Court File and Parties
Court File No.: 03-FL-928-1 Date: 2019-06-19 Ontario Superior Court of Justice
Between: Paul Eugene Francois Marchand, Applicant And: Susanne MacKenzie, Respondent
Counsel: Christian Pilon, for the Applicant Suzanne Galarneau, for the Respondent
Heard: February 21, 2017, April 18, 2019, and May 15, 2019 (at Ottawa)
Reasons for Motion
Linhares de Sousa J.
Introduction and Issues
[1] The remaining issues on this motion are the following:
For the Applicant Father, Paul Eugene Francois Marchand:
- Has the Respondent Mother, Susanne Mackenzie, satisfied her legal disclosure obligation?
- Should an income be imputed to Ms. Mackenzie for the purpose of child support and if yes then what amount should be impute to her?
- Costs of this motion.
For the Respondent Mother, Ms. MacKenzie:
- That she pay an order of child support in accordance with the Child Support Guidelines;
- That she be credited with an overpayment of child support paid by her in the amount of $1,908 based on a retroactive adjustment of her income for child support purposes;
- Costs on the previous motion for custody;
- That the Mr. Marchand be ordered, as a positive obligation, to advise Ms. Mackenzie once the child Sophie is no longer in school on a full-time basis; and
- Costs of this motion.
Factual Background
[2] Since the issue of the costs of the previous motion for custody is before this court, it is necessary to examine the procedural history of this case as well as the relevant factual background of the parties leading to this litigation.
[3] The parties cohabited for but a brief two years. The parties commenced cohabiting in October of 2000 and separated at the end of November 2002. One child was born of their relationship, namely Sophie MacKenzie Marchand, born March 26, 2002, some 8 months before the parties’ separation.
[4] On July 14, 2007 Ms. MacKenzie gave birth to her second child Matthew. She continues to be the single mother to the child Matthew.
[5] Sophie resided with her mother and was in her care from the time of the separation of the parties in November 2002 (the parenting arrangement recognized in the order of Justice Toscano-Roccamo, dated September 27, 2006) until December 2014.
[6] In November 2014, Ms. Mackenzie was diagnosed with cancer. She received treatment for her cancer, including undergoing some surgeries, which created substantial physical and mental challenges to her. She has indicated in her affidavit of March 19, 2019, that the cancer treatment has caused her negative side effects and that she has therefore decided to stop them.
[7] In December, 2014, as a result of CAS involvement, Sophie’s primary residence was changed from that of her mother to that of her father and the CAS withdrew from any further involvement in the case. Despite this change, Ms. MacKenzie continued to receive child support for Sophie from Mr. Marchand, under the order of Justice Tascano-Roccamo, dated September 27, 2006 which amounted to a substantial amount of money.
[8] A motion to change the order of Justice Toscano-Roccamo, dated September 27, 2006, was brought by the Mr. Marchand, in November of 2015, almost one year after Sophie went to live with him, against the Ms. Mackenzie seeking, at the outset, an order for the custody and primary residence of Sophie, a termination of his existing obligation to pay child support to Ms. Mackenzie for Sophie and an order for Ms. Mackenzie to pay child support to him for the child Sophie based on her annual income. As part of his motion, Mr. Marchand provided his financial disclosure as required by the Family Law Rules.
[9] On March 4, 2016, the parties found themselves before Master Champagne, as she then was, on a case conference. At that time the parties, as can be seen from the endorsement of Master Champagne, were able to agree that Sophie had been living with her father since December, 2014 and that his responsibility for child support for Sophie should be terminated as of that date. The parties further agreed that Mr. Marchand was owed $21,693.00 by Ms. Mackenzie as a result of him overpaying child support on the existing child support order between December, 2014 and February, 2016 when Sophie was in his care.
[10] Ms. Mackenzie agreed, at that time, to pay Mr. Marchand this money owed “forthwith” and it was so ordered to be paid “immediately” along with the repayment of any subsequent child support payments that FRO may seize for March, 2016 going forward before the new court order could be processed.
[11] Mr. Marchand has acknowledged, in an affidavit dated June 16, 2016, that in accordance with the order of Master Champagne, dated March 4, 2016, during the months of April and May, 2016, he received total payments from Ms. Mackenzie of $32,490.98 as reimbursement to him for the child support payments made by him after Sophie came to live with him.
