ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Vito Adorno
Anthony Di Battista, counsel for the Applicant Vito Adorno
Applicant
- and -
Rocchina Sorbo Adorno
Carolyn Kovac, counsel for the Respondent Rocchina Sorbo Adorno
Respondent
HEARD: May 29 and 30, 2019, and June 3, 4, 5, 6 and 7, 2019
REASONS FOR JUDGMENT
PETERSEN J.
Overview
1Mr. Adorno filed an Application for relief under the Divorce Act, R.S.C. 1985, c. 3 and Family Law Act, R.S.O. 1990, c. F.3 on March 13, 2015. Ms. Adorno filed her Answer on April 17, 2015. The two central issues in dispute were custody and access in respect of the parties’ daughter. There were also monetary issues in dispute. The divorce itself was not contested.
2Over the past few years, several temporary interim orders were made regarding access and child support, pursuant to motions brought by the parties. At trial, custody and access remained the central issues in dispute. Mr. Adorno sought joint custody and an equal shared parenting plan, whereas Ms. Adorno sought sole custody and an order that the child’s primary residence be with her, with a parental access schedule for Mr. Adorno that included equal parenting only in the summer and during holidays.
3At trial, there were also monetary issues in dispute, including child support arrears, retroactive and ongoing child support, imputation of income to Mr. Adorno, s.7 expenses, liability for a joint line of credit debt, equalization of net family property, and offset issues involving previous costs orders.
4After seven days of trial, I ruled on some of the issues as follows:
a) I severed the issue of divorce from the remaining issues in the case;
b) I found that Ms. Adorno had withdrawn her claim for retroactive reimbursement of s. 7 expenses related to the child’s pre-school fees;
c) I found that Mr. Adorno had unilaterally and improperly offset a $2,500 award of costs owed to him by Ms. Adorno against $2,787 in retroactive child support that he was ordered to pay for the 2017 year (pursuant to Justice Seppi’s order dated December 19, 2017). Consequently, I ordered Mr. Adorno to pay Ms. Adorno $2,500 in child support arrears within 10 days;
d) I noted that Ms. Adorno had not complied with Justice Seppi’s order to pay costs in the amount of $2,500. I advised the parties that I would take her non-compliance into account when I decide the issue of costs of the trial;
e) I ordered joint custody of the parties’ daughter and made some ancillary rulings about parental decision-making on matters affecting the child;
f) I ordered a shared parenting schedule with equal week-about access throughout the year. I made numerous ancillary orders with respect to access on holidays, birthdays, and other special events;
g) I ordered Mr. Adorno to maintain the child as a dependent on his health and dental benefits plans so long as he has benefits coverage available to him through either his union or his employer; and
h) I provided the parties with a written Endorsement containing my orders on June 7, 2019. (The summary above is not a complete reiteration of all the orders.)
5Detailed reasons for my orders were delivered orally at the end of the trial.
6I reserved my decision on all remaining monetary issues in the case. I noted that Justice Seppi’s temporary order dated December 19, 2017, with respect to ongoing child support, remained in effect until such time as I issued my final decision. I reminded Mr. Adorno of his obligation to continue to pay $608 per month in child support unless and until I ordered otherwise.
7These Reasons for Judgment deal with the following outstanding issues:
a) equalization of net family property;
b) child support for 2015 and 2016, with credit for amounts paid;
c) imputation of income to Mr. Adorno in 2018 and 2019;
d) adjustment for child support paid in 2018 and 2019 to date;
e) amount of monthly child support going forward, taking into account the new shared parenting arrangement; and
f) apportionment of the parties’ respective contributions to s. 7 expenses going forward.
Equalization of Net Family Properties
8When Mr. Adorno filed his Application (Form 8), he indicated (by checking box 20 on the Form) that he was making a claim for equalization of net family properties. In the section of Form 8 that requires an Applicant to provide particulars of the orders that they are seeking, he did not specify any amount as an equalization payment. Instead, he requested an order that the parties pay their one-half share of their joint line of credit with TD Canada Trust in the amount of $20,000.
9In her Answer (Form 10), Ms. Adorno indicated that she did not agree with Mr. Adorno’s equalization claim. She asked that the equalization claim be dismissed with costs. In the section of Form 10 where Ms. Adorno outlined her own claims, she did not indicate that she was making an equalization claim (i.e. she did not check box 20 on the Form). In the section of Form 10 that requires the Respondent to provide particulars of the orders that they are seeking, she did not specify any amount as an equalization entitlement and did not request an order for an equalization payment.
10Ms. Adorno is now requesting an order that Mr. Adorno make an equalization payment to her in the amount of $1,520. Mr. Adorno disputes her calculation of their net family properties and takes the position that no equalization payment is owed by either of them. Moreover, he objects to her right to pursue an equalization payment on the basis that she did not request it in her pleadings.
Preliminary Issue About Deficient Pleadings
11The primary objective of the Family Law Rules, O. Reg. 114/99, is to enable the Court to deal with cases justly, which includes ensuring that the procedure is fair to all parties: Rule 2(2) and 2(3)(a). The Court is required to apply the Rules in a manner that promotes this objective: Rule 2(4).
