Kyte v. Clarke, 2014 NSSC 133

SUPREME COURT OF Nova Scotia FAMILY DIVISION Citation: Kyte v. Clarke , 2014 NSSC 133 Date: 2014-07-16 Docket: No. 1206-43643 Registry: Sydney Between: Sheila Kyte Applicant v. Richard Clarke Respondent DECISION Judge: The Honourable Justice M. Clare MacLellan Heard: September 24, 2012; October 11, 2012; May 8, 2013; and January 29, 2014, in Sydney, Nova Scotia Written Release: July 16, 2014 Counsel: Sheila Kyte, Self-Represented Darlene MacRury, Counsel for Richard Clarke PARTIES’ HISTORY [ 1 ] The parties married on September 30, 1989, and separated in April 2001.

They entered into a detailed Separation Agreement on the 21 st of November, 2002 . A consensual and detailed Corollary Relief Judgment was granted on the 5th day of August 2003 , which incorporated various portions of the Separation Agreement. The Corollary Relief Judgment was varied by consent and a less detailed Varied Corollary Relief Order issued on May 7, 2010 . The parties, in particular, Ms. Kyte, have referenced the settlement conference, the result of with which she did not fully agree.

It is necessary to clarify that the Varied Corollary Relief Order was partly the result of a settlement conference held in February 2010 but largely the result of subsequent lawyers’ negotiations. When I reviewed the file in its entirety, the settlement conference was referenced as unsuccessful. The lawyers continued to negotiate and advised the Court an agreement was reached in April 2010 and the Varied Order was granted in May 2010 . Ms.

Kyte applied to vary the Order on August 12, 2011 . [ 2 ] The areas of dispute are centred around the college expenses for Thea, the oldest child, born September 19, 1991, and the extracurricular activities for Thea and the twins, Alison and Rachel, born May 13, 1996 (hereinafter referred to as “the twins”). Ms. Kyte seeks a determination of Mr. Clarke’s annual income, based on an increase in his professional salary as an L.P.N. and from his rental income, particularly capital cost allowance claimed by Mr. Clarke. Ms.

Kyte seeks variation to deal with arrears and a prospective order for Thea’s second university degree or diploma, and increased s. 3 and s. 7s for all three children. [ 3 ] Mr. Clarke agrees to a recalculation and an adjustment of s. 3 Guideline child support based solely on the increase in his professional income, as an L.P.N. Mr. Clarke asserts he received no net income from his rental properties. Mr. Clarke opposes additional payments for university expenses for Thea and extracurricular activities for Alison and Rachel; on the basis that he does not have sufficient income.

He wishes that the twins would continue with these activities but he indicates he does not have the money to make that possible. Mr. Clarke asserts that the s. 3 maintenance, in the amount of $850.00, is sufficient to meet his responsibility for the children’s needs in relation to university expenses and extracurricular activities. Mr. Clarke maintains he is never late in paying the children’s support.

ISSUES 1. Has Ms. Kyte established a change in circumstances necessary to justify a variation in child support? 2. Is a change in circumstance necessary in relation to Thea’s college expenses? 3. What is Mr. Clarke’s income for child support purposes? (

a) What role does Mr. Clarke’s non-disclosure play in the Court’s analysis? (

b) What determination should be made in relation to Mr. Clarke’s rental properties? 4. What is Ms. Kyte’s income? 5. (

a) How should the R.E.S.P. be credited between the parties in relation to Thea’s college expenses? (

b) What is Thea’s income? (

c) What are Thea’s reasonable college expenses? (

d) What is Thea’s obligation to contribute to her college expenses? (

e) What are the proper calculations for prizes, scholarships, and grants received by Thea for university expenses? 6. (

a) What award, if any, ought to be made under s. 7, in relation to Rachel and Alison’s extracurricular activities(horseback riding, art, and music lessons)? (

b) What award, if any, ought to be made for the driver education expenses for the threechildren? 7. What, if any, retroactive order ought to be made to Mr. Clarke in relation to s. 3 Guideline support and s. 7 extra-ordinaryexpenses? 8. What, if any, arrears exist under s. 3 and s. 7? 9. Can a prospective order be made for Thea’s ongoing university expenses? 10. Is a costs award appropriate? CHANGE OF CIRCUMSTANCE [4] Pursuant to s. 17(1)(

a) of the Divorce Act, the Court has wide power to deal with the variation of an existing support order. The Court, however, still must find a material change in circumstance. This is required by the Divorce Act, s. 17(4) and Guideline s. 14. [5] I find an examination of change in circumstance for Thea’s university expenses is not necessary, given clause 7 of the currentOrder, the May 2010 Order, which provides: The parties acknowledge and agree that the child, Thea, will be attending the University College of Cape Breton in September, 2010.

Upon receipt of disclosure of the s. 7 education expenses, the parties shall attempt to reach an agreement on the payment of theseexpenses. In the event an agreement is not reached with respect to the payment of the s. 7 expenses, either party shall be entitled to filean application with the Court to have the matter heard. [6] If I am in error in my

interpretation of clause 7, I find that Thea’s university expenses do constitute a material change incircumstances sufficient to re-examine child support. [7] Mr. Clarke agrees, through counsel, that a material change of circumstance exists, given that his salary has increased since2010 and that s. 3 child support should be adjusted accordingly. He agrees college expenses and driver’s education classes do constitute achange of circumstances; however, maintains he has insufficient funds to address these changes in circumstance. [8] Mr.

Clarke argues that there is no change in circumstance in relation to the additional extracurricular activities of Rachel andAlison. He argues that he should not be required to pay any extra-ordinary expenses in relation to the twins’ extracurricular activities. Ihave been provided with no authority by Mr. Clarke to require the Court to sub divide a change of circumstance analysis to this finitedegree. I find if there is a material change of circumstance within the meaning of Willick v. Willick, (SCC), [1994]S.C.J.

No. 94, the Court is entitled to examine all aspects of child maintenance, s. 3, and s. 7, or such other sections as may be pleadedwhere a material change of circumstance has been established. [9] It is necessary to set Mr. Clarke’s income for child support purposes. The analysis of Mr. Clarke’s income has been greatlyhampered by the failure to disclose, which tragically is seen in too many child support cases. Failure to disclose is one of the primarycauses for the long delay in court cases and the frustration in analysing these cases. The non-disclosure difficulty is not necessary.

It isnot necessary in most cases and it is not necessary in this case. However, the Court was required to devote almost the entire two and ahalf (2 ½) days of evidence in order to fairly deal with the establishment of income of Mr. Clarke and, to a lesser degree, the R.E.S.P.monitored by Ms. Kyte. This is so despite a very detailed pre-trial and clear directions relating to income, rental properties, and theR.E.S.P. As well, the Varied Corollary Relief Order of May 2010 contains an obligation to both parties to disclose completed Income

Tax Returns with all attachments by June of each year. [ 10 ] Ms. Kyte was self-represented and, as such, her testimony drifted to activities and events prior to the May 2010 Order. As well, while instructed to be careful, her post trial submissions contained material not presented to the Court. While the post-trial submissions drifted into areas that were not properly before the Court, this information was not relevant. [ 11 ] I do accept Ms. Kyte’s evidence that Mr.

Clarke’s actual 2009 income was not accurately disclosed at the time of settlement conference or the subsequent negotiations that lead to the consensual Variation Order. I accept that she subsequently learned, after the Varied Consent Order was issued, that Mr. Clarke’s actual income was $10,235.00 more than she believed at the time she agreed to the Order. I believe this lack of disclosure was part of the reason that discord developed between the parties. The discord is obvious from a review of Exhibit #8, the email from Mr. Clarke to Ms. Kyte. Prior to July 2010, the parties were able to communicate directly.

I believe that the failure to disclose caused a rift that drove the parties farther apart, to the point that they communicated through the children only. [ 12 ] The parties, at the time of the settlement conference and, more importantly, the subsequent negotiations that led to the Consent Order, were represented by experienced counsel. I accept Ms. Kyte’s evidence that Mr.