[12] Before Master Champagne, the parties also agreed that Ms. MacKenzie was responsible for paying Mr. Marchand child support for Sophie but there was no agreement on the amount of child support she should pay.
[13] What is also clear from the endorsement of Master Champagne is that despite the passage of time since Mr. Marchand had started his motion to change, Ms. Mackenzie had not yet filed the responding material and financial disclosure that was required of her, nor had she done anything about getting a formal extension for such filing. In order to have the matter proceed “expeditiously”, Master Champagne granted Ms. Mackenzie “a further extension of time” to file and serve her responding and required material to March 7, 2016, with an order of costs against her, in the amount of $1,500. There was no evidence as to whether these costs have been paid by her.
[14] Master Champagne further ordered: (a) on a temporary without prejudice basis, Sophie’s primary residence was to be with her father and the parties were to retain Debora Scholey to provide an updated report on the wishes of the child and to report back to the parties on the wishes of the child; Ms. Scholey’s retainer was to be shared equally between the parties; (b) on a temporary without prejudice basis (of Mr. Marchand seeking child support, retroactive to December, 2014), Ms. Mackenzie was ordered to pay $343 per month in child support for Sophie based on her own estimation of an annual income of $38,000; and (c) a detailed list of specified financial disclosure to be made by Ms. MacKenzie “within 90 days” (June, 2016), namely, (i) a copy of any trust agreement or amending agree[ment]to any trust in which the respondent has an interest including the Mackenzie family trust; (ii) copies of all bank statements in the respondent’s name for 2013, 2014 and 2015; (iii) copies of all credit card statements in the respondent’s name for 2013, 2014, and 2015; (iv) documentary evidence of all the respondent’s liabilities; (v) copies of all applications for credit that the respondent has made in the past three years; and (vi) financial statements if any, for any trust in which the respondent has an interest.
[15] Master Champagne gave the parties leave to set aside a half day for the motion hearing of this matter.
[16] On March 11, 2016, Ms. Mackenzie filed her response to Mr. Marchand’s motion to change, disagreeing with his claim for custody of Sophie and making her own claim for access to Sophie as “per the child’s wishes”. In advancing claims of her own, Ms. Mackenzie did not ask for any change in the custody of Sophie and sought an order for access to Sophie, “once per week for the purpose of counselling; and, Otherwise in accordance with the wishes of the child”.
[17] With respect to the question of child support, Ms Mackenzie agreed with Mr. Marchand, in her responding material, that his existing obligation to pay child support be terminated and that she pay child support to Mr. Marchand for the child Sophie based on her annual income of $38,598 in the monthly amount of $343 in accordance with the Child Support Guidelines, with payments to start on March 1, 2016, some two years after Sophie went to live with her father. She was effectively contesting the father’s claim to retroactive child support to the time Sophie went to live with Mr. Marchand.
[18] Along with her responding material, Ms. MacKenzie filed a Financial and Property Statement dated March 3, 2016. Attached to that Financial Statement was her 2012, 2013, and 2014 income tax returns. Throughout the course of this prolonged proceeding, Ms. MacKenzie filed subsequent Financial Statements with subsequent income tax return attachments. These were her Financial and Property Statement dated, February 15, 2017 and her Financial and Property Statement, dated March 19, 2019. In addition to the income tax returns and assessments mentioned earlier, Ms. MacKenzie also filed her income tax returns, assessments and reassessments for the years, 2015, 2016 and 2017, and most recently, in volume 6 of the continuing record, an income tax return summary for 2018.
[19] In order to advance his claim for custody to Sophie, shortly after the appearance before Master Champagne and in accordance with her order, counsel for Mr. Marchand contacted Ms. Scholey to determine whether she would meet with Sophie, to which she agreed. Ms. Scholey had previously been involved with Sophie and for that reason she was chosen by the parties to ascertain the wishes of the child. Counsel for Mr. Marchand signed Ms. Scholey’s retainer on behalf of his client on May 3, 2016.
[20] On May 19, 2016 Ms. Scholey had still not yet heard from Ms. MacKenzie or her lawyer about jointly retaining her to speak to Sophie. Nothing had changed in this regard by June of 2016.
