COURT FILE NO.: FC-15-584-1
DATE: December 30, 2020
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
T.I.R., Applicant
- and -
C.F.J.D., Respondent
T.I.R., Self-represented
Natasha D. Pappin, Counsel for the Respondent
HEARD: September 24, 2020 and October 23, 2020
REASONS FOR DECISION
JAMES J.
[1] This is a Motion to Change brought by the Respondent, C.F.J.D. He is seeking to adjust his child support and life insurance obligations and to impute income to the Applicant. He also seeks a variety of credits and adjustments.
[2] The Applicant, T.I.D., has filed a Response wherein she is seeking increased support and section 7 expenses and various credits and adjustments.
[3] The parties were married in 1998 and separated in 2014. They have two children, M. age 22 and N. age 20.
[4] The Final Order now sought to be varied was made in October 2016. At that time both parties were regular members of the Canadian Forces. Subsequently, the Applicant left the military and is currently receiving income replacement benefits from Veteran’s Affairs Canada (“V.A.”) for problems with her [omitted for publishing]. Her post-discharge V.A. receipts total about $49,000 per year. She can earn up to $20,000 annually without affecting her V.A. benefits. The Applicant trained as [omitted for publishing] in the 1990s and re-enrolled in 2016. She completed 2 years of a 3-year program then withdrew.
[5] The Final Order provided for annual $3,000 contributions by the children towards their education costs.
[6] M. commenced post-secondary schooling in September 2016, in the [omitted for publishing] program at [omitted for publishing], Ontario. A Registered Education Savings Plan (“RESP”) covered the costs of his first year. He contributed $3,000 towards his first-year expenses by paying for his apartment during the summer of 2017.
[7] In September 2017 M. returned to school in a new program, [omitted for publishing], which was funded in part by his RESP. He completed the program in May 2019. The RESP funding was substantially spent by the end of M.’s second year.
[8] The parties disagree on the necessity of some of M.’s school expenses. The Applicant says the Respondent’s share of these expenses for the 2017-18 school year is $2,696.15 and between $2,563.74 and $3,307.70 for 2018-19. This is supported by summaries marked as Exhibit F to the Applicant’s Affidavit of September 11, 2020. The Respondent disputes the reasonableness of the expenses and says that the Applicant did not follow the protocol for their review and approval.
[9] The Final Order provided that the Respondent would pay child support for M. during the summer months when he resided with the Applicant and week-about set-off child support for N..
[10] N. commenced post-secondary schooling in September 2018 and started her third year in September 2020. She spends her summers with both parties equally. Initially, her schooling costs were paid primarily by her RESP but that fund has now been used up and the parties will share her ongoing expenses on a proportionate basis.
M.’s Child Support
[11] I agree with the Respondent that his child support obligation for M. should terminate on July 31, 2020 for the following reasons:
a. M. graduated in May 2020;
b. He continued to keep his apartment in [omitted for publishing] until September 2020 and did not live fulltime with the Applicant through the summer and fall of 2020;
c. After he gave up his apartment in [omitted for publishing], he lived part time with his girlfriend;
d. He earned about $20,000 in 2019, most if not all of which was earned in the second half of the year.
N.’s Child Support
[12] The Respondent continued to pay table amount child support for N. during the summer months on a set-off basis when she lived out of town for school and spent the summers of 2019 and 2020 alternating between the parties’ residences. Her basic living expenses while away at school were initially covered by her RESP but recently, the Respondent has been paying some additional school-related costs, just as the Applicant did for M.
[13] The Respondent says he has paid combined child support from the time of the Divorce Order of $636 per month. I accept the Respondent’s support scenario # 2 filed at the hearing wherein the Respondent contends that his support payments ought to have been reduced when N. began college in September 2018 then further reduced starting in August 2019, when M. completed his program.
[14] The ongoing child support for N. is $188 per month which represents the Respondent’s share of the set-off child support for the 4 months when N. is home from school.
[15] The Order implementing these Reasons for Decision ought to clearly set out each parent’s income for child support purposes and their respective child support obligation.
The Respondent’s Income
[16] The parties have agreed in Exhibit B to the Respondent’s Affidavit of August 21, 2020 that the Respondent’s income for 2018 and 2019 was $111,341.40 and $112,944.40. This represents his employment income before deducting his rental losses. I agree that the Respondent’s income for support purposes should not be reduced by the losses he says he incurred in relation to his rental properties.
[17] I do not accept the Applicant’s contention that the Respondent has rented his income properties for an inappropriately low rental rate and that the properties should generate income, not losses. No expert evidence was tendered on the issue of what the proper rental rates should be for the properties (which is required) and this component of the Applicant’s claims is dismissed for lack of proper proof.
[18] The Respondent’s 2020 income is projected to be $110,544. In August 2020 his annual rate dropped to $104,616 and the Respondent requests that his ongoing support be based on his current lower income. I do not agree. Support ought to continue to be based on last year’s income as this makes for more consistency in future years.
