COURT FILE NO.: 713/12
DATE: 20210602
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Nicole Clements, Applicant
Self-represented
- and -
Jamie Clements, Respondent
Self-represented
HEARD: February 23 and May 13, 2021 by Zoom
Minnema J.
REASONS FOR JUDGMENT
[1] This is a Motion to Change brought by the applicant wife dated March 17, 2020 seeking to vary the Divorce Order of Justice Sheffield dated May 7, 2013. In it she sought changes to the parenting time as well adjustments to child support both ongoing and retroactively "FROM 2012 TO DATE" regarding the children Joshua (18), Riley (15) and Madison (11). The respondent husband in his Response to Motion to Change agreed to change the ongoing support based on his earned income but disagreed on the retroactive adjustment. He also claimed "50/50 joint access".
[2] At the settlement conference before Justice Trousdale on January 12, 2021, the parties agreed to withdraw their parenting time claims, leaving three outstanding issues for this hearing identified as follows:
Whether there are any arrears of child support, and if any how much?
Whether or not all or part of the Respondent's medical pension should be taken into account in determining his income for child support, and if so, whether it should be grossed up as the Respondent receives his medical pension free of income tax.
The issue of costs.
[3] This matter was first before me on February 23, 2021 but was adjourned to May 13, 2021 because the husband had not obtained the disclosure related to his medical pension that had been ordered. That information has now been received.
Facts
[4] As noted, the Divorce Order is dated May 7, 2013. The husband has been employed by the military throughout. The child support ordered for three children of $1,482 per month was based on his estimated income of $77,100 per year for 2012. The husband's Line 150 income for 2012 was in fact $72,626. The parties agree that the tax-free disability benefits he was receiving from Veterans Affairs Canada ("VAC") were included and grossed up to arrive at the number of $77,100.
[5] The order states at paragraph 16 "[The husband] shall, by 01 June of each year in which child support is payable, deliver to [the wife] a copy of his or her notice of assessment, notice of reassessment (if any) and income tax return for the previous year." Further disclosure of the VAC benefits was not mentioned.
[6] There is a dispute in the evidence about whether the disclosure prior to 2018 happened as ordered, which I will address further below. The wife says that she heard in 2017 that the husband had a promotion and that at some point she heard of a 2014 payout, so in June of 2018 she asked for and he immediately provided his tax records going back to 2012. They show that his Line 150 salary to be:
$72,851 for 2012
$73,626 for 2013
$94,055 for 2014
$76,262 for 2015
$81,312 for 2016
$92,572 for 2017
[7] The wife brought this MTC as noted on March 17, 2020 seeking retroactive adjustments based on his Line 150 income only going back to 2012.
[8] The husband's Income Tax Returns and Notices of Assessment filed for this proceeding show Line 150 income for 2018 of $85,541 and for 2019 of $89,101. His Financial Statement sworn February 5, 2021 indicates that his current employment income based on a recent paystub is $89,784. In his Response to Motion to Change ("RTMTC") he acknowledges that his income has changed and indicates that child support should be adjusted. It was therefore adjusted on consent at the case conference on October 26, 2020 to $1,689.17 per month commencing June 1, 2020 based on his 2019 income of $85,541. That seems to have been a mistake, as he agreed in his RTMTC to adjust the support to $1,749.62 as of June 1, 2020, and his employment income for 2019 was actually $89,101.
[9] Regarding the disability pension, although there is agreement that it was considered for the original order, the wife says she simply forgot about it, and only learned (or was reminded) it existed at the case conference in October 2020. The letter re the VAC benefits from L. MacLean of Veteran Affairs Canada is dated March 19, 2021. It sets out all the "tax-free disability awards" the husband has received, even before 2013. They are:
2006 $2,103.17 lumps sum in lieu of monthly disability benefits
2012 $3,529.69 ($1,746.11 one-time adjustment and $254.75 for 7 months)
2013 $3,111.96 ($254.75 for 12 months)
2014 $3,140.04 ($259.33 for 12 months)
2015 $3,276.48 ($266.38 for 11 months, then $346.30 for December as he became eligible to receive additional pension on behalf of the three children)
2016 $4,879.18 ($350.44 for each of January and February, and $417.83 to the end of the year because he became eligible to receive additional pension on behalf of his common-law spouse)
2017 $5,084.28 ($423.69 for 12 months)
2018 $5,193.96 ($432.83 for 12 months)
2019 $6,939.75 ($442.81 for 3 months, and then a new additional tax-free benefit was added for $623,48 for the remaining 9 months)
2020 $7,349.06 ($635.31 for the first 10 months, and $497.98 for each of the last two months)
[10] For 2021 and ongoing, the husband received $503.47 for each of January and February, and an additional adjustment in February of $551.06. Since March the monthly tax-free payments have been $641.67. The statement says that these are payable for life, indexed, with a possible additional pension for the children until age 25 if they are making progress in a recognized course of instruction.