[21] In June 2016, Mr. Marchand filed a motion seeking to deal with the existing order of Justice Toscano Roccamo, requesting, among other things such as child support, a final order of sole custody to his daughter, Sophie, and for primary residence with him.
[22] It was Mr. Marchand’s evidence that not having heard back from Ms. MacKenzie about her signing the joint retainer for Ms. Scholey to see their daughter, he instructed his counsel to proceed to a final motion to seek a final order of custody for his daughter.
[23] He also sought a final order that access to Ms. MacKenzie would be “per the child’s wishes”. There is no evidence that Ms. MacKenzie ever signed the joint retainer to have Ms. Scholey see Sophie. The evidence also established that Ms. Mackenzie had not had contact with Sophie since her move to her father’s home in December, 2014.
[24] As part of his revived June 2016 motion, Mr. Marchand sought an order imputing income to Ms. MacKenzie and that she be ordered to pay child support in accordance with that imputed income, retroactive to December 2014, as well as her proportionate share of Sophie’s special and/or extraordinary expenses in accordance with the Child Support Guidelines.
[25] A date for the questioning of Ms. MacKenzie was set for July, 19, 2016. The questioning took place and during that process, for the first time, counsel for Ms. MacKenzie put on the record that her client was withdrawing her claim for custody to Sophie. Despite that acknowledgement, Ms. MacKenzie’s counsel did not agree, nor did Ms. MacKenzie agree, at that time, to sign a consent custody order on her client’s behalf, as requested by Mr. Marchand’s counsel so as to finalize the issue, leaving the matter to the anticipated court appearance.
[26] The motion permitted by the order of Master Champagne, dated March 4, 2016, now Mr. Marchand’s revived motion, was eventually set to be heard on September, 2016. The endorsement record indicates that on that date the matter was struck from the list as no facta had been filed. Correspondence referred to by both counsel indicated that counsel had been in discussions concerning the adjournment of the motion date for various reasons.
[27] In August 2016, after a short period of representing herself, Ms. MacKenzie retained her current counsel on the record. At the request of Ms. MacKenzie’s new counsel, both counsel for the parties were able to agree to adjourn Mr. Marchand’s revived motion, which he had originally commenced in November of 2015 to February 21, 2017, when the matter came before me.
[28] As my endorsement of that same date indicates, as of that date, the parties were able to reach an agreement for a consent court order dealing with the issues of custody of and access to Sophie as follows:
- Mr. Marchand was to have sole custody of Sophie with her principal residence with him;
- Ms. MacKenzie was to have access to Sophie, in accordance with the child’s wishes; and
- Mr. Marchand was to be able to obtain a passport for Sophie and travel with her outside Canada without the consent or signature of Ms. MacKenzie.
[29] The parties could not agree on the question of Mr. Marchand’s obligation to inform Ms. MacKenzie, if he were travelling outside Canada with his daughter and the dates of their absence from Canada, a request made by Ms. MacKenzie. I ruled and incorporated it as part of the final consent custody and access order, that Mr. Marchand was obligated to inform Ms. MacKenzie when he travelled outside of Canada with his daughter and the dates of their absence.
[30] A final order to that effect was presented to me and finally signed by me on May 3, 2017 and can be found in the Endorsement section of the continuing record. I also made it very clear on that date that Ms. MacKenzie was obligated to complete her financial disclosure, as was ordered by Master Champagne on March 4, 2016, which had not yet been completed.
[31] The evidence shows that to date Ms. MacKenzie continues to not have any contact with her daughter. Ms. MacKenzie alleges that Mr. Marchand has alienated her daughter from her and her half-brother, Matthew. While I have no doubt that she firmly believes that fact, there is no evidence before this court on which such a finding can be made.
[32] At the end of that hearing on February 21, 2017, the outstanding issues between the parties to be determined by this court were those enumerated in the introductory paragraphs of this decision.
Financial Disclosure
[33] The first logical question to deal with is to determine whether Ms. MacKenzie has satisfied her financial disclosure obligations. After a detailed, and rather time consuming examination of the 6 volumes of the continuing record, I am able to conclude that Ms. MacKenzie, as of the final date of the motion hearing had substantially complied with the order of Master Champagne, dated March 4, 2016 for financial disclosure.
