COURT FILE NO.: FC290/21

DATE: September 12, 2024

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Debbie Shipway

David R.S. Pentz, for the Applicant

Applicant

• and -

Scott Kenneth Shipway

Self-represented

Respondent

HEARD: April 15, 16, 2024

REASONS FOR JUDGMENT

HASSAN J.

INTRODUCTION

[1] The Applicant, Debbie Shipway, and the Respondent, Scott Shipway, separated in September 2016, after a 13-year relationship. They were married for nine years.

[2] At the time of their separation the parties entered a comprehensive Separation Agreement resolving all issues between them.

[3] For the purposes of this proceeding the Separation Agreement provided that the parties would share "custody" (now decision-making responsibility) of the only child of the marriage, Jade Shipway, born November 3, 2008, and that the Respondent would have access (now parenting time) with the child, Jade, on alternate weekends, one mid-week visit and shared holiday time. The Respondent was to pay child support pursuant to s. 3 of the Child Support Guidelines, O. Reg. 391/97.

[4] This Application was commenced in November 2021. The Applicant sought to change the Separation Agreement between the parties, relating to decision-making responsibility, parenting time, child support and special expenses for the child, Jade. She sought to impute income to the Respondent, in the event that he retired early from his employment.

[5] The Respondent filed an Answer and Claim in January 2022. He agreed to a change in the Separation Agreement, and sought orders relating to parenting time, child support and special expenses. He sought shared parenting time with the child, Jade. He indicated that he intended to reduce his employment hours or retire from his employment, due to health issues. He indicated his retirement would allow him to spend more time with Jade.

[6] By order of March 22, 2024, the claim for Divorce was severed from the corollary issues and was to be finalized on Affidavit evidence. The Divorce has not been granted to date. The parties asked that the Divorce be finalized along with my Judgment on the issues below.

[7] By order of May 4, 2023, the parties resolved all parenting issues on a final basis, with the assistance of counsel who had been appointed for the child, Jade. The parties agree that pursuant to the parenting time terms, the Respondent has care of the child, Jade, for at least 40% of the time. Child support, then, will be determined pursuant to s. 9 of the Child Support Guidelines.

[8] In a related order in May 2023, the remaining issues in the proceeding were identified as child support, benefit plan and s. 7 expenses.

[9] The Respondent did leave his employment, in January 2022. He conceded that income should be imputed to him, based on his previous employment income. His only source of income, following the departure from his employment, is dividend income paid to him from stocks purchased with proceeds of sale of a property and some investments.

[10] The Applicant took the position that employment income should be imputed to the Respondent, in addition to his dividend income.

[11] The Respondent took the position that income should also be imputed to the Applicant, for rental income she is or could be earning.

[12] The parties also disagreed about the proportionate sharing of special expenses for the child, Jade.

[13] Following his departure from his employment the Respondent obtained a benefit plan to cover himself and the child, Jade. The parties disagree about how expenses not covered by both benefit plans should be divided between the parties.

ISSUES

[14] The issues I must determine, then, are:

1. Divorce.

2. Should income be imputed to the Respondent, for both his employment income and dividend income, for the purposes of child support?

3. Should income be imputed to the Applicant for not maximizing her rental income?

4. What would be the most appropriate quantum of child support under s. 9 of the Child Support Guidelines?

5. What would be the most appropriate proportionate sharing for s. 7 expenses?

6. Should medical, dental and optical expenses be shared disproportionately?

RELEVANT FACTS

[15] Evidence at trial consisted of the Affidavit of the Applicant, sworn on April 12, 2024, the viva voce evidence of each party, and various Exhibits offered by each party.

Background

[16] The Applicant, Debbie Shipway, is 46 years of age, having been born on June 27, 1978. She is an Industrial Electrician. She resides with her partner, Charles Shaw, in a home they jointly own, on a farm property near Eden, Ontario.

[17] The Respondent, Scott Shipway, is 52 years of age, having been born on December 17, 1971. He is also an Industrial Electrician. He resides at a home owned by him, in Aylmer, Ontario.

[18] The parties were married on January 10, 2007. They have one child, Jade Shirley Shipway, born November 3, 2008.

[19] Following separation the parties resolved all issues between them by way of a Separation Agreement, including a parenting schedule and child support for the child, Jade.

[20] Both parties sought to change the parenting terms and child support in this proceeding.

[21] By May 2023, the parties had resolved the parenting issues on a final basis, which is contained in the Order of Gorman J. dated May 4, 2023. As indicated above, the Order resolved all issues, with the exception of child support, special expenses and benefits plans. These issues were the subject of the trial which proceeded for one and a half days on April 15 and 16, 2024.

