COURT FILE NO.: DF-1949-11
DATE: 2021-06-08
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Carmela Ciardullo – Applicant
Paul Yves Plourde - Respondent
BEFORE: Justice R. F. MacLeod
COUNSEL: Ben Fortino, for the Applicant
Ursula Cebulak, for the Respondent
HEARD: May 17, 2021 via videoconference
E N D O R S E M E N T
[1] The respondent father’s income increased from $330,322 in $2017 to $1,004,484 in 2018 and to $2,290,000 in 2019. The court has been asked to determine the father’s child support and spousal support obligations from 2018 forward.
[2] The father seeks an order determining that the table amount of child support payable is inappropriate pursuant to section 4 of the Federal Child Support Guidelines.
[3] The father also seeks an order varying the final order of July 3, 2018 regarding the spousal support payable from January 1, 2019 to April 1, 2019.
[4] The mother seeks to have the formulas for child and spousal support in the July 3, 2018 final order implemented using the father’s full line 150 income.
[5] The applicant’s documents for this motion included:
a) Amended Motion to Change, dated January 13, 2021;
b) Affidavit of Melissa Young-Brodgesell, dated February 21, 2020;
c) Affidavit of the mother dated, January 29, 2020;
d) Affidavit of the mother dated, December 24, 2020;
e) Affidavit of the mother dated, February 21, 2020;
f) Affidavit of the mother dated, May 12, 2021;
g) Affidavit of the mother dated, January 12, 2021;
h) Financial statement of the mother, dated December 30, 2019;
i) Financial statement of the mother, dated January 29, 2020;
j) Financial statement of the mother, dated December 24, 2020;
k) Financial statement of the mother, dated February 8, 2019;
l) Financial statement of the mother, dated September 14, 2019;
m) Factum and book of authorities, dated May 14, 2021.
[6] The respondent’s documents for the motion included:
a) Affidavit of the father, dated March 20, 2019;
b) Affidavit of the father, dated February 12, 2020;
c) Affidavit of the father, dated May 10, 2021;
d) Financial statement of the father, dated February 12, 2020;
e) Financial statement of the father, dated May 10, 2021;
f) Amended Response to Motion to Change, dated May 12, 2020;
g) Factum and book of authorities, dated February 28, 2020.
Relevant Background
[7] The parties were married on December 23, 2001. They separated on August 5, 2011. They divorced on June 8, 2018.
[8] There are two children namely, Sophie Grace Plourde, born July 14, 2003, and Laura Grace Plourde, born September 15, 2005. The children reside with the mother.
[9] The parties entered into a final order, on consent, on April 2, 2014.
[10] With respect to child support, the order contained a standard clause obligating the father to pay child support for the two children in the amount of $3,675 per month based on 2013 income of $295,902. Provisions were made for the apportionment and satisfaction of section 7 expenses. Provisions were made for review of the child support arrangements on an annual basis or upon a material change in the condition, means, needs or other circumstances of the mother or children.
[11] Specifically, paragraph 12 of the April 2, 2014 order says:
“12. Once a year, if either party asks in writing, the Applicant and Respondent shall review the child support arrangements.”
[12] With respect to spousal support, the order contained the following:
“16. The Respondent shall pay to the Applicant spousal support for a further five years. Upon spousal support payment by the Respondent to the Applicant on April 1, 2019, the Applicant hereby releases her right to spousal support from the Respondent and she shall have no further right to receive from the Respondent spousal support. The Applicant shall execute a full and final spousal support waiver in a form acceptable to the Respondent’s counsel. The Applicant and the Respondent acknowledge and agree that any arrears of spousal support owing on April 30, 2019, shall be paid fully by the Respondent in accordance with his spousal support obligation at that time.
Commencing on April 1, 2014, and each month thereafter, the Respondent shall pay to the Applicant spousal support in the amount of $5086 in accordance with the low range of the Spousal Support Advisory Guidelines, based on the Respondent’s 2013 income in the amount of $295,902 and the Applicant’s imputed income in the amount of $35,000. The Applicant has an obligation to become self-sufficient.
Each May 1 the Applicant and the Respondent shall review the quantum of the Respondent’s spousal support obligation. To calculate the quantum of the Respondent’s spousal support obligation, the parties shall use the Respondent’s line 150 income for the preceding year and the greater of the Applicant’s imputed income in the amount of $35,000 or her actual line 150 income. The Respondent shall always pay to the Applicant spousal support based on the low range of Spousal Support Advisory Guidelines.”
[13] The final order of April 2, 2014 was varied, on consent, by the final order of July 3, 2018.
[14] The new final order provided retroactive adjustments of child support and spousal support for 2015, 2016 and 2017. It set the ongoing amount of child support as of January 1, 2018 and the ongoing amount of spousal support commencing January 1, 2018.