[34] Nonetheless, Ms. Mackenzie’s financial disclosure in these proceedings has been problematic from the beginning, as can be seen by Master Champagne’s costs order on March 4, 2016, against Ms. MacKenzie. The reasons why Ms. MacKenzie’s financial disclosure in these proceedings have been problematic are the following.
[35] Firstly, I find Ms MacKenzie’s financial disclosure to have been unduly delayed and provided in a very piecemeal way. Without a doubt, this method of providing disclosure has led to prolonging these proceedings and unreasonably so.
[36] Secondly, Ms. MacKenzie’s financial disclosure in this matter, reveals numerous inconsistencies and contradictions, which necessarily led to further disclosure demands (such as requested explanations for her capital gains income) and which, again further contributed to the unreasonable prolonging of these proceedings.
[37] Based on the various dates on which Ms. MacKenzie began to seriously complete her financial disclosure obligations, there is no question that her current counsel has been working diligently on her client’s behalf, to meet Ms. MacKenzie’s financial disclosure obligations. By early- to mid-2017, Ms. MacKenzie had provided her Financial and Property Statements, required, although partial income tax returns, bank statements and her credit card statements as well as the ordered Deed of Settlement of the MacKenzie Clan Trust.
[38] What remained outstanding, at that time, were the financial statements for “any trust in which” Ms MacKenzie had an interest, as ordered by Master Champagne on March 4, 2016. Briefly, as explained by Ms. MacKenzie in her affidavit dated March 19, 2019 (volume 5 tab 2 of the continuing record), Ms. MacKenzie’s father was the substantial owner of shares in Laurentide Holdings Limited and had transferred his shares in that company to the MacKenzie Family Trust in 2000. In 2007, Ms. MacKenzie received approximately $1.2 million from her interest in the company, when the company disposed of a significant asset.
[39] In 2009, according to Ms. MacKenzie, the MacKenzie Trust was dissolved and Ms. Mackenzie’s interest, her shareholding, in Laurentide Holdings Limited was transferred to her own trust, the MacKenzie Clan Trust. Ms. MacKenzie’s sister’s interest was transferred to her own trust. According to Ms. MacKenzie the sole purpose of her MacKenzie Clan Trust is to hold the shares of Laurentide Holdings Limited which in turn holds a remaining piece of real estate owned by Mr. MacKenzie prior to his death and bequeathed to Ms. MacKenzie’s sisters and her. There was no value for the property currently held by Laurentide Holdings Limited although there is evidence to suggest that it could be substantial. Counsel for Mr. Marchand, certainly made submissions to that effect. However, to attempt to put any value on that property would be mere speculation and I decline to do so.
[40] It was the evidence of Ms. MacKenzie that in 2010 she received an additional $300,000 which resulted in her sister, Ms. Jocelyn MacKenzie, obtaining a controlling interest in Laurentide Holdings Limited. In 2012 Ms. MacKenzie’s father died and she inherited approximately $60,000.
[41] With respect to the release of the Laurentide Holdings Limited financial statements. Ms Mackenzie took the position that her sister, the majority shareholder of that company, as well as the Vice-president and managing person of the company, would not authorize the release of those documents, despite her requests to do so in order to meet her disclosure obligations.
[42] What Ms. MacKenzie chose not to share with the court is the fact that Ms. MacKenzie served on the Board of Directors of the company at the relevant time. This information was produced by counsel for Mr. Marchand on the last day of the hearing (vol. 6, tab 2E of the continuing record). This fact is hardly insignificant.
[43] The unaudited statements of the company for 2013, 2014 and 2015 had been released to counsel for Ms. MacKenzie in January, 2017 by Ms. Jocelyn MacKenzie with a strict prohibition to revealing them to “in particular, Eugene Marchand or any of his representives”. (Ms. Jocelyn MacKenzie’s letter can be found at volume 5, tab 2 A of the continuing record.)
[44] Counsel for Mr. Marchand was invited to examine the financial statements of Laurentide Holdings Limited in the possession of Ms. MacKenzie’ counsel under the terms set by Ms. Jocelyn MacKenzie. Counsel for Mr. Marchand declined the invitation to put himself in a conflict of interest situation with his client.