Positions
[11] The wife is seeking the support she feels the husband should be paying and should have been paying. This includes support adjustments back to 2012 with the VAC payments added to the husband's income.
[12] The husband does not believe the VAC benefits should be included in his income for child support purposes, asserting it is for his pain and suffering. He says that the wife knew of his income changes all along, and that he would have paid the adjustments if asked in a timely way. He indicates that he has no ability to pay her the lump sum she is now seeking.
VAC Disability Pension
[13] I have limited information on the VAC pension, including the section and version of the legislation it was awarded under, and neither party has made a legal argument. In Hewitt v. Rogers, 2018 ONSC 1384, the issue was whether tax free lump sum disability awards from VAC should be included as income for the purposes of child support. In making her decision, Justice Trousdale thoroughly reviewed the law up to that point including the case law as it developed for the inclusion of a monthly disability pension. The husband indicates that he had the option of monthly payments or a lump sum, and he chose the former. For the reasons Justice Trousdale noted and the cases she relied on, and in particular the summary at paragraphs 100 and 101 which I adopt here, I find that the VAC payments that the husband receives and has been receiving are income for child support purposes. I note that he has consistently earned more than the wife. I am unaware of other children he is providing for and, regardless, there is the first family first consideration. The benefits include additional amounts he receives on account of the children in question here. Lastly, the parties initially included the pension income on consent in calculating the support amount in the original order. As stated by Justice Trousdale at paragraph 101: "I could not ignore the reality that this additional substantial income coming into the home of the father would increase the standard of living in the father's home and his means, and would increase his relative ability to contribute to the support of the children."
Retroactivity
Law
[14] The starting point on retroactive child support is S. (D.B.) v. G. (S.R.); L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, most often referred to as "DBS", which summarizes its conclusions at paragraphs 133 to 135. At paragraph 133 it indicates that in determining whether to make a retroactive award a court will need to look at all the relevant circumstances of the case in front of it and listed four considerations. The issue was fundamentally reconsidered in Michel v. Graydon, 2020 SCC 24, which gave further updated guidance on the scope of those four factors and how they are to be analyzed. Both of those cases were helpfully interpreted and applied more recently in Henderson v. Micetich, 2021 ABCA 103.
Analysis – Retroactive Support
[15] Is a retroactive award due in this case upon consideration of the four DBS factors as revisited in Michel? The factors are set out under the headings that follow.
Conduct of the Payor/Blameworthy Behaviour
[16] As noted, there was a disagreement in the affidavit evidence on the question of whether the husband had complied with the requirement in the Divorce Order to provide his yearly tax information. This is important. If the husband concealed his income increases, misled the wife about his income, or failed to disclose his income, that would be blameworthy conduct: DBS at para. 106; Michel at paras. 116 and 117. The parties therefore gave oral evidence.
[17] The wife's evidence is that although the Divorce Order requires copies of his yearly tax information, the husband would just tell her verbally that there was no change. She did not explain when or how often that would occur. There was no evidence of a demand for the actual documents. There is no evidence of her complaining that the disclosure provisions of the order were not being complied with or of demands or queries about the written tax information when the deadline of June 1 passed.
[18] The wife says that she had heard that the husband had received a large lump sum payout in 2014. She did not indicate when or from whom she received that information. She did not indicate what she did when she got it. Again, there is no evidence of a demand or even a challenge to the husband regarding his alleged verbal reporting for that year, or a request for verification or a paper copy.
[19] The wife indicates that she heard in 2017 that the husband had a promotion. Her evidence was that she did nothing. She claims he told her that nothing had changed, and she did not challenge him, despite having contrary information. She waited until June of the next year to, by her account, request copies of his income tax information for the first time. That request was promptly complied with going all the way back to 2012. There is no suggestion of any other demands by her, or of any resulting delays or denials by the husband. The wife says that when she got the information in June of 2018 she saved up for legal costs and brought this MTC on March 17, 2020, about one year and 10 months later. While she did indeed have a lawyer of record to help her with her documents when the MTC was initiated, right after the proceeding was started court operations were curtailed as a result of COVID-19. When they resumed (the Return to Operations Court on July 24, 2020), the wife was self-representing.
[20] The husband says to the contrary that he provided the wife copies of the tax documents yearly as provided for in the Divorce Order, handing them to her at access exchanges. He further says that when she quickly lost the first ones and requested them again, he provided them in 2014. He says that when she lost them a second time, he provided them yet again in 2018, including copies all the way back to 2012, which disclosure the wife confirms. He says that the wife knew of all his income changes, and that he would have paid any required adjustments if asked in a timely way, as he has always made his payments and never denied payments. There is no evidence of fear or intimidation or any other reason why the wife, backed by the court order, could not have asked for the paper copies if they were being withheld. According to the wife the parties were on speaking terms.
