COURT FILE NO.: FS-19-007889
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Rafael Angel Vladimir Bustamante Lugo, Applicant
AND:
Betsy Marina Di Gregorio Loyo, Respondent
BEFORE: M. Kraft, J.
COUNSEL: Malerie Rose, for the Applicant
Anthony Colangelo, for the Respondent
HEARD: February 4, 2021
ENDORSEMENT
On February 4, 2021, I heard a motion and cross-motion in this case by videoconference.
The issues for determination on the motion were:
a. Whether the court ought to make a determination regarding the wife’s claim for retroactive child support for the period January 1, 2017 to December 31, 2020 on an interim motion and if so, a determination of 1) both parties’ incomes for child support purposes in 2017, 2018, 2019 and 2020; and 2) whether full Table child support is owing for the time period for two children, or whether there is a combination of full table and set-off child support owing given the residency of the children during the time period;
b. The determination of prospective child support owing for the two children of the marriage commencing January 1, 2021, which involves 1) a determination of the both parties’ current incomes for support purposes; and 2) a determination of the appropriate level of child support to pay for the daughter’s oldest child who is currently in post-secondary studies and has allegedly withdrawn from her parent-child relationship with the husband;
c. Whether the divorce ought to be split from the corollary relief issues; and
d. Whether the wife is entitled to receive a cash payment from the husband in a sum equal to her half of the Family Law Value of the husband’s pension with the Bank of Montreal as per the parties’ Separation Agreement, dated June 24, 2016.
- In support of the wife’s motion and in response to the husband’s cross-motion, the wife filed the following material:
a. A Notice of Motion, dated December 2, 2020;
b. Her affidavit, sworn on October 13, 2020;
c. Her reply affidavit, sworn on January 31, 2021;
d. Her Factum, dated December 12, 2020;
e. Her Supplementary Factum, dated February 1, 2021; and
f. Her Financial Statement, sworn on January 6, 2021.
- In support of the husband’s motion and in response to the wife’s cross-motion, the husband filed the following motion:
a. A Notice of Cross-Motion, dated January 26, 2021;
b. His affidavit, sworn January 26, 2021;
c. His Summary of Argument, dated January 27, 2021; and
d. His Financial Statement, sworn on January 4, 2021.
Preliminary Issue
At the start of the motion, counsel for the husband submitted that the wife’s Reply affidavit, sworn on January 31, 2021 (“January 31^st^ affidavit”), was not proper Reply as it dealt with issues other than new matters raised in evidence by the husband’s responding affidavit as required by Rule 14(20) of the Family Law Rules and/or that certain sentences in paragraphs 2, 3, 4, and 18, in the January 31^st^ affidavit, as well as Exhibit’s “G”, “M”, “N and “P” attached to the January 31^st^ affidavit, ought to be struck entirely or given little weight by the Court.
Counsel for the wife agreed to remove from her client’s January 31^st^ affidavit, the offending sentence in paragraph 2; the offending sentence in paragraph 3; the entire paragraph 4, and the offending sentence in paragraph 18 from the evidence to be considered on the motion. Further, counsel for the wife agreed to remove the portions of Exhibits “G” and “M” to the wife’s January 31^st^ affidavit, in which the wife had personally translated various text messages from Spanish into English and agreed to remove Exhibit “N” to her affidavit. Finally, in connection with Exhibit “P”, the parties agreed that this exhibit would remain in evidence and directed me to ascribe whatever weight I considered appropriate to that exhibit to the wife’s Reply affidavit.
Background Facts:
The parties were married on December 19, 2000. They separated on January 31, 2016.
There are two children of the marriage, Betsy Loraine Bustamante, born April 27, 2002 (“Mini”), (at present, 18) and Anabella Marina Bustamante (“Bella”) born July 17, 2007 (at present, age 13).
The parties entered into a comprehensive Separation Agreement on June 24, 2016, resolving all of the issues outstanding from the breakdown of their marriage.
Pursuant to the terms of the Separation Agreement, Mini and Bella were to reside equally with the parties. The child support provisions of the separation agreement refer to the parties’ 2015 incomes, as $109,432 for the husband and $107,947 for the wife. Paragraph 5(a) of the separation agreement sets out that,
“Given the relative equality of their respective incomes, neither party shall pay the other table child support while they have a shared residency regime in place and their incomes are relatively equal (within $10,000 of each other).”
- The Separation Agreement also set out that:
“The parties will provide each other with a copy of their income tax returns and any notices of assessment and reassessment issued on an annual basis by no later than June 1^st^ of each year beginning with 2016 for the purpose of calculating child support for the upcoming year and their respective shares of future s.7 expenses.”