[45] Ms. MacKenzie finally and eventually authorized her lawyer to release the financial statements of Laurentide Holdings Limited, contrary to her sister’s declared wishes and instructions. Mr. Marchand’s counsel finally received those statements on about April 3, 2017.
[46] The last outstanding piece of financial disclosure was the financial statements for Ms. MacKenzie’s own trust, the MacKenzie Clan Trust, which still remained outstanding as of November 2, 2018. (See affidavit of Mr. Marchand, of the same date at volume 3, tab 4.)
[47] According to the affidavit of Ms. MacKenzie, dated March 19, 2019 (tab 2 of volume 5 of the continuing record) she hired an accountant to provide these statements. The unaudited financial statements of the MacKenzie Clan Trust for the years 2015, 2016, 2017 and 2018 are filed as exhibit D to the same affidavit. (See also volume 6 of the continuing record, tab 1B.)
[48] As of that time, Ms. MacKenzie’s obligation to provide financial disclosure, which was ordered on March 4, 2016, by Master Champagne, some three years later, was satisfied.
[49] This delay in satisfying her legal obligation for financial disclosure is unreasonable and contrary to the declared purposes of the Family Law Rules which provides for the just and expeditious resolution of family law litigation. Even allowing for some reasonable delay, while Ms. MacKenzie dealt with the difficult challenges to her health that she experienced in 2014 and 2015, the delay in this case is extreme and not justified in any way.
[50] Ms. MacKenzie indicated, in her affidavit material, that she has an issue with the legal representation she received from her previous counsel. Nonetheless, the obligation to disclose was hers and was made clear to her at the hearing before Master Champagne. At a minimum, she ought to have reasonably known and accepted the imperative of expeditious disclosure in 2016, given the costs award made against her by Master Champagne on March 4, 2016. Ms. MacKenzie’s difficulties with her previous representation cannot be used as an excuse to not consider the time and costs Mr. Marchand needed to expend in order to obtain the financial disclosure which had been ordered and to which he was entitled.
Child Support
Imputation of Income
[51] It is the position of Ms. MacKenzie that her obligation to pay child support for Sophie be based on her line 150 income as shown on her income tax returns for the years 2012 to 2018 inclusive and ongoing. Ms. MacKenzie is of the view that Mr. Marchand’s claim to impute an income to her is for the sole purpose of him wanting to share in the wealth of her family and the land owned by Laurentide Holdings Limited. I see no need to address this allegation. The conflict between these parties is a deep one. The focus of this court is, as it should be, the wellbeing of Sophie and the financial contribution to her support, to which she is entitled, in accordance to the respective abilities and means of both her parents, according to the law of child support.
[52] Ms. MacKenzie’s financial disclosure reveals that her line 150 income for the following years are:
2012 $29,836.17 2013 $42,643.00 2014 $57,259.00 2015 $31,698.00 2016 $42,517.00 2017 $27,234.00 2018 $18,625.00
[53] As the evidence discloses these reported line 150 incomes are generally made up of interest, dividends, capital gains and the cashing in of RRSPs, and laterally, part-time employment.
[54] The financial disclosure arising from both the Laurentide Holdings Limited and Ms. MacKenzie’s own trust, the MacKenzie Clan Trust, financial documents indicates that Ms. MacKenzie does not currently receive any income or funds from those sources. Nor has she done so for some time.
[55] KPMG, the accountants for Laurentide Holdings Limited reported that “no dividends were reported to CRA as having been paid in any of the years ended November 30, 2015, 2014 and 2013”. Furthermore, information regarding the 2016 year end was pending. (See volume 5 of the continuing record, tab 2B.)
[56] It was Ms. MacKenzie’s evidence that the last time she received income from Laurentide Holdings Limited was in 2010. There was no evidence addressing the issue of whether Ms. MacKenzie could draw income or funds from her interest in the company.
[57] With respect to the MacKenzie Clan Trust, it was the evidence of Ms. MacKenzie that she has drawn no income from the Trust, whose sole purpose was to hold her shares in Laurentide Holdings Limited. This was confirmed by the financial statements of the Trust. However, what the financial statements for the trust indicate is that the Trust’s sole long-term investment are 6,847,826 Class A Common shares of Laurentide Holdings Limited. The value of those shares is reported to be a minimal or nominal amount.
