COURT FILE NO.: FS-21-26930

DATE: 20230215

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ARLENE O’NEILL

Applicant

– and –

BRIAN CUTLER

Respondent

Howard Wolch for the Applicant

Paul Pellman for the Respondent

HEARD: January 27 and February 9, 2023

davies, J.

REASONS FOR DECISION

Section 7 expenses and costs

A. Overview

[1] Ms. O’Neill brought a motion for an order vesting title in the family cottage in her name. In the alternative, she sought an order for partition and sale of the cottage and the division of its contents. She also sought reimbursement for half the carrying costs for the cottage and the matrimonial home since she and Mr. Cutler separated. Ms. O’Neill also sought ongoing and retroactive child support and s. 7 expenses. Mr. Cutler brought a cross-motion for an order vesting title in the family cottage in his name, which he abandoned at the start of the hearing.

[2] I dismissed Ms. O’Neill’s request for a vesting order in relation to the family cottage. I also dismissed her request for partition and sale of the family cottage. However, I granted Ms. O’Neill access to the cottage over the Christmas holidays in 2022 and for several weekends through the summer in 2023. Going forward, I ordered Mr. Cutler to pay all the carrying costs for the cottage for as long as he is living there and half the carrying costs of the matrimonial home. I did not rule on Ms. O’Neill’s request for reimbursement for common expenses she has already paid.

[3] Finally, I ordered Mr. Cutler to pay $82,236.85 in retroactive child support and $3,383.34 a month in ongoing child support for their two youngest children. I disallowed some retroactive s. 7 expenses claimed by Ms. O’Neill but I ordered Mr. Cutler to pay 32.69 per cent of retroactive s. 7 expenses for 2021 and 2022 for:

a. post-secondary education expenses for their eldest child;

b. private school expenses;

c. tutoring for their younger two children;

d. orthodontic expenses for any child not covered by insurance; and

e. part-time caregiver.

[4] Ms. O’Neill and Mr. Cutler agree on all the retroactive s. 7 expenses except for the post-secondary education expenses for their eldest child. They agree that tuition, books and rent are included in the post-secondary education expenses. But they disagree on what ancillary expenses should be included for the purpose of calculating retroactive s. 7 expenses. They also disagree on whether their child should be expected to contribute towards his post-secondary education. Finally, they disagree on how much they should each contribute to their child’s ancillary expenses going forward.

[5] Ms. O’Neill requested a case conference to resolve the retroactive s. 7 expenses. In her case conference materials, Ms. O’Neill also raised an issue about the carrying costs for the family cottage. Ms. O’Neill takes the position that the carrying costs for the cottage in December 2022 were $4,221.18. Mr. Cutler paid Ms. O’Neill only $221 of the $4,221.18 she says in owing. Mr. Cutler takes the position that he is entitled to credit for two $2,000 payments he made before my decision was released. Ms. O’Neill disagrees.

[6] These reasons will address the following issues:

a. What ancillary expenses should be included in post-secondary education expenses for the purpose of calculating Mr. Cutler’s contribution to retroactive s. 7 expenses?

b. Should their eldest child contribute to the ancillary expenses associated with his post-secondary education?

c. How much should Ms. O’Neill and Mr. Cutler contribute towards ancillary expenses for their eldest child going forward?

d. Is Mr. Cutler entitled to a credit of $4,000 towards the cottage expenses in December 2022 for the payments he made before my reasons were released?

[7] These reasons also address the costs of the long motion and the costs of the two case conferences convened to deal with the calculation of retroactive s. 7 expenses.

B. What Ancillary Expenses Should be Included in Post-Secondary Education Expenses?

[8] Ms. O’Neill and Mr. Cutler agree that some amount for food, transportation (including gas and car insurance), household supplies, tutoring and personal supplies should be included as ancillary expenses related to their child’s post-secondary education for the purpose of calculating s. 7 expenses. But they disagree on how much should be included for these items. They also disagree on whether any amount should be included for entertainment.

[9] Any expense included as a s. 7 expense must be necessary and reasonable: Child Support Guidelines, s 7(1). Necessity is assessed in relation to the child’s best interests. The reasonableness of an expense is assessed in relation to the means of the parents. The onus is on Ms. O’Neill to prove that the expenses she claims are necessary and reasonable: Zaffino-Sanza v. Sanza, 2019 ONSC 2649 at para. 54

[10] Ms. O’Neill initially claimed that Mr. Cutler owed her 32.69 per cent of expenses she characterized as “room and board” for 2021 and 2022 (which total $35,903.42). What Ms. O’Neill characterized as “room and board” was just the total of their son’s credit card bills for the last two years. I expressed significant skepticism about whether some of the charges (particularly those from the LCBO, cannabis stores and other forms of entertainment) should be included as s. 7 expenses. I adjourned the matter to allow the parties to analyze the credit card statements in detail and revise their positions.