The parties agreed to use their incomes as reported in their 2015 income tax returns for 2016 and agreed that on June 1, 2017, they would exchange their respective 2016 income tax returns, using their reported income in 2016 as the basis from which to calculate the future child support in 2017. In other words, the parties were relying on the preceding year’s income for future child support, not an uncommon practice in family law when agreements are signed in the middle of a calendar year and current incomes are not known.
On January 7, 2018, an incident occurred while Mini and Bella were with the husband. This incident involved the husband allegedly slapping Mini across the face. The Children’s Aid Society (“CAS”) became involved with the family as a result of this incident. After this incident, both Mini and Bella began residing with the wife exclusively from the period January 15, 2018 to May 1, 2019. Between May and August 2019 Bella engaged in reunification therapy with the husband and she started to spend time with the husband, such that by September 2019, Bella had resumed sharing her time by living equally with both parties. Mini did not and she continues to reside with the wife exclusively.
In February 2019, the husband had issued the within Application to regain access to the children, seeking an order that the children have their primary residence with him while they completed a therapeutic reunification program to repair his relationship with them. In the Application, the father pleaded that the mother had engaged in parental alienation which led to the breakdown of his relationship with the children. The mother denies these allegations and asserts that the breakdown of the girls’ relationship with their father arose out of the husband’s own actions and the January 7, 2018 incident described above. The wife filed an Answer and Claim seeking sole custody of the children; retroactive child support, prospective child support; an order requiring the husband to produce annual income disclosure; an order for financial disclosure of the husband’s rental income information; and for an access schedule for the children and husband.
The husband did not pay monthly child support to the wife in 2017 or in 2018. In April 2019, just prior to a scheduled case conference, the husband paid the wife a combination of a lump sum on account of retroactive child support with six post-dated child support cheques, in the total sum of $30,074, without any explanation as to how he had calculated the lump sum or what his level of income was. The wife submits that the husband did so only because a case conference was scheduled. Whatever the reason, the husband is entitled to receive credit for payments made by him toward child support. The wife submits, however, that despite these payments, the husband will owe her significant retroactive child support.
On May 1, 2019, the parties attended a case conference before Nakonechny, J., at which she made a consent order that Bella begin to resume spending time with the husband, followed by a step-up in the time she was spending with the husband, until a resumption of the equal time-sharing schedule occurred in September 2019.
In March 2020, the wife was terminated from her employment due to the Covid-19 health crisis. For the remainder of the 2020 year, the wife deposes that she lived off employment insurance and her child tax benefit payments, and she also cashed in RRSPs, drawing on capital, to pay for her and the children’s living expenses.
On December 17, 2020, the wife’s motion for retroactive child support, financial disclosure and prospective child support came on before me. The husband sought an adjournment because his counsel was ill and unable to attend. The wife agreed to the adjournment on terms. Accordingly, I made the following order:
a. The wife’s motion was adjourned to February 4, 2021;
b. Pending the return of the motion, the husband was to make a temporary “without prejudice” payment toward child support for the two children in the sum of $3,000, credit for which he was to receive when the issues of retroactive and prospective child support were determined at the return of the motion;
c. The husband was to serve and file an updated sworn financial statement within 21 days;
d. The wife was to serve and file an updated sworn financial statement by January 15, 2021;
e. The parties were given leave to conduct questioning; and
f. The husband was to pay the wife’s costs of the attendance in the fixed sum of $500.
The wife seeks retroactive child support for 2017, 2018, 2019 and 2020. The parties do not agree on the quantum of the husband’s income for these years, the wife’s income for these years, the children’s residency during these years, whether parental alienation is a factor that the court ought to consider and whether the fact that Mini allegedly repudiated her relationship with the husband ought to be considered.
One of the main points in contention about the husband’s income is rental income he earns from two properties: the basement of the house in which he lives (“Toronto property”) and a property in Florida. While the husband acknowledges that he earns rental income from both properties, he takes the position that he has negative net rental income after he pays legitimate expenses for both properties. The wife does not agree and submits that income ought to be imputed to the husband, after certain expenses only are deducted from the gross rental income. The husband submits that an order for retroactive child support will prejudice him and that the issue of retroactive child support ought to be adjourned to trial where the issues in dispute can be canvassed on a full evidentiary record.
The wife also seeks prospective child support. While the husband does not dispute this, he claims that income ought to be imputed to the wife in accordance with her 2019 income, the most recent reported income for her of about $135,000. Alternatively, he takes the position that income ought to be imputed to the wife, even though she is unemployed because according to him, she has not explained why she has not experienced a decline in her lifestyle. The wife deposes that she estimates that her 2021 income will be $24,000.