[58] Ms. MacKenzie’s academic and other course qualifications were filed at volume 6 tab 2 F of the continuing record. Ms. MacKenzie obtained between 1990 and 2001, a University Bachelor of Arts degree and has also completed courses in options licensing, financial planning and securities with The Canadian Securities Institute, together with another course in marketing from George Brown College.
[59] It was the evidence of Ms. MacKenzie that she has earned no significant earned income since the birth of Sophie in 2002. In 2013, she began a dental hygiene course but could not continue because of her illness and her child care responsibilities for her son, Matthew. Her alternate plan was to become a part-time bookkeeper and commenced a course in that field. Because of her illness and cancer treatment she was not able to continue and was not able to work for most of 2015. She had hoped to return to school in 2016 but was not able to do so. She currently works on a part-time basis for a tax preparation company, hoping to eventually secure employment as a bookkeeper.
[60] From the above evidence, it is clear that Ms. MacKenzie, except for her current part-time work, has not been substantially remuneratively employed since the birth of Sophie. On her own evidence she has effectively, taken a number of courses over the years and has lived on the child support she received from Mr. Marchand and on her inheritance for the last 10 years. The evidence shows that Ms. MacKenzie has chosen to support herself by drawing on her substantial inherited assets.
[61] Despite her lack of earned income, Ms. MacKenzie has continued to maintain a lifestyle for herself and her son that necessarily required her to draw on her investment assets in order to prevent an accumulation of serious debt and she has been able to pay down on some of her debt. While there is no question that since Sophie went to live with her father, Ms. MacKenzie has depleted some of her investment assets. However, she has not incurred any substantial debts, while at the same time appearing to maintain what appears to be a consistent lifestyle.
[62] The fact that Ms. MacKenzie’s uses her available investment resources and property to support herself and her son at a level that far exceeds her reported line 150 income is borne out in the three (3) Financial and Property Statements filed in these proceedings.
[63] An examination of those three (3) financial and property statements reveals the following. Ms. MacKenzie’s first Financial and Property Statement is dated March 3, 2016. She was questioned on it by Mr. Marchand’s counsel on July 19, 2016 which apparently led to so much conflict between them. That statement declared that Ms. MacKenzie’s gross annual income from all sources (interest, investment and RRSP) was $35,999.88. She declared total monthly expenses of approximately $12,711.43 (including $102. for Sophie) or $152,537.16 yearly in the same period.
[64] She declared the value of all of the property held by her to be $2,859,954 and a total debt of $551,000, leaving her declared net worth to be approximately $2,308,000.
[65] Furthermore, she declared that her MacKenzie Family Trust held 1 share of Laurentide Holdings Limited with an estimated value of $1,500,000. In addition Ms. Mackenzie attached a proposed budget of $5,131.00 per month or $61,572.00 per year, with no amount allotted for support for Sophie but included an RESP payment for Sophie of approximately $1,224 per year.
[66] Ms. MacKenzie’s second Financial and Property Statement is dated February 15, 2017. It declared her annual income from all sources for 2016 (interest and investments) to be $21,697.92. She declared her monthly expenses to be $6,519.23 or $78,230.76 per year. This amount included the monthly child support for Sophie of $343 per month.
[67] She declared the value of all of the property held by her to be $1,169,688.94 with her debts being less than her previous statement at $518,822 leaving her declared net worth at $650,866.20.
[68] Furthermore, she again declared that her MacKenzie Clan Trust held one Laurentide Holdings Limited share, “owning raw land with an unknown value”. There was no proposed budget. Under this financial and property statement, Ms. MacKenzie appears to have lost approximately $1 million in investment assets with no explanation from her other than she has been depleting her assets to maintain her lifestyle, which she knows she cannot continue to do.
[69] Ms. MacKenzie’s last Financial and Property statement is dated March 19, 2019. Ms. MacKenzie declares her income from all sources to be $20,947.68. The only source of her income is declared to be her employment income and a child tax credit. Despite her continued substantial investment holdings, valued at over $1 million, she has declared no investment, dividend or capital gains income, as in past years. Her total monthly expenses she declares to be $5,745.19 or $68,942.28 per year, inclusive of the monthly child support of $343 she pays for Sophie.