Income of Applicant

[22] The Applicant is an Industrial Electrician. As of December 2023, she has been employed at Dr. Oetker in London and earns $85,176 from her employment, according to her Financial Statement sworn January 24, 2024.

[23] The Applicant also earns rental income from a property jointly owned by her and Mr. Shaw. The home is rented to Mr. Shaw's mother, at a rental rate of $750 per month. The Applicant conceded that the rental income was below market rent for the property, which she estimated at $2,000 per month. She testified that the rent was reduced to accommodate Mr. Shaw's mother, who lives with a number of medical issues. She included one-half of the rental income in her Financial Statement. She testified that the property runs at a deficit, with the rental income being received. Her total income, including one-half of the rental income, is $89,376.

[24] The Applicant is also a 25% owner of a property, with her mother. She testified that she was placed on title to assist her mother in purchasing the property and that she neither contributes to the property nor receives any income from the property.

Income of Respondent

[25] The Respondent was previously employed at Formet Industries in St. Thomas, and had been for approximately 24 years. He earned an average of around $90,000 in his last three years of employment. His income from employment for his last full year of employment, being 2021, was $82,770, according to his 2021 Income Tax Return.

[26] The Respondent left his employment in January 2022. He testified that he was experiencing pain as a result of Rheumatoid Arthritis. He testified that he had to stand on hard floors during his employment and experienced pain despite taking medications, including Morphine.

[27] The Respondent did not provide any medical evidence relating to his medical issues. He testified that he was not relying on a disability as the reason for leaving his employment, and he conceded that income should be imputed to him for voluntarily leaving his employment.

[28] The Respondent referred to his decision to leave his employment as a voluntary retirement. He offered no evidence relating to his alleged retirement. He did not provide his Record of Employment, which would indicate his reason for leaving his employment, or any letter of resignation or retirement.

[29] The Respondent testified that he did not receive any payout upon leaving his employment. On cross-examination he indicated that he received a payout from Magna's profit-sharing program, of approximately $2,446 (Formet is owned by Magna). He testified that the remaining entitlement from the profit-sharing benefits was paid into his R.R.S.P. He indicated that Magna matches R.R.S.P. contributions toward the purchase of Magna stock.

[30] The Respondent did not provide any documentation relating to funds received upon leaving his employment, or relating to the profit-sharing benefits.

[31] The Respondent's source of income at present, consists of dividends earned from shares purchased in 2021, following the sale of a property and some investments.

[32] The Respondent provided no evidence relating to the sale of his property or investments or relating to the investments subsequently made in the stock market.

[33] On cross-examination, the Respondent indicated that he sold a property sometime in 2021 and invested the proceeds in the stock market. The Respondent testified that he sold the property at the peak of the market and that he invested at just the right time and his investments increased considerably.

[34] The Respondent did not provide any evidence or documentation relating to any of his investments or stock holdings. His Financial Statement dated January 13, 2024, indicated a Scotia itrade investment account totalling $1,111,320, a Scotia itrade TFSA totalling $111,186, and a Scotia itrade R.R.S.P. account totalling $1,057,952.

[35] In 2021, prior to leaving his employment, the Respondent earned taxable dividends of $32,791 from his investments, and capital gains of $51, in addition to employment income of $82,770, for a total Line 15000 income of $115,614.

[36] The Respondent's Notice of Assessment for 2022 indicates that he earned total Line 15000 income of $80,383. He did not provide his Income Tax Return for 2022. The Respondent agreed in cross-examination that the majority of this income would be from dividend payments, with only a few weeks of employment income in January 2022, prior to leaving his employment.

[37] The Respondent did not provide an Income Tax Return for 2023. His Notice of Assessment indicates total Line 15000 income of $78,168. Attached to his February 2024 Financial Statement was a T5 Statement of Investment Income for 2023, indicating a taxable amount of eligible dividends of $77,702. The Respondent testified that the small difference would be capital gains earned in 2023.

[38] It was put to the Respondent in cross-examination that he could have continued in his employment and still receive the dividend income from his investments. The Respondent did not deny this proposition but indicated that if he was still working he would have structured his investments so as not to receive dividends. He testified that he structured his investments so as to allow for his retirement and still be able to support himself and Jade, as he did not have an employment pension.

Special Expenses and Benefit Plans

[39] After the Respondent left his employment, he purchased a private benefit plan for himself and the child, Jade. He did not advise the Applicant or provide details of the plan.

[40] After the Applicant changed her employment her benefit plan changed. She did not advise the Respondent or provide details of the plan.

[41] By Temporary Order of March 22, 2024, the parties were each ordered to maintain the child, Jade, on any extended benefit plan available to them and to equally share the cost of any expense not covered by the benefit plans. The parties were ordered to provide details and a copy of their benefit plan. The respective plans were provided at the commencement of trial.