Imputing Income to the Applicant
[19] Section 17(7) of the Divorce Act addresses the objectives of a variation of an existing order for spousal support. One of the four factors to be considered is the promotion of self-sufficiency of each former spouse so far as practicable within a reasonable time.
[20] The Applicant in this case is 46 years old. The parties have been separated for 6 years. The Respondent says the Applicant should have income imputed to her because she has not sought employment within her limitations. He says that the medical evidence in support to her claims that she is unable to work, is inadequate.
[21] The Applicant receives an income replacement benefit of about $49,000 annually from V.A. This benefit is designed to provide income support for veterans who are experiencing post-discharge difficulties due to a health problem resulting primarily from military service. It is not the same as a disability payment although the benefit operates in conjunction with the V.A. rehabilitation program. Its duration is uncertain, dependent in part on whether the applicant has been identified as having diminished earning capacity. The evidence is unclear whether the Applicant has been identified or not.
[22] The Applicant also receives a very small disability payment for a right foot injury related to her military service.
[23] The income replacement benefit contains a provision that permits a recipient to earn up to $20,000 per year before offsets are applied. The provision is intended to “encourage activities that are beneficial and meaningful, such as a part-time job.”
[24] The Applicant’s doctor provided a brief note dated August 8, 2020, indicating that the Applicant has developed “[omitted for publishing]” that is currently active and requires ongoing treatment. He also mentioned pending specialist treatment including surgery for “[omitted for publishing]” and said the Applicant was unable to participate in activities with prolonged standing or excessive walking. It is unclear how long the treatment cycle for [omitted for publishing] will last.
[25] The Applicant sought to upgrade her nursing skills after separation by re-certifying as a registered practical nurse but withdrew from, or was unable to complete, the program. The Applicant has not worked in this field since before entering the military where she was employed in an unrelated trade.
[26] Ms. Pappin referred to Juvatopolos v. Juvatopolos, (2005 CanLII 35677 ONCA). The appellant in that case was a stay at home mother with limited skills who was awarded spousal support of $1,200 per month on the assumption that the appellant would be able to earn $12,000 per year. Nine years later she had re-partnered and the respondent sought to reduce the amount of spousal support payable. The variation hearing judge found that the appellant had failed to make an effort to become self-sufficient principally because of the financial support of her new partner. She had part-time income of more than $17,000 and failed to account for a personal injury award and an inheritance. Her support was reduced to $400 per month which the Court of Appeal commented was at the low end of the range but did not interfere with.
[27] Ms. Pappin also referred to the recent case of Choquette v. Choquette, 2019 ONCA 306. The parties in this case separated after a 15-year marriage. Spousal support was set at $4,750 per month premised on the appellant rejoining the workforce quickly. Twenty-two years later the appellant still had not returned to work. At the same time, the respondent’s income had increased from about $390,000 to over $1 million annually. The appellant had purchased rental properties which she operated at a loss and her net worth had increased from about $200,000 after leaving the marriage to about $780,000. The variation hearing judge found that the appellant had not made a serious attempt to find work and determined that it would be appropriate to terminate her entitlement to spousal support.
[28] In the Court of Appeal the appellant argued that if it was ever possible for her to become self-sufficient, it was not now a realistic objective at age 62 when her professional qualifications were stale. The Court concluded that termination of spousal support was preferable to a reduction because any economic hardship arising from the breakdown of the marriage had long been addressed through the provision of support, and any current hardship was not the result of the marriage or its breakdown, but her own choices (para. 19).
[29] While each case turns on its own particular facts, the cited cases illustrate that in appropriate situations, entitlement to indefinite spousal support doesn’t necessarily equate to perpetual spousal support. I also note that neither case deals with a situation where the support recipient receives transition funding due to a health problem arising primarily from her military service.
[30] On the available evidence I am not persuaded that the Applicant is deliberately under-employed or unemployed within the meaning of section 19 of the Federal Child Support Advisory Guidelines. The “imputing income” provisions of these guidelines are also relevant to spousal support considerations, which is the situation here. The fact that she is receiving rehabilitative services from V.A. together with the medical information from her doctor is sufficient to satisfy the evidentiary onus on the Applicant. While it may be possible to earn income while receiving the income replacement benefit, it does not follow that the Applicant must do so.
[31] At the same time, however, the Applicant has an ongoing obligation to disclose whether her medical situation has improved sufficiently to permit her to obtain employment within her capabilities. The Applicant shall provide timely updates to the Respondent respecting her participation in the V.A. rehabilitation program as well as material changes in her health and medical conditions so that changes in her employability can be monitored.
The Respondent’s Obligations for M.’s Additional School Expenses
[32] The Respondent says that the approval protocol for M.’s disputed school expenses was not followed and he disagrees with some of the expenses claimed. The evidence suggests to me that while the approval process was not followed scrupulously, the Applicant made an effort to inform the Respondent and I have the impression that there are instances where the Respondent’s acceptance of a particular expense was unreasonably withheld. M.’s school budget of $10,000 to $12,000 that includes living away from home during the school year, is lower than in many cases that come before the Court. It is also lower than N.’s budget.