Clarke’s 2009 professional and rental income was not revealed to her prior to consenting to the May 2010 Order; although his ownership of some rental units was known to her at the time. [ 13 ] The real relevant years’, 2010 to 2013, incomes are as follows (Exhibit #31 and Exhibit #33): • 2009 - $55,224.00($56,058.00 - $834.00 union dues) (Note for 2009: line 150 is $53,198.00 due to rental loss of $3,000.00) • 2010 - $55,204.00 • 2011 - $50, 957.00 • 2012 - $48,548.00 • 2013 - unknown (estimated on 3 years previous, as no data was provided for 2013 income) ($154,707.00 ÷ 3 = $51,569.00) [ 14 ] I find these figures represent Mr.

Clarke’s gross annual income from nursing minus his union dues and professional association fees. Mr. Clarke’s annual income as an L.P.N. was $55,024.00 in 2009. His 2010 income, when actually received, was $10,215.00 more than his annual income contemplated for 2010 in the Varied Consent Corollary Relief Order. [ 15 ] I find that Mr. Clarke’s refusal to disclose, as ordered by the 2010 Supreme Court Order, and the subsequent receipt of his actual 2009 income were the impetus behind Ms.

Kyte’s current application to vary. [ 16 ] From the material provided, I have been able to piece together, with some degree of difficulty, Mr. Clarke’s rental units’ income. This is a combination of my

interpretation of Exhibits #24, #31 and #33: • 2009 - Gross Rental Income - $39,825.00 - 7 units • 2010 - Gross Rental Income - $47,700.00 - 7 units • 2011 - Gross Rental Income - $47,700.00 - 7 units • 2012 - Gross Rental Income - $46,390.00 -7 units (Tax

Summary, Exhibit #33) • 2013 - Gross Rental Income - no disclosure provided. [ 17 ] Mr. Clarke’s capital cost allowance relating to the rental income is as follows: • 2009 - $0.00 (Exhibit #31) • 2010 - $12,723.00 • 2011 - $12,222.00 • 2012 - $ 8,707.00 • 2013 - no materials provided; however, there was an extra unit rented [ 18 ] It became apparent during the hearing that Mr. Clarke borrowed $80,000.00 to renovate the Park Street property. I assume that the unit would have increased his rental properties beyond the 7 rental units claimed by Mr. Clarke. [ 19 ] If Ms.

Kyte is correct in her belief that the capital cost allowance of the rental properties ought to be included totally in the calculation of Mr. Clarke’s gross annual income, then his income for the relevant years without imputation is: • 2010 - $67,927.00 • 2011 - $63,179.00 • 2012 - $57,225.00 • 2013 - $57,225.00 (Mr. Clarke’s evidence)

[20] Ms. Kyte’s income for the relevant years was: (Exhibit #1) • 2009 - $84,465.00 • 2010 - $88,132.00 • 2011 - $92,106.00 • 2012 - $87,446.00 (Statement of Income) • 2012 - Tax Return - $94,662.00. • 2013 - $94,000.00 (Ms. Kyte’s evidence) [21] It is to be noted that Ms. Kyte’s income for the year 2009 was $3,588.00 more than set out in the 2010 Varied Order. Heractual 2010 income is $7,255.00 more than projected in the 2010 Varied Corollary Relief Order. [22] Pursuant to the current Order, clause 2, the parties were to disclose their Income Tax Returns by June 1st.

Clause 2 provides: Richard Clarke and Sheila Kyte shall provide each other with a copy of his or her income tax return, completed with all attachments,even if the return is not filed, along with all notices of assessments received from Revenue Canada, on an annual basis on or before June1st. [23] The issue of full disclosure was dealt with in detail at pre-trial on August 1st, 2012, when Ms. Kyte asked for all rentalmaterials, debts and rents, and properties owned by Mr. Clarke. I find that Ms. Kyte asked for information from Mr. Clarke in order toanalyse his rental income.

According to his evidence, he simply felt she was not entitled to the receipt of this information. He refused toprovide his tax returns reflecting his annual income, although the returns were requested by Ms. Kyte on a number of occasions. Ms.Kyte did disclose her tax returns in a timely manner to Mr. Clarke and to the Court. Mr. Clarke had no issues in relation to Ms.Kyte’sdisclosure. [24] Mr. Clarke told the Court, during the two days he gave evidence, that he had receipts for all his rental expenses. He advisedthat he maintained a separate bank account for his rental property transactions.

He advised he has a professional complete his income taxreturns. Mr. Clarke advised he keeps all his properties well maintained. However, full disclosure of rental income and expenses werenever provided. Mr. Clarke’s viva voce evidence was given on 2 separate days, which were months apart. The Court did not receiveanything more substantial than Mr. Clarke’s Income Tax Return, without attachments, and his assurance that the Income Tax Return wasaccurate. This remained so, despite the Court’s direction to Mr.

Clarke to produce all rental information at pre-trial and mid-way throughhis evidence, when the Court adjourned for the day. I accept, as well, that Ms. Kyte, prior to hearing, asked for this information, and Mr.Clarke elected not to provide the same. Mr. Clarke simply stated in evidence when cross-examined by Ms. Kyte that he did not believethat she was entitled to this information relating to rental income. I advised him at that time that she was.

I accept, as well, that Mr.Clarke choose not to disclose his income tax returns for 2010 and 2011, the operative years, until June, 2012; he did not produce his 2012income tax return until a few days prior to the commencement of hearing and past the deadline directed by the Court. There were noattachments provided with the tax returns. There were no reasons or excuses provided for this failure to provide disclosure in a timelymanner or as required by the Varied Corollary Relief Order May 2010 and as required by the pre-trial conference. [25] Ms.

Kyte was advised at the pre-trial to provide all information on the children’s college fund. This material was provided lateand full disclosure was never provided in a manner to permit clear analysis. The Court is obligated to make findings based on clear andcogent information, which was very difficult in this case given the piecemeal, incomplete manner in which Mr. Clarke disclosed inrelation to the rental properties, and, to a lesser degree, Ms. Kyte disclosed in relation to the R.E.S.P. Mr. Clarke ignored his obligationto report under the Varied Corollary Relief Order.

He also ignored Guideline Rule 21(2) requiring him to provide specified informationwithin thirty (30) days of receipt of Ms. Kyte’s application. Pursuant to Guideline 21(2), he was required to provide a copy of everypersonal income tax return filed in the last three (3) years, along with Notices of Assessment, a financial statement of his business, astatement showing breakdown of salary, wages and benefits. [26] Guideline 23 provides that: 23.

Where the court proceeds to a hearing on the basis of an application under paragraph 22(1)(a), the court may draw an adverseinference against the spouse who failed to comply and impute income to that spouse in such amount as it considers appropriate. [27] Guideline 25 makes ongoing disclosure an obligation, upon request from a payee, and to do so within thirty (30) days. This isnot new law. The Nova Scotia Court of Appeal in the case of Snow v. Wilcox, 1999 NSCA 163 , [1999] N.S.J. No. 453, JusticeFlynn found at paragraph 22: 22.

In the case of a self-employed businessman, like the respondent, there is very good reason why the Court must look beyond the baretax return to determine the self-employed businessman's income for the purposes of the Guidelines. The net business income, for incometax purposes, of a self employed businessman, is not necessarily a true reflection of his income, for the purpose of determining his abilityto pay child support. The tax department may permit the self employed businessman to make certain deductions from the gross incomeof the business in the calculation of his net business income for income tax purposes.

However, in the determination of the income ofthat same self employed businessman, for the purpose of assessing his ability to pay child support, those same deductions may not bereasonable. [28] This was the same opinion expressed in the same year by then Chief Justice of the Court of Appeal, Constance Glube, in thecase of Vermeulen v. Vermeulen, [1999] N.S.J. No. 193, para. 29:

29. … It is one thing to deal with your income tax to provide the most favorable conclusion, but it is another matter if that affects theperson's apparent ability to make support payments. [29] I find, as I’ve already stated, that the analysis of Mr. Clarke’s income from the rental properties was needlessly complicated bynon-disclosure. Partial disclosure of the rental properties that were mortgaged was secured only as a result of the Court direction partway through the hearing. Mr. Clarke then provided Exhibit #32, his mortgage payments and interest for the year 2012.

Exhibit #32 isthe only receipt of expenses provided throughout this matter, along with a line of credit which I don’t classify as an income generatingexpense. In relation to the other years and expenses paid to maintain the properties, the Court has no information. I found Exhibit #32 tobe of little help in calculating Mr. Clarke’s gross rental income or net rental income for the years under review. [30] Mr. Clarke also provided conflicting evidence as to the actual number of rental units he owned. During cross-examination byMs.