[42] By final consent order of May 4, 2023, the parties agreed to equally share the cost of reasonable extracurricular activities, agreed to between the parties. The parties had also previously agreed to share the costs of Jade's therapy and counselling.

Respondent's Lack of Disclosure

[43] I will comment briefly on the Respondent's lack of financial disclosure, as it factored largely at this trial.

[44] In proceedings involving a claim for support, both parties have an obligation, pursuant to the Family Law Rules and the Child Support Guidelines, to produce evidence sufficient to determine their income for support purposes. This obligation is ongoing and up to the time of trial (see rule 13 of the Family Law Rules and s. 21 of the Child Support Guidelines). The requirement does not depend on a request; any time a spouse's source or quantum of income changes, proof is to be provided forthwith and, in most cases, a fresh Financial Statement or Certificate of Financial Disclosure should be served. Parties need to know the level and sources of income of the other parent to be able to properly prepare for trial and to consider settlement terms prior to trial.

[45] In this case, the Respondent was not only under a duty to disclose his employment and income information, pursuant to the Family Law Rules and Child Support Guidelines, he was also under an obligation to produce ongoing income information, pursuant to an order of Price J. dated March 30, 2022.

[46] I find that the Respondent failed in his responsibility and legal obligation to produce ongoing updates and proof of his income. I also find that the failure was an intentional attempt to prevent the Applicant from knowing about the circumstances of his departure from his employment and details of the sale of his property and investments and his providential investment in the stock market.

[47] The Respondent testified that he sold his property and made his investments in the stock market sometime in 2021. He indicated at one time in his testimony that it was in the summer and at another time in the fall. He testified that he left his employment at Formet in January 2022. He did not provide a date or a Record of Employment. His Income Tax Return for 2021 indicated that he earned employment income of $82,770 and dividend income of $32,791.

[48] The Respondent sworn a Financial Statement on January 17, 2022. He indicated his income to be solely from employment, in the amount of $80,119. There is no mention in his Financial Statement, of the $32,791 dividend income earned in 2021, or of any dividend income being earned at the time he swore the Statement. Under his Bank of Nova Scotia investment account, the Respondent simply indicated "TBD". This was the same for his R.R.S.P. accounts. The Schedule A for Additional Sources of Income, which specifically lists "total amount of dividends received from taxable Canadian corporations" is blank. The Respondent attached pay stubs from Formet, for the periods ending December 20, 2021 and January 2, 2022. No T5 is attached for dividend income from 2021.

[49] By January 2022 the Respondent was well aware of his intention to leave his employment; the value of his investments and R.R.S.P's; and the dividend income he was earning from his investments. I find that he deliberately withheld this information and deliberately swore an inaccurate Financial Statement. The Respondent laid the blame on his lawyer at the time and testified that she chose what to include and that he did not look closely at it before swearing it. I do not accept that explanation or deflection of blame. The Respondent was fully aware of his income, including dividend income, and the value of his investments. I find he simply chose not to include this important information in his sworn Statement.

[50] The Respondent did not serve an updated Financial Statement for another two years, when he served his Financial Statement of February 2024, after this matter was set for trial. For the first time he disclosed his status as "retired"; his 2023 income; his dividend and capital gains income; and the value of his investments and R.R.S.P.'s. He did not provide a Record of Employment or statements from any of his investments. That information was never provided.

[51] By the time this matter was called to trial on April 15, 2024, the Respondent had still not disclosed the date he left his employment; the details or statements of his investments; or the details of his investment income, aside from what was contained in his February 2024 Financial Statement. He served a Document Brief for the trial but still did not include any of this highly relevant evidence.

[52] It was only during the Respondent's cross-examination that the Applicant learned for the first time, when the Respondent retired; the nature of his investment income; and the fact that he was receiving dividend income while still employed at Formet.

ANALYSIS

Imputation of Employment Income

[53] Section 19(1)(a) of the Child Support Guidelines provides that a court may impute income to a parent as it considers appropriate in the circumstances, which circumstances include:

1. Their intentional under-employment or unemployment, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse (subsection 19(1)(a));

2. The spouse has failed to provide income information when under a legal obligation to do so (subsection 19(1)(f)).; and

3. The spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax (subsection 19(1)(h)).

[54] The potential imputation of income follows from the obligation on all parents to maximize their earning capacity and to ensure that their children receive the full benefit of that income earning potential. Decisions and plans of parents are judged in terms of this obligation, with consideration for the interests of the child(ren) over the preferences and wishes of the parent. The standard is reasonableness.

Drygala v. Pauli, 2002 CanLII 41868 (ON CA); Lavie v. Lavie, 2018 ONCA 10 (C.A.).