[70] She declared the value of all of her property to be $1,176,374.74 and her outstanding debts to be $550,073.05 with a total net worth of $626,301. Once again Ms. MacKenzie declared her MacKenzie Clan Trust, no shares in Laurentide Holdings Limited are identified and value of the Trust is “unknown” in this statement.
[71] Based on the above financial evidence, which at times, I found to be inconsistent, contradictory, and short on explanations for facts that cry out for further information, some of which I have identified above, coupled with the long delays and obstacles created by Ms. MacKenzie to giving Mr. Marchand the financial disclosure to which he was entitled, I am persuaded that an income, other than her declared line 150 income, ought to be imputed to Ms. MacKenzie for purposes of her child support obligation for Sophie. I am persuaded of this conclusion for the following reasons.
[72] On her own evidence, for the last 10 years at least, Ms. MacKenzie has be utilizing her investment assets and inheritance to fund her expenses and maintaining her lifestyle. There is no question that Sophie was a beneficiary of this when she lived with her mother and half-brother. Section 19(1)(e)(i) of the Child Support Guidelines indicates that a parent who has an obligation for child support is expected to reasonably utilize their property to generate income. While it is generally not considered too wise to deplete finite property for obvious reasons, Ms. MacKenzie has done so regularly and almost as a pattern, in order to support herself and fund her lifestyle.
[73] Since going to live with her father, and despite the fact that her mother has continued to use her investment assets to fund her lifestyle, Sophie has reaped, on a monthly basis, a very small proportion of the total funds and resources which Ms. MacKenzie has made available to herself and her son for purposes of their support. Because Ms. MacKenzie has chosen to use her investment assets in the way she has done so, I see no reason why those resources should not also be accounted for, for child support purposes. It is clearly assets and funds that her mother and brother are using to maintain their lifestyle. I see no logical reason not to impute some of the assets and funds, withdrawn by Ms. MacKenzie from her investment property, apparently on a regular basis, to her income as available to meet her child support obligations. For example, with respect to her last Financial and Property Statement, dated March 19, 2019, given the fact that Ms. Mackenzie continues to have over a million dollars in assets, it is totally unreasonable that she would not attribute some investment income to herself and take the position that one should only include her part-time employment income of approximately $21,000 per year for child support purposes, while she continues to rely on her assets to fund her total yearly expenses of approximately $69,000 per year, as per her last Financial Statement. To the extent that Ms. MacKenzie continues to rely on her substantial assets and investment holding to fund her own lifestyle and expenses, which appear to well exceed her earning capacity, Sophie, also, ought to have the benefit of her mother’s use of those assets for income purposes.
[74] In my view, there is ample jurisprudence to support this conclusion. See in particular, Verhey v. Verhey, 2017 ONSC 2216; Jackson v. Mayerle, 2016 ONSC 72 at para. 715; Kretschmer v. Terrigno, 2012 ABCA 345 at para 13; Reyes v. Rollo, 2001 CarswellOnt 4541 at paras. 60-62; and Schnell v. Schnell, 2001 SKCA 123 at para.33.
[75] With respect to what income ought to be imputed to Ms. MacKenzie for the relevant years, based on my reasons above, I conclude that her declared annual expenses for the years available would be a fair and reasonable amount of income to impute to her for child support purposes. The evidence shows that those declared annual expenses were funded by the use of her investment assets in order to maintain her lifestyle. As a result I impute to Ms. Mackenzie the following incomes for the years:
2014 $152,537 per annum 2015 $152,537 per annum 2016 $78,230.76 per annum 2017 $68,942.00 per annum 2018 and ongoing until further order of the court $68,942.00 per annum
[76] Based on the imputed incomes identified above for the years in question, Ms. MacKenzie is ordered to pay child support for Sophie in accordance with the Child Support Guidelines, commencing December 1, 2014 and ongoing until further order of the court.
[77] I leave it to counsel to do the actual divorce mate calculations, for the relevant years in question and to determine the arrears of child support owed by Ms. MacKenzie to be paid to Mr. Marchand, forthwith. Ms. MacKenzie is, of course, to be given credit for any support payments made by her. It is clear that Ms. MacKenzie is not owed any overpayment of child support. If any issue arises in these calculations, then, I may be spoken to.