Kyte, he agrees that he claimed for seven (7) units on his income tax in the years 2010 and 2011 (Exhibit #24). He claimed in thosetwo documents that he had seven (7) units when, in fact, he had eight (8). He agreed that having eight (8) units would, of course, increasethe income above what was contained as gross rental income in Exhibit #24 for the taxation years 2010 and 2011. However, elsewhere inhis evidence Mr. Clarke advised he had only seven (7) rental units. [31] Mr. Clarke also advised on his first day of giving evidence that he had not negotiated a mortgage on the Park Street rentalproperty.

On his second day on the stand, when confronted with the document, Exhibit #34, Mr. Clarke then admitted that he had an$80,000.00 mortgage on Park Street and that this mortgage existed prior to his first misstatement to the Court. He agrees the mortgagedid exist at least a month prior to him giving testimony. This property was also to be rented once renovated. The number of rental unitsthat this Park Street property produced was never questioned nor was it ever revealed. [32] In evidence, Mr. Clarke also advised that he was able to pay the costs of his rental properties entirely from the rental incomereceived.

However, elsewhere Mr. Clarke advised it was necessary for him to utilize the entire capital cost allowance to maintain hisrental properties. [33] A factual discrepancy arose in relation to disclosure by Mr. Clarke. During cross-examination, Mr. Clarke agreed that on July24, 2010, he sent a text to Ms. Kyte that he could not provide a copy of his 2009 tax return, as required. That text reads in part: “… As for the income tax, I have not filed yet. Want proof, I can give it to you. As I said before, don’t contact me. There’s no need. [34] However, when requested by the Court to produce additional information, Mr.

Clarke’s 2009 income tax return was, in fact,filed by Mr. Clarke on April 29, 2010, with Revenue Canada and so this income tax return was available for production prior to the texthe sent to Ms. Kyte on July 24, 2010. This is clear conflict in Mr. Clarke’s own testimony. No explanation was provided. [35] How I am to interpret these internal evidentiary discrepancies and failures to disclose is the issue I must decide. It is a seriousproblem that has been reviewed thoroughly in the case of Baker-Warren v. Denault, [2009] N.S.J.

No. 209, a decision of JusticeForgeron dealing with cases of contradictory evidence of a witness. A portion of that case provides (paragraphs 18 and 19): 18 For the benefit of the parties, I will review some of the factors which I have considered when making credibility determinations. Itis important to note, however, that credibility assessment is not a science. It is not always possible to "articulate with precision thecomplex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the variousversions of events:" R. v. Gagnon 2006 SCC 17, para. 20.

I further note that "assessing credibility is a difficult and delicate matter thatdoes not always lend itself to precise and complete verbalization:" R. v. R.E.M. 2008 SCC 51, para. 49. 19 With these caveats in mind, the following are some of the factors which were balanced when the court assessed credibility:

a) What were the inconsistencies and weaknesses in the witness' evidence, which include internal inconsistencies, prior inconsistentstatements, inconsistencies between the witness' testimony, and the documentary evidence, and the testimony of other witnesses: Re:Novak Estate,2008 NSSC 283(S.C.);

b) Did the witness have an interest in the outcome or was he/she personally connected to either party;

c) Did the witness have a motive to deceive;

d) Did the witness have the ability to observe the factual matters about which he/she testified;

e) Did the witness have a sufficient power of recollection to provide the court with an accurate account;

f) Is the testimony in harmony with the preponderance of probabilities which a practical and informed person would find reasonablegiven the particular place and conditions: Faryna v. Chorney (BC CA), [1952] 2 D.L.R. 354;

g) Was there an internal consistency and logical flow to the evidence;

h) Was the evidence provided in a candid and straight forward manner, or was the witness evasive, strategic, hesitant, or biased; and

i) Where appropriate, was the witness capable of making an admission against interest, or was the witness self-serving? [36] I have examined some of the factors summarized by Justice Forgeron, which she based on various Supreme Court of Canadadecisions, against Mr. Clarke’s testimony. At the end of the day, having transcribed Mr. Clarke’s evidence, having reviewed histestimony thoroughly, I find that Mr. Clarke simply made up his mind he would not disclose any material that he did not want to eventhough he told the Court on a number of occasions that he had this material available.

I find on a balance of probabilities, on clear andcogent evidence, that Mr. Clarke knew that disclosure was required of his professional income, of his rental income and he refused to

disclose. He had ample opportunities to disclose requested financial material. These opportunities were:

l) the Varied Corollary Relief Order of May, 2010; 2) the requests by Ms. Kyte, starting in July, 2010; 3) the pre-trial with the Court; and 4) the Court’s mid trial direction for Mr. Clarke to provide his rental information. The Court remained willing to accept material from Mr. Clarke mid-way through his evidence. Mr. Clarke had his opportunitiesto disclose on numerous occasions and his failure to do so can only be found to be intentional. I find the purpose of his intentional failureto disclose, particularly as it relates to the rental income, was to frustrate Ms.

Kyte’s application to vary. [37] In addition, I do not accept Mr. Clarke’s testimony that he was unaware that there was a need for monies for Thea to attenduniversity or that Ms. Kyte wished to receive extra money for the twins’ extracurricular activities. This is contradicted by a letter fromMs. Kyte to Ms. MacRury looking for assistance with Thea’s university and Exhibit #8 (at page 5), which contains various requests, atvarious times, from Ms. Kyte seeking assistance with the twins’ activities and assistance with Thea’s university expenses. [38] In addition, I find that Mr.

Clarke rebuked any meaningful dialogue with Ms. Kyte. In Exhibit #8, Ms. Kyte asked for taxinformation and for his input on vacations for the daughters. His response was received on July 14, 2010. As contained in an email(Exhibit #8), Ms. Kyte asks for information on the vacation, advises when her vacation starts and her statement in relation to the IncomeTax Return, her e-mail is polite: P.S. - I trust that you received my letter requesting a copy of your income tax return in the mail. Since I have had no response am I toassume that you do NOT wish to comply? Just need to clarify. Mr.

Clarke’s response was not: As 4 the income tax, I have not filed yet, want proof I can give it, as I said before do not contact me, there is no need. I know vacationsand you. I can vomit when I see your face or name and that’s pretty sad and never thought I would see that day, but I guess greed andjealously can overcome a person, ps want to see my mortgages, truck payments, credit cards, once again leave me alone and if thatmeans not seeing the girls so be it, not seeing them anyway...thanks Rick... I’ve always paid what we agreed to plus, and never stole offu. [39] In an attempt to establish Mr.

Clarke’s income for guideline purposes, the Court must weave its way through various sectionsin the Divorce Act and subsequent Guidelines. I have considered the Divorce Act, s. 17(4) and s.17(6.1) and s. 14(

a) of the Child SupportGuidelines, in relation to finding a change of circumstances. Now it is necessary to examine whether or not Mr. Clarke’s non-disclosurehas any effect in relation to the children’s changed circumstances as proven. In short, is he earning more income than he did in 2010. [40] The starting point for the determination of parental income is Guideline 16. Sections 17 and 19 are triggered when

Section 16and

Schedule 111 fail to provide the fairest determination of the parent’s current annual income as stated in the payor’s Income TaxReturns. [41] In Snow v. Wilcox, supra., para.17 provides that when there has not been disclosure of a self-employed parent/payor, it isappropriate to examine averaging income over three (3) years, pursuant to Guideline 17 or to impute income pursuant to

section 19. Therelevant subsections of

section 19 to this particular case are as follows: 19.

(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstancesinclude the following: … (

d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines; … (

f) the spouse has failed to provide income information when under a legal obligation to do so; (

g) the spouse unreasonably deducts expenses from income; Section 19(2) provides:

(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction ispermitted under the Income Tax Act. [42] I find, based on the evidence, that I cannot accept Mr. Clarke’s representations that the only income he receives comes from hisposition as an L.P.N. and that he receives no net income from his rental properties. [43] The issues of non-disclosure and imputation were examined by Justice Coady in the matter of Ghosn v. Ghosn, 2006 NSSC 2, [2006] N.S.J.