[55] The Court in M.A.B. v. M.G.C., 2022 ONSC 7207, set out the steps in the three-fold analysis, as follows:

1. First, the court must determine if the party in question has been deliberately under-employed or unemployed. If the answer is no, then the inquiry is at an end.

2. If the court finds that the party has been deliberately under-employed or unemployed, it must then determine whether this has been required by the reasons set out in section 19(1)(a), specifically the needs of any child or by the reasonable educational or health needs of the parent or spouse. If the court is satisfied that one of these reasons has been established, it cannot impute income to the party.

3. Even if the reasons specifically set out in section 19(1)(a) are not satisfied, the court must then determine if there is any other reasonable basis for declining to impute income to a deliberately under-employed or unemployed party. The court has a wide discretion with respect to imputation of income, and in the context of deliberate under-employment or unemployment situations, this discretion does not extend only to the situations specifically referred to in section 19(1)(a) relating to the needs of a child or the educational or health needs of the party. The exercise of the court's discretion will turn on the overall reasonableness of the payor's decisions and actions in relation to their income, taking into consideration all of the relevant circumstances.

[56] The court found that the assessment of reasonableness must be undertaken under the umbrella of the legislative and policy objectives of support, including the obligation of a spouse to financially maintain their dependants and the importance of ensuring a fair standard of support. In assessing the reasonableness of the party's decisions, the court must also be guided by the principle that parents should not be permitted to arrange their financial affairs to prefer their own interests over those of their children; M.A.B. v. M.G.C., 2022 ONSC 7207.

[57] With regard to Mr. Shipman, he conceded that income ought to be imputed to him, as a result of his departure from his employment. He did not seek to justify the decision for medical reasons or because he had previously indicated an intention to "retire" early (although he had made that representation to the Applicant).

[58] I would have found that an imputation of income was appropriate in the circumstances. The Applicant was 50 years of age at the time he elected to leave his employment. He had an ongoing child support obligation. He did not offer any evidence of a physical inability to continue to perform the tasks of his employment, as he had for the past 24 years. Although he did testify to having some health issues that were exacerbated by the duties of his employment, he did not provide any evidence of attempts to seek accommodations or to seek alternate employment. He testified that he had not left his employment due to a disability. The Applicant did not have entitlement to a pension which had vested, or to any other retirement allowances which would be triggered by his departure.

[59] In short, there was no justification present or even offered by the Applicant to leave his secure, well-paying job.

[60] I have no hesitation in finding that income ought to be imputed to the Applicant, as a result of his intentional unemployment.

Quantum

[61] With regard to quantum, the Applicant also conceded that income should be imputed consistent with his previous employment income. He proposed the sum of $85,000. The Applicant also proposed $85,000, being slightly less than the average of the Applicant's last three full years of employment.

[62] The Applicant initially sought to impute employment income of $97,000, in her first draft order. This, however, was prior to learning the details of the Respondent’s departure from his employment and the nature and quantum of the Respondent's investments. The Applicant learned, for the first time, at trial, about the details of the Respondent's date of "retirement" and of the nature of the Respondent's present income. As discussed below, the Applicant then sought to impute investment income of $75,000 per annum, in addition to the Respondent's employment income.

[63] I find imputed employment income of $85,000 to be appropriate. It is consistent with the quantum both parties suggested, and reflects an average of the Respondent's income prior to his departure from Formet.

Duration

[64] Neither party offered evidence or submissions as to how long employment income should be imputed to the Respondent. Absent this evidence I find that it would be reasonable to conclude that the Respondent would work to the regular retirement age of 65 (see Fratianni v. D'Ambrosio, 2019 ONSC 2190).

[65] It is quite possible that the child, Jade, will cease to be a dependent prior to this retirement age.

Imputation of Investment Income

Position of the Applicant

[66] The Applicant submitted that I should impute the Respondent's investment income, in addition to his employment income. This submission was only made at the close of trial, during closing arguments. This was because the Applicant only became aware of the date of the Respondent's retirement and the nature of his income during the trial. The Applicant argued that the Respondent's substantial investment asset has the ability and is, in fact, earning income, completely separate from his employment. For a period of time he was earning both incomes. She argued that the Respondent had the discretion to decide how much income he would receive from his stock holdings and he structured his investments to receive dividend income. She submitted, the Respondent's asset does not diminish in value and he could elect to continue receiving dividends without reducing the value of his holdings. In this sense, the Applicant argued, the investments differ from an employment pension or R.R.S.P. withdrawals, in that the income earned does not change the value of the asset.

[67] The Applicant also submitted that I should take into account the fact that the Respondent attempted to hide his assets and mislead the Applicant as to the nature of his income and assets.

Position of the Respondent

[68] The Respondent conceded in cross-examination, that there was a period of time wherein he was receiving both employment income and investment income. He testified, however, that he structured his investments to receive a sufficient income to meet his and Jade's needs, in anticipation of his retirement. He testified that he would have structured his investments differently, to purchase property rather than receive income, if he was not going to retire.