[21] Regarding the VAC pension, the parties may not have understood that it could be included in income going forward. The Divorce Order did not require ongoing disclosure with respect to it, and it would not have shown up in the husband's Line 150 income. Even in her MTC, prepared with the assistance of counsel, the wife did not seek to have that income considered in the adjustments she sought. As noted, she says she simply forgot until it came up at a court conference. It was then made an issue in this proceeding, without an amendment to the pleadings. I am not being critical of the parties or of the wife's counsel or even their former counsel who drafted the agreement upon which the Divorce Order was based. I think it is fair to say in looking at the case law reviewed in the Hewitt decision, that it was not entirely clear that the VAC pension would automatically be included in the husband's income.
[22] I am unable to find that the wife has met her onus of establishing blameworthy conduct by the husband in the sense of concealing income increases, misleading her about his income, or failing to disclose. His account of providing yearly tax disclosure and duplicates upon request is more logically consistent when juxtaposed to the agreed upon events.
[23] Even considering the most expansive definition of blameworthy conduct, it still cannot be said that the husband was privileging his own interests over the children's right to support, and in that sense acting poorly. The ignorance of the applicability of the VAC amounts appears to have been a mutual mistake. Having forgotten about the disability benefits, both parties seemed to have believed that the husband was at times even overpaying his child support, particularly in the years 2013 and 2015, perhaps explaining in part the wife's delay. Until the husband's promotion, except for the back-pay adjustment in 2014, table support based on the husband's employment income has not been too far off the current order, again without the VAC being considered. In my view the evidence does not establish that the husband engaged in blameworthy conduct in this case.
Delay in Seeking Retroactive Support
[24] A delay will only be prejudicial if it is deemed to be unreasonable taking into account a generous appreciation of the social context in which the claimant's decision to seek child support was made: DBS at para. 101; Michel at para. 113. A delay motivated by any of a number of reasons, such as those set out at para. 85 in Michel, should be not generally understood to be arbitrary: Michel at para. 113. Of those reasons, there is no evidence here of any threats or intimidation by the husband, and he provided the required disclosure. The wife has only referred to two explanations, one directly, the other more indirectly.
[25] The first direct reason is that she said that she did not bring her MTC right away because she needed to save up the necessary money to do so. I have addressed that already in part at para. 27 above and would only note, in addition, that the wife has not provided much in the way of evidence in support of that reason. Even though it is a bit of a mess (it appears that she did it by hand herself notwithstanding that she had counsel at the time), her Financial Statement filed with her MTC indicated a yearly income of $63,375.76 and parts of it raise questions about its accuracy; for example she indicated that her home is valued at $200,000 with a $200,000 mortgage against it.
[26] The second reason indirectly raised – a factor that was not listed in Michel or DBS – was that of mutual mistake. The wife did not know the extent of the husband's true earnings because, as she put it, she simply forgot about the VAC benefits. As Michel clarified, the test is not whether the wife had a reasonable 'excuse' for her delay, as that improperly attributes blame (para. 111). Given that the purpose of child support is to protect the financial entitlements due to children by their parents (Michel at para. 38), it is difficult to see how a delay occasioned because of mutual mistake should work against the children. As noted in Henderson at paragraph 44 "[p]ut simply, delay has a very limited role to play in determining the availability and extent of a retroactive child support order" and the support recipient's delay has to be viewed in light of a number of factors, including the information available.
[27] The husband here argued that there is no good reason for the wife's delay and that the MTC was not triggered by the child support at all. The evidence indicates that he had communicated an intent to transfer to Kingston from Petawawa at which time he wanted equal "50/50" parenting time, and that told the wife he was going to be "filing with the courts to have the order amended". She filed her MTC anticipating that by addressing the children's residency. He therefore sees the MTC in a sense as a pre-emptive attempt by the wife to deal with that, and at the same time to move ahead with a claim for back child support almost as an aside. However, as noted in Henderson at para. 47, any suggestion along the lines that the request for support is a litigation strategy simply overlooks the fact that the children are entitled to support, and therefore it is not a relevant consideration.
Circumstances of the Children
[28] There is no evidence about the circumstances of the children other than that all three are still in school. The two youngest are under the age of 18. Joshua has just turned 18 but there is no evidence or argument before me that the usual table Guidelines approach is inappropriate (section 3(2)). Child support is the right of the children, and payment of proper child support is essential for their care. There is no requirement for the wife to prove any need on the part of the children for them to receive retroactive support amounts (Henderson at para. 60).