No. 33, where he made a determination on facts very similar to this case although the rental incomes in that casewere much larger. That case was also acutely hampered by non-disclosure. Justice Coady interpreted the various cases in examining theinterplay between

section 11 and

section 12 of

Schedule III.

Section 11 states that I should include the payor’s deduction for the

allowable capital cost allowance with respect to the real property, that this sum should be included in the gross annual income of thepayor.

Section 12 provides: 12. Where the spouse earns income through a partnership or sole proprietorship, deduct any amount included in income that is properlyrequired by the partnership or sole proprietorship for purposes of capitalization. [44] As indicated, I have virtually no disclosure that would permit a

Section 12 analysis, except the mortgage statement of one year,2012. [45] Justice Coady interpreted Justice Williams decision in Grant v. Grant, 2001 NSSF 13 , [2001] N.S.J. No. 100, andhe agreed with Justice Williams in that that there are numerous scenarios available for the individual applications of Sections 11 and 12,such that would permit a judge to make a fair analysis, based on the facts that were provided. Justice Williams found in the Grant case,at paragraph 139, 140 and 141. 139 ... Capital cost allowance on real property is considered income for Child Support purposes via s. 11 of

Schedule III.

Section 12allows deductions where the property in question is depreciating. Real property does not generally depreciate. That said, there wouldseem to be some unfairness created were capital cost allowance included in a person's income for child support purposes and thenrecaptured and again treated as income on the sale of the property. In fact, in terms of cash flow it may be argued that it is moreappropriate to treat this as income for child support purposes at the time of sale and recapture.

Were this the case, however, a personcould manipulate the level of his income (and child support obligation) by delaying the sale of property until there was no longer a childsupport obligation. 140 One can understand the sentiment behind Mr. Grant's argument.

Including capital cost allowance on real property in income forchild support purposes does not recognize the fact that in cash flow terms the mortgage principal amounts must be paid at some rate(from that income) and are not deductible in calculating line 150 total income. 141 There are arguments and equities running both ways and an endless number of scenarios possible.

In my view, there should besufficient judicial discretion to determine an outcome that is fair and considers the particular circumstances before the Court as opposedto a rigid rule. (emphasis added) [46] Justice Coady stated in the Ghosn case, at paragraph 31: 31 The Grant case essentially stands for the proposition that capital cost allowance for residential rental units should not automaticallybe included for child support purposes and principal mortgage payments not necessarily deducted. [47] In the case before Justice Coady, he found it appropriate to add all “depreciation” back into the calculation of the payor’s grossannual income and from that figure remove fifty percent (50%) of the capital cost. [48] Justice Forgeron in Murphy v.

Bert, 2007 NSSC 376 , [2007] N.S.J. No. 543, found that the interest portion of themortgage is a properly deductible expense, but the principal portion of the mortgager is not. She states at paragraph 34(

a) as follows: (

a) The interest portion of the mortgage is properly deductible as an expense, but the principle portion is not. If Mr. Murphy werepermitted to deduct both the principle and interest payment from the gross rental income, the children would, in effect, be paying for Mr.Murphy's acquisition of a capital asset. Once the mortgage is paid in full, the rental properties will be owned by Mr. Murphy, not Mr.Murphy and the children. It is therefore inappropriate to reduce the gross rental income by the entire mortgage payment. I will onlypermit the interest deduction in the calculation of income in conformity with the Income Tax Act; (

b) I will not permit a deduction for capital cost allowance. Little evidence was provided on this issue and there was no breakdownproven between personal and real property.

There was no evidence led to suggest that the real property was depreciating in value and noevidence provided in relation to the depreciation of personal property. [49] I note in that case, failure to disclose was not an issue and Justice Forgeron had at least some receipts, which would allow herto make a reasonable calculation in relation to maintenance and repairs for each property. [50] Freedman et al in the text, Financial Principles in Family Law, Carswell 2013 provides at 38.2.4: Although it is a legal question, in our view, CCA with respect to real property should be added back as this is a non-cash expenditure thatdoes not impact a payer-spouse’s income or ability to pay child support.

Furthermore, the ITA and the Guidelines allow a payer-spouse,a deduction from rental income for repairs and maintenance incurred to maintain the value of the real property. If CCA with respect toreal property was not added back to Total Income for Guideline purposes and a deduction was also allowed for repairs and maintenancethe payor-spouse would benefit from a deduction twice for the same expenditure. It may also be appropriate to deduct capitalimprovements or an allowance for capital improvements. [51] In the case before the Court, Mr.

Clarke claims expenses for maintaining his rental properties for each year without receipts, aswell as capital cost allowance. I have not been provided with a receipt supporting the $22,242.00 he spent for repairs and insurances as

referenced in his Income Tax Returns. [52] I find Mr. Clarke’s failure to disclose goes to the heart of credibility. I cannot accept his listing of expenses in Income TaxReturns without the reliable receipts. I accept Mr. Clarke did have expenses but I am unsure what the legitimate expenses were in orderto do the calculation that Freedman suggests. I kept foremost in my analysis that Mr. Clarke advised he had proof of theseexpenditures. He chose not to disclose the same to the Court.

The expenses for maintaining the buildings, separate and apart from thecapital cost allowance, were: • in 2010 - $5,727.00; • in 2011 - $5,747.00; • in 2012 - $10,768.00 for a total of $22,242.00 maintenance expenses. [53] My common sense tells me that if a payor states he has information and yet refuses to produce this information; it is generallybecause he wishes to keep it from the Court’s review. This may influence the Judge to make a negative inference as is permitted underthe Guideline 23. When a trier of facts is asked to draw a negative inference, how far can the Court go?

That is examined by JusticeSaunders of the Appeal Court in the Supreme Court of Nova Scotia in the case of Nova Scotia (Attorney General) v. Jacque DryCleaners, 2013 NSCA 4 , [2013] N.S.J. No. 4, a decision in January 2013, at paragraph 31: 31 An inference may be described as a conclusion that is logical. An inference is not a hunch. A hunch is little more than a guess, a50/50 chance at best, that may turn out to be right or wrong, once all the facts are brought to light. Whereas an inference is a conclusionreached when the probability of its likelihood is confirmed by surrounding, established facts.

When engaged in the process of reasoningwe are often called upon to draw an inference which acts as a kind of cognitive tool or buckle used to cinch together two potentiallyrelated, but still separated propositions. In the context of judicial decision-making, drawing an inference is the intellectual process bywhich we assimilate and test the evidence in order to satisfy ourselves that the link between the two propositions is strong enough toestablish the probability of the ultimate conclusion.

We do that based on our powers of observation, life's experience and common sense.In matters such as this, reasonableness is the gauge by which we evaluate the strength of the conclusion reached through our reasoning. [54] In the case of Eager v. Graves, (ON CA), [2002] O.J., 3878, the Appeal Court Justice in that caserecalculated the Trial Judge’s calculation of seventy percent (70%) of the gross annual rental income to the reduced amount forty percent(40%) of the gross annual income.

In that case, the Court had uncontradicted evidence in relation to the so called “hard costs”, thatbeing mortgage interest, property taxes and insurances for the years under review. That decision, I note, makes no determination oncapital cost allowance or where capital cost allowance may fit within that particular rental income scenario. [55] Ms. Kyte is familiar with the Bert v. Murphy and Eager v. Graves (supra.) decisions, as she provided to the Court. In hersubmissions she asks the Court to re-examine the rental income. She asks the capital cost allowance be added to Mr.

Clarke’s grossannual income as an L.P.N. I agree with Justice Coady and Justice Williams that there are no hard and fast rules in the

interpretations ofGuideline 11 and Guideline 12. I find that in the area of Mr. Clarke’s income, the issues of depreciation and rental income, Ms. Kyteappeared to be knowledgeable and comfortable in dealing with these issues. I have determined that she has established on clear andcogent evidence that the capital cost allowance in total should be included in the payor’s gross annual income without any deduction formonies he may have spent to maintain the properties. [56] Mr.