Decision

[69] I agree with the Applicant, that the Respondent's investment income ought to be included in his total income for support purposes, in addition to the imputed employment income.

[70] I start from the principle that spouses have an obligation to maximize their earning capacity for the purposes of determining their child support obligation. The objectives of the Child Support Guidelines include the goal that children benefit from the financial means of their parents.

[71] In relation to investments, Payor are expected to utilize their income earning assets with the expectation of "a reasonable rate a prudent investor might be able to earn at the relevant time" (see Halliwell v. Halliwell, 2017 ONCA 349). If a spouse fails in this obligation s. 19(1)(e) of the Child Support Guidelines provides that a court may impute income where "the spouse's property is not reasonably utilized to generate income."

[72] The Respondent made the decision in 2021 to sell his property and to invest in the stock market. He did not provide any evidence as to why he took these steps at that particular time, except to say that he was selling at the top of the market, given the Covid 19 pandemic.

[73] The Respondent was fortunate in his investments and elected to create a new income source, in the form of dividends earned from his investments. He did not provide any evidence as to the value received from the sale of his home, aside from an estimate on cross-examination. He testified that he sold at peak value and was fortunate to enjoy a significant increase in his investments. The end result was investment assets of over two million. The Respondent did not provide any details of the nature of the investments, the potential rates of return or his investment plan. Statements of the investments have never been provided. The Respondent did testify in cross-examination, that his aim was create a stream of income similar to his employment income, to continue meeting his and Jade's needs.

[74] It is not disputed that by 2021 the Respondent was earning income from two independent sources; his employment income and the income derived from his investments. By January 2022, he made the voluntary decision to terminate one of those sources by leaving his employment. I have found that this was not a reasonable decision, in the face of a child support obligation.

[75] The Respondent, at some point, made the decision that he would structure his investments so as to replace his employment income. He appears to have structured his investment so as to maximize the dividend tax credit, resulting in minimal tax payable and a net income similar to his employment. He offered no evidence as to his investment strategy.

[76] Although he made no submissions in this regard, the Respondent asks, in effect, that I treat his investment income as a form of retirement pension. I decline to do so for a number of reasons.

[77] Firstly, the Respondent's dividend income is not a pension. It was not tied in any way to the departure from his employment, except in his own plans relating to retirement. Even in this regard the Respondent offered no evidence as to the timing of his investments or any "retirement planning." The Respondent could and, in fact did, earn both forms of income for a period of time, in late 2021 to January 2022. The Respondent clearly did not have to leave his employment to earn his dividend income.

[78] Secondly, the Respondent's investments earn income without depleting the asset from which the income is earned. As was observed in Boston v. Boston, 2001 SCC 43, [2001] 2 S.C.R. 413,

"Pension income is obviously different from business income or income from an investment…..When a pension produces income the asset is being liquidated…... By contrast, when a business or investment is producing income, that income can be spent without affecting the asset itself. In fact, the business or asset may continue to increase in value."

[79] The Respondent earns his dividend income while maintaining his investment assets. He is not depleting the asset to earn income. In this sense the investment bears no resemblance to a pension asset. The Respondent did testify in cross-examination, that he may have invested differently if he was not retiring. He offered no explanation as to how or why. It would be irrelevant, in my view, as income could still be imputed for the potential income earning capacity of the investment assets. As it stands, the Respondent did structure his investments to earn dividend income. The question is, was it reasonable, then, to leave his employment and reduce his income, simply because he had created a second source of income. I find that it was not.

[80] The Respondent was earning dividend income prior to leaving his employment. He continued to earn dividend income after he left his employment. While the Respondent may have characterized his departure from his employment to be a "retirement", it was not; it was a voluntary reduction of his income. The Respondent chose to be voluntarily unemployed. The fact that I found it appropriate to impute employment income does not affect the nature of his investment income. It is income for child support purposes and should be included as income along with the imputed employment income.

Quantum

[81] Regarding the quantum of income to be imputed, the onus is initially on the Applicant to offer evidence as to the appropriate quantum to be imputed. As indicated above, the standard would be that of "a reasonable rate a prudent investor might be able to earn at the relevant time."

[82] However, the Respondent provided no evidence of the funds received; the investment options considered; the potential rates or return; the nature of his actual investment; or the decisions made which led to his present investments. Neither the Applicant nor the Court can make any determination as to what a fair and reasonable imputation of income would be, for the investments.