[15] It was specified, in paragraph 12, that “once a year, on or after July 15th each year, if either party asks in writing, the Applicant and Respondent shall review the child support arrangement.”
[16] The new final order provided a fixed, non-variable, contribution by the father to the mother of $333 monthly on account of all the children’s extracurricular activities. The mother was prohibited from seeking further contributions for section 7 extracurricular expenses.
[17] The new final order stipulated that any future adjustment to spousal support shall be retroactive to January 1 of the relevant year.
[18] Paragraphs 16-18 of the final order of April 2, 2014 regarding ongoing spousal support were specified to remain in full force and effect.
[19] For both spousal and child support, the orders stipulate that the amount payable in a given year is to be based on the income earned in the previous year.
[20] In 2016, the father participated in an acquisition project that increased the worth of his employer from $645 million to $1.2 billion. As a result, the father received income from the employer’s performance incentive compensation program, starting in 2016.
[21] The father’s income for the relevant years is as follows:
2016: $320,968
2017: $330,322
2018: $1,004,484
2019: $2,290,000
2020: $337,000
[22] In April 2019, the father was terminated from his employment.
Child Support in High Income Cases: Legislation and Case Law
Section 3 and 4 of the Federal Child Support Guidelines
Presumptive rule
3 (1) Unless otherwise provided under these Guidelines, the amount of a child support order for children under the age of majority is
(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought; and
(b) the amount, if any, determined under section 7.
Incomes over $150,000
4 Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order is
(a) the amount determined under section 3; or
(b) if the court considers that amount to be inappropriate,
(i) in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;
(ii) in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and
(iii) the amount, if any, determined under section 7.
[23] In Willick v. Willick (1994), 1994 CanLII 28 (SCC), 6 R.F.L. (4th) 161 (S.C.C.), Sopinka J. stated that child support should not increase indefinitely with increases in a parent’s income.
[24] In Francis v. Baker, 1999 CanLII 659 (SCC), 1999 CarswellOnt 2734, the Supreme Court of Canada applied the following principles:
It was Parliament's intention that there be a presumption in favour of the Table amounts in all cases (para.42);
The Guidelines figures can only be increased or reduced under s.4 if the party seeking such a deviation has rebutted the presumption that the applicable Table amount is appropriate (para.42);
There must be clear and compelling evidence for departing from the Guidelines figures (para.43);
Parliament expressly listed in s.4(b)(ii) the factors relevant to determining both appropriateness and inappropriateness of the Table amounts or any deviation therefrom (para. 44);
Courts should determine Table amounts to be inappropriate and so create more suitable awards only after examining all circumstances including the factors expressly set out in s.4(b)(ii) (para.44);
Section 4(b)(ii) emphasizes the "centrality" of the actual situation of the children. The actual circumstances of the children are at least as important as any single element of the legislative purpose underlying the section (para.39). A proper construction of s.4 requires that the objectives of predictability, consistency and efficiency on the one hand, be balanced with those of fairness, flexibility and recognition of the actual "condition, means, needs and other circumstances of the children" on the other. (para.40)
While child support payments unquestionably result in some kind of wealth transfer to the children which results in an indirect benefit to the non-paying parent, the objectives of child support payments must be kept in mind. The Guidelines have not displaced the Divorce Act which has as its objective the maintenance of children rather than household equalization or spousal support (para.41).
The court must have all necessary information before it in order to determine inappropriateness under s.4. If the evidence provided is a child expense budget, then "the unique economic situation of high income earners" must be considered.
The test for reasonableness of expenses will be a demonstration by the paying parent that the budgeted expense is so high "as to exceed the generous ambit within which reasonable disagreement is possible": Bellenden v. Satterthwaite, [1948] 1 All E.R. 343 (Eng. C.A.), at 345.
[25] In Simon v. Simon, 1999 CanLII 3818 (ON CA), 1999 CarswellOnt 3863 (Ont. C.A.), the Ontario Court of Appeal held that the mother was not required to justify the table amount of support under section 4. The onus was on the father to prove that the amount was excessive or at least to establish a prima facie case for the mother to answer that the amount was excessive.
[26] The father was found not to have met this onus despite that the childcare budget filed by the mother included purchasing a home for the mother and child. He was ordered to pay the table amount of $9,200 monthly.
[27] In Tauber v. Tauber, 2000 CarswellOnt 2019 (Ont. C.A.), Rosenberg J. A. held that the payor had at least raised a prima facie case that the table amount of $17,000 was excessive. The onus then shifted to the mother. The Court of Appeal sent the matter back to the trial judge.
[28] Mr. Tauber’s income was greater than Mr. Simon’s and Mr. Baker’s combined. It is difficult to reconcile how $9,200 monthly in Simon was not excessive but $17,000 monthly in Tauber was.