[33] The amount claimed by the Applicant from the Respondent is about $6,000 based on proportionate sharing of these costs. She says she withdrew money from her RRSP to fund some of the expenses the Respondent would not accept. The Respondent points to N.’s expenses to demonstrate that what the Applicant is claiming in relation to M. is unreasonably large. It is not productive to pick and choose among the expenses to determine what was reasonable and what may not have been. In my view, this item should be resolved with the Respondent owing the Applicant $3,500 of the disputed expenses.
The Applicant’s Obligations for N.’s Additional School Expenses
[34] The Respondent has paid additional school expenses for N. and claims reimbursement from the Applicant. He says a reasonable budget is $375 per month. He says the Applicant has not paid her share of these expenses since March 2020. The Respondent is entitled to a payment from the Applicant for her proportionate share of N.’s reasonable school expenses to date. The Respondent says this amounts to $1,276.84 from March 2020 to September 30, 2020. I accept these amounts.
Applicant’s Spousal Support
[35] As part of adjusting the parties’ child support obligations when M. and N. began their post-secondary education, there shall also be a corresponding adjustment to the Applicant’s spousal support. Exhibit D in the Respondent’s Supplementary Affidavit sets this out and shows the Respondent’s underpayment to be $3,850. I would reduce this amount (somewhat arbitrarily) on account of the income tax implications to $3,000 and this will eliminate the need for a retroactive adjustment by the Canada Revenue Agency. This is the amount to be credited to the Applicant when determining the net amount of the Respondent’s overpayment of child support which according to Exhibit D is $9,011 and which I accept.
[36] Spousal support shall continue to be based on mid-range Spousal Support Advisory Guidelines (“SSAG”).
Miscellaneous
[37] The Applicant shall re-imburse the Respondent for amounts paid by the Respondent for M.’s dental care expenses incurred subsequent to August 1, 2019 because that is when his child support entitlement ended.
[38] The Respondent says that the Applicant’s withdrawal from her RRSP should be counted as income for support purposes. The Applicant says she was forced to make the withdrawal to help Matt with his school expenses when the Respondent would not help fund Matt’s additional expenses. At least some of these expenses have been found to be reasonable and the Respondent has been required to reimburse the Applicant $3,500. The money was not used to benefit the Applicant. I am not prepared to add the RRSP withdrawal to the Applicant’s income for the year in which it occurred as requested in paragraph 6 of the Respondent’s Factum.
[39] The Respondent requests that a monthly amount be deducted from the Applicant’s spousal support because he says she hasn’t paid her contribution to N.’s school expenses. He says there is no reason to believe that she will do so in the future. I am not prepared to make that assumption. The Applicant requested the Respondent to contribute more to Matt’s school expenses and he chose not to, so it is not surprising that the Applicant didn’t pay what the Respondent requested. Going forward, the Applicant is to pay her appropriate share of N.’s reasonable school expenses.
[40] The Respondent requests that his life insurance commitment to the Applicant be reduced from $250,000 to $100,000. The Final Order provides for an adjustment when there is a material change in circumstances. Considering the reduction in the Respondent’s obligations, the amount of life insurance required to be maintained for the benefit of the Applicant shall be reduced by half to $125,000.
[41] It appears that the net result of this decision will be a credit due to the Respondent from the Applicant which will need to be repaid. The repayment terms are negotiable but if the parties are unable to agree, they may deliver written submissions on the issue, not to exceed two pages, as part of the process of finalizing the order. As a general rule, I usually prefer to see debts repaid within a two-year period.
[42] The Respondent’s support payments have not been paid through the Family Responsibility Office. No one has requested that this arrangement be changed. Accordingly, the parties shall continue to pay amounts that are due directly to each other.
[43] Except as altered by these Reasons for Decision, the Final Order from October 21, 2016 shall remain in full force and effect.
Disposition
[44] Counsel for the Respondent shall prepare a draft order and send copies to the Court and the Applicant for review together with any explanatory commentary including SSAG printouts that may be appropriate or useful, all within 25 days. The Applicant shall have 7 days to provide any comments about the form and content of the draft order to the Respondent and the Court via the trial coordinator. If necessary, the Court or the parties may schedule an appointment through the trial coordinator for a teleconference to settle the terms of the Order implementing these Reasons for Decision.
[45] If the parties are unable to agree on costs, the Respondent may deliver his costs submissions, maximum 4 pages, and a draft bill of costs within 20 days and the Applicant shall have 15 days to respond.
Mr. Justice Martin James
DATE RELEASED: December 30, 2020
COURT FILE NO.: FC-15-584-1
DATE: December 30, 2020
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
T.I.R.
- and –
C.F.J.D.
REASONS FOR DECISION
Mr. Justice Martin James
DATE RELEASED: December 30, 2020