Court File and Parties

Court File No.: FS-18-01521 Date: 2020-10-28 Superior Court of Justice - Ontario

Re: Hana Mohamed And: Abdinoor Mohamed

Before: J.T. Akbarali J.

Counsel: Ryan Aalto, for the Applicant Steven Benmor, for the Respondent

Heard: October 27, 2020

Endorsement

Overview

[1] The respondent husband brings this motion seeking to change the interim consent support order of Del Frate J. dated June 13, 2018, on the basis that his income has decreased substantially since the order was entered into.

Background

[2] The parties were married on August 9, 2008 and separated on October 25, 2017. There are three children of the marriage, aged 11, 10 and 6 years old. The middle child is autistic and has special needs.

[3] The applicant wife is, and has been, the children’s primary caregiver. She trained as a registered practical nurse, but she has not worked outside the home since 2008.

[4] The parties’ consent order provides for table child support for three children of $4,006 per month, based on the respondent’s annual income of $239,604. It also provides for monthly spousal support of $3,250 per month.

[5] The respondent argues that his 2017 income, upon which the order was based, was unusually high, and his income has been substantially lower since that time. He argues that he is experiencing financial hardship, and has accumulated debts and arrears in his support obligations because he cannot make ends meet. He seeks a temporary order recalculating the support owing from 2018 to today, based on his T4 income. He seeks a new prospective order based on his current employment income. He also seeks to have income imputed to the applicant commencing January 1, 2019.

[6] The applicant argues that the respondent’s line 150 income, which includes withdrawals he made from his RRSP, should be used to calculate his support obligations. The respondent argues that he withdrew funds from his RRSP to pay his debts, including his support obligations. He argues that the parties’ financial statements demonstrate that their debts were greater than their assets at the date of separation, and that, as a result, he has a net family property of zero, but he alone bears ongoing responsibility for debts used to meet the family’s needs during the marriage. He thus argues that the RRSP withdrawals should not be included as income on this interim motion.

[7] The applicant argues that her parenting responsibilities preclude her from being able to work right now. She disputes that any income should be imputed to her, retroactively or prospectively.

[8] At the outset of this motion, I asked the parties about the request to deal with retroactive support and arrears, noting that this is an interim motion, which typically looks only at prospective orders. The parties agree that any order I make on this motion is a temporary, without prejudice order, and is not meant to tie the hands of a trial judge from later determining the parties’ incomes, or making different calculations as to adjustments to support that may be necessary as a result. Rather, at this stage, I am asked to change the consent interim support order to do rough justice. The respondent seeks new orders for support retroactive to July 1, 2018, to address the hardship he deposes to as a result of the garnishment of his income by the Family Responsibility Office.

Issues

[9] On this motion, I am asked to determine, on a without prejudice, interim basis, the respondent’s child and spousal support obligations since July 1, 2018, the date on which the order of Del Frate J. took effect. This requires me to answer the following questions:

a. What was the respondent’s income for support purposes in 2018, 2019 and what is his income for support purposes in 2020?

b. Should income be imputed to the applicant, and if so, how much, and as of when?

Analysis

General Principles Applicable to Determinations of Interim Support

[10] As a preliminary matter, I note that there is no requirement to prove a material change in circumstances before a temporary support order can be changed: Perino v. Perino (2007), 2007 CanLII 46919 (ON SC), 46 R.F.L. (6th) 448, at para. 26, citing K.L.H. v. M.A.M. (2002), 2002 CanLII 49530 (ON SC), 24 R.F.L. (5th) 395. The applicant did not argue that the order could not, or should not, be changed retroactively to July 1, 2018, or at all.

[11] The court has jurisdiction to make an interim order for child support under s. 15.1 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), and an interim order for spousal support under s. 15.2.

[12] Under s. 17 of the Divorce Act, a court may make an order varying a support order, prospectively or retroactively.

[13] As Van Rensburg J., as she then was, stated in Perino, at paras. 27-28:

The factors to be considered by the Court in making a final or interim order for spousal support are listed in s. 15.2(4) of the Divorce Act. The Court must consider the length of time of cohabitation, the functions performed by the spouses during cohabitation and any arrangements relating to support of either spouse. The objectives listed in s. 15.2(6) of the Divorce Act must also be kept in mind. These are the recognition of the economic advantages or disadvantages from the marriage or its breakdown, apportionment of financial consequences arising from the care of children, alleviation of economic hardship arising from the breakdown of the marriage and the promotion of self-sufficiency of the spouses within a reasonable period of time.