12In this case, there is no unfairness or injustice in permitting Ms. Adorno to pursue an equalization claim despite the absence of a specific pleading requesting an equalization payment. The issue of equalization was raised by Mr. Adorno in his Application. It was explicitly disputed by Ms. Adorno in her Answer. Throughout this proceeding, the parties have been aware that equalization was a contested issue. Both parties served and filed Net Family Property Statements, in advance of the trial, to support their respective positions on the issue. Mr. Adorno was not blind-sided by an equalization claim raised for the first time at trial.
13Furthermore, if Ms. Adorno is, in fact, entitled to an equalization payment, it would be unfair to preclude her equalization claim based on deficient pleadings when it is clear that both parties were aware from the outset that equalization was a live issue in this proceeding.
14I therefore conclude that Ms. Adorno is entitled to pursue her equalization claim.
Formula for Equalization Calculation
15The first step in an equalization calculation is to determine the parties’ respective net family properties.
16“Net family property” refers to the value of assets that each spouse owned on the valuation date (subject to statutory exceptions) after deducting the spouse’s liabilities on the valuation date and the net value of the property that they each owned (other than the matrimonial home) on the date of marriage: Family Law Act, s. 4(1). Pursuant to s. 5(1) of the Family Law Act, the party whose net family property is the lesser of the two is entitled to a payment of one-half of the difference.
17The valuation date in this case is January 1, 2015, the date on which the parties separated with no reasonable prospect of reconciliation: Family Law Act, s. 4(1).
Joint Line of Credit
18The parties’ equalization dispute arises primarily from the difference in treatment of their joint line of credit in their respective net family property calculations. The parties opened the line of credit jointly with Mr. Adorno’s father on April 5, 2011, seven months before they got married. They used the line of credit primarily to pay for large wedding expenses. The record shows that the line of credit was also used to pay for some smaller daily expenses, such as gas. There is no evidence that Mr. Adorno’s father ever withdrew any money from the line of credit or ever used it to pay his own personal expenses.
19By their date of marriage on December 3, 2011, there was a $20,000 balance owing on the line of credit. Two days later, the parties deposited a total of $25,980 to the account, then immediately withdrew $14,360 to pay the banquet hall where the wedding was held. The funds deposited on December 5, 2011 constituted cash gifts received from guests who attended the wedding, as well as cash gifts from Ms. Adorno’s bridal shower and Mr. Adorno’s stag. Monthly bank statements show that during the period of the parties’ cohabitation after their wedding, the line of credit was routinely used to pay for various living expenses, including gas (e.g. Petro-Canada, Esso), food (e.g. Tim Horton’s, KFC, Taco Bell), retail purchases (e.g. Walmart, Giant Tiger, Mexx, Tip Top Tailors, Aldo, Zero 20 Bambini, Canadian Tire) and insurance. There is no evidence that Mr. Adorno’s father incurred any of these expenses.
20Ms. Adorno testified that many of the purchases were made by Mr. Adorno alone. She said that she did not have a bank card to access the account independently. Mr. Adorno acknowledged that he personally incurred some of the expenses. He testified that some expenses were purchases for their child and some were for household items. During his cross-examination, he denied the suggestion that all the expenses were his alone. He testified that the parties often shopped and ate out together. During her cross-examination, Ms. Adorno acknowledged that joint expenses were incurred. On January 1, 2015, the date of their separation, the balance owing on the line of credit was $20,202. Mr. Adorno testified that the current balance owing (at the date of trial) is still approximately $20,000. He said he has been making the necessary minimum payments to service the debt since the parties separated. He stated that he has occasionally received financial assistance from his father to make payments but has received no assistance from Ms. Adorno. This evidence was neither challenged on cross-examination nor contradicted by Ms. Adorno.
21Ms. Adorno made it clear that she has no intention of paying any share of the balance owing on the joint line of credit. She gave evidence about joint expenses that she paid from her personal CIBC bank account (both before and after the wedding). She explained that she paid these expenses because no funds were available on the line of credit. She argues that she has already contributed more than her share of the balance owing on the line of credit. This argument is disputed by Mr. Adorno.
22In calculating the parties’ net family properties, I have no jurisdiction under the Family Law Act to apportion liability for their joint debt on the line of credit: Shelly v. Shelly, [2004] O.J. No. 743 (Ont. S. C.), at para. 15. I therefore decline to consider Mr. Adorno’s request for an order that the parties pay their respective one-half shares of the $20,000 balance. I make no finding and no comment on Ms. Adorno’s claim that she has already paid her share.
Date of Marriage – Assets and Debts
23Neither party owned a home on the date of marriage. They jointly possessed $25,980 in cash from wedding and engagement gifts. Half of this amount ($12,990) must therefore be included in their respective assets on the date of marriage. They owed $20,000 on their joint line of credit, which was the result of large wedding expenditures. Although Mr. Adorno’s father is a joint owner of the account, who presumably could have been pursued by the creditor bank if payments on the debt were not made, there is no evidence that any of the debt as of the date of marriage was attributable to his personal expenses. The parties incurred the debt together for their wedding and one half of the balance owing ($10,000) should therefore be attributed to each of them on the date of marriage. The fact that they used their joint funds (i.e. $25,980 in cash gifts from friends and family) to pay down the line of credit two days after the wedding is evidence of their shared intention to be jointly responsible for the debt.