[78] Ms. Mackenzie is also ordered to pay her proportionate share of Sophie’s section 7 expenses, effective December 1, 2014, using the above imputed incomes and Mr. Marchand’s declared income to calculate those amounts. The order of Justice Toscano Roccamo does not identify what Sophie’s section 7 expenses are, and presumably since the date of that order these expenses might have changed. I am hopeful the parties, with the help of their counsel, will resolve this issue between them. If an issue arises then I can be spoken to.
[79] Mr. Marchand is obligated to inform Ms. MacKenzie when Sophie is no longer pursuing her education on a full-time basis.
Costs of Custody and Access Motion
[80] The last matter to be dealt with is the costs of the custody and access motion and renewed custody and access motion that resulted in the final consent order dealing with Sophie’s parenting.
[81] Ms. MacKenzie states in her affidavit of February 15, 2017 (para. 2) that “at no time during these proceedings have I opposed the Applicant Father’s request for custody and primary residence of our daughter”. I cannot accept this statement as an accurate reflection of how Ms. MacKenzie has responded to Mr. Marchand’s motion to change. Given Sophie’s age and unwillingness to have contact with her mother after she moved to her father’s residence in December 2014, as well the very real personal challenges concerning her health that Ms. MacKenzie was dealing with at the time, it may have been accepted as being predictable by Ms. MacKenzie that Sophie’ custody and residence should change to that of her father. Nonetheless, on the record and factual background of this case, as I have just described it, it was not at all made clear to Mr. Marchand, nor this court, that Ms. MacKenzie was not opposing Mr. Marchand’s request for a change of custody order for Sophie.
[82] Ms. MacKenzie was subject to the order of Master Champagne to retain Ms. Scholey concerning Sophie’s wishes in visiting with her. This may have held out some hope to her to resume contact with her daughter. Yet she failed to follow up on this and sign the joint retainer. Ms. MacKenzie has provided no evidence to explain this failing on her part. But this too was abandoned by Ms. MacKenzie at the questioning that took place in July of 2016.
[83] While given the opportunity to resolve the questions of custody and access by way of a final consent order in July of 2016, it was again putted to the motion for change hearing.
[84] As a result, Mr. Marchand cannot be faulted for continuing to pursue the motion to change, in order to finalize before the court the questions of custody and access, given the conflict between the parties.
[85] The final custody order came on February 21, 2017, some two years and four months after Mr. Marchand had commenced his motion to change. Albeit, the genuineness of a custody and access dispute between the parties effectively finished in July of 2016, some 9 months after the motion to change had been commenced by Mr. Marchand.
[86] I find it incomprehensible that the parties could not have finalized the custody and access dispute at that time. But, it appears that they could not. Furthermore, they continued to argue about travel issues and appropriate notice for travel with Sophie until my order of February 21, 2017, at which time Ms. MacKenzie succeeded on her request to be given notice of any travel plans Mr. Marchand had for Sophie.
[87] On January 25, 2017, Ms. MacKenzie’s counsel made an offer to settle the issues of custody and access which was given to Mr. Marchand and his counsel. With respect to the issues of custody, access and notification of travel with Sophie is as good as the final order that was given by me on February 21, 2017, but for the question of costs, which was left open, by me, to be argued at a later date.
[88] No comparable offer was made by Mr Marchand. Counsel for Mr. Marchand submitted that his client could not accept Ms MacKenzie’s offer of January 25, 2017, because it provided for no costs. That is not a justification for the unreasonableness of making no offer or failing to counter offer, with a provision for costs.
[89] After considering all of the circumstances regarding the custody and access portion of the motion, I am of the view that at a minimum, it would be unfair to deny Mr Marchand his costs in pursuing the custody and access issues of the motion to change up to the date of Ms. MacKenzie’s declared abandonment of her claim for custody, in July of 2016.
[90] I will leave it to counsel to argue the quantum of costs relating to the custody and access part of the motion at the same time they provide their written submissions on the costs of this motion.
[91] Mr. Marchand shall have two weeks from the date of the release of these reasons to serve and file his written submissions on costs, including any offers to settle. Ms. MacKenzie shall have two weeks from that date to serve and file her written submissions on costs, including any offers to settle. Mr. Marchand shall then have one week from that date to serve and file a reply if he finds it advisable.
M. Linhares de Sousa J.