Clarke represents that his professional income was reduced modestly in 2012 and his capital cost allowance was alsoapproximately $3,500.00 less in 2012. I have, as indicated, no disclosure available in relation to his 2013 rental income or capital costallowance. Given the discrepancies in Mr. Clarke’s testimony and his failure to disclose, I have imputed his total income pursuant toSections 19(1)(d), (g), and (f). I find that Mr. Clarke has a sizeable gross rental income and it may even be higher now given hisrecognition that he had more units than contained in his Income Tax Return.

Also, he has another property on Park Street underconstruction. Based on his gross rental income provided, I cannot establish his net rental income because I was not provided theevidence that would allow this calculation. I have sufficient evidence, I find, to impute but not sufficient information upon which tomake the calculation that I would have preferred to make, that is one based on evidence from Mr. Clarke. [57] As I have indicated, it was clear and I find from the evidence that in 2012 Mr. Clarke borrowed $80,000.00 to renovate anadditional unit or units, which by 2013, I would assume, should be rented.

His rental income and capital cost allowance have probablyincreased. I have elected in my calculation and imputation to select the two higher years of capital cost allowance and to mean thoseyears, that yields a capital cost allowance figure of $12,742.00. This sum should be added to Mr. Clarke’s professional income as anL.P.N. for the years 2010, 2011, 2012 and 2013. I indicate that I have no information in relation to his professional income or rentalincome for the year 2013 and therefore I have imputed that to be the same as the average of the three (3) preceding years.

So Mr.Clarke’s capital cost allowance will be calculated as follows: • 2010 - $12,723.00 • 2011 - 12,222.00 • 2012 – 12,472.00 • 2013 - 12,472.00 (meaned 2010 and 2011) • 2014 - 12,472.00 (imputed)

[ 58 ] In the years 2013 and 2014, as indicated, I have meaned the capital cost for the years 2010 and 2011 and I have selected those years because of the inexplicable decline in 2012 when Mr. Clarke had more rental units. I have meaned the two years previous, 2010 and 2011 to provide a capital cost allowance for 2012, 2013 and 2014 in the amount of $12,472.00 for each year. [ 59 ] I have meaned the last three (3) reported years to achieve a figure for Mr. Clarke’s professional income for 2013 and 2014, after union dues, of $51,569.66 for each year. This mode of calculating is provided for in Guideline section 17(1) which provides: 17.

(1) If the court is of the opinion that the determination of a spouse’s annual income under

section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years. [ 60 ] Doing the final calculation, that is, adding to each year the capital cost allowance permitted, I have determined his income as follows: LP.N. C.C.A.

Gross Annual Income 2010 - $55,204.00 + $12,492.00 = $67,696.00 2011 - $50,957.00 + $12,472.00 = $63,429.00 2012 - $48,548,00 + $12,472.00 = $61,020.00 (Exhibit #33) 2013 - $51,569.00 + $12,472.00 = $64,041.00 (Imputed) 2014 - $51,569.00 + $12,472.00 = $64,041.00 [ 61 ] I find meaning income and reversing claimed capital cost allowance is necessary to reach incomes that are fair and reasonable upon which to calculate child support. [ 62 ] A separate issue was raised during the trial was that Ms. Kyte knew that Mr. Clarke had these properties and she knew that before the settlement conference.

She was aware he received rental income. It was suggested this knowledge formed some type of estoppel. I find that any previous held property, i.e. through matrimonial settlement, that contributes an income is not precluded from the calculation of child support. Income generating properties which existed before separation do not support an estoppel argument. It would be essentially the same as saying he was a nurse when they married and if his income increased after divorce, the Applicant cannot seek any increase in child support.

I find that an increase in child support is not estopped from the argument that these rental properties were owned, or owned entirely or owned partly prior to the 2010 Consent Corollary Relief Order. S. 3 CHILD SUPPORT FOR THREE

(3) CHILDREN [ 63 ] I acknowledge that Thea is now a child over the age of majority. However, I exercise my discretion under Section 3(2) to find that the guideline amount for three (3) children, and Thea should be included in using the Guidelines even though she is over the age of majority. Thea is living at home and has while she was in college and high school. At the income I have set for Mr. Clarke, he is to pay, for his three (3) children, $1,168.00 per month onward. MS. KYTE’S INCOME [ 64 ] Ms. Kyte’s income has been provided. She is an employee with no other source of income.

Her income accuracy has not been questioned. She provided her tax return, I have used the Line 150 figure, as it is the higher than her Statement of Income figure, of $94,000.00, for the last year she reported. I accept $94,662.00, which is the figure to be used for 2013 and 2014. If these figures are found to be significantly inaccurate in the future, Mr. Clarke would have the opportunity to argue a change of circumstances on that basis. However I found that Ms. Kyte has disclosed to the best of her ability and prepared materials to the best of her ability, with the exception of the R.E.S.P.

I will enter into an analysis of the confusing nature of her treatment of the R.E.S.P. and her budgets for Thea. However, I do not find that her confusion was intended to deceive, but actually the reverse was true in that she was attempting to clarify the picture and in her clarifications often contradicted. According to Ms. Kyte’s 2010 Income Tax Return (Exhibit #1), she cashed in an R.R.S.P. of $4,200.00, but she also invested that same year in an RRSP in the amount of $6,393.00. Therefore I make no adjustment to her income for that year.

I set her income for the relevant years as follows: • 2010 - $88,132.00; • 2011 - $92,106.00 • 2012 - $94,662.00 • 2013 - $94,662.00 • 2014 - $94,662.00 (imputed)

[ 65 ] I reject her income provided in her Exhibit #1, her Statement of Income, where she indicates that in 2012 she expected to earn $84,446.00. I note this Exhibit was prepared on August 31, 2012 and by that time she should have had a better idea as to what her annual income was, as was reflected in her Income Tax Return, which she did provide to the Court. Mr. Clarke’s counsel notes Ms. Kyte does not outline that she receives $645.00 per month from Mr. Reginatto, as per their living arrangement for sharing household expenses. I would not find this to be an appropriate entry in an income statement in any event.

This is the exchange of monies between spouses to run the household. It does not come within what I would classify as income and therefore is not an error. Ms. Kyte does in her Statement of Expenses, in

Section 16(

e) require $1,300.00 per month for university costs, indicating that’s the average per month for Thea’s expenses. This constitutes a figure of $15,600.00 each year, which is not borne out by the evidence and is in variance with Thea’s actual costs for university. In her evidence, she indicated she has a personal loan and a car loan as well as a line of credit in her name. She indicates that line of credit is, however, for Thea’s use and at this time the line of credit was almost at its limit.

However, this expense does not appear anywhere in her Statement of Expenses nor is it in Thea’s expenses or as a separate exhibit. As I am to examine s. 7 expenses, university and extracurricular, the reporting of the payee’s income from all sources is an important factor while the debts are less important. I am satisfied she has reported her actual income to the Court. I disregard the line of credit, which remains unproven. [ 66 ] In relation to the R.E.S.P., before the trial started Ms. Kyte was required to give a clear

summary of all aspects of the R.E.S.P.. She had sole control over this fund. The analysis of the R.E.S.P., based solely on Ms. Kyte’s evidence should have been a seemingly simple calculation. It became extraordinarily difficult. There are numerous inconsistencies within Ms. Kyte’s evidence relating to the R.E.S.P.. She claims that while together the parties contributed fifty-five percent (55%) of the amount of the R.E.S.P. While separated, she says she contributed another forty-five percent (45%) and therefore she ought to receive this additional credit in the s. 7 analysis of Thea’s university expenses.

In her evidence, Ms. Kyte indicated that during the first year of university, Thea may have received $8,872.00 as extracted from the fund. Elsewhere in her evidence, she advised that in the year 2009-2010, (Thea’s first year) $6,622.00 was taken from the fund. Also, she indicated that she was including a Government grant of $557.49, which was received every year, which she calculated as part of her contribution to the R.E.S.P. Elsewhere in her testimony she indicated that there were errors made by the university which confused the credit received for the R.E.S.P.

Elsewhere she indicated it was difficult to get full reporting from the R.E.S.P. investment company. Finally, towards the end of cross-examination by Ms. MacRury, Ms. Kyte agreed she received: 1. in the year 2009, she received $6,622.00; 2. in the year 2010, she received $3,499.00; 3. in the year 2011, she received $3,283.00 (Exhibit #20); and 4. in the year 2012, she indicated that she received $3,247.00. [ 67 ] The early years up to 2012, the R.E.S.P. is exhibited by her in (Exhibit #4, page 5) from the investment company signed by a Ms. or Mr.