24Mr. Adorno claims that he had no other debts or assets on the date of marriage. This claim is not disputed by Ms. Adorno.
25Ms. Adorno claims that she owned general household items with a value totalling $5,000 on the date of marriage. Mr. Adorno disputes this and claims that her belongings on the date of marriage were only worth $3,000. Ms. Adorno bears the onus of proving any deductions claimed in her net family property calculation: s. 4(3) of the Family Law Act. She called no evidence that would assist me in determining the value of her belongings on the date of marriage. I will therefore use the lower value of $3,000.
26Consequently, I conclude that the net value of Mr. Adorno’s property on the date of marriage was $2,990 ($12,990 - $10,000) and the net value of Ms. Adorno’s property on the date of marriage was $5,990 ($12,990 + $3,000 - $10,000).
Valuation Date – Assets and Debts
27Neither party owned the matrimonial home (nor any other real property) on the valuation date. Mr. Adorno had a pension valued at $13,040. He also had savings of $1,000 in his personal bank account. He owned a 2015 Dodge Caravan, but no evidence was led regarding the value of that car. I cannot attribute an arbitrary value to the vehicle without evidence, so it will not be included in the calculation of Mr. Adorno’s net family property. I conclude that his assets on the valuation date totalled $14,040 ($13,040 + $1,000).
28On the valuation date, Ms. Adorno owned a ring valued at $3,000 and a 2007 Dodge Caliber valued at $3,000. She also had $691 in her personal bank account. Her assets on the valuation date totalled $6,691 ($3,000 + $3,000 + $691).
29As noted above, the balance owing on the joint line of credit on the valuation date was $20,202. In my view, this debt should be attributed to the parties equally ($10,101 each) for the purpose of calculating their net family properties. I make this finding because most of the major purchases and many of the smaller purchases were for joint expenses, none were incurred by Mr. Adorno’s father, and the parties’ practice since opening the account was to treat it as a joint debt.
30On the date of separation, Ms. Adorno had additional debts, namely an outstanding 407 ETR account and credit card bills totalling $3,800. The total of her debts on the valuation date was therefore $13,901 ($10,101 + $3,800).
31On the date of separation, Mr. Adorno had a loan in the amount of $24,000. This debt represented financing for the purchase of his 2015 vehicle. It cannot be included in the calculation of his net family property unless the value of the vehicle is also included. As noted above, Mr. Adorno adduced no evidence of the car’s value, so its value was not included in the calculation of his assets on the valuation date. I therefore deny his request for a deduction of the $24,000 debt.
Net Family Properties
32Based on the factual findings made above, I calculate the parties’ net family properties as follows:
Mr. Adorno Ms. Adorno
Assets on Valuation Date: $14,040 $ 6,691
Debts on Valuation Date: $10,101 $13,901
Net Property on Date of Marriage: $ 2,990 $ 5,990
Total: $ 949 ($13,200)
33When a spouse’s net family property equals a sum less than zero, it is deemed to be zero pursuant to s. 4(5) of the Family Law Act.
Equalization Calculation
34Mr. Adorno has net family property of $949. Ms. Adorno has net family property of zero. Mr. Adorno therefore owes Ms. Adorno an equalization payment of $474.50.
Child Support
Child Support for 2015
35The parties separated on January 1, 2015. Throughout the 2015 calendar year, their child resided primarily with Ms. Adorno. Mr. Adorno was therefore obligated to pay child support in 2015, commensurate with his income that year.
36In accordance with s. 16 of the Federal Child Support Guidelines (“FCS Guidelines”), a parent’s annual income for child support purposes is determined using the sources of income set out under the heading “Total Income” in that parent’s T1 General Tax Form (at line 150), unless the court imputes additional income. The parent’s line 150 income must be adjusted in accordance with Schedule III of the FCS Guidelines, which stipulates that union dues are to be deducted: s. 1(g).
37Mr. Adorno’s income tax return for 2015 shows at line 150 that he declared a total income of $36,481. The record establishes that this income was comprised of employment wages, short term disability benefits received from his employer, and employment insurance benefits. He paid $236 in union dues in 2015.
38I therefore conclude that Mr. Adorno’s annual income in 2015 was $36,245 ($36,481 - $236). At trial, Ms. Adorno did not request that additional income be imputed to Mr. Adorno for the 2015 year.
39According to the FCS Guidelines Table that was in effect in 2015, the amount of child support payable for one child based on an income of $36,245 was $317 per month. Mr. Adorno therefore ought to have paid a total of $3,804 in child support in 2015 ($317/month x 12 months).
40The parties agree that Mr. Adorno actually paid a total of $3,500 in child support in 2015. Mr. Adorno therefore owes Ms. Adorno child support in the amount of $304 for the year 2015 ($3,804 - $3,500).
Child Support for 2016
41Although there were some changes to Mr. Adorno’s access schedule, the parties’ child continued to reside principally with Ms. Adorno throughout 2016, except during the month of August and over Thanksgiving and Christmas breaks when the parties had equal parenting time. Mr. Adorno was therefore obligated to pay child support in 2016.