The Wife’s Position
According to the wife, the husband has caused serious delay throughout these proceedings and has failed to comply with the Family Law Rules. In particular, the wife submits that the husband had made it extremely difficult for her to calculate his retroactive child support obligation because he did not file his income tax returns on time, he failed to report rental income earned by him when he did file his returns initially and he opted to pay the wife a lump sum retroactive child support payment in 2019 without any explanation as to how he calculated the sum. Further, the husband refiled his income tax returns in an attempt to correct his reported income and, as a result, his reported income may not be reliable.
The wife submits that the husband failed to file his income tax returns (”ITRs”) in a timely fashion and when he did file his ITRs for 2017, 2018 and 2019, he resubmitted them three times, making it virtually impossible for her to calculate the retroactive child support owing to her by him. The wife submits that the court ought to impute rental income to the husband for child support purposes. Specifically, the wife deposes that:
a. The husband first submitted his 2017 taxes to CRA on March 14, 2019. He claimed Bella as a dependent contrary to the terms of the Separation Agreement and without consultation with the wife. In his first CRA filing of his 2017 ITR, the husband did not report his rental income from the Toronto property. He did report gross rental income for the Florida property but included expenses which exceeded the rental income, including the cost of a trip he took to Argentina and Florida in excess of $15,000. The husband resubmitted his 2017 ITR on June 5, 2020, because he had failed to report his rental income from the Toronto property when he first filed his taxes. He submitted expenses associated with the Toronto rental property that exceeded the rental income he received. Knowing he was obliged to pay child support, the husband continued to claim Bella as a dependent and claimed expenses the wife had paid on behalf of the children. On this 2^nd^ submission to CRA, the husband was granted a refund of $1,907.66.
b. The husband first submitted his 2018 ITR to CRA on March 14, 2019. Again, he did not disclose his rental income for the Toronto property. For the Florida property, he claimed rental income then resubmitted his taxes. On May 12, 2020, the husband re-submitted his 2018 ITR to include his previously unreported rental income from the Toronto property. He deducted capital losses and other expenses associated with both the Toronto and Florida properties resulting in his showing a loss in one property and minor net rental income for the other property. On this 2^nd^ submission to CRA of his 2018, the husband was granted a refund of $2,243.34; and
c. The husband first submitted his 2019 ITR on May 18, 2020.The expenses reported associated with both the Toronto and Florida property were excessive and showed an unreasonable 181% increase in utilities.
- The wife maintains that the husband has engaged in blameworthy conduct based on the following facts:
a. Despite having issued an Application in February 2019, the husband did not file a sworn financial statement with the Application or with his Reply. In fact, the husband did not file a sworn financial statement until January 4, 2021, 22 months after he initiated these proceedings;
b. The husband never exchanged his ITRs with the wife in June of each year, as contemplated in the parties’ Separation Agreement. This is because he did not file his ITRs on time. As a result, child support was not adjusted annually as intended by the parties;
c. About a week before the parties’ first case conference which was scheduled for May 1, 2019, the husband paid the wife a lump sum on account of retroactive child support with six post-dated support cheques, together which totalled $30,704, without any explanation as to how he calculated the lump sum or on what income it was based; and
d. The Order of Nakonechny, J., dated May 1, 2019, required the husband to produce copies of rental agreements he has in connection with both the basement of his Toronto home and his property in Florida. To date, the husband has still not produced any rental agreements.
Husband’s Income according to the Wife
The wife submits that the husband’s income for child support purposes is comprised of income from three sources: 1) his employment at BMO; 2) rental income from his Florida property; and 3) rental income from his Toronto property. In paragraph 61 of the wife’s Reply affidavit, sworn on January 31, 2021, the wife prepared a chart explaining her position regarding the husband’s income for 2017, 2018, 2019 and 2020 based on these three sources of income.
In her calculations, the wife uses the gross rental income the husband reported in his income tax returns for each of these years from the Florida property and the Toronto property. While the husband reported a net loss for each property on his income tax returns, given that he claims his expenses in relation to each of the properties exceeds the gross rental income, the wife does not agree. Instead, the wife submits that the court ought to only allow the husband to deduct “hard expenses” from the gross rental income earned, namely, insurance, property taxes and utilities.