[11] The parties’ positions are now closer but they still do not agree on what ancillary expenses should be included in the s. 7 calculation. Ms. O’Neill now argues that $20,834.15 of the charges on their son’s credit card should be included in the s. 7 expenses. Mr. O’Neill argues that only $15,000 of the expenses are reasonable and necessary.

[12] The biggest ancillary expense is for food. Their son spent $10,286.49 on food and groceries over the last two years. Almost all the food charges are from restaurants and delivery services. There are very few charges for groceries. On average, their son spent approximately $575 a month on food while he was away at school. It is not my intention to scrutinize every charge on their son’s credit card. That is not the Court’s function. However, having reviewed the pattern of spending over two years and having regard to Ms. O’Neill and Mr. Cutler’s income, I find that it is reasonable to include $500 a month for food while their son is at University, or $8000 over the last two years.

[13] Ms. O’Neill claims $5,380.53 should be included for gas, insurance, car repairs and other transportation, which averages to less than $300 a month. I am satisfied that transportation expenses are necessary and $300 a month is a reasonable amount to include for the purpose of calculation s. 7 expenses.

[14] Ms. O’Neill claims an additional $2,963.89 for clothing, computer repairs, household supplies, school supplies and personal items, which averages to approximately $165 a month. Again, it is not my intention to scrutinize each charge in this category. I am, however, satisfied that it is reasonable to include $150 a month (or $2,700 over the last two years) for incidental expenses in addition to food and transportation.

[15] I am not satisfied that the expenses Ms. O’Neill characterized as “entertainment” or “travel” are necessary or reasonable. Almost all those expenses are for alcohol and cannabis either while their son was at school or while he was travelling. I am not satisfied those expenses are necessary. Nor is it reasonable to require Mr. Cutler to contribute to their child’s consumption of alcohol and cannabis. I have, therefore, deducted $2,455.25 from the total claimed by Ms. O’Neill.

[16] Ms. O’Neill has also claimed a contribution for a $330 traffic ticket their son received. It is not reasonable for either parent to be required to pay for their son’s traffic tickets. Their son should pay any fine he incurred for violating the Highway Traffic Act as a way of holding him accountable for his own driving infractions.

[17] To be clear, either parent is free to pay for some or all their son’s alcohol, cannabis, travel and traffic tickets. It is not for me to decide whether it is appropriate for a parent to pay those expenses. The question for me is whether those expenses are necessary and reasonable expenses related to post-secondary education for the purpose of s. 7 of the Child Support Guidelines such that each parent is required to contribute to them.

[18] In total, the ancillary expenses related to their child’s post-secondary education for 2021 and 2022 are fixed at $16,080.53.

C. Contribution from their eldest child

[19] Ms. O’Neill argues that she and Mr. Cutler should be responsible for all the ancillary expenses related to their child’s post-secondary education. I disagree. Adult children have an obligation to make a reasonable contribution to their own post-secondary education: Coghill v. Coghill, 2006 CanLII 28734 (ON SC), [2006] O.J. No. 2602 (S.C.J.).

[20] I must, of course, consider whether their child has the ability to contribute to his post-secondary education expenses: Lew v. Lewi, 2006 CanLII 15446 (ON CA) at para. 41. I heard evidence on the motion that their eldest child is in a co-op program at university and has had several work placements. I also heard that he has had various part-time jobs during the school year. Their child is not expected to contribute all his income toward his expenses. But I am satisfied that he can contribute to the ancillary expenses associated with his post-secondary education. This is particularly true given that his parents have agreed to pay his tuition, books and rent without any contribution from him.

[21] It is reasonable for their child to pay one third of his ancillary expenses.

D. Calculation of Mr. Cutler’s contribution for retroactive s. 7 expenses

[22] I have fixed the s. 7 expenses for ancillary expenses related to their eldest child’s post-secondary education for 2021 and 2022 at $16,080.53. Their child is responsible for $5,360.18 of those expenses.

[23] I have already ruled that Mr. Cutler is responsible for 32.69 per cent of s. 7 expenses. Mr. Cutler is, therefore, responsible for 32.69 percent of $10,720.35 or $3,504.48.