Puna, Customer Services Representative, Child Education Fund Inc. (not dated) indicates: As per your request please find below payments made from the R.E.S.P. with agreement #104133, beneficiary Thea Clarke. The value of the third and last EAP will be known at the end of August, 2012. This is information from the insurer as to the amounts given in certain years and those are the amounts that I have used in my calculations. [ 68 ] When confronted with the difficulties in the R.E.S.P., Ms. Kyte indicated that it was difficult to extract information from the investment company.

Furthermore, she advised that she was entitled to forty-five percent (45%) more than Mr. Clarke because of her contribution. She did not give any basis to support her submission. Ms. Kyte did provide a typed

summary of her view on the issue. She believes the

summary is a proper exhibit. She also provided a typed list of figures which does not outline what the figures relate to, the author or the date, just a number of figures from someone. These documents were not helpful. [ 69 ] The parties did both agree that there was an arrangement where Mr. Clarke would, for years, contribute to the twins’ fund and Ms. Kyte would contribute to Thea’s. It is also clear that Thea was already in class and had completed her first term at the time the parties entered the settlement conference. She would have completed her second term by the time the Order under review was signed.

However, as I have indicated already, at pre-trial and throughout, I made it very apparent to both parties that accurate accounting was necessary. I find that there is no clear or cogent evidence to support Ms. Kyte’s submission that she should be entitled to more than Mr. Clarke in the R.E.S.P. I find that from the consensual Varied Corollary Relief Order referenced this issue as it related to Alison and Rachel. The parties agreed that there would be at least a discussion in relation to Thea’s university expenses.

If this was an issue, it would have been an issue at that time as the child was already in University. However, it is not provided for in the Varied Corollary Relief Order, which purports to replace all child support provisions of the Corollary Relief Judgment granted in 2003. [ 70 ] I have indicated there is no confirmation to support Ms. Kyte’s submission; and she has been unable to provide any evidence to support her contention that since she provided for this fund since 2001 to 2010 that she should be allowed a greater sum than Mr. Clarke. I do not award her any greater sum.

I have divided the R.E.S.P. on a 50/50 basis between the parties. [ 71 ] Ms. Kyte has the responsibility of proving on clear and cogent evidence and she has failed to do so in relation to the R.E.S.P. I have selected her last version on cross-examination, which corroborate the exhibit that she provided at the onset of the trial and the statement from the insurer. I find Thea received the following sums from the R.E.S.P.: • 2009 - $6,622.00 • 2010 - $3,499.00

• 2011 - $3,283.00 • 2012 - $3,248.00 (Exhibit #20) [ 72 ] Ms. Kyte indicated in her testimony that the Government would match her for a portion of the R.E.S.P. She indicated that a portion of the R.E.S.P. was provided by the Government in the amount was $557.00 a year. She indicates that this is a sum that she put in with her contributions as opposed to providing any portion of the same sum to Mr. Clarke. The Government contribution is to be calculated as a credit reducing Thea’s expenses. It is not a contribution by a parent. As I have indicated already, she is unable to explain the basis for her calculation.

Furthermore I find that the yearly information for the R.E.S.P. was available. Ms. Kyte advised that the R.E.S.P. receipt was filed with her daughter’s Income Tax Return was received in her daughter’s name. The Court asked both parties to provide Income Tax Returns, complete with all attachments. There is no such attachments and no internal reference as to what this R.E.S.P. in Thea’s Income Tax Return (Exhibit #2). I note that all the parties’ tax returns were provided without attachments. This is information that was readily available and should have been produced.

The parties are required to prove on a balance of probabilities to prove that their submission is accurate. Ms. Kyte has failed to provide that she had contributed more than Mr. Clarke. She has failed to provide essential information to enable the Court to readily determine the treatment of the R.E.S.P. as it relates to Thea’s college expenses. This required the Court to transcribe the entirety of her evidence to examine if the Court could extract a more exact picture. I do not understand why the “slip”, as she references it, filed with Thea’s Income Tax Return was not exhibited.

I have elected to use the most reliable figures available and those are the figures provided by the insurer, (Exhibits #4, page 5 and Exhibit #20) as the actual amounts of contributions from this fund. SCHOLARSHIPS [ 73 ] In relation to the issue of scholarships, Ms. Kyte indicates that Thea received a scholarship each year of $500.00 and her first term she received additional prizes from Riverview in the amount of $550.00. [ 74 ] Ms. Kyte, on her own volition, has elected to establish the child’s contribution to the child’s university was at first based on earnings of the previous year.

In her direct evidence, she advised that she appreciated that was not the correct way to make a s.7 calculation. Essentially she used the previous year’s income to calculate what the contribution should be for the next year. In her post trial submissions, Ms. Kyte altered this approach and used the income earned for the same year.

A chart of Thea’s gross earnings are as follows: Exhibit #2 2009 - $12,761.00 2010 - $13,527.00 2011 - $14,861.00 2012 - $14,407.00 (post trial submission) [ 75 ] There is no income information in relation to Thea’s income in 2013, but her mother projected it would be lower given that she had to alter her work

schedule due to her course load at university. [ 76 ] Ms. Kyte has elected to halve Thea’s income. The question now is whether or not her proportionment of fifty percent (50%) of Thea’s gross income as Thea’s contribution to university purposes is sufficient or whether more should be taken. I note, however, that Ms. Kyte also receives Thea’s Income Tax refund each year, which if calculated indicates that in actual fact she is taking approximately sixty percent (60%) of Thea’s earnings between those two sources. Ms.

Kyte, in the university budget prepared for Thea, asks the Court to accept the Government rate for Thea’s mileage on the vehicle purchased for $5,000.00 during Thea’s first year of university. The car was purchased because Thea does not live on a bus route and car-pooling was not feasible. Ms. Kyte advised and provided information that a car over four (4) years was a more reasonable purchase and less expensive than Thea living in residence and having a meal plan.

I accept her representation that the vehicle, if used over four (4) years, was a more reasonable expense and I accept that her contribution from Thea of the fifty percent (50%) of Thea’s income plus Thea’s Income Tax Return is a reasonable and fair contribution to ask Thea to make. [ 77 ] It is necessary for the purposes of clarity to set a reasonable budget for each year of Thea’s university. The credits and costs for each year are set out in Ms. Kyte’s summaries. I have examined the expenses from Ms. Kyte’s (Exhibit #4), her viva voce evidence and her post trial submissions.

Starting at the year 2009, I accept Ms. Kyte’s figures on tuition, books and parking passes. I reject her calculation for the Government mileage rate for Thea’s Toyota Tercel. Ms. Kyte has provided no basis on which to use the Government vehicle rate. The child is not a Government employee. As well, I understand the Government rate does include some excess wear and tear whereas Ms. Kyte has added wear and tear as a separate expense. I do accept as accurate the car insurances for the year 2009 and the car repair costs.

I note that Thea’s expenses for 2009-2010, as contained in Exhibit #4 conflict with the same expenses provided by the Applicant in her submissions at page 11. There is a variation of almost $1,600.00 increase in the submissions for the same year. There’s an additional discrepancy in her own exhibit, Exhibit #7, which is Ms. Kyte’s letter dated March 1, 2011 from her then lawyer, Lisa Fraser-Hill, to Darlene MacRury, which reads as follows: This is to advise that Ms. Kyte contacted me recently regarding s. 7 expenses for post-secondary education and a band trip coming up for 2 of the children. Ms.

Kyte is seeking Mr. Clarke’s contribution towards both s. 7 expenses. Thea paid the majority of her educational costs from an education fund, scholarship and her own financial contribution from summer employment. Ms. Kyte informed me there is a balance of $2,449.18 remaining to be paid towards this year’s university costs. A sixty/forty split in your client’s favour would provide that he would be responsible for approximately $979.67 of the $2,449.18. (emphasis added)

[ 78 ] This letter was written March 1, 2011, representing a deficit for the completion of that year. The discrepancy in calculations was not addressed over the other budgets provided for the same year by the same author. However, while I dealt with the varying amounts and varying bottom lines. I do accept the following. Thea went to university, she did well in university, she studied towards two (2) separate degrees in university at the same time. She worked part time and earned an impressive income working part time and summers. She lived in the country, not on a bus route which required her to have a vehicle.