The wife’s position is that the husband’s income for 2017, 2018 and 2019 was as follows:
Year
BMO income
Net rental income from Kenwood
Net rental income from Florida
Total income
2017
$108,537.58
$9,869.27 (being $12,000 gross rental income less $246.28 insurance, less $1,513.36 property taxes and less $341.09 utilities);
$16,275.01 (being $10,128.30 gross rental income less $829.81 insurance and less $3,023.48 property taxes)
$134,681.86
2018
$107,358.90
$13,73.90 (being $15,600 gross rental income, less $283.12 in insurance, less $1,727.61 in property taxes and less $515.37 in utilities);
$16,121 (being $20,66.42 gross rental income, less $908.29 insurance and less $3,016.73 property taxes);
$137,174.20
2019
$107,466.90
$12,648.28 (being $16,200 gross rental income less $303.16 insurance, less $1,798.28 in property taxes and less $1,450.28 in utilities);
$16,121.00 (being $17,051 in gross income less $930.00 in insurance).
$136,236.19
The husband does not agree with the wife’s calculation of his income in these years.
The wife deposes that in 2020, other than the two months of income she earned from employment, her sources of income have been unemployment insurance, child tax benefits and RRSP withdrawals. Again, she anticipates that her income will be about $24,168 in 2021.
Summary and Calculation of Retroactive Child Support Owing according to the Wife
- According to the wife, the husband owes her retroactive child support in the sum of $28,200 for 2017, 2018, 2019 and 2020, based on her position of his income in each of these years (see paragraph 27 above), broken down as follows:
a. In 2017, based on an income of $134,681.86 for the husband and an income of $104,609 for the wife, the husband would owe the wife set-off child support in the sum of $367 a month as both children were residing equally with the parties. Accordingly, the husband owes the wife retroactive child support for this 12-month period in the sum of $4,404;
b. In 2018, based on an income of $137,173 for the husband and an income of $128,167 for the wife, the husband would owe full table child support for both children in the sum of $1,926 a month as both children were residing with the wife. Accordingly, the husband owes retroactive child support in the sum of $23,112 for this 12-month period.
c. For the period January 2019 to August 2019, when both Mini and Bella resided with the wife, based on an income of $136,236 for the husband and an income of $127,708 for the wife, the husband would owe child support of $1,915 a month. This assumes the husband pays full Table child support for both children. Accordingly, the husband owes retroactive child support in the sum of $15,320 for this 8-month period.
d. For the period September 2019, through to December 2019, when Bella started to live equally with the parties and Mini resided solely with the wife, based on an income of $136,236 for the husband and an income of $137,708 for the wife, the husband would owe child support of $708 a month. This assumes that the husband pays full Table child support for Mini and set-off child support for Bella, for 1.5 children. Accordingly, the husband owes retroactive child support of $2,832 for this 4-month period.
e. In 2020, when Bella lived equally with the parties and Mini resided solely with the wife, based on an income of $136,236 for the husband and an income of $60,626 for the wife (which is comprised of employment income until March 2020; EI, child tax benefit and withdrawal of RRSPs), the wife submits that the husband owes child support in the sum of $1,353 a month. This assumes that the husband pays full Table child support for Mini and set-off child support for Bella, for 1.5 children. Accordingly, the husband owes retroactive child support of $16,236 for this 12-month period.
- The wife’s position is that the total retroactive child support owing by the husband to the wife for 2017 to the end of 2020 amounts to $61,904. However, the husband is to be given credit for the child support he did pay the wife during this time period. On April 12, 2019, the husband paid a lump sum to the wife in the sum of $21,008 for retroactive child support for January 15, 2018 to February 15, 2019 and six cheques in the amount of $1,616 each, postdated to July 16, 2020. The total sum of $30,704 was paid by the husband to the wife, A further $3,000 was paid as per my Order, dated December 17, 2020, for a total of $33,704. Accordingly, the wife submits that a further $28,200 is owing to her by the husband as retroactive child support.
2021 Prospective Child Support
- The wife submits that for 2021, based on a 2019 income of $136,236 for the husband and a 2021 income of $24,168 for the wife, the husband would owe the wife child support of $1,722 a month. This calculation assumes the husband owes full Table child support for Mini and set-off child support for Bella, or 1.5 children. This is the prospective child support the wife seeks commencing January 1, 2021 and on the first day of each following month, pending further court order or agreement of the parties. Accordingly, the wife submits that the husband owes the wife $3,444 for the first two months of 2021.
Pension
- The wife seeks an order that she be paid the sum of $70,343.40 by the husband, which she claims is her share of the Family Law Value (“FLV”) of his pension with BMO, as per the terms of the parties’ Separation Agreement. The wife submits that the parties’ Separation Agreement provides that she has the option to choose whether she receives her share of the FLV of the husband’s pension in the form of a LIRA, RRSP, LIF or cash payment. The wife seeks to receive her share of the husband’s BMO pension in a cash payment. Since the BMO Pension Administrator has indicated that they cannot transfer a lump sum equal to her share of the FLV of the husband’s BMO pension to her in cash, the wife seeks an order requiring the husband to pay her a cash payment of $70,343.40.