42Mr. Adorno’s income tax return for 2016 shows at line 150 that he declared a total income of $43,082. The record shows that this income was comprised of employment wages, RRSP income, and short-term disability benefits received from his employer. He paid $297 in union dues. I conclude that his annual income in 2016 was $42,785 ($43,082 - $297).
43Ms. Adorno has not requested that any additional income be imputed to him for the 2016 year.
44According to the FCS Guidelines Table that was in effect 2016, the amount of child support payable for one child based on an income of $42,785 was $385 per month. Mr. Adorno therefore ought to have paid a total of $4,620 in child support in 2016 ($385/month x 12 months).
45The record establishes that Mr. Adorno paid only $2,037 in child support in 2016. He therefore owes child support to Ms. Adorno in the amount of $2,583 for the 2016 year ($4,620 - $2,037).
Child Support for 2017
46The issue of child support for 2017 was decided by Justice Seppi in her temporary order dated December 19, 2017, subject to any adjustment made at trial. In her Endorsement, Justice Seppi noted that Mr. Adorno had a new employer and that his T4 slip dated November 4, 2017 showed that he had earned about $55,000 in the first 10 months of that year. She refused to impute to him an income of $81,660 as requested by Ms. Adorno, who argued that Mr. Adorno was only working part time hours and was intentionally under-employed. Justice Seppi noted that there was conflicting evidence about whether Mr. Adorno was working to capacity. She held that the issue should be determined at trial rather than based on untested affidavit evidence on a motion. She ordered Mr. Adorno to pay $608/month in child support based on a projected (pro-rated) income of $66,600 for 2017, subject to potential adjustment at trial.
47After giving Mr. Adorno credit for child support payments that he had already made in 2017, Justice Seppi ordered him to pay $2,787 to make up the difference between what he had actually paid and what the FCS Guidelines required based on his projected 2017 income of $66,600, subject to adjustment at trial.
48Mr. Adorno’s 2017 Notice of Assessment shows that he declared a total income (at line 150 of his tax return) of $64,722 that year.
49Neither party requested any adjustment to the amount of child supported ordered by Justice Seppi for 2017. It is therefore unnecessary for me to deal with the issue of child support that year (apart from the order I already made at trial requiring Mr. Adorno to comply with Justice Seppi’s order within 10 days).
Imputation of Income to Mr. Adorno in 2018
50Mr. Adorno’s 2018 tax return shows at line 150 that he declared a total income of $59,020 that year. The record establishes that his income was comprised of employment wages, RRSP income, and disability benefits received from his employer. He paid $628 in union dues.
51Ms. Adorno asks the court to impute additional income to Mr. Adorno for the 2018 year, beyond the amount declared in his tax return. She alleges that he had undeclared cash income. She further alleges that he could have worked more hours than he did. She submits that he took sick leave from work and received disability benefits (at reduced pay) when he was well enough to work and earn his regular wage. She also argues that even when he was not on sick leave, he was not consistently working 40 hours per week, even though full-time work was available to him. She asks the court to impute to him an annual income of $66,600.
52Mr. Adorno denies all of Ms. Adorno’s allegations and submits that he has never earned $66,600 in his entire career.
53Section 19 of the FCS Guidelines permits the court to impute such amount of income as it considers appropriate in circumstances where a payor parent conceals income or is intentionally under-employed. Any amount imputed by the Court must, however, be grounded in the evidence: Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711 (C.A.), at para. 44.
54There is insufficient evidence to establish, on a balance of probabilities, that Mr. Adorno had any undisclosed cash income in 2018. Mr. Adorno works as an electrician. He is a member of Local 353 of the International Brotherhood of Electrical Workers (“IBEW”) and obtains job assignments through his union hall. Ms. Adorno testified that he used to do some electrical “side jobs” for cash when they were living together, such as installing pot lights in people’s homes. She provided no particulars of the frequency of these alleged side jobs or of the amount of cash supposedly earned. Mr. Adorno denies ever earning any cash income outside of the jobs obtained through his union hall.
55Even if I were to accept that Mr. Adorno did some work for cash during the early period of the parties’ marriage (an issue upon which I make no finding), there is no evidence whatsoever that he was doing any such side jobs in 2018. Furthermore, the evidence suggests that he has been unable to work regular full-time hours for the past three years due to health concerns. The record establishes that he collected short-term disability benefits for several weeks in each of 2015, 2016, 2018, and 2019. I find that it is therefore unlikely that he has been working extra hours on the side.
56With respect to the allegation that Mr. Adorno is choosing not to work to his full capacity, I note that a finding of intentional under-employment does not require proof of bad faith or deliberate evasion of child support obligations: Lavie v. Lavie, 2018 ONCA 10, at para. 26. A payor parent is deemed to be intentionally under-employed if they choose to earn less than they are capable of earning, having regard to all the relevant circumstances: Drygala, at paras. 29-36. The relevant circumstances include the person’s age, education, training, experience, skills, and past earnings history: Drygala, at para. 45; Lawson v. Lawson (2006), 2006 CanLII 26573 (ON CA), 81 O.R. (3d) 321 (C.A.), at para. 36.