In dealing with an order for interim support the primary focus is on the needs of the recipient and the means of the payor….

[14] I note there is no challenge to the applicant’s eligibility for spousal support. Given the traditional nature of the marriage, the applicant’s role as primary caregiver of the children, and given the age of the children and the special needs of the parties’ middle child, there is no question that the applicant has suffered economic hardship as a result of the breakdown of the marriage and the care of the children.

[15] On this interim motion, both parties have approached the question of spousal support having regard to the Spousal Support Advisory Guidelines (Ottawa: Department of Justice Canada, 2008) (“SSAGs”). The parties did not argue about where in the range the applicant’s entitlement would fall. Rather, both parties approached the question of spousal support on the basis that an order for support at the mid-range of the SSAGs is appropriate. Both parties seem to agree on the children’s s. 7 expenses for purposes of the calculation. Both parties also agree that the $175 monthly that the applicant receives from the Ontario Disability Support Program for the parties’ middle child should not be included in the applicant’s income.

[16] The disagreement between the parties, as I have noted, is the determination of their income inputs for purposes of the calculation.

[17] Against this backdrop I turn to an analysis of the parties’ incomes.

The Respondent’s Income

[18] The respondent is a T4 employee. His income is based on a base salary of $83,300 plus a bonus.

[19] In 2017, based on his tax return, the respondent’s line 150 income was $239,604. In that year, in addition to his base income, he deposes that he received a bonus of $142,604. In addition, he withdrew $14,000 from his RRSP. He also reported about $600 in taxable dividends.

[20] In 2018, the respondent’s T4 income was $166,558. He made a $15,000 RRSP withdrawal. His tax return discloses that his line 150 income was $180,712.

[21] In 2019, the respondent’s T4 income was $127,645. That year, he made an RRSP withdrawal of $12,000, and reported line 150 income on his tax return of $139,645.38.

[22] The most recent evidence of the respondent’s current income is a pay stub from his employer for the two-week period ending October 18, 2020. This paystub shows year-to-date earnings of $101,767.39. Annualized, the respondent’s current income, rounded up by a few dollars, is thus $126,000. Although annualizing his income to date may be inaccurate depending on how and when the respondent’s bonus is paid, both counsel before me sought to annualize the respondent’s 2020 income without regard to the timing of payment of his bonus. I thus assume this approach to the calculation of the respondent’s 2020 T4 income, for purposes of this interim motion, is sound.

[23] The applicant seeks to add an amount for an RRSP withdrawal to the respondent’s 2020 income, arguing that the respondent has a pattern of withdrawing from his RRSP, and the calculation of his current income should assume he will do so again.

[24] The dispute between the parties with respect to the respondent’s income is thus not about the numbers per se, but about whether the respondent’s RRSP withdrawals should be considered part of his income for support purposes.

[25] The applicant relies on Fraser v. Fraser, 2013 ONCA 715, 40 R.F.L. (7th) 311, at para. 97, where the Court of Appeal for Ontario held that, under s. 16 of the Federal Child Support Guidelines, S.O.R./97-175, RRSP income is presumptively included in the payor’s income for child support purposes. However, as the Court of Appeal noted at para. 98 of Fraser, under s. 17 of the Guidelines, the court may depart from the income determination made under s. 16 where it is satisfied that it would not be the fairest determination of income.

[26] The respondent argues that including his RRSP income in his income for support purposes is not a fair determination of his income. His affidavit describes the financial hardship he is suffering as a result of garnishments by the Family Responsibility Office due to his ongoing child and spousal support obligations being based on an income significantly higher than that he actually earns. He deposes that, after garnishments by the Family Responsibility Office, he is left with $954 net each month to pay for rent, groceries and transportation.

[27] The respondent has accumulated significant debt. His financial statement shows that his debt level at the date of separation was about $118,000 but it has risen to $149,000 today – a calculation that does not include any amount for support arrears, although I understand some arrears have accumulated. The respondent’s financial statement also shows a decrease in the value of his assets since the date of separation.

[28] In contrast, the applicant’s financial statement shows that she owned no property at the date of separation but has accumulated savings of about $33,000 since that time. It also shows that she holds no debts as of the date of separation or today. It thus appears that there may be at least some validity to the respondent’s argument that, while there is no equalization payment owing, he is suffering some economic disadvantage arising out of the breakdown of the parties’ marriage because he has been left with full responsibility for the debts accumulated during the marriage. The applicant made no argument that the respondent’s debts at separation were not debts incurred for the benefit of the family.