Severance of Divorce
- The wife does not oppose the severance of the divorce provided there is a support order in place for the children.
The Husband’s Position
The husband seeks to split the divorce from the corollary relief issues. He submits that once the court makes an order for temporary child support on this motion, reasonable arrangements for child support will have been made and there would be no prejudice to the wife if the divorce is granted.
In terms of retroactive child support, the husband’s position is that the determination of his income, the wife’s income and the calculation of what is owing is too complex to be determined on a temporary motion. Further, the wife’s credibility is at issue and, as a result, the issue of retroactive child support ought to be addressed at trial when a trial judge has the benefit of an entire record before him/her and can weigh issues of credibility through viva voce testimony.
More particularly, the husband’s position is that the following variables and facts preclude this issue from being determined on a temporary motion:
a. The wife wishes to impute income to the husband retroactively, on the basis of rental income he has earned, which he submits is already included in his line 150 income on his income tax returns for the years 2017-2019;
b. The wife ignores the husband’s stated expenses for his rental properties and arbitrarily deducts what she calls “hard expenses” from the gross rental income;
c. The wife calculates child support arrears for a year based on the income earned by the husband in that particular year when the terms of the parties’ separation agreement specifically stipulates that the parties will calculate child support based on the preceding year;
d. The residential arrangements of the children changed which was contrary to the terms of the separation agreement and the husband sought to rectify these living arrangements when he issued the within application;
e. The wife’s income is in dispute as, according to the husband, her financial statement demonstrates that she has not suffered financial hardship since she lost her employment in March 2020, which is contrary to her affidavit evidence; and
f. A retroactive child support award will prejudice him.
The crux of the husband’s argument is that a temporary support order is intended to be a “holding order” to get the parties to trial and given that the material on the motion is conflicting and incomplete, it is not fair or appropriate to grant retractive child support to the wife on the evidentiary record of this motion. Since the wife raises issues as to the husband’s actual income specifically with respect to his claims for rental expenses for both his Toronto property and Florida property and the husband raises issues with the wife’s income and lifestyle, there are substantial issues in dispute with respect to retroactivity. Accordingly, the entire issue of retroactive child support should be left to a trial judge.
If the court is inclined to order retroactive child support, the husband’s position is that the parties ought to use the preceding year’s income as contemplated by the terms of their separation agreement, so that in 2017, the parties would calculate child support based on their 2016 reported incomes and in 2018, the parties would calculate child support based on their 2017 reported incomes and so on. In particular, the husband submits as follows:
a. For 2017, the parties earned incomes in 2016 that were about $10,000 apart and, therefore, as per the terms of the separation agreement, it would follow that neither party would have had to pay the other child support, since the children were residing with equally with each parent. In 2016, the husband’s Line 150 income was $108,345 and the wife’s Line 150 income was $98,415. [Note that in 2017, the wife’s line 150 income was $108,890 and the wife’s Line 150 income was $104,609, also less than $10,000 apart.]
b. For 2018, the husband acknowledges that both children were residing with the wife. The husband submits that based on his 2017 Line 150 income of $108,890 and the wife’s Line 150 income of $104,609, he would owe child support of $18,170. He paid the wife $17,776, so he owes $394.
c. For 2019, the wife ought to have used the parties’ preceding year’s reported incomes. He submits that based on his 2018 Line 150 income of $106,848 and her 2018 Line 150 income of $128,167, he would owe child support of $1,555 a month from January 2019 to July 31, 2019 when both girls resided with the wife and $424 a month for the five-month period after Bella began residing with the parents equally and Mini stayed with the wife (for 1.5 children), for a total of $13,005. It is the husband’s position that he paid the wife $12,928 in support in 2019, and therefore he owes her $77.
d. For 2020, the husband again submits that the parties’ preceding year’s incomes ought to be used as per the terms of the separation agreement. He submits that had the wife used his 2019 Line 150 income of $113,350 and her 2019 Line 150 income of $137,708, he would only be obliged to pay full Table child support for Mini for the period January 2020 to April 2020, when she finished High School, and that he would be obliged to pay set-off child support for Bella for the entire year. He asks the Court to use the wife’s 2019 income for 2020. He calculated that he would owe the wife $180 in total for 2020.
e. For 2021, the husband submits that his 2019 Line 150 income of $113,250 until he files his 2020 ITR, and that the wife’s 2019 Line 150 income of $137,708 be used. The husband submits that on her sworn financial statements, dated March 1, 2019 and January 6, 2021, the wife stated her income to be $134,425.25. The husband is prepared for the Court to use the wife’s stated income on her financial statement of $134,425.25 for 2020.