[83] As observed by the Court in Di Sabatino v. Di Sabatino, 2022 ONSC 334;

A spousal support applicant is entitled as of right to have the support claim determined on the basis of full, fair and frank financial disclosure. An applicant should not be required to forensically uncover and/or reconstruct the respondent's true financial affairs by engaging in a series of costly motions and negotiations. While keeping one's cards "close to the vest" is a shrewd tactic in business (as it is in poker), it is not so in family law. To the contrary, it is not only unwise, it is also prohibited and can result in a loss of standing in the proceedings, see Manchanda v. Thethi, 2016 ONCA 909 at para. 13.

[84] In this case, the Applicant did not seek an adjournment to receive disclosure relating to the Respondent's investments, in order to offer submissions as to the appropriate amount to impute. Instead, she asked only that I impute what the Respondent was actually earning from his investments. I accept that as the most reasonable quantum in the circumstances.

[85] The Respondent's dividend income appears to be earned entirely through taxable Canadian corporations, making the dividends eligible Canadian dividends. Section 5 of Schedule III of the Child Support Guidelines provides that in determining the Respondent's income for child support purposes, the court should "Replace the taxable amount of dividends from taxable Canadian corporations received by the spouse by the actual amount of those dividends received by the spouse." This amount will then be grossed-up through the Divorcemate software, to reflect the tax savings received through dividend tax credits. This credit adjusts the tax which would be included from the eligible dividend income to account for the fact that the income was already taxed in the hands of the corporation.

[86] I find, then, that the appropriate quantum to impute to the Respondent, for his investment income, to be the "actual amount of eligible dividends" shown on his 2023 T5 Statement of Investment Income, being $56,306.05. This amount will be grossed-up and added to the imputed employment income, for a total income for support purposes, of $159,854 (see Divorcemate calculations attached as Schedule A to this Judgment).

Duration

[87] Given the complete lack of evidence offered by the Respondent, in relation to his investment income, I find the above imputed quantum to be the minimum income he could earn from his investments. Accordingly, should the Respondent earn more from his investments, then that is the amount that should be included as income for child support purposes, in addition to the imputed employment income provided for above.

Imputation of Rental Income to the Applicant

[88] The Respondent submitted that the Applicant was not disclosing or including income from properties she owns.

[89] The Applicant conceded having an interest in the property located at 650 Cheapside Street in London, jointly with her partner. She conceded that the property was being rented to her partner's mother, at a rate well below market rental rates in the area. She testified that they lose money each month, with the property, but arranged for the purchase to assist her partner's mother.

[90] I find that income should be imputed to the Applicant, for the rental income earned from this property. The Applicant also has an obligation to maximize her income for child support purposes.

[91] The Respondent has the onus of offering evidence as to the amount he seeks to impute. He did not offer submissions in this regard. He did file a Document Brief containing some documents relating to property values, but did not seek to have any of the documents adduced into evidence.

[92] The Applicant included the sum of $350 per month as net rental income, in her Financial Statement. This is one-half of the rental income received from the property. I find this to be an appropriate amount to include as imputed rental income to the Applicant. While rental income would generally be reduced by rental expenses, I find this rental amount should not be reduced, given the voluntary reduction in rental income which could be earned.

[93] The Applicant's income for support purposes, then, would be $89,376, as set out in the Divorcemate calculations attached.

CHILD SUPPORT

[94] The parties agree that their respective child support obligations should be determined pursuant to s. 9 of the Guidelines. The parties agree that under the existing final consent order of May 4, 2023, the child, Jade, is in the care of the Respondent for a minimum of 40%, triggering the provisions of s. 9. The Applicant conceded that the child, Jade, often spends more time in the care of the Respondent, than is provided in the May 2023 Order.

[95] Section 9 of the Federal Child Support Guidelines, SOR/97-175, addresses the determination of the quantum of child support in shared parenting scenarios. It provides:

Shared parenting time

9. If each spouse exercises not less than 40% of parenting time with a child over the course of a year, the amount of the child support order must be determined by taking into account

(a) the amounts set out in the applicable tables for each of the spouses;

(b) the increased costs of shared parenting time arrangements; and

(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

[96] The Supreme Court of Canada, in Contino v. Leonelli-Contino, 2005 SCC 63, set out the approach required in determining a child support obligation under s. 9 of the Child Support Guidelines. The Court found that in creating the s. 9 category, the makers were acknowledging that in shared custody situations (now referred to as shared parenting time), neither the straight s. 3 support, nor a straight "set-off" amount, were necessarily appropriate, and that there were no presumptions either way. Instead, the Court is to consider the circumstances of both parties and the children, to determine the appropriate support for that family. The court indicated:

3. When dealing with shared custody, however, the formula used in ss. 3 and 8 was not retained. New categories of custodial arrangements were created under s. 9…

Pushing in favour of some adjustment is a concern for fair and consistent treatment of payors who incur increased expenses during the time they spend with the child. There are two dimensions to the fairness claim. The first is fairness between the payor and the support recipient, who is arguably being relieved of some costs assumed by the payor. The second is fair and consistent treatment of the payor as compared to payors at the same income level who may not be spending any money directly on their children apart from the payment of child support.