[29] The respondent’s affidavit indicates that the withdrawals from his RRSP are being used to pay his bills because he cannot afford his expenses. These expenses include his support obligations that are based on an income much higher than he earns, or indeed, has earned at any time since 2017.

[30] In my view, on this interim motion, excluding the respondent’s RRSP withdrawals from his line 150 income results in the fairest calculation of his income for support purposes. For 2018 and 2019, that approach means his income for support purposes equals his T4 income. For 2020, I have no evidence of any income other than employment income, so I conclude that it is fairest to use the best estimate of his 2020 income for support purposes. I thus conclude that the respondent’s income for support purposes is as follows:

2018 - $166,558

2019 - $127,645

2020 - $126,000.

The Applicant’s Income

[31] The parties disagree about whether income should be imputed to the applicant.

[32] The parties cohabited for nine years. The relationship was a traditional one. The respondent was the primary income earner, while the applicant was the primary caregiver for the children.

[33] Prior to the marriage, the applicant spent two years employed as a registered practical nurse, but she has not been employed since June 2008.

[34] The applicant’s registered practical nurse license expired in 2012. To renew her license, she would have to return to school.

[35] The applicant deposes that with three young children in her care, including a child with autism, she does not have any immediate plans to return to work.

[36] The respondent states that it has been three years since separation. He states that the applicant has the obligation to make efforts to become self-supporting within a reasonable period of time. The applicant is 38 years old, and healthy. The respondent deposes that the children are in school full time, leaving the applicant free to return to work. The respondent argues that, as a registered practical nurse, the applicant could earn no less than $60,000 a year. Even with her expired license, he argues that she could work as a personal support worker earning $40,000 a year. On this motion, he seeks to impute her with $30,000 in annual income – the equivalent of a part-time nursing position, or a full-time minimum wage position.

[37] The applicant states that she has not applied for registered practical nursing positions since separation for several reasons. These include her allegation that she was assaulted by the respondent and left with facial injuries and mental trauma from which she had to recover, the fact that the youngest child was only three years old at the time of separation and not yet attending school, the fact that the older two children were attending different schools which complicated pickups and drop offs, the need to return to school to be able to reinstate her nursing license, therapy programs in which the middle child was enrolled, the fact that she had to homeschool the children after the children’s schools were closed due to the COVID-19 pandemic, and the fact that she intends to move the children to online schooling in November, 2020 due to an increase in COVID-19 cases in Toronto.

[38] The applicant also deposes that nursing work requires shift work, which she cannot do due to her childcare responsibilities. She also notes that she does not have a car, and so has to walk to drop off and pick up the children from school.

[39] Notably, the applicant’s affidavit does not explain whether any paid childcare options would be available to her, nor does her affidavit suggest she has any plan to return to the paid workforce, or even a plan to prepare for a return to the paid workforce.

[40] Section 19 of the Child Support Guidelines provides that a court may impute such amount of income to a spouse as it considers appropriate in the circumstances. These circumstances include situations where a spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage. As Van Rensburg J. confirmed in Perino, at para. 28, a finding of intentional under-employment does not require a finding of bad faith. The issue is whether the spouse, through their own conduct, is earning less than he or she is capable of earning.

[41] In my view, it is appropriate to impute some income to the applicant prospectively. It has been three years since separation. The children are in school full-time. The applicant has made no effort to look for work. She raises concerns about her ability to do shift work, which are valid concerns. However, she has not made any effort to look for work that she would be able to perform, or to consider childcare options which would allow her to earn an income. Her affidavit indicates that she has no current plans to even prepare for a return to the paid workforce. In my view, some imputation of income is necessary in view of the obligation on the applicant to seek to become self-supporting within a reasonable period of time. She has had three years to make some effort to become self-supporting, but she has done nothing in pursuit of that goal. I conclude it is appropriate to prospectively impute minimum wage income of $30,000 a year to the applicant.

[42] I make this determination notwithstanding the applicant’s intention to return the children to on-line schooling. The applicant may choose to withdraw the children from in person schooling due to the pandemic, but there is no evidence before me that it is in the children’s best interest to do so. I thus conclude that the choice to take the children out of school is not a choice that should be used to circumvent the applicant’s obligation to become self-supporting.

