Court File and Parties
Newmarket Court File No.: FC-18-56079-00 Date: 20190322 Superior Court of Justice - Ontario
Re: Maria Vittoria Costa, Applicant And: Alexander (Sandro) Costa, Respondent
Before: The Honourable Madam Justice H. McGee
Counsel: E. Mourao, Counsel for the Applicant Alexander (Sandro) Costa, Self-Represented
Heard: March 20, 2019
Ruling on Motion
Motion for Child Support, Section 7 Expenses and Spousal Support
1This is Ms. Costa’s motion for child support, section 7 expenses and spousal support. She is a teacher earning $98,075 a year. Mr. Costa is an entrepreneur in the energy field. In 2014 he sold the majority of shares, and all the assets of a corporation that he had developed to ONEnergy, a company with whom he has since been employed as Vice President. He retains his corporation, which holds a 9.9% voting interest in ONEnergy.
2The parties separated on May 31, 2016 after almost 24 years of marriage. Mr. Costa moved out of the matrimonial home, and at some point thereafter, began cohabitating with his new partner. Ms. Costa remains in the home with their two adult children, both of whom are presently at university.
3Mr. Costa has only paid regular, voluntary child support since June 1, 2018. He has paid no section 7 expenses or spousal support. He agrees that he owes child support and section 7 expenses from June 1, 2016 to May 31, 2018; against which there are settled credits. The after tax (tuition credit) amount of section 7 expenses, less each adult child’s contribution that is to be proportionately divided is not contested.
4I make orders below for ongoing child support and section 7 expenses. I also fix arrears of child support as of December 31, 2018.
5Ms. Costa seeks $1,700 per month in spousal support. Mr. Costa asks that the claim be dismissed. I find that Ms. Costa has an entitlement to spousal support, but decline to make an order for spousal support.
6In the larger proceeding there remains a question of Mr. Costa’s actual income for support purposes. He has not yet disclosed corporate documents which may reveal additional interests. It is unknown what form those interests may take, equity or income.
7On today’s motion I am limited to a finding of income on Mr. Costa’s T4s and Line 150 of his Income Tax Returns. The Notices of Assessment for 2016 and 2017 were only received by Mr. Costa in September 2018. During the motion, it was discovered that both have been since reassessed, as Mr. Costa improperly claimed certain support deductions.
8I am also limited to the available evidence as to a possible termination of Mr. Costa’s employment with ONEnergy. He asserts that he lost his job on February 4, 2019, seven days after this motion date was set at the January 28, 2019 settlement conference. It is difficult to take issue with counsel’s assertion that the timing of the termination is suspicious.
9The termination is only evidenced by a letter from a person with whom Mr. Costa has a management relationship. Given the 2014 sale, he may not be at arm’s length from ONEnergy; potentially invoking section 18 of the Federal Child Support Guidelines.
10No details of a severance package are provided, but for a term in the February 4, 2019 letter for salary continuance until May 31, 2019. In his submissions, Mr. Costa even couches the salary continuance terms as uncertain.
11Meanwhile, Mr. Costa has two businesses under development, neither of which are shown on his most recent Financial Statement: March 12, 2019. At the start of the motion he objected to counsel filing website print outs for those two businesses, one of which he acknowledges broadcasts a lengthy list of existing customers.
12Mr. Costa has placed almost no evidence before the court to explain the circumstances of the alleged termination. I find that the present record is equally consistent with a financial reorganization of his own making, so I do not time limit my award of child support and section 7 expenses.
Preliminary Orders
13Order to issue that Mr. Costa is to serve and file with the Court his 2016 and 2017 Income Tax Return Reassessments on or before March 29, 2019. Questioning is permitted.
The Nature of a Temporary Order for Support
14Temporary Orders are intended to cover the period of time between the making of the Order and Trial. Their purpose is to provide a reasonably acceptable solution to a difficult problem. A full investigation of the facts may demonstrate a substantially different Order than that granted on a motion. The motions judge must rely on the evidence before her. The Order must be made in accordance with the Federal Child Support Guidelines, the Spousal Support Advisory Guidelines and the Divorce Act.