But then adjustments are hard to evaluate. More time spent with a child may not involve increased spending or significant savings for the other parent. Where there is a significant disparity of incomes, a new formula can mean a drastic change in the amount of support for the lower income parent, who was previously the custodial parent, and exacerbate the differences in standard of living in the two households. There is also a concern that shared custody can entail more cost in duplication of services and leave less money for support.

[97] The Applicant testified that as of February 2020, she and her partner moved into a larger home on a hobby farm. She indicated that Jade benefited from the larger home and open space and her involvement with the animals they kept on the farm. She indicated that she had an alarm system installed for times when Jade was alone in the home, as a result of her work schedule. She also testified to needing to purchase a satellite to allow for better internet access and to sharing the cost of Jade's cell phone, with her, needed to contact her and her Father. She testified that she paid for all of Jade's haircare. She agreed that she had not requested contribution from the Applicant for the phone or haircare costs. The Applicant agreed that the parties generally shared the cost of Jade's clothing and uniforms and that she purchased winter boots and a winter coat, which moved back and forth with Jade. The Applicant also referred to school fees and a laptop bag, which the Respondent did not contribute to and was not asked to.

[98] The Applicant earns $89,000 per annum. She shares household expenses with her partner. She and her partner own two properties and she has a 25% interest in a property, with her Mother. The Applicant has a vehicle, R.R.S.P's and savings. Her Financial Statement indicates a net worth of just over $600,000.

[99] The Respondent testified to increased housing costs to accommodate his increased time with Jade, since the May 2023 Order. He testified that he undertook renovations to his home to provide for a bedroom for Jade and improvements to the home, including a new kitchen, appliances and a new heat pump system. He also testified to increased costs for hydro, vehicle expenses, groceries and clothing. Both parties testified to purchasing art supplies for Jade, who has a love of and talent for art.

[100] The Respondent owns one property where he resides. He has a vehicle and savings and investments. His Financial Statement indicates a net worth of over $2.7 million.

Decision

[101] Based on my imputation of income above, the Respondent's income for child support purposes, is $159,854. The Applicant's income is $89,376. She also benefits from the contributions of her partner, toward their household expenses, which she indicates is about $1,800 per month.

[102] The set-off amount of child support, based on the respective incomes I have found for the parties, is $541 per month, payable by the Respondent. This is the starting point of my analysis.

[103] Prior to the change in parenting time, the Respondent was paying child support in the amount of $800 per month.

[104] I do not find that either party experienced any significant change in their day-to-day living costs, as a result of the move to a more shared parenting schedule. Both parties testified to changes in their housing, but I do not find that either change was necessitated or even initiated as a result of their time with Jade.

[105] I find that both parties share a similar standard of living in their homes, with neither living an extravagant lifestyle. The Applicant has higher expenses, resulting largely from taxes and mortgage costs, not incurred by the Respondent.

[106] The Respondent does have assets of significantly higher value than the Applicant, owing largely to his timely and profitable investments. The portion of assets not attributed to income earning are largely held as savings. I do not find that the increased assets have resulted in any significant increase in the Respondent's standard of living, from prior to his investments.

[107] With close to equal parenting time with the child, Jade, comparable standards of living in the respective households, and similar costs incurred on behalf of Jade (once special expenses are defined), I find that the set-off quantum of child support, in the amount of $541 per month, to be appropriate in the circumstances.

Retroactive Adjustment of Child Support

[108] The Applicant seeks an adjustment to child support, retroactive to June 2023, when the Respondent unilaterally stopped his child support payments.

[109] The income sources I have imputed to the Respondent, have existed since some time in 2021. The change in parenting time commenced in May 2023. The Respondent ought to have been paying the set-off child support commencing June 2023. Arrears of child support, to September 2024, then, would total $8,656.00. The Applicant asks that the arrears be paid at a rate of $300.00 per month, which I find to be reasonable.

SPECIAL EXPENSES AND BENEFIT PLANS

[110] Neither party made submissions with regard to the sharing of special expenses, with the exception of reference to the sharing of medical, dental and optical costs not covered by either parties' benefit plan.

[111] After the Respondent left his employment, he obtained private benefit coverage for himself and the child, Jade. The benefit plan was only provided at the commencement of trial (as was the Applicant's plan).

[112] The Applicant argued that to the extent that the Respondent's plan was inferior to her employment plan, he should pay more of the costs not covered by either plan. No evidence was offered and no submissions were made, as to what that difference would be. I am not in a position to make that determination.