[43] However, in my view it is not appropriate to retroactively impute income to the applicant. The ages of the children, the special needs of the parties’ autistic child, the applicant’s evidence about the trauma she sustained and the time needed to recover from it, the requirement to homeschool the children in the spring of 2020 due to the COIVD-19 pandemic and the resultant closure of schools, and the lengthy period of time during which the applicant was out of the workforce, all suggest that a three year period is a reasonable period of time for the applicant to begin earning an income.

Conclusions

[44] On this interim motion, with a primary focus on the needs of the recipient and the means of the payor, and having regard to the objectives of the SSAGs, including the recognition of the economic disadvantage that both parties have suffered from the marriage breakdown, the economic hardship arising from the breakdown of the marriage, the financial consequences that the applicant has suffered arising from the care of the children, and the need to promote the applicant’s self-sufficiency within a reasonable period of time, I agree with the approach adopted by the parties that interim spousal support at the mid-range of the SSAGs is appropriate. This is, obviously, in addition to the respondent’s table child support obligation for the parties’ three children.

[45] I thus conclude that support be calculated using the following inputs:

a. For the period June 1, 2018 to December 31, 2018, the respondent’s income shall be $166,558 and the applicant’s income shall be zero, although the automatic benefits that she receives (Canada Child Benefit, Ontario Child Benefit and Child Disability Benefit) shall be factored into the calculation. Counsel agree this is automatically done by the software and does not require a separate input.

b. For the period January 1, 2019 to December 31, 2019, the respondent’s income shall be $127,645, and the applicant’s income shall be zero. The automatic benefits that she receives shall be factored into the calculation as specified in para. a) above.

c. For the period January 1, 2020 to October 31, 2020, the respondent’s income shall be $126,000 and the applicant’s income shall be zero. The automatic benefits that the applicant receives shall be factored into the calculation as specified in para. a) above

d. Support arrears from 2018 to October 31, 2020 shall be recalculated based on the calculations set out above.

e. Prospectively, ongoing support shall be determined using an income for the respondent of $126,000 and an income for the applicant of $30,000. The automatic benefits that the applicant receives shall be factored into the calculation as specified in para. a) above. Support shall be payable prospectively on the first day of each month, commencing November 1, 2020.

f. All the support calculations shall ignore the $175 ODSP payment the applicant receives for the parties’ middle child, and shall include the s. 7 expenses which each has included on their calculations filed on the motion.

[46] The support orders that result from these calculations shall be temporary, without prejudice basis. The parties shall be free to assert at trial that either or both of their incomes should be other than as I have determined them to be herein, and that the retroactive support payments should be adjusted accordingly.

Remaining Issues

[47] If the parties are unable to agree on the calculations using the inputs I have determined, they may provide written submissions on the appropriate quantum of table child support and spousal support. In addition, in view of the imputation of income to the applicant on a prospective basis, if they parties are unable to agree on the appropriate treatment of s. 7 expenses going forward, they may provide further written submissions on that issue, as follows:

a. Written submissions on quantum of support and s. 7 expenses shall be delivered by each party by November 6, 2020. Submissions shall be limited to three pages, plus calculations and any supporting law.

b. Written submissions responding to the other party’s support calculations shall be delivered by November 13, 2020. Responding submissions shall be limited to two pages, plus case law.

[48] If the parties are unable to agree on the quantum of support and s. 7 expenses, the determination of costs shall be deferred until after I release reasons on those issues.

[49] If the parties are able to agree on the quantum of support and s. 7 expenses, they may provide a draft consent order to me for signature, together with a support deduction order. The draft order shall either recalculate the appropriate amount of arrears, or shall direct the Family Responsibility Office to recalculate the sums due and owing to the applicant or credited to the respondent for child support and spousal support, and shall provide that any enforcement shall be suspended until the recalculation is complete. If the parties are able to agree on costs, they may include a costs provision in the draft order.

[50] If the parties are able to agree on the quantum of support and s. 7 expenses, but are unable to agree on costs, I will receive written submissions on that issue, as follows:

a. Any party claiming costs shall deliver written costs submissions not to exceed three pages together with a bill of costs and any relevant case law and offers to settle by November 6, 2020.

b. Responding submissions, not to exceed three pages together with a bill of costs and any relevant case law and offers to settle, shall be delivered by November 13, 2020.

c. Reply submissions, not to exceed two pages shall be delivered by November 18, 2020.

[51] Any submissions delivered to me pursuant to these reasons shall be delivered by email to my assistant, at yomattie.evans@ontario.ca.

J.T. Akbarali J.

Date: October 28, 2020