15On a motion for temporary support, the court need not conduct a complete inquiry into all aspects of the claim. That is best left to the trial judge. Temporary support is better understood as a holding order based on the present record.
Child Support
16I adopt the chart found at Exhibit D of Ms. Costa’s February 14, 2018 affidavit. It sets out the agreed credits to a payment of child support, and the table support owed for two children on income of $180,097; being Mr. Costa’s T4 income for 2016 and 2017. I will fix arrears as of December 31, 2018 and order monthly support as of January 1, 2019.
17The chart extends the income of $180,097 to 2018 which matches Mr. Costa’s 2018 T4, but not his year end payslip. A careful examination of the latter and a November 2018 payslip confirms Mr. Costa’s assertion that the difference results from a December payment of $9,411 in expenses.
18Ordinarily, I would have information on the characterization of those expenses and whether they are adjustments per Schedule III of the Guidelines. The net effect, after an adding back and grossing up of those expenses is generally higher than the simple addition of the expenses to T4 income. Mr. Costa does not list non-taxable benefits in his March 12, 2019 Financial Statement.
19On this motion, I will use the T4 income of $180,097 for 2018, without prejudice to a higher amount being assessed upon a fuller picture of Mr. Costa’s income.
20Order to go fixing table child support arrears at $36,368 as of December 31, 2018. [1]
21Order to go that Mr. Costa shall pay table support of $2,438 for two children based on income of $180,097 commencing January 1, 2019.
22Order to go that Mr. Costa may move to vary the payment of table support upon compliance with paragraphs 1, 2, 3, 4, 11, and 12 of the consent disclosure Order of January 28, 2019, service of his Record of Employment and any further details of his severance package.
23Support Deduction Order to Issue.
Section 7 Expenses
24Ms. Costa has paid the adult children’s section 7 expenses, and seeks an order for Mr. Costa’s proportionate share since September 1, 2018.
25Section 7 of the Federal Child Support Guidelines provides for the proportionate sharing of post-secondary education expenses that the parties “can reasonably cover, taking into account [each] spouse’s income and the amount that the spouse would receive under the applicable table.”
26Because both children are residing at home, the section 7 expenses requested by Ms. Costa are primarily related to tuition and transportation. The amount sought was not contested, and in my view, is reasonable to the means of the family. The parents have a combined family income of $206,173.
27The proportionate sharing of the section 7 expenses, per the SSAG calculation found at Exhibit I to Mr. Costa’s February 28, 2019 affidavit is $682 per month (net of tax) payable by each parent. I accept this figure. [2]
28Order to go that commencing September 1, 2018, Mr. Costa shall pay section 7 expenses of $682 per month to Ms. Costa.
29Support Deduction Order to issue.
Spousal Support
Entitlement
30Entitlement is not an issue on this temporary motion. The appropriate “with child” formula for assessing support recognizes the length of this marriage and the current period of ongoing financial provision for the parties’ two adult children.
31Neither is entitlement likely to be an issue at trial; although duration may need to be considered should no compensatory basis for support be found that survives the children’s independence.
32Because entitlement will not likely be an issue, it may be useful for the parties to observe prior to trial that financial dependencies can shift within, and after the conclusion of long term marriages. Spousal support is not gender based. Neither is it unalterable. Should Mr. Costa be able to evidence his various assertions and should his circumstances be genuinely out of his control, he may be the future spouse in need of support. [3]
Quantum of Spousal Support
June 1, 2016 to December 31, 2017
33This period is no longer eligible for tax deductible spousal support. The lump sum sought by Ms. Costa for this period has not been calculated net of tax. Neither have the section 7 expenses been calculated for September 2016 forward, when only the oldest was in post-secondary education.
34All of these variables are necessary to determine spousal support for this period, and I decline to guess at them. Spousal Support for June 1, 2016 to December 31, 2017 is to be decided by further motion, or at trial.