[24] Within 30 days, Mr. Cutler shall pay Ms. O’Neill $3,504.48 in retroactive s. 7 expenses for the ancillary expenses related to their child’s post-secondary education.

E. Ongoing Monthly Ancillary Expenses

[25] Mr. Cutler and Ms. O’Neill have both asked me to set a monthly budget for ancillary expenses for their eldest child so they can avoid arguing over their son’s credit card statements every month. Mr. Cutler argues that I should set the budget at $990 per month. Ms. O’Neill argues the budget should be set at $1,500 a month.

[26] The ancillary expenses I have allowed amount to approximately $1,000 per month. Based on the pattern of spending over the last two years and the means of the parties, I find that a budget of $1,000 a month is reasonable for their child for food, transportation and other personal expenses while he is away at university. Each month their eldest child is living away from home for university or for a co-op placement as part of his university program, Mr. Cutler shall pay $217.93 towards ancillary expenses. Ms. O’Neill shall contribute $448.73 and their son is responsible for the balance.

F. Is Mr. Cutler entitled to a credit towards the December 2022 cottage expenses for payments made before December 5, 2022?

[27] Mr. Cutler moved into the family cottage without Ms. O’Neill’s consent in September 2021. He refused to let Ms. O’Neill use the cottage after he moved in. While he paid the maintenance expenses for the cottage, he did not contribute to the mortgage or property taxes for the cottage until July 2022. Mr. Cutler did not contribute to the mortgage or maintenance of the jointly owned home in Toronto either.

[28] In her motion, Ms. O’Neill sought $83,500 from Mr. Cutler for his share of the expenses since separation. I did not order Mr. Cutler to reimburse Ms. O’Neill for the expenses she has already paid. I ruled that a full accounting of their respective contributions to the expenses for the jointly owned properties should be done at trial. However, I did order Mr. Cutler to pay all the cottage-related expenses going forward for as long as he continues to live there. I also ordered him to pay half the carrying costs for the matrimonial home, including mortgage, insurance and property taxes for the jointly owned home in Toronto.

[29] Mr. Cutler acknowledges that his portion of the expenses for the cottage and matrimonial home is $4,281.18 a month. However, he argues that he is entitled to a credit of $4,000 towards the December expenses because he made two voluntary payments of $2,000 before my decision was released on December 5, 2022.

[30] I am not satisfied that Mr. Cutler should receive a credit now for the payments he made before my decision was released. I accept that Mr. Cutler made those payments in good faith. He is entitled to a credit for those payments in the final accounting of all the post-separation payments he and Ms. O’Neill have made towards the jointly owned property.

[31] I ordered Mr. Cutler to pay all the expenses for the cottage for as long as he continues to live there and half of the expenses for the matrimonial home. Between December 5, 2022 when my decision was released and January 5, 2023, Ms. O’Neill paid $6,087.20 in mortgage and insurance payments for the matrimonial home and cottage. Mr. Cutler is required to pay his share of those expenses in accordance with my order.

[32] I appreciate that Mr. Cutler has had to pay Ms. O’Neill more than $80,000 in retroactive child support since early December 2022. I understand that compliance with my order has put financial pressure on Mr. Cutler. That, however, is a problem of his own making. Mr. Cutler chose not to pay any child support or s. 7 expenses for more than two years after he and Ms. O’Neill separated. By doing so, he put his own interests over the interests of his children. He also chose not to contribute to the carrying costs of their jointly owned properties. Mr. Cutler enjoyed a significant financial advantage for an extended period when he was not contributing to his family. He is not entitled to any further indulgence in relation to his financial obligations to his family.

[33] Mr. Cutler shall pay Ms. O’Neill the remaining $4,000 owing on the expense incurred by Ms. O’Neill for the cottage and matrimonial home between December 5, 2022 and January 5, 2023.

G. Costs on Ms. O’Neill’s motion and Mr. Cutler’s abandoned cross-motion

[34] Ms. O’Neill seeks $28,136.44 in partial indemnity costs on her motion and Mr. Cutler’s cross-motion. She argues that she had “a substantial degree of success” on her motion and was entirely successful on Mr. Cutler’s cross-motion.

[35] Mr. Cutler, on the other hand, argues that Ms. O’Neill should pay him $15,000 in costs on the motion and cross-motion. He argues that Ms. O’Neill was unsuccessful on several aspects of her motion and she acted unreasonably because she failed to try to settle the motion.

[36] Ms. O’Neill was successful on Mr. Cutler’s cross-motion for an order vesting the cottage in his name. Mr. Cutler abandoned his motion at the start of the hearing. Nonetheless, Ms. O’Neill was put to the expense of responding to his cross-motion.