Pension
- The husband takes the position that paragraph 10 of the parties’ separation agreement sets out the wife’s entitlement to the FLV of his BMO pension. The parties agreed that once the FLV of the husband’s pension was determined, the wife had the option to ask the husband’s Pension Administrator to transfer a lump sum equal to the FLV to her in a variety of ways. In particular, the separation agreement provides as follows:
“ix. The following transfer options are available to the wife pursuant to the Pension Form 4:
Transfer lump sum to a locked-in retirement account (“LIRA”);
Transfer lump sum to a life income fund (“LIF”) (if the wife is eligible to buy a LIF, which can be purchased in the calendar year before the year she turns 55 years of age, at the earliest);
Transfer to a Registered Retirement Savings Plan (“RRSP”), a Registered Retirement Income Fund (“RRIF”) or cash payment.
g. The parties agree, and irrevocably authorize and direct, that:
i. Once the Family Law Value of the husband’s pension interests is determined, the wife at her sole option, may ask the Pension Administrator to:
Transfer a lump sum to a LIRA;
Transfer a lump to a LIF;
Transfer to a RRSP, RRIF or cash payment.”
The husband submits that the method of how the wife would receive her half of the FLV of his BMO pension is partially at the wife’s discretion and partially at the discretion of what the Pension Administrator is permitted to do. While the husband acknowledges that the terms of the Separation Agreement allow the wife to “ask” the Pension Administrator to transfer a lump sum to her in a cash payment, the Pension Administrator at BMO has indicated that it is not possible. Accordingly, the wife can receive a lump sum equal to her half of the FLV of his pension by way of a transfer to a LIRA, a LIF or an RRSP. The husband submits that it was never contemplated that the husband would pay the wife a cash payment directly on account of his pension.
The husband maintains that the wife has the letter from BMO Pension Services dated May 23, 2019 along with the FSCO forms she needs to complete to have half of the FLV of his pension transferred to her and that this process is not in his control.
Analysis:
The husband had a clear obligation to pay child support to the wife both when the children began residing solely with her and has continued to have the obligation since then.
The court has jurisdiction to order retroactive child support on a temporary basis, pursuant to the Divorce Act, s.15.1. While the husband would prefer a trial judge to deal with retroactive child support on account of disputed income issues between the parties, I find that the Court has sufficient information about the husband’s incomes in 2018 and 2019, such that it can order retroactive child support at this time without prejudicing the husband’s interests.
A court making an interim order shall do so under the applicable Child Support Guidelines: Divorce Act, s.15.1(3). Notwithstanding this subsection, a court may award an amount that is different from the amount that would be determined in accordance with the applicable Guidelines if the Court is satisfied that circumstances set out in either s.15.1(5) or 15.1(7) are applicable. Neither of those circumstances exists in this case. Certainly, neither party relied on either of these provisions on the motion.
In this case, the parties agree that:
a. The children resided equally with both parents in 2017;
b. The children resided in the wife’s sole care in 2018;
c. The children resided in the wife’s sole care from January 1, 2019 to September 1, 2019;
d. Bella began to share her time equally with the parents from September 1, 2019 to December 31, 2019 and Mini continued to reside with the wife solely;
e. For 2020, Bella shared her time equally between the parents and Mini resided with the wife solely;
f. Thus far in 2021, Bella has shared her time equally between her parents and Mini has resided with the wife solely;
g. The husband did not pay monthly child support to the wife in 2017, 2018, 2019 or 2020.
h. The husband made a lump sum payment and some monthly payments in 2019, totalling $30,704 and a payment of $3,000 on December 17, 2020, for which he ought to receive credit against retroactive child support owing by him; and
i. The wife lost her employment as a result of the Covid-19 health crisis in March 2020.
Given the parties’ dispute over how the husband’s rental income ought to be calculated and the conflicting evidence on this issue, I will make a temporary order for retroactive child support based on the husband’s employment income from BMO only. I will leave the matter of calculating the husband’s rental income from the Toronto property and the Florida property to the trial judge who will have the benefit of a complete record and viva voce testimony.
While pursuant to the parties’ Separation Agreement, there were to use the preceding year’s income to adjust prospective child support (likely because current income was not known to the parties), I do not agree with the husband that I am bound to use the preceding year’s income for years that have passed and the Court has the income information evidencing what the parties earned in past years.