January 1, 2018 to August 31, 2018
35This period is eligible for a tax deduction, but again, I do not have the section 7 expenses which are a precondition to calculating the appropriate range for this period. However, in doing this calculation myself, using the 2018 income figures of $180,097 and $98,075 and no section 7 expenses, the SSAG range is:
Low $379 NDI split of 45% to Mr. Costa and 55% to Ms. Costa
Medium $1,020 NDI split of (rounded) 43% to Mr. Costa and 57% to Ms. Costa
High $1,663 NDI split of (rounded) 41% to Mr. Costa and 59% to Ms. Costa
36For reasons more fully set out below, I decline to make on order on this motion for spousal support during this period when the effect would be to provide one spouse with NDI 10% higher than the other. When the section 7 budget is available for this period, the range may differ, so my decision governing this period is without prejudice to a further motion, or claim at trial for support from January 1, 2018 to August 31, 2018.
September 2018 to Present
37The SSAG range of spousal support using Mr. Costa’s income of $180,098 and Ms. Costa’s income of $98,075 and the section 7 expenses after September 1, 2018 is:
Low $0 NDI split of (rounded) 47% to Mr. Costa and 53% to Ms. Costa
Medium $569 NDI split of (rounded) 45% to Mr. Costa and 55% to Ms. Costa
High $1,222 NDI split of (rounded) 43% to Mr. Costa and 57% to Ms. Costa
38I am not prepared to order spousal support to Ms. Costa after September 2018, as her Net Disposable Income is already higher than Mr. Costa’s. As explained during submissions, the payment of section 7 expenses often overshadows the range of spousal support, as child support takes priority. Moreover, the high range of spousal support sought by Ms. Costa would in my view, grant her a disproportionate amount of NDI.
39There is no presumptive amount of spousal support within the SSAG range, but as a general statement, spousal support in the immediate period following a long term marriage, particularly a long term marriage with children, ought to move the parents towards parity. Spousal Support should not exacerbate post separation income disparities.
40The range of spousal support generated by the Spousal Support Advisory Guidelines does not always bracket parity. Ultimately, a court must decide on the amount of spousal support that best meets its objectives as set out in section 15 of the Divorce Act. Those objectives are: to recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; to apportion financial consequences arising from the care of children over and above any obligation for the support of any child of the marriage, to promote economic self-sufficiency; and to relieve economic hardship arising from the breakdown of the marriage.
41Sometimes a higher range of spousal support is the preferred approach because there is an indirect benefit back to the payor, such as when spousal support is used to pay a joint debt, or maintain a joint property. Here, Ms. Costa has all the benefits of the matrimonial home which is registered in her name. She alone will benefit from any increase in value. [4]
42When I consider the ranges of spousal support in paragraphs 35 and 37 above, and the section 15 Divorce Act objectives, I can find no basis to award spousal support to Ms. Costa that would serve only to further increase her NDI over that of Mr. Costa. She is self-sufficient. Her housing and day to day expenses are being met. The children’s financial needs are fully addressed by the terms herein for their support and expenses.
Costs
43If costs cannot be resolved, the applicant is to deliver her submissions by April 8, 2019, response from the respondent is to be filed by April 23, 2019. No reply permitted. Costs submissions are limited to three pages exclusive of Offers to Settle, a comparison of Offers and a Bill of Costs. Submissions are to be filed in the Continuing Record. If case law is referenced, please provide only the citation. No case book is required.
Justice H. McGee Date: March 22, 2019
1Being $10,622 for 2016, $14,556 for 2017 and $11,190 for 2018.
2Which is calculated without any payment of spousal support.
3For example, in 2014 the parties’ respective incomes were $83,011 for Ms. Costa and $36,008 for Mr. Costa. If these were the actual incomes for support purposes and had the parties separated in that year, Ms. Costa would have been the support payor.
4Mr. Costa makes no trust claim.