[37] Success was divided on Ms. O’Neill’s motion. She was not successful on her request for a vesting order or an order for partition and sale of the cottage. She was not successful on her claim that Mr. Cutler reimburse her for payments she made towards the jointly owned matrimonial home and cottage. But she was successful on her request for retroactive and ongoing child support (although I did not accept her argument about Mr. Cutler’s income). Finally, Ms. O’Neill was partially successful on her claim for s. 7 expenses.

[38] Because success was divided, I may apportion the costs on Ms. O’Neill’s motion as appropriate: Family Law Rules, Rule 24(6). However, whatever costs order I make must be fair, reasonable and proportionate: Family Law Rules, Rule 24(12). I can consider the conduct of the parties, the time spent and fees incurred on the motion, and any offers made.

[39] Both parties argue the other has acted unreasonably. Ms. O’Neill argues that Mr. Cutler unreasonably refused to pay child support for years and unreasonably moved into the cottage without her consent, both of which she says necessitated the motion. I agree that Mr. Cutler acted unreasonably at least in relation to his child support obligation. Mr. Cutler has had an obligation to support his children since he and Ms. O’Neill separated, and he chose not to do so for more than two years.

[40] Mr. Cutler argues Ms. O’Neill acted unreasonably because she made no meaningful effort to settle. I agree. Ms. O’Neill served an offer to settle on Mr. Cutler three days before the motion was heard. Her offer essentially just tracked the relief sought in her notice of motion. The offer did not contain any compromise in relation to the ownership or sale of the cottage. The offer did not contain any compromise on the issue of Mr. Cutler’s income for the purpose of calculating child support. The offer contained a very small compromise (of less than $5,000) in relation to the s. 7 expenses and an even smaller compromise (of less than $2,000) in relation to Ms. O’Neill’s claim to be reimbursed for Mr. Cutler’s personal expenses. I agree with Mr. Cutler that Ms. O’Neill’s offer does not appear to be a genuine attempt to settle. Rather, it seems to have been a strategic move so she would be able to claim enhanced costs if she was entirely successful on the motion. Parties are expected to make meaningful efforts to avoid litigation and settle matters without court intervention.

[41] Mr. Cutler made two offers to settle. His offers were reasonable and were a good faith attempt to settle. Some aspects of his offer are the same as what I ordered. For example, in his last offer, Mr. Cutler proposed that he would pay $3,383 a month in child support, which is exactly what I have ordered him to pay when his eldest son is away at university. In terms of s. 7 expenses, he offered to pay 33%, which is almost exactly what I ordered him to pay. However, he offered to pay less in retroactive child support and retroactive s. 7 expenses than I ordered him to pay.

[42] In terms of time spent and fees incurred, it is not possible to tell from either bill of costs how much time counsel spent on the issues on which Ms. O’Neill was successful and the issues on which Mr. Cutler was successful. I am, therefore, left to decide what costs are reasonable and proportionate having regard to the level of success and the complexity of the issues.

[43] I find that Ms. O’Neill and Mr. Cutler should bear their own costs in relation to their competing claims in relation to the ownership of the cottage, which were both unsuccessful. The issues related to the ownership or sale of the cottage were legally complicated. I find that at least half of the time was spent preparing and arguing those issues.

[44] I find that Ms. O’Neill is entitled to some costs in relation to her claim for retroactive child support and retroactive s. 7 expenses. I find that only half of Ms. O’Neill’s legal fees relate to the child support issues, which would be $12,414.75 on a partial indemnity basis. However, my order was identical to Mr. Cutler’s offer on both ongoing child support and what proportion of s. 7 expenses Mr. Cutler is required to pay. Had Ms. O’Neill accepted his reasonable offer on those issues, the motion would have been shorter and less complicated.

[45] I find that it would be just, reasonable and proportionate to require Mr. Cutler to pay Ms. O’Neill $10,000 in costs inclusive of HST and disbursements on Ms. O’Neill’s motion.

H. Costs for the two case conferences to resolve the retroactive s. 7 expenses for their child’s post-secondary education expenses

[46] Ms. O’Neill requested a case conference to address the calculation of retroactive s. 7 expenses because she and Mr. Cutler could not agree. Ms. O’Neill also sought a ruling that Mr. Cutler owed her an additional $4,000 towards the December 2022 carrying costs of the cottage. There were two hearings – January 27, 2023 and February 9, 2023 – to address those two issues.