Thea is a new driver requiring costly car insurance. I note her car insurance reduced over the years. After reviewing the materials a number of times as well as the transcript, I have prepared the following estimate of Thea’s university expenses at Cape Breton University. I find Ms. Kyte was unclear on budget preparations but I cannot conclude that this problem was intentional, rather Ms. Kyte was attempting to provide a clear picture but had difficulty as is often seen by self-represented parties.

I have had these expenses typed up for the four (4) operative years, which were distributed to the parties at the end of the oral decision. [ 79 ] I find that the first year start-up costs was a more expensive year than subsequent years. I have also allowed the expenses for the cost of buying the car, a new laptop, and supplies, as claimed in Ms. Kyte’s submissions. I found the lunch estimate of $480.00 a year to be reasonable, especially given this young lady was taking two programs and may, at times, require two meals at the university during the day.

I have allowed the vehicle repair expenses in the amount of $362.84. I disallowed her calculation of the Government rate, the mileage to work, which would have amounted to a total of $4,000.00. That figure and the cost of the car for the first year would virtually defeat the savings made by the child not staying in residence. I have given an estimate of gas, inspection and licencing and allowed the amount of $250.00 a month for eight (8) months while Thea was in university for a total of $2,000.00 for the term 2009 - 2010.

Calculation of those expenditures for the first year together with start-up costs subtotals $6,000.00. The total for the first year is $17,288.13. [ 80 ] Dealing with the credits for that year, I have examined Ms. Kyte’s Exhibit #4 and her submissions, as well as her viva voce evidence and indicated there is a variation between the two figures I have disallowed any excess beyond the figure I have calculated. I note that expenditures such as books and gas are accounts that generally can produce a receipt; even for second hand books.

I have, however, accepted the quantum for books, printing supplies and gas, licensing and inspection, although not receipted, I find to be reasonable estimates for a cost that was actually incurred, but simply not receipted. The costs are more in keeping with various budgets I have seen in various other files in factual situations similar to Thea’s. Ms. Kyte wants a figure to allow Thea to work fewer hours and also have more time to herself. She indicates that Thea is taking two (2) programs and also volunteers at two (2) other locations.

However, these costs were already incurred prior to the Consent Order of May 2010 and the income had already been earned. I am not prepared to make the variation Ms. Kyte requests.

University expenses and credits are set out at pages 44 to 48. [ 81 ] As a result of scholarships, tuition credits, actual R.R.S.P surrendered and fifty percent (50%) of her income, along with the Income Tax Refund brings her total university credits to $17,333.00. [ 82 ] The credits for the year 2009 - 2010 are as follows: Bursary - $l,022.00 Entrance Scholarship - 500.00 Health Plan Opt out - 126.00 Canada Games Scholarship - 500.00 Graduation prizes (Grade 12) - 550.00 Tuition credit - 858.00 Actual R.E.S.P. surrendered and received that year - 6,622.00 50% of Thea’s income - 6,380.00 Tax refund - 775.00 Total $17,333.00 I find in relation to the first year of university, Thea has no residual need for financial help from her parents.

This is as a result of her own industrious nature and her parents’ saving in the R.E.S.P. [ 83 ] In relation to the budget for the year 2010 - 2011, I have allowed Ms. Kyte’s estimates in her submissions up to the point of the mileage claim. I allow the costs as presented for tuition and ancillary university fees , books purchased and the parking passes for a sub total of $9,178.00.

I accept as well the car insurance; which I have again pro-rated over an eight (8) month period in the amount of $775.00, as well as car repairs (receipted) of $742.00, gas for eight (8) months, including licensing, inspections, oil changes in the amount of $2,000.00. I have allowed supplies - ink - $120.00, paper and pens - $150.00, and lunches the amount of $480.00. I have disallowed, as I have indicated, the mileage which I find to be excessive and without evidentiary basis.

I have disallowed personal toiletries, clothing, cell phone and hair care which ought not to be calculated in an educational budget where the student lives at home.

Her total cost for the year 2010 - 2011 is $13,445. Her contribution of fifty percent (50%) plus her Income Tax Return allows her forty percent (40%) of her gross income for her personal needs, for her travel back and forth to work if those needs cannot bet met by s. 3 child support or her support from her mother’s income. [ 84 ] Calculating the credits Thea received for the academic year 2010 - 2011, I agree with Ms. Kyte’s calculation for credits, with the exception of her calculation again with the R.E.S.P. As indicated already, Ms.

Kyte has used Exhibits #21 and #22 to support her submission that the R.E.S.P. provided only $1,924.57. This is contrary to her own viva voce evidence and contrary to the R.E.S.P. she exhibited in Exhibit #4, page 5, which indicates for that academic year, Thea received $3,499.00 from the R.E.S.P. This would result in an additional $1,575.00 being added to Thea’s credits, for a total balance of her credits from all sources for that year in the amount of $14,901.46. As a result, I find Thea has no shortfall for the academic year of 2010 - 2011. I found no prohibitive value in Exhibits #21 and #22 provided by Ms.

Kyte, which were not clear and not presented in a manner useful to the Court. I find that the evidence given by Ms. Kyte in her cross-examination and in her Exhibit #4, page 5, to be more reliable. [ 85 ] In relation to the expenses for 2011 - 2012, I accept Ms. Kyte’s calculations with the exception, again, of her calculation of mileage. I understand, given that Thea was taking two degrees at the same time that her tuition would have been higher this year. I accept her expenditure for books is higher.

I have also disallowed her expenditures for clothing, cell phone, and hair, as these expenses are not appropriate in an educational budget where the student lives at home and receives financial support plus support from the Payee Parent. I accept the remainder of Ms. Kyte’s calculations. The sub total is $17,060.00, to which will be added: insurance pro-rated over the year in the amount of $631.33; and gas, license, and inspection for eight (8) months in the amount of $2,000.00. There are no receipts provided for car repairs, and no figure is given for that year.

Lunches are granted in the amount of $480.00, and supplies are allowed in the amount of $270.00. There is a difference in this year, as mileage for her summer placement, which was associated with her career, was permitted and an additional $400.00 added to her expenses. The total funds necessary for the academic year 2011 - 2012 are $20,729.06. Credits for that year, as provided by Ms. Kyte ,are accepted with, once again, the adjustment for the increase from the R.E.S.P. which I find to be $3,283.00. That adjustment resulted in an additional $1,478.00 received by Thea for that year for a total of $22,238.94.

Once again, there is no financial shortfall to be divided between the parties due to bursaries, scholarships and Thea’s hard work; as well as her parents’ foresight in setting up her R.E.S.P. [ 86 ] The expenses for the academic year 2012 - 2013 are not tendered as an exhibit but, rather, were filed with submissions. While this is not the best manner for this to proceed, as such, this is not subject to cross-examination, I did accept the documents, as these are consistent with previous years. I have considered the expenses as presented in Ms. Kyte’s appendix to her post trial submissions.

In relation to the year 2012 - 2013, I accept the university expenses put forward by Ms. Kyte except for the mileage calculation. The subtotal is $8,527.33, to which I have added: for mileage, in the amount of $200.00 per month; for gas, license, and inspection for 8 months - $2,000.00; car insurance pro-rated over 8 months - $455.33; school supplies of $270.00; and lunches of $480.00, for a total of $11,732,33. I have disallowed personal toiletries, clothing, cell phone, and hair for reasons already given. Her total expenses for that year are $11,732.33. [ 87 ] I accept all Ms.

Kyte’s credits as set out by her for the year 2012 - 2013, with the exception of the R.E.S.P., which, once again, she under-estimates when compared with her own exhibits. Once again, the amount that should be permitted for the year 2012 - 2013 is $3,248.00, which requires me to add an additional $1,461.00 to Thea’s credits for a total of $14,575.32.