In 2017, the husband’s notice of assessment indicated that his Line 150 income was $108,890 and the wife’s notice of assessment indicates that her Line 150 income was $104,609. Given that the parties’ incomes are within $10,000 of each other, I am not prepared to make a retroactive child support order at this stage in the proceeding. In 2017, the children were residing with the parties equally and the separation agreement was in operation.
Both parties have taken the position that when Mini was residing with the wife solely and Bella was living with the parties equally (September 2019 onward), child support was to be based on the Guidelines table amount for one child and the set-off amount for one child (1.5 children). In determining the amounts of child support that were or are to be paid on a temporary basis, I am prepared to use this approach in these circumstances.
In 2018, the husband’s employment income from BMO was $107,358.90 and the wife’s notice of assessment indicates that her Line 150 income was $128,167. This was a year when both children were residing with the wife. According to the Guidelines, the husband ought to have paid child support to the wife in the sum of $1,561 a month, or $18,732 for the year.
In 2019, the husband’s employment income from BMO was $107,466. and the wife’s notice of assessment indicates that her Line 150 income was $137,708. For the eight months of January 1, 2019 to August 31, 2019, both children were residing with the wife. According to the Guidelines, the husband would be obliged to pay the wife child support of $1,563 a month, or $12,504 for the first eight months of the year. For the period September 1, 2019 to December 31, 2019, Mini resided with the wife and Bella shared her residence equally. Calculating child support in this manner, the husband would be obligated to pay the wife child support in the sum of $356 a month, or $1,424 for these four moths. The total child support owing by the husband to the wife for the 2019 calendar was $13,928.
For 2020, although I can appreciate that the parties would not have received their tax slips or prepared their income tax returns for 2020 by the time the motion was heard, I was not provided with evidence as to what each party actually earned in income from sources such as employment, UIC/CERB (perhaps) or Child Tax Benefits in 2020. The Court can use the parties’ preceding year’s incomes to determine child support for 2020, which can be adjusted once the parties exchange their income tax returns in May 2021 or at trial; use an estimated income figure for both parties for 2020, which can be adjusted once the correct income figures are known or at trial; or perhaps use a combination of approaches. As mentioned above, the husband’s 2019 employment income from BMO was $107,456. The wife’s Line 150 income was $137,708. However, through no fault of her own, the wife’s employment was terminated in March 2020. At paragraph 35 of her Reply affidavit, sworn on January 31, 2021, the wife estimates that her 2020 income will be $60,626.38 (comprised of her EP payments, Colliers income including wages, severance, notice and vacations paid out, as well as her RRSP withdrawals). According to the wife, her income at the current time (2021) is comprised of UIC and Child Tax Benefit payments and the employment insurance will run out shortly. The last known income of the husband is his 2019 income. There is no evidence to suggest that his income from BMO was less in 2020 or is less now that it was in 2019. In 2020, Mini resided with the wife and Bella shared her residence equally. Applying the method of calculating monthly child support referred to in paragraph 51 above, the husband would be obliged to pay the wife child support in the sum of $1,000 a month, or $12,000 for the 2020 calendar year.
According to my calculations, the husbands should pay the wife temporary retroactive child support in the sum of $18,732 for 2018; $13,928 for 2019, and $12,000 for 2020, for a total of $44,660. Giving the husband credit for the $33,704 he paid in child support during this time period, he would owe the wife a balance of $10,956 in temporary retroactive child support.
2021 Prospective Child Support
I do not accept the husband’s argument that income ought to be imputed to the wife for 2020 or at the present time, based on her 2019 income. The wife’s employment position was terminated as a result of the Covid-19 health crisis. The husband does not disagree that her termination was beyond her control. It is clear from the wife’s evidence that she has sought employment opportunities since her termination. The court rejects the husband’s submission that the wife has not provided evidence of financial hardship or lifestyle adjustments as a result of her unemployment. To the contrary, the wife’s counsel clearly submitted that the wife has been relying on unemployment insurance and her child tax benefit payments and that she has withdrawn funds from her RRSP and has therefore been depleting capital to meet her and the children’s expenses. This is not a circumstance of intentional underemployment.