[113] The Applicant also argued that the expenses covered by the parties’ plans should be shared and each submit their portion to their benefit plan. No evidence was offered as to whether either plan would allow for this form of benefit coverage. Generally, coverage must be sought from one plan initially and then a determination made as to whether the other plan can cover any shortfall. I am not in a position to determine whether the parties’ plans provide for any other process. Absent that evidence, the parties should simply share the costs of expenses once benefit coverage has been maximized.

[114] The Order of May 4, 2023 provides that the parties will equally share the costs of agreed upon extra-curricular activities. At present, this consists of Jade's involvement in the Reach for the Top school team.

[115] The parties agreed to equally share the costs of therapy and counselling for Jade, not covered by either parties' benefit plan.

DIVORCE

[116] As indicated, the Applicant's claim for a divorce was split from the corollary issues in March 2024.

[117] The parties have been separated since September 2016.

[118] The Applicant adduced into evidence, the parties' Marriage Certificate from Playa del Carmen, Mexico, with an English translation, and her Affidavit for Divorce.

[119] The Divorce Order will be issued separate from the order on the corollary issues.

ORDER

[120] For reasons set out above, orders shall issue as follows:

1. A separate, simple divorce order shall issue, providing that Debbie Shipway and Scott Kenneth Shipway, who were married at Playa del Carmen, Mexico, on January 10, 2007, shall be divorced and that the divorce shall take effect 31 days after the date of this order.

[121] A separate order shall issue, pursuant to the Divorce Act:

1. The Respondent's income for child support purposes, shall consist of:

a. Imputed employment income of $85,000.00 per annum, until the Respondent reaches the age of 65 or the child ceases to be a dependent, pursuant to the terms of the Divorce Act;

b. Imputed dividend investment income of the greater of the Respondent's actual amount of eligible dividends or $56,306.00, with the amount to be grossed-up to account for any dividend tax credits.

2. Commencing on October 1, 2024 and on the first of each day thereafter, the Applicant, Debbie Shipway, shall pay child support to the Respondent, Scott Shipway, for the child, Jade Shipway, born November 3, 2008, in the amount of $829.00, pursuant to section 9 of the Federal Child Support Guidelines.

3. Commencing on October 1, 2024 and on the first of each day thereafter, the Respondent, Scott Shipway, shall pay child support to the Applicant, Debbie Shipway, for the child, Jade Shipway, born November 3, 2008, in the amount of $1,370.00, pursuant to section 9 of the Federal Child Support Guidelines.

4. For convenience, commencing on October 1, 2024 and on the first of each day thereafter, the Respondent, Scott Shipway, shall pay the difference in child support owing by both parties, to the Applicant, Debbie Shipway, in the amount of $541.00.

5. Arrears of child support owing by the Respondent, Scott Shipway, to the Applicant, Debbie Shipway, for the period from June 1, 2023 to September 1, 2024, is fixed in the amount of $8,656.00, to be paid at a rate of $300.00 per month, commencing on October 1, 2024.

6. The Applicant and the Respondent shall equally share Special Expenses for the child, Jade Shipway, born November 3, 2008, pursuant to s. 7 of the Federal Child Support Guidelines, such expenses to include but not be limited to:

a. All medical, dental, optical, therapy and counselling expenses not covered by either parties' benefit plan;

b. The cost of the child’s cell phone, not paid by the child;

c. The cost of any computer and case required by the child for educational purposes; and

d. Any costs for extracurricular expenses, consented to in advance, with consent not to be unreasonably withheld.

7. The Applicant and the Respondent shall each maintain the child, Jade Shipway, born November 3, 2008, on an extended benefit plan, for as long as the child continues to be a dependent, pursuant to the terms of the Divorce Act. In the event that either party does not have a benefit plan available to them, they shall immediately obtain and secure an equivalent private benefit plan for the benefit of the child.

8. In the event that the parties are unable to resolve the issue of costs between themselves, the parties may provide written cost submissions, as follows:

a. The Applicant shall serve and file submissions within 30 days;

b. The Respondent shall serve and file submissions 30 days thereafter;

c. The Applicant shall serve and file any reply submissions 15 days thereafter;

d. Submissions shall be restricted to four pages, double-spaced and 12-point font, not including Bills of Costs or any relevant Offers to Settle. Reply submissions shall be restricted to two pages; and

e. The parties shall file cost submissions through the JSO (portal) or to StThomas.Courthouse@ontario.ca.

“Justice Sharon E. Hassan”

Justice Sharon E. Hassan

Released: September 12, 2024

COURT FILE NO.: FC290/21

DATE: September 12, 2024

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Debbie Shipway

Applicant

• and -

Scott Kenneth Shipway

Respondent

REASONS FOR JUDGMENT

HASSAN J.

Released: September 12, 2024