Hardship
[29] As noted in Michel at paras. 125 and 126, hardship has to be assessed looking at the totality of the circumstances and in a holistic way, including taking into account the hardship of the recipient parent and children when support was not paid at the level it should have been. The focus is not just on the payor parent any longer. Having said that, the wife has not provided much in the way of evidence related to her own hardship (see para. 25 above).
[30] The husband says he cannot afford the lump sum arrears the wife is claiming. His Financial Statement shows a current income of $89,784. He shows yearly expenses of about the same amount, but that includes his child support payments. His Financial Statement is incomplete. He shows no expenses (zero) for accommodation, and nothing in Part 3 for real estate ownership. The wife indicated in her Form 15A that the husband has a partner who has two children of her own living with them and that they bought a new home in Petawawa, which the husband has not disputed.
[31] As noted in Henderson at para. 70, the claim of hardship by a payor must be tangible and supported by evidence, and the hardship must be 'undue' meaning more than just the resulting financial difficulty when an immediate lump sum cash payment is awarded. In my view the husband has not established hardship.
Summary
[32] In weighing the above factors, no one factor is decisive: They must be interpreted and applied in accordance with the fact that retroactive support is for a legally enforceable debt: DBS at paragraph 99; Michel at para. 109.
[33] In this case, although there is a lack of blameworthy conduct by the husband, I am inclined to order retroactive support. It is not exceptional relief (DBS at para. 5; Michel at para. 31) and I do not see strong reasons between the factors not to do so (Michel at para. 132).
[34] As noted, once a court decides to make a retroactive award, it should generally make the award retroactive to the date when effective notice was given to the payor parent, unless there is blameworthy conduct, in which case adjustments would be back to the date of the change. Again, I have not found any blameworthy conduct. While I appreciate the reasoning of Justice Martin in Michel at paragraphs 130 and 131 questioning why the date of retroactivity should not simply correspond to the date when the support ought to have been paid, in my view it would be unfair upon consideration of all the factors in this case to deviate from the general approach. As noted in DBS at para. 135, courts must strive to resolve such situations in the fairest way possible, with utmost sensitivity to the situation at hand, and it is the true responsibility of both parents is to ensure that the situation never reached a point when a retroactive award was needed.
[35] There is no evidence that the wife requested an increase in child support at any time prior to serving her MTC on the husband on March 25, 2020. The date of effective notice and formal notice are therefore one in the same. Given the delays since then as a result of the pandemic, this will create its own not insignificant back adjustment, although on somewhat smaller scale than what the wife was originally seeking.
[36] As noted in DBS at paragraph 126, the final step is that the court will need to determine the quantum of the retroactive award consistent with the applicable statutory scheme.
[37] Child support variation in this case is governed by the Divorce Act, R.S.C. 1985, c. 3. Pursuant to section 17(1)(a), (4), and (6.1), if I am satisfied that there has been a change of circumstances within the meaning of section 14 of the Federal Child Support Guidelines, SOR/97-175, I am to make a variation order in accordance with those Guidelines. As the previous order was made "in accordance with the applicable table", a change in circumstances is any event that would result in a different support order (Guidelines section 14(a)).
[38] With the adjustments needing to be made commencing April 1, 2020, I note that the husband's income for last year (2020) from his tax documents was not available. However, that is not a serious problem. The husband's income from employment for 2019 was $89,101 and his current income from employment is $89,784. I am going to pick an amount half-way between the two as his 2020 income from employment. That number is $89,442.50. When the husband's VAC pension for 2020 of $7,349.06 is added and grossed up, the income for support purposes is $101,074 and the support payment is $1,937 per month (see Schedule A[^1]).
[39] The husband's current employment income is $89,784 and his VAC pension for 2021 is expected to be $7,975 grossed up ($503.47 for each of January and February, a $551.06 adjustment, and $641.67 per month commencing March 1, 2021). The income for support purposes is $102,594 and the support payment is $1,961 per month (see Schedule B).
Decision
[40] For the reasons set out above, the temporary order of October 26, 2020 is vacated, and paragraph 6 of the Divorce Order is varied as follows: the husband shall pay child support for three children of
$1,937 per month from April 1 to December 31, 2020 based on an annual income of $101,074;
$1,961 per month commencing January 1, 2021 based on an estimated annual income of $102,594.
[41] The necessary adjustments will be made by the Family Responsibility Office.
[42] In my view the results here are mixed. The wife did not obtain the full retroactive payments she was seeking. The husband did not avoid a retroactive award or the inclusion of his VAC benefits as income for child support purposes. The parties resolved the parenting schedule issues on consent. In these circumstances, I am not inclined to award costs.
Minnema J.
Released: June 2, 2021
[^1]: The wife's lawyer in helping her prepare her initiating materials did a poor job on her Change Information Form, and failed to include the ages of the parties which is why "0" is indicated in both schedules. It does not impact the calculations.