s.34(1)(j)).
[32] Section 12 of the Child Support Guidelines also provides that the Court may require security for child support.
[33] The life insurance provisions in the 2013 Order may be varied as an incident of child support if there is a change in circumstances within the meaning of the Child Support Guidelines. I find that there has been a change in circumstances that warrants a variation of the life insurance provisions. The parties have agreed that there has been a change in circumstances for the purpose of varying the child support payment based on the change to the equal timesharing arrangement. This similarly applies to the provisions for life insurance.
[34] Having found that there has been a change in circumstances, I would vary the 2013 Order to impose on both parties a mutual requirement to secure their respective child support obligations. I would not excuse Ms. Belter from an obligation to provide life insurance or death benefit coverage because she has other assets, for the same reasons that I would not exempt Mr. Malboeuf from providing such coverage.
[35] Based on the expected duration of child support, I accept Mr. Malboeuf’s calculation of $85,000 as the required coverage to replace his basic monthly table child support obligation but add an additional amount of $30,000 to provide security for s.7 expenses, including post-secondary expenses. The coverage that Mr. Malboeuf is required to maintain to secure his child support obligation is therefore $115,000. Taking into consideration the Ontario Court of Appeal’s decision in Katz v. Katz, 2014 ONCA 606, I would also allow this coverage to decrease by 10% per year on the anniversary of this Order until Christian is no longer entitled to child support, when the obligation to maintain such coverage will end.
[36] Based on similar calculations, the coverage that Ms. Belter is required to maintain to secure her child support obligation is $100,000. This coverage may also decrease by 10% per year on the anniversary of this Order until Christian is no longer entitled to child support, when the obligation to maintain such coverage will end.
[37] Each party should be required to designate the other as the beneficiary in trust for Christian of such coverage. There is no basis to require Ms. Belter to be the beneficiary of Mr. Malboeuf’s coverage, yet not to require Mr. Malboeuf to be the beneficiary of Ms. Belter’s coverage. This is consistent with s.34(1) (i) and (j) of the Family Law Act which provide for the designation of the other spouse, or the child, as the beneficiary.
[38] Neither party provided clear evidence on the precise life insurance coverage that was either in place or available to each of them to secure child support. At the oral hearing, it was apparent that both parties might only have the death benefit provided through their employment with the federal public service. This death benefit is two times their annual salary, but reduces by 10% per year after age 65. There may be other restrictions on this death benefit, including whether the governing legislation, the Public Service Superannuation Act, R.S.C. 1985 c.P-36, allows the designation of a beneficiary “irrevocably” and/or whether more than one beneficiary may be designated so that it is possible to direct excess coverage elsewhere.
[39] There is insufficient information before me on the exact coverage available to the parties. Therefore, I direct the parties to attempt to resolve the particulars of the life insurance/benefit clauses required to secure their respective child support obligations.
[40] If the parties are unable to agree on such provisions, either party may schedule a further motion before me to determine this issue. On such a motion, each party shall file further evidence setting out all required information to make such a decision. This should include precise information regarding what policies or benefits are available, any restrictions on their use or designations, the amount of coverage available and how this may change over time, and any related costs to maintaining the coverage.
C. Other Provisions of the 2013 Order
[41] Mr. Malboeuf seeks changes to the parenting provisions of the 2013 Order given the change in the child’s residence, and changing the distance measurements from yards to metres. Ms. Belter’s position is that these changes are not necessary and largely immaterial.
[42] All of the proposed changes are minimal in substance, particularly given the fact that Christian is now 17 years of age and has been living in an equal timesharing arrangement since April 1, 2017. But the 2013 Order is premised on Christian primarily residing with Ms. Belter, and this is no longer the case. I find that there has been a material change in circumstances that warrants a variation of the parenting provisions. The Order below reflects these minor changes, which adjust the terms of the 2013 Order to reflect the current reality of the equal timesharing arrangement. I find these changes are in Christian’s best interests.
Orders
[43] Given the above, I make the following Orders:
the Order of Justice Polowin dated January 29, 2013, is changed as follows: a. Paragraphs 1 to 4 are struck and replaced with the following: “1. Christian will reside with each party in accordance with his wishes, which is currently on an alternating week on week off basis. b. Paragraph 12 is changed to provide that: i. commencing April 1, 2017, and on the first day of each subsequent month until and including December 1, 2017, Ms. Belter will pay child support to Mr. Malboeuf in the amount of $786 per month and Mr. Malboeuf will pay child support to Ms. Belter in the amount of $1,118 per month, for a net set off payment of $332 per month. This child support is payable for Christian Belter-Malboeuf, born October 25, 2001. These amounts are based on Ms. Belter’s 2016 income for child support purposes being $88,107 and Mr. Malboeuf’s 2016 income for child support purposes being $130,524; and ii. commencing effective January 1, 2018, and on the first day of each subsequent month until varied by written agreement or court order, Ms. Belter will pay child support to Mr. Malboeuf in the amount of $880 per month and Mr. Malboeuf will pay child support to Ms. Belter in the amount of $1,039 per month, for a net set off payment of $159 per month. This child support is payable for Christian Belter-Malboeuf, born October 25, 2001. These amounts are based on Ms. Belter’s 2017 income for child support purposes being $96,117 and Mr. Malboeuf’s 2017 income for child support purposes being $116,385. c. The percentage shares under paragraph 13 are changed to provide that: i. commencing April 1, 2017, through to December 31, 2017, Ms. Belter’s share of Christian’s s.7 expenses is 40% and Mr. Malboeuf’s is 60% (based on 2016 incomes); and ii. commencing January 1, 2018, through to December 31, 2018, and continuing thereafter until varied by written agreement between the parties or court order, Ms. Belter’s share of Christian’s s.7 expenses is 45% and Mr. Malboeuf’s is 55% (based on 2017 incomes). d. The term “25 yards” in paragraphs 19 c) and 20 are changed to “25 metres”, and the term “5 yards” in paragraph 19 c) is changed to “5 metres”. e. The parties shall attempt to agree on terms for their mutual provision of life insurance or benefit coverage to secure their respective child support obligations, providing for the following (unless otherwise agreed): i. that Mr. Malboeuf be required to maintain coverage in the amount of $115,000. This coverage may decrease by 10% per year on the anniversary of this Order until Christian is no longer entitled to child support, when the obligation to maintain such coverage will end; ii. that Ms. Belter be required to maintain coverage in the amount of $100,000. This coverage may decrease by 10% per year until Christian is no longer entitled to child support, when the obligation to maintain such coverage will end; and iii. each party shall designate the other as the beneficiary in trust for Christian of such coverage. If the parties are unable to agree on such terms, either may schedule a further motion before me to determine this issue. On such a motion, each party shall file further evidence setting out all required information to make such a decision. This should include precise information regarding what policies or benefits are available, any restrictions on their use or designations, the amount of coverage available and how this may change over time, and any related costs to maintaining the coverage.
Except as otherwise changed in the above, the Order of Justice Polowin dated January 29, 2013 remains in full force and effect.
If required, leave is granted under s.37(3) of the Family Law Act for the 2015 Motion to Change to be determined.
Costs
[44] In the event that the parties are unable to agree on costs of this motion, the Applicant may file submissions with respect to costs on or before November 14, 2018. The Respondent may file submissions with respect to costs on or before November 21, 2018. Cost submissions of both parties shall be no more than three pages in length, plus any offers to settle and bills of costs, and shall comply with Rule 4 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
Justice Pam MacEachern