57The FCS Guidelines recognize that a parent’s earning capacity may be negatively affected by health concerns. Subsection 19(1)(a) of the FCS Guidelines stipulates that income cannot be imputed if a parent’s under-employment is required by their reasonable health needs.
58There is evidence in the record regarding Mr. Adorno’s education, training, experience, earnings history, and health-related concerns. He is an electrician by trade. He began apprenticing in 1999 and obtained his licence in 2009. Although he regularly obtains jobs through his IBEW union hall, some of the assignments are short term and there are gaps between jobs when he is unemployed. The record establishes that he has worked for at least six different employers since 2013 and has consistently earned a wage of approximately $38-$39/hour. He has also occasionally received employment insurance benefits between jobs
59If Mr. Adorno worked 40 hours/week for 52 weeks at an hourly wage of $38-$39, he could expect to earn between $79,000 and $81,000 annually. However, Mr. Adorno’s actual earnings history since he obtained his licence is as follows:
2009 - $26,668
2010 - $49,154
2011 - $37,127
2012 - $43,102
2013 - $60,657
2014 - $64,115
2015 - $36,481
2016 - $43,082
2017 - $64,722
2018 - $59,019
60Mr. Adorno testified that hours of work are not guaranteed when he obtains a full-time job through his union hall. He explained that job sites shut down, inclement weather causes interruptions in construction projects, and other unanticipated delays occur such that projects are simply not ready to start as originally planned. He said his ability to work 40 hours/week is therefore dictated by industry conditions.
61Mr. Adorno’s testimony on this issue is corroborated by documents in the record, including a memo to all employees of Tam Electric Ltd. (one of his former employers) indicating that new construction dates were being delayed by a drop in new home sales. The record also includes a letter dated November 15, 2017 from his then employer, D.A.R.T. Electric Ltd. It confirms that Mr. Adorno was a full-time employee and states, “we work a 40 hour week unless there is a shortage of work, then we would put our men on a 3-4 day week, and rotate to try to keep everyone working” rather than lay someone off. His paystubs from D.A.R.T. in the early part of 2017 show that his hours of work fluctuated between 29/week and 38.5/week over a three-month period.
62Based on the totality of the evidence, I accept Mr. Adorno’s explanation for why he does not regularly work 40 hours/week, even when he is healthy and employed full-time. The construction industry dictates his hours of work. He is not choosing to work less than full-time hours. In my view, it would not be appropriate in the circumstances to impute a greater income to him on this basis.
63I must also consider Ms. Adorno’s argument that income should be imputed to Mr. Adorno because he took sick leave without justification and thereby sabotaged his earning potential in 2018. The documentary record establishes that Mr. Adorno commenced a short-term disability (“STD”) leave on September 8, 2018 and received a weekly benefit of $700 (based on 75% of his weekly salary to a maximum of $700). He remained on approved STD leave from work for the duration of 2018.
64Mr. Adorno testified that he suffered a disc herniation in 2010 and has had back issues since then. He stated that his back pain has caused him to take medical leaves from work. The documentary record proves that he was on a prior approved STD leave in late 2015 and early 2016, though there is no evidence of the underlying cause for this leave. Ms. Adorno notes that his first prolonged medical absence from work (with concurrent drop in income) coincided with the year that the parties separated (2015).
65The timing of Mr. Adorno’s sudden drop in income understandably fuels Ms. Adorno’s suspicion that he is malingering. However, for the reasons that follow, I find that his 2018 medical leave does not constitute intentional under-employment.
66First, Mr. Adorno submitted evidence of a text message between the parties in December 2014, in which he complained to her about back pain. This was prior to their separation. This evidence suggests that he did not fabricate a claim of back pain after the parties separated in order to take leave from work and intentionally diminish his income.
67Secondly, Mr. Adorno qualified for STD benefits during both of his medical leaves. The record includes letters from Great West Life, the insurer that provides disability benefits to members of IBEW Local 353 under a group plan purchased by the union. The first letter is dated November 3, 2015. It confirms that Mr. Adorno was approved for STD benefits (equivalent to 75 percent of his regular wage) based on a review of the medical information that he had submitted to the insurer. The letter states that his benefits will commence effective October 28, 2015, after the expiry of a one-week waiting period. It advises Mr. Adorno that he will remain eligible for STD benefits (for up to 26 weeks) so long as he is wholly and continuously unable to perform the duties of his regular work and continuously under treatment from a physician. It further advises that Great West Life will be monitoring his condition and occasionally asking for information from his doctors.
68The precise duration of Mr. Adorno’s medical leave in 2015 is unclear, but the record establishes that he remained off work and continued to collect STD benefits for part of 2016.
69The second letter from Great West Life is dated September 25, 2018. It similarly confirms that Mr. Adorno is eligible to receive STD benefits for up to 26 weeks (and long-term disability (LTD) benefits thereafter for up to 24 months) provided that he is wholly and continuously unable to perform the duties of his regular work and continuously under treatment from a physician. The letter stipulates that his condition will be monitored by Great West Life and that he will be required to provide information from his doctors on a periodic basis to substantiate his ongoing disability.