[29] In Ewing v. Ewing, 2009 ABCA 227, 2009 CarswellAlta 979 (Alta. C.A.), the Alberta Court of Appeal dealt carefully with the test and approach to be observed when dealing with section 4 of the Guidelines. The Court of Appeal confirmed that the test for deviation from the table amount is that the evidence, in its entirety, must be sufficient to “raise a concern” that the table amount is inappropriate. The evidence for departure from the Guidelines must be clear and compelling. A party seeking a deviation is not required to testify or adduce evidence and no unfavourable conclusion should be drawn from a failure to do so since it is recognized that a party may not possess the required relevant evidence.
[30] The Court of Appeal also reemphasized that the court must examine the actual means, needs and circumstances of the children. Child support is child maintenance and nothing more, and its determination requires a child-centred analysis of the conditions, needs and other circumstances of the child and the parent’s ability to pay. It is an error to assume that children are automatically entitled to share in the entirety of the parent’s wealth.
Issue: Is the table amount generated by the father’s income in 2018 and 2019 “inappropriate”?
[31] The existing order allows a review of the child support amounts without need to establish a material change in circumstances.
[32] Unlike the spousal support terms of the current order, there is no template imposed to limit or narrow the scope of the review. The order does not say that the review is limited to determining the income of the father and imposing the table amount based on that income.
[33] The review can properly include an analysis under section 4 of the Guidelines.
[34] The table amount generated by the father’s 2018 income of $1,004,484 is $12,331 monthly.
[35] The table amount generated by the father’s 2019 income of $2,294,795 is $27,815 monthly.
[36] The children are currently 17 and 15 years of age.
[37] The mother’s financial statement of December 30, 2019 includes a children’s budget totaling $55,800 annually. The mother readily acknowledges that her requested child support award surpasses the children’s monthly budget.
[38] The mother’s financial statement sworn December 24, 2020 shows a budget for the entire household totaling $118,320 annually. The table child support payment based on the father’s 2018 income easily covers the entire household budget. The child support table amount based on the father’s 2019 income is almost 3 times the entire household budget.
[39] The father has been maintaining ongoing child support payments of $4,129 monthly based on his 2017 income. He emphasizes that there is no aspect of the children’s standard of living or accustomed lifestyle that has suffered from 2017 to the present. The family never enjoyed a multimillion-dollar lifestyle because the family never, prior to 2018, had a multimillion-dollar income.
[40] The father’s lifestyle did not change with his increased income. There is no evidence of extravagance or luxury of any kind. This is no doubt partly a reflection of the fact that the father is currently unemployed with an uncertain economic future.
[41] If the mother’s request regarding child support is granted, the father would be in arrears of child support in the amount of $388,972.
[42] The father asserts that such a large award would decimate his retirement savings. A review of his financial statements, however, raises more questions than answers on this point. The father’s net worth appears to have increased by only approximately $180,000 since 2017. He acknowledges that he placed $200,000 against his mortgage, he purchased an RRSP of about $100,000 and made a small investment of $20,000 in a business venture. No other explanation was offered as to where the rest of the money went.
[43] In 2018 and 2019 the father earned approximately $2.6 million over and above his usual pattern of income. Even after assuming 50% of this “bonus” income goes to the government, there is significant money unaccounted for.
[44] The father has not established that he does not have the ability to pay the order requested by the mother.
[45] The father has, however, rebutted the presumption that the table amount in this case is appropriate. The children are not wanting. Their accustomed lifestyle has been maintained. The clear and compelling evidence is the financial statements and budgets filed by the mother. The table amounts requested would unquestionably provide the mother more than just child maintenance. The evidence easily “raises a concern” that the table amount would result in indirect spousal support to the mother or unwarranted capital transfer between parents. Given the ages of the children it is almost a certainty that an award of $388,000 to the mother would have that result.
[46] The father asks that the court exercise its discretion in setting the appropriate amount of child support by fixing the father’s income for support purposes at $500,000 for 2018 and 2019. The table amount at this income for two children is $6,277 monthly. This amount is approximately 35% greater than the amount required to cover the children’s budget filed in December of 2019.
[47] The father’s request satisfies the fairness objective of section 4 of the Guidelines and recognizes the actual "condition, means, needs and other circumstances of the children."
[48] The father’s 2018 and 2019 income for child support purposes shall be deemed to be $500,000. This amount shall be input into the formula established by the final order of July 3, 2018.
Issue: Should the spousal support formula in the orders of July 3, 2018 and April 2, 2014 be varied?
[49] The parties twice consented to an order for a spousal support formula which is very clear in its operation. The mother’s spousal support entitlement is limited to 10 years and terminates on April 1, 2019. The spousal support amount is determined using the incomes from the previous year, with the mother having an imputed income of $35,000 if her actual income is lower.
[50] The amount payable is specified to be the low range of the SSAG calculations.