As well, I do not accept the husband’s position that no child support is payable for Mini once she graduated high school because she is 18 years of age and thus is no longer a child of the marriage. Mini is enrolled in full-time post-secondary educational studies. A portion of her post-secondary expenses are paid for by an RESP, to which both parents contributed. However, the wife deposes that Mini’s expenses exceed the funds available in the RESP. While it is true that Mini and the husband do not have a close relationship, this is not a circumstance where the child has unilaterally terminated a relationship with the husband. Rather, it appears that the breakdown in the relationship arose after the January 7, 2018 incident for which the husband accepted responsibility and felt remorse. He agreed to work on his relationship with Mini. For the husband to blame the wife for his estrangement from Mini seems disingenuous in light of his own statements made at the CAS Family Planning meeting1.
Accordingly, for temporary support purposes going forward, the wife’s income will be imputed at $24,000 as she proposes. If the wife obtains employment, she is to provide full details of the income she will earn from the employment to the husband. The child support amount should be re-calculated and upon agreement the new amount and starting date, the parties can file a Form 14B motion to change the temporary order. If she does not obtain employment and nevertheless has earned more than $24,000 by the end of 2021, then the 2021 child support can be adjusted retroactively at trial. Using the last known employment income for the husband of $107456 (2019) and an income of $24,000 for the wife, then the husband owes child support to the wife in the sum of $1,000 a month. This child support ought to have begun on January 1, 2021. For January and February 2021, therefore, the sum of $2,000 is owed by the husband to the wife.
Pension
- As for the wife’s claim to receive the FLV of the husband’s BMO pension, she seeks to receive the entire FLV of the pension in the sum of $70,343.40. The FSCO Form 4B, Statement of Family Law Value of the husband’s BMO pension, states that the FLV of the pension is $70,343.40 and that the “maximum amount that may be assigned and transferred to the former spouse of the Plan member from the pension plan of the Family Law Valuation Date is $35,171.70”. Therefore, as to the wife’s claim with respect to the pension, given the pension paragraphs contained in the separation agreement, the legal basis upon which the wife relies in support of her request for an order that the husband pay an amount to her for her half of the FLV of his pension has not been stated. Part E of the FSCO Form 4B outlines the Transfer Options for the wife. If the wife is not prepared to opt for the transfer of her share of the pension into a LIRA, LIF or RRSP and continues to seek a cash payment of her share to her by the husband, then this issue must be dealt with at trial.
Severance of Divorce
- In light of the wife’s position regarding the request to split the divorce with the making of a temporary child support order below, it appears that the wife does not oppose the request for an order splitting the divorce claim.
Conclusion and Order
- Accordingly, this Court makes the following order:
a. The divorce shall be split from the corollary relief issues. The husband may proceed with an uncontested divorce at his expense. The balance of the issues in the case shall proceed as a corollary relief proceeding;
b. Within ten days, the husband shall pay the wife the sum of $12,956 ($10,956 for 2018, 2019, 2020 + $2,000 for Jan. and Feb. 2021) on account of temporary retroactive child support for 2018, 2019 and 2020 and for the months of January and February 2021, without prejudice to the husband’s right to submit that these amounts ought to have been less and the wife’s right to submit that these amounts ought to have been more at trial. This temporary retroactive payment of child support does not include payment on account of s.7 expenses during the time period 2018 to 2020, inclusive and is without prejudice to both parties’ rights to raise this at trial.
c. The determination of the quantum of income the husband earns from the rental of the Toronto property’s basement and the Florida property, for the period 2017 to trial, shall be determined by a trial judge. If it is determined that the husband earned income in excess of the employment income figures set out in in this order, then child support may be recalculated for the time period at trial;
d. Commencing March 1, 2021 and the first day of each following month, the husband shall pay temporary without prejudice child support for the two children of the marriage in the sum of $1,000 a month based on an income of $107,456 for him (employment income from BMO only) and an income of $24,000 for the wife. If the wife obtains employment, she shall provide full details of the income she will earn from the employment to the husband. The child support amount shall then be re-calculated and upon agreement the new amount and starting date, the parties can file a Form 14B motion to change the temporary order. If the wife does not obtain employment and nevertheless has earned more than $24,000 by the end of 2021, then the 2021 child support shall be adjusted retroactively at trial. This order is without prejudice to either party claiming that the quantum of child support ought to be higher or lower at trial and is subject to adjustment by the trial judge and/or that child support should be determined on a basis other than that I used to determine the child support terms of this order;
e. The parties are encouraged to agree on costs of this motion. If they cannot do so, counsel for the applicant shall make written submissions as to costs of no more than 3 pages (not including offers to settle and a Bill of Costs) by February 22, 2020. The respondent shall make responding costs submissions of no ore than 3 pages (not including offers to settle or a Bill of Costs) by February 26, 2021. Reply, if any, shall be filed of no more than 1page by March 2, 2021.
February 8, 2021
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M. Kraft, J.