70I infer from the fact that Mr. Adorno qualified for STD benefits that his absence from work was due to bona fide health issues that impeded his ability to perform his duties. He was required to submit medical documentation to Great West Life in order to substantiate his disability and have his STD benefits claim approved by the insurer. In these circumstances, I am persuaded on a balance of probabilities that his leave from work and reduced income in 2018 was required by his reasonable health needs. Therefore, income ought not to be imputed to him on the basis of intentional under-employment.
Child Support in 2018
71In 2018, the parties’ child continued to reside principally with Ms. Adorno, except during the summer months and other school breaks when the parties shared parenting time equally. Mr. Adorno was therefore obligated to pay child support in 2018.
72Mr. Adorno’s annual income in 2018 was $58,392 ($59,020 from line 150 - $628 union dues). According to the FCS Guidelines, the amount of child support payable for one child based on an income of $58,392 was $540 per month. Mr. Adorno therefore ought to have paid a total of $6,480 in child support in 2018 ($540/month x 12 months).
73Mr. Adorno actually paid $608/month in child support throughout 2018, pursuant to Justice Seppi’s temporary order dated December 17, 2017. He asks for a retroactive reduction of the amount of support owing for 2018 based on his actual income that year.
74Mr. Adorno paid a total of $7,296 for child support in 2018. He therefore overpaid by $816. He is entitled to reimbursement of that amount by Ms. Adorno.
Imputation of Income to Mr. Adorno in 2019
75Mr. Adorno paid $608/month in child support from January to June 2019 inclusive, pursuant to Justice Seppi’s temporary order dated December 17, 2017. That order was based on a projected income of $66,600. Mr. Adorno is seeking a retroactive adjustment (reduction) in his monthly child support payment based on his actual income in 2019.
76There is little evidence before me regarding Mr. Adorno’s 2019 income to date. The documentary record shows that he was receiving $700/month in STD benefits up until February 20, 2019. He testified that he subsequently qualified for LTD benefits and remained off work continuously until the trial in June 2019. He claimed not to know the exact amount of his weekly LTD benefits. He stated that the LTD benefits are based on 75 percent of his regular wage but are capped at a certain amount. He could not recall the cap. He estimated that he was receiving about $2,800/month from Great West Life. Based on that estimate, if he remained on LTD leave throughout the year, his projected (pro-rated) annual income for 2019 would be $33,600. However, he testified that he intended to return to work at some point in 2019.
77Mr. Adorno had an obligation to make full income disclosure, but he produced no documentation regarding his LTD benefits. During his cross-examination, he was asked why he did not disclose his LTD application. He responded that he was not required to make a separate application for LTD benefits. He asserted that he was simply “rolled over” into the LTD plan after 26 weeks of STD leave. He submitted no documentary evidence to corroborate that assertion. The September 25, 2018 letter from Great West Life states that, if he remained disabled and eligible for continued disability benefits under the LTD plan, “a further letter will be sent explaining the differences in the timing and calculation of the LTD benefit payable.” He adduced no evidence of additional correspondence from Great West Life. Moreover, he submitted only vague information and no documentation regarding the amount of LTD benefits that he is receiving. Due to this lack of disclosure and the deficiency in his evidence, I am unable to ascertain his actual income to date in 2019. I will therefore calculate his child support obligations in 2019 based on an imputed income of $58,392, which is what he earned in 2018. This is his most recent income based on the available evidence.
Child Support in First Six Months of 2019
78According to the FCS Guidelines, the Table amount of monthly child support for one child, based on an income of $58,392 is $540/month. Mr. Adorno paid $608/month during the first sixth months of this year ($3,648). He ought to have paid $3,240 ($540 x 6 months). He therefore overpaid by $408. He is entitled to reimbursement of that amount.
Child Support Effective July 1, 2019
79Mr. Adorno is currently paying $608/month in child support pursuant to Justice Seppi’s temporary order. This amount was calculated (by Justice Seppi) based on a projected income of $66,600 and on the assumption that the parties’ daughter would continue to reside principally with Ms. Adorno. Effective July 1, 2019, I ordered an equal shared parenting arrangement. The child now lives half time with her mother and half time with her father. I must therefore consider and apply the factors set out in s. 9 of the FCS Guidelines in determining the amount of Mr. Adorno’s ongoing child support payments.
80Section 9 of the FCS Guidelines stipulates that when a parent has physical custody of a child for not less than 40 percent of the time over the course of a year, the amount of child support must be determined by taking into account the Table amounts set out for each of the parents, the increased costs of a shared custody arrangement, and the conditions, means, needs and other circumstances of each parent and of any child for whom support is sought. The Supreme Court of Canada in Contino v. Leonelli-Contino, 2005 SCC 63, at para. 27, has emphasized that these three criteria are conjunctive and that none should prevail:
Consideration should be given to the overall situation of shared custody and the costs related to the arrangement while paying attention to the needs, resources and situation of parents and any child. This will allow sufficient flexibility to ensure that the economic reality and particular circumstances of each family are properly accounted for. It is meant to ensure a fair level of child support.