[47] Mr. Cutler now seeks $9,100 in full recovery costs for the two appearances. Ms. O’Neill seeks $5,000 in partial recovery costs for the two appearances.

[48] Success was divided on the post-motion issues. On the one hand, I ruled in favour of Ms. O’Neill that Mr. Cutler owes a further $4,000 towards the December 2022 carry costs of the cottage. On the other hand, I ruled largely in Mr. Cutler’s favour in relation to the retroactive s. 7 expenses and I ruled that their son should contribute to his incidental expenses. I must, therefore, apportion the fees as appropriate.

[49] Ms. O’Neill’s original position on the ancillary expenses related to their child’s “room and board” was unreasonable. It was obvious from a cursory review of just a few pages of the credit card statements Ms. O’Neill filed in support of her claim that many of the charges (particularly those from the LCBO, the Beer Store and cannabis dispensaries) were neither necessary nor reasonable and do not qualify as s. 7 expenses.

[50] I find that Ms. O’Neill’s conduct in relation to the case conferences was also unreasonable for three reasons. First, the first appearance was not productive because Ms. O’Neill did not analyze their child’s credit card statements. It was not reasonable for Ms. O’Neill to expect the Court to audit 100 pages of their child’s credit card statements. Second, between the two conferences, Ms. O’Neill’s lawyer did not respond to a request from Mr. Cutler’s lawyer to discuss the matter. Parties are expected to discuss and try to settle or narrow the issues before every court appearance. Finally, Ms. O’Neill did not give Mr. Cutler all the relevant disclosure until the morning of the second appearance. She uploaded additional credit card statements a few minutes before the second conference started. I appreciate that Ms. O’Neill is frustrated by Mr. Cutler’s reluctance to pay what she feels he owes her. I also appreciate that she is angry that he failed to support the children and failed to pay his share of the carrying costs of their properties for years. Nonetheless, as the applicant, Ms. O’Neill had the burden of proving the s. 7 expenses she was claiming are reasonable and necessary. She cannot expect Mr. Cutler to simply accept her calculations. She also has an obligation to provide all relevant disclosure in a timely manner.

[51] In my view, it is appropriate for Ms. O’Neill to pay a small amount in costs for the time thrown away on the first conference. Otherwise, I find that it is fair and appropriate for the parties to bear their own costs because success was divided. Ms. O’Neill shall pay Mr. Cutler $2,500 for the costs thrown away for the first appearance.

I. Conclusion and Order

[52] Ms. O’Neill and Mr. Cutler agree that my ruling on retroactive s. 7 expenses for 2021 and 2022 will not be revisited at trial. They also agree that my ruling on the budget for ancillary expenses for their eldest child pending trial will not be revisited at trial. The parties are free to call evidence and make arguments at trial that the budget for ancillary expenses related to their eldest child’s post-secondary education at trial should be changed going forward.

[53] Mr. Cutler is entitled to a credit for the two $2000 payments he made in November and December 2022 in the final post-separation adjustments.

[54] The following interim order shall issue:

a. The retroactive s.7 expenses for ancillary expenses related to their eldest child’s post-secondary education for 2021 and 2022 are fixed at $16,080.53.

b. Within 30 days, Mr. Cutler shall pay Ms. O’Neill $3,504.48 for his share of the retroactive ancillary expenses related to their eldest child’s post-secondary education.

c. Pending trial, the monthly ancillary fees related to their eldest son post-secondary education shall be fixed at $1000 for any month their eldest child is living away from home for university or a co-op placement as part of his university program. Their eldest child is responsible for one third of his ancillary expenses. Mr. Cutler shall pay $217.93 towards ancillary expenses each month. Ms. O’Neill shall contribute $448.73 towards ancillary expenses each month.

d. Within 30 days, Mr. Cutler shall pay Ms. O’Neill $4,000 for the expenses incurred by Ms. O’Neill for the cottage and matrimonial home between December 5, 2022 and January 5, 2023.

e. Mr. Cutler shall forthwith pay Ms. O’Neill $10,000 in costs inclusive of HST and disbursements on Ms. O’Neill’s motion and his cross-motion.

f. Ms. O’Neill shall forthwith pay Mr. Cutler $2,500 in costs inclusive of HST and disbursements for the two appearances on January 27, 2023 and February 9, 2023.

Davies, J.

Released: February 15, 2023

COURT FILE NO.: FS-21-26930

DATE: 20230215

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ARLENE O’NEILL

Applicant

– and –

BRIAN CUTLER

Respondent

REASONS FOR JUDGMENT

Davies, J.

Released: February 15, 2023