[51] The father seeks now to reduce the amount of spousal support owing from January 1, 2019 to April 1, 2019 on the basis that the mother should not share in the father’s post-separation increase in his income. He asserts that his recent success was as a result of skills acquired after the marriage and had nothing to do with the mother’s contributions. He is seeking a variation under section 37 of the Family Law Act.
[52] Section 37 of the Family Law Act:
Application for variation
37 (1) An application to the court for variation of an order made or confirmed under this Part may be made by,
(a) a dependant or respondent named in the order;
(b) a parent of a dependant referred to in clause (a);
(c) the personal representative of a respondent referred to in clause (a); or
(d) an agency referred to in subsection 33 (3). 1997, c. 20, s. 6.
Powers of court: spouse and parent support
37 (2) In the case of an order for support of a spouse or parent, if the court is satisfied that there has been a material change in the dependant’s or respondent’s circumstances or that evidence not available on the previous hearing has become available, the court may,
(a) discharge, vary or suspend a term of the order, prospectively or retroactively;
(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and
(c) make any other order under section 34 that the court considers appropriate in the circumstances referred to in section 33
[53] The father, in argument, glossed over the issue of whether a material change in circumstances has occurred. He assumes that the increase in his income from 2017 to 2018 is a material change.
[54] The basic spousal support formula remained unchanged between the orders of April 2, 2014 and July 3, 2018. Post-separation, the father’s income varied significantly between a low of $255,000 in 2010 to a high of $475,000 in 2015.
[55] The father did not raise the issue of the mother’s sharing of his post-separation increase in income when relitigating the terms of the 2014 final order in 2018. Knowing that his income varied significantly, he was content to allow the mother’s spousal support to rise and fall along with his income.
[56] The current consent order is dated July 3, 2018. By that date, on the father’s own evidence, he had been involved in the acquisition project and had been receiving compensation from the employer incentive program as a result of the acquisition project for over two years. He did not raise the issue of capping the mother’s support despite his knowledge of the acquisition project and of the incentive program.
[57] The father does not argue that he was surprised or taken unaware by his significant increase in income in 2018. That is, he does not argue that it was unforeseen.
[58] The mother, however, in her factum does state that the increase in the father’s income from 2017 to 2018 was not contemplated by her at the time and is a significant change in circumstance.
[59] But what is the actual effect of the change in income under the existing order?
[60] If the existing order is not varied the mother will receive spousal support of $24,395 monthly from January 1, 2019 to April 1, 2019. This is the low range SSAG amount based on income of $1,004,484 and a fixed child support amount of $6,277 as determined above under section 4 of the Guidelines.
[61] The father has paid $4,957 monthly for those months.
[62] The total difference over those 4 months is $77,752. At issue, then, is ~$40,000 net of taxes from the father’s point of view.
[63] The change in the father’s circumstances is that his income increased by over $600,000 in one year, but his spousal support obligation only increased by a net total of $40,000.
[64] In the circumstances of this case, this change is not material and is not sufficient to warrant a variation of the July 3, 2018 order.
[65] The father’s motion to vary spousal support is dismissed. The father’s 2018 income for spousal support purposes is $1,004,484. This amount shall be input into the formula established in the July 3, 2018 order.
Calculations:
[66] The DivorceMate calculations incorporating the findings of the court are appended as Schedule A to this endorsement.
Orders:
[67] The Respondent shall pay child support to the Applicant for the two children of the marriage as follows:
a) From January 1, 2018 to December 1, 2018 the sum of $4,241 monthly based on 2017 income of $330,222;
b) From January 1, 2019 to December 1, 2019, the sum of $6,277 monthly based on deemed 2018 income of $500,000;
c) From January 1, 2020 to December 1, 2020, the sum of $6,277 monthly based on deemed 2019 income of $500,000;
d) From January 1, 2021 forward, the sum of $4,321 monthly based on 2020 income of $337,000.
[68] The Respondent shall pay the Applicant spousal support as follows:
a) From January 1, 2018 through December 1, 2018 the sum of $5,024 monthly based on 2017 income of $330,222;
b) From January 1, 2019 to April 1, 2019, the sum of $24,395 monthly based on 2018 income of $1,004,484.
[69] The Applicant’s entitlement to spousal support terminated on April 2, 2019.
[70] Except as altered by this endorsement, the order of July 3, 2018 remains in full force and effect.
[71] If costs are at issue, submissions of no longer than 3 pages, plus Offers to Settle, plus Bills of Costs shall be served and filed by July 1, 2021. If none are received, the issue of costs shall be deemed resolved.
R. F. MacLeod, J.
DATE: June 8, 2021
COURT FILE NO.: DF-1949-11
DATE: 2021-06-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Carmela Ciardullo
Applicant
- and -
Paul Yves Plourde
Respondent
ENDORSEMENT
MacLeod, J.
Released: June 8, 2021