81Mr. Adorno argues that a straight set-off should be applied, such that Mr. Adorno’s child support payment would be calculated by determining the Table amount for each of the parents as though each was seeking child support from the other, with the amount payable being the difference between the two amounts.
82A straight set-off serves only as a starting point in the exercise of judicial discretion under s. 9 of the FCS Guidelines: Contino, at paras. 41, 49. It has no presumptive value: Contino, at para. 49. It is a relevant consideration that reflects the underlying principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to do so: Divorce Act, s. 26.1(2). However, full consideration must also be given to the other two factors set out in ss. 9(b) and (c) of the FCS Guidelines. The fixed and variable costs of each spouse must be measured to take into account increased costs attributable to joint custody, and adjustments must be made accordingly. Further adjustments may be needed to ensure that the final outcome is fair in light of the conditions, means, needs and other circumstances of each spouse and child for whom support is sought: Contino, at para. 49.
83According to the Supreme Court of Canada, the “court retains the discretion to modify the set-off amount where, considering the financial realities of the parents, it would lead to significant variation in the standard of living experienced by the children as they move from one household to another”: Contino, at para. 51. One of the objectives of the FCS Guidelines is to avoid, to the extent possible, great disparities between households. The Court must examine the standard of living of the child in each household and the ability of each parent to absorb the costs required to maintain the appropriate standard of living in the circumstances: Contino, at para. 68. Section 9(c) of the FCS Guidelines therefore vests the Court with a “broad discretion for conducting an analysis of the resources and needs of both the parents” and the children: Contino, at para. 68.
84Ms. Adorno argues that a straight set-off of the Table amounts would result in dramatically disparate standards of living between the parties’ two households and would ultimately disadvantage their daughter. Mr. Adorno submits that the parties currently enjoy roughly the same standard of living and would be able to maintain their current households if a set-off were ordered by the Court.
85The evidence in the record shows that Ms. Adorno’s education and marketable skills are limited. Her earnings history has been modest. The documentary record establishes that she earned the following annual income amounts over the past eight years:
2011 - $20,023
2012 - $12,783
2013 - $20,378
2014 - $23,111
2015 - $15,440
2016 - $ 1,211
2017 - $ 1,106
2018 - $11,878
86Ms. Adorno is currently employed as a full-time cook at Rainbow Academy, a learning and child care centre. She is earning $15/hour, plus a $2/hour wage enhancement provided by a government grant. The wage enhancement is contingent on ongoing discretionary government funding. She typically works at least 27.5 hours/week, sometimes more. There is no suggestion that she is intentionally under-employed.
87Ms. Adorno testified that she expects to earn between $24,000 and $26,000 in 2019. This testimony is consistent with the documentary record. The FCS Guidelines Table amount of child support for one child based on an annual income of $25,000 is $199/month. A set-off of this amount against the Table amount of $540/month (based on Mr. Adorno’s imputed 2019 income) would result in a child support payment by Mr. Adorno of $341/month.
88Mr. Adorno will incur some additional costs as a result of caring for their daughter 50 percent of the time year-round, such as increased grocery bills and other daily living expenses. However, his overall household expenses will not significantly increase. The parties have been sharing physical custody of their daughter equally on a week-about schedule during summers for the past few years. Mr. Adorno has also exercised regular overnight access. Consequently, he has been required to maintain a bedroom, clothes, and toys in his home for their daughter to enjoy when she is residing with him. Similarly, Ms. Adorno’s overall household expenses will not decrease significantly as a result of their daughter spending 50 percent of her time at Mr. Adorno’s house. Ms. Adorno will still be required to maintain a bedroom, clothes, toys, etc. for when their daughter is in her care.
89Although Mr. Adorno has a significantly higher income than Ms. Adorno, they have roughly the same standard of living. They both reside in houses in the same area of Bolton; Mr. Adorno moved closer to Ms. Adorno to facilitate access to their daughter.
90The record shows that Mr. Adorno’s living expenses are higher than Ms. Adorno’s expenses. He cohabits with his common law spouse and their newborn child in a home that they rent for $985/month, plus utilities. Their utility bills, including water, heat, hydro, cable tv, and internet amount to approximately $600/month. He has additional expenses related to his cell phone, substantial car loan payments, and monthly debt payments for the parties’ joint line of credit. Naturally, he also has daily living expenses, such as food and clothing. According to the budget submitted as part of his Financial Statement dated April 2, 2019, his monthly expenses amount to a total of $6,224. These claimed expenses were not seriously contested at trial.
91Mr. Adorno’s spouse works full-time in Human Resources for a small company. She occasionally supplements her income as a hairstylist in her mother’s salon. She testified that she expects to earn approximately $50,000 in 2019. She is therefore able to contribute to their joint living expenses, notwithstanding that she has a teenage daughter from a previous relationship who she supports. Mr. Adorno indicated on his Financial Statement that his spouse contributes about $1,500 monthly toward their household bills.
92Ms. Adorno lives with family members rent-free. She listed no rent, utilities or other housing expenses on her Financial Statement dated May 1, 2019. Thus, although her income is limited, her cost of living is considerably lower than that of Mr. Adorno because of the generous family support that she enjoys. She has expenses related to her vehicle (gas, oil, insurance) and cell phone, as well as daily living expenses (clothing, food, etc.), but she has budgeted less than $1,400/month for all these costs.
93In light of their personal circumstances and resources, I conclude that both parties have the means to contribute to their daughter’s needs. There is no evidence that the straight set-off proposed by Mr. Adorno would result in a disparity in the parties’ standards of living. Ms. Adorno was able to maintain her current household with the benefit of family support throughout 2016 and 2017, when she had virtually no income other than the child support she received from Mr. Adorno and child tax benefits. Her increased income in 2019 will compensate for the reduction in Mr. Adorno’s monthly child support payment. There is no evidence before me of the potential impact on her tax benefits. There is no evidence that her ability to maintain her current household will be jeopardized. The parties’ daughter will continue to enjoy an equivalent standard of living in both of her parents’ homes.
94I have concluded that a payment of $341/month in child support ($199 set off against $540) is fair in the circumstances and meets the objectives of the FCS Guidelines. This amount is reviewable annually on July 1st of each year and shall be adjusted in accordance with the Table amount of child support owing by each parent based on their income the previous year. The parties shall exchange their completed tax returns and Notices of Assessment (or Reassessment) by June 1st of each year to facilitate this review.
95Mr. Adorno overpaid child support in July, August and September of 2019. He paid $608/month instead of $341/month. He is therefore entitled to reimbursement in the amount of $801 for overpayment of child support.
SET-OFF OF CHILD SUPPORT PAYMENTS
96As set out above, Mr. Adorno owes Ms. Adorno child support in the amount of $304 for 2015 and $2,583 for 2016. He overpaid child support in the amount of $816 in 2018. He overpaid a total of $1,209 in child support ($408 + $801) to date in 2019. He therefore owes Ms. Adorno a total of $862 to bring his child support obligation up to date. No arrears will be owing once that amount is paid (assuming that he complied with my order at trial to pay $2,500 in child support for 2017).
Section 7 Expenses
97Neither party requests retroactive reimbursement of s. 7 expenses. There are no arrears in s.7 expenses payable by either party prior to the date of this judgment.
98Mr. Adorno is not seeking a contribution from Ms. Adorno for ongoing costs associated with their daughter’s participation in the YMCA before-school and after-school care program on the days that she resides with him. Mr. Adorno will bear those costs alone.
99Ms. Adorno requests that Mr. Adorno be ordered to contribute to their daughter’s special and extraordinary expenses proportionate to the parties’ incomes, pursuant to s. 7(2) of the FCS Guidelines, including extra-curricular activities. Mr. Adorno is willing to contribute pro rata to these expenses, provided that the parties agree to extra-curricular activities beforehand.
100Based on my findings above, Mr. Adorno’s imputed income for 2019 is $58,392. Ms. Adorno’s projected income for 2019 is $25,000. Mr. Adorno will therefore be responsible to pay 70 percent of the s. 7 expenses, with extra-curricular activities agreed upon by the parties in advance. Ms. Adorno will be responsible to pay 30 percent of these expenses. These percentages will be adjusted in proportion to the parties’ respective incomes on July 1st of each year.
ORDERS
101For the reasons set out above, I make the following orders:
a) Mr. Adorno shall pay Ms. Adorno an equalization payment in the amount of $474.50 within 30 days of the date of this judgment;
b) Mr. Adorno shall pay Ms. Adorno an amount of $862 in child support for the years 2015, 2016, 2018 and 2019 to date, within 30 days of the date of this judgment;
c) Commencing October 1, 2019, Mr. Adorno shall pay Ms. Adorno $341/month in child support, payable on the first day of every month. This payment shall be enforced through the Family Responsibility Office, unless the parties mutually agree otherwise. A support deduction order will issue;
d) The parties will agree to their daughter’s extra-curricular activities in advance. Mr. Adorno shall pay 70 percent and Ms. Adorno shall pay 30 percent of the cost of these activities and of any other s. 7 expenses relating to their daughter; and
e) The parties will exchange their complete income tax returns and Notices of Assessment by June 1st of each year. The amount of child support payable and the proportionate percentages of the parties’ contributions to s. 7 expenses will be reviewed annually, in accordance with their incomes, effective July 1st of each year.
Costs
102The parties are strongly encouraged to negotiate the costs of this proceeding. If they are unable to reach an agreement, brief written costs submissions (not to exceed two pages, excluding Bills of Costs and any Offers to Settle) may be submitted. Mr. Adorno’s written submissions shall be delivered no later than October 11, 2019. Ms. Adorno’s responding submissions shall be delivered no later than October 25, 2019. (An extension of these deadlines may be granted if the parties mutually request it for the purpose of pursuing negotiations regarding costs.) No reply submissions will be made unless requested by me.
NOTE: If I have made any arithmetical errors in my calculations, the parties may bring them to my attention within 14 days of the date of this judgment so that they may be corrected. If an error is detected, either party should write to the Court, with a copy to the opposing party. If necessary, a teleconference call may be scheduled to speak to the issue.
Petersen J.
Released: September 24, 2019