No deficit exists, and Thea is left with approximately forty percent (40%) gross of her income for that year for her personal use. [ 88 ] Cost of College - 2009/2010 2009/2010 (Exhibit #4) $5,660.00 Books (no receipts) 600.00 Passes 115.00 Health Plan 126.00 Student Fee 185.00 Reverse Scholarship 500.00 Car Purchase 5,000.00 Insurance ($1,633.00 ÷12 x 8 (Exhibit #5) 1,088.00 Car repairs $362.84 + gas estimate - $800.00 2,362.84 Laptop 941.29 Printer Ink 80.00 Paper and supplies 150.00 Lunches 480.00 $17,288.13 Start-up costs = $5,941.00 of this year - car and computer

Credits Bursary $l,022.00 Health Plan opt out 126.00 Cape Breton University (reverse) 500.00 Canada Games Scholarship 500.00 Graduation prizes (grade 12) 550.00 Tuition credit 858.70 Actual R.E.S.P. 6,622.00 Thea’s contribution (50% income) 6,380.00 Tax Refund 775.00 $17,333.70 2010 - 2011 Tuition and Fees (Exhibit #4, page 22) Fitness Centre Membership $40.00 Medical Plan 138.00 Lab Fee 50.00 Student Union Fee 185.00 Distance Fee 75.00 Tuition Degree Programs 5,660.00 Reverse N.S University Student Bursary 128.30 Student Union Fee 18.50 Distance Fee 75.00 Tuition Degree Programs 566.00 Interest Charges 1.38 Student Union Fee 18.50 Tuition Degree Programs 566.00 Reverse NS University Student Bursary 128.30 Reverse NS University Student Bursary 64.15 Refund Cheque 228.10 Books 1st term (Exhibit #4, page 26) 656.68 Books 2nd term (Exhibit #4, page 24) 464.50 Parking Pass 2010 57.50 Parking Pass 2011 (2nd term receipt misplaced) 57.50 Subtotal up to car expenses in post-trial submissions $9,178.41

Car insurance ($1,163.00÷12 x 8) $775.00 Car repairs 742.00 Gas, license, inspection, etc. 2,000.00 Supplies - ink 120.00 - paper 150.00 Lunches 480.00 $13,445.41 Credits - 2010/2011 Ms.

Kyte’s submission $13,326.00 R.E.S.P. (Exhibit #4, page 5)= $34.99 not $1,924.57 Add $1.575.06 to her credits = $14,901.00 1,575.06 Total credits $ 14,901.06 2011/2012 Expenses Tuition and Fees ( Exhibit #4, pages 32, 33) Fitness Centre Student Membership $41.00 Medical Plan 145.00 Student Union Fee 185.00 Tuition Degree Programs 5,830.00 Student Union Fee 18.50 Tuition Degree Programs 583.00 Reverse NS University Student Bursary 128.30 Reverse NS University Student Bursary 769.80 Student Union Fee 111.00 Tuition Degree Program 3,498.00 Reverse NS University Student Bursary 256.60 Student Union Fee 37.00 Distance Fee 75.00 Tuition degree Programs 1,166.00 Student Union Fee 18.50 Tuition degree Programs 583.00 Reverse NS University Student Bursary 128.30 Tuition Spring/Summer 2,332.00 Student Union fee 74.00 Fitness Centre Student Membership 25.00

Distance Fee 75.00 Books 1st term (Exhibit #4, page 35) 398.25 Books 1st term (Exhibit #4, page 35) 125.48 Books 2nd term (bought second hand, no receipt) 200.00 Books Spring courses (Exhibit #4, page 36) 144.00 Subtotal $16,947.73 Car insurance $631.33 Gas, license, inspection, etc. 2,000.00 Summer placement gas 400.00 Lunches 480.00 School supplies 270.00 $ 20,729.06 Credits 2011/2012 Her $20,760.94 + $1,478.00 (R.E.S.P. adjustment) $22,238.94 2012 - 2013 Tuition and Fees Student Union Fee 166.50 Medical Plan 135.00 Fitness Centre Student Membership 43.00 Distance Fee 80.00 Students Union Dental Plan 120.00 Tuition Degree Programs 5,409.00 Student Union Fee 18.50 Tuition Spring/Summer 583.00 Student Union Fee 18.50 Tuition Degree Programs 601.00 Graduation Fee 17.39 HST Tax 2.61 Transcript Fee 17.39 HST Tax 2.61 Student Union Fee 18.50

Tuition Degree Program 601.00 Interest Charges 2013/02/01 9.72 Transcript Fee 4.35 Transcript Fee 4.35 HST Tax 1.30 Transcript Fee 4.35 HST Tax 0.65 Books (exhibit #18) 554.11 Parking Pass 1st term (Exhibit 17) 57.50 Parking Pass 2nd Term (Exhibit 17) 57.50 Sub Total $8,527.83 Gas, license, inspection $2,000.00 Car insurance ($683.00 ÷12 x 8) 455.33 No repairs, licensing in any year (???) Supplies 270.00 Lunches 480.00 $11,733.16 Credits 2012/2013 R.E.S.P. - adjusted from $3,248.00 - $1,786.00 = $1,462.00 $13,113.32 1,462.00 $ 14,575.32 [ 89 ] Issue #6. - s. 7 Expenses.

The Guidelines require a Court, in its discretionary role to order, upon either party’s request, an amount to cover any portion of the specific expenses. The Court is to take into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the children and to the family’s spending pattern prior to separation.

As well, I am to consider if the custodial parent can cover the expense with his/her income and the child support already provided. [ 90 ] I find, having reviewed the parties’ evidence and the Corollary Relief Order as varied in May 2010; the parties contemplated extra-ordinary expenses, for horseback riding lessons and music to be part of Mr. Clarke’s ongoing s. 3 child support quantum. Ms. Kyte now seeks additional s. 7's in relation to horseback riding, music, and art. She has provided estimates as to the cost of these activities (Exhibit #5). In her viva voce evidence, Ms.

Kyte indicated that the children’s activities had changed, but the quantum of the expense had remained essentially the same. Having regard to the evidence of the parties and bearing in mind the quantum of maintenance that I have concluded Mr. Clarke shall pay. I find that the extra-ordinary expenses claimed by Ms. Kyte are not reasonable. Mr. Clarke’s s. 3 child support is sufficient to pay the activities sought.

I make no additional award for the twins’ extra-curricular activities. [ 91 ] I do, however, find that it is necessary and reasonable that the parents share in the s. 7's expenses, as relating to the driver’s education costs for the three (3) children, of $1,500.00. I acknowledge that Thea has already paid for her own. However, it is appropriate that the parents share in the cost of driver’s education in proportion to their incomes. Mr. Clarke’s income is fixed at $64,041.94 for 2014; Ms. Kyte’s income is set at $94,662.00, for a total of $158,703.00. On a 60/40 basis, Mr.

Clarke is to assume the amount of $600.00 as an extra-ordinary expense for the driving education for the three (3) children. This sum is to be payable along with the s. 3 arrears payable by Mr. Clarke. [ 92 ] Mr. Clarke’s child support shall be varied retroactively to the date that he first refused to disclose his Income Tax Returns, which is July 24, 2010 (Exhibit #8). This is a clear example of blameworthy conduct permitting retroactive relief to precede the date of

the Application. The fourteen (14) month proceeding versus the date of Application is due solely to Mr. Clarke’s repeated refusal todisclose fundamental information. I have set the arrears as follows: 2010 $67,696.00 . For a 6 month period (July to December, 2010) he shall pay $1,260.00 - $850.00/mo = $410 extra x 6 months = $2,460.00 2011 $63,429.00. For a 12 month period he shall pay $1,158.00 - $850.00 = $308.00 x 12 months = $3,696.00 2012 $61,020.00. For a 12 month period he shall pay $l,117.00 - $850.00 = $267.00/mo x 12 months = $3,204.00 On page 28, I calculated Mr.

Clarke’s combined income at $61,020.00, not $64,042.00. This results in an overpayment as follows:$61,020.00 x 3 children for 12 months @ $l,117.00 per month = $13,404.00 due. Amount paid was $850.00 per month x 12 =$10,200.00 paid. Shortfall to pay is $3,204.00 per annum not $3,816.00. Mr. Clarke’s adjustment due to my error in the oral decisionfor 2012 is $624.00, which is to be deducted from the total arrears set at $14,094.00. Corrected arrears are $13,482.00. 2013 $64,042.00 For a 12 month period at $1,168.00 - $850.00 leaves a shortfall of $318.00 x 12 months = $3,816.00 2014 $64,042.00.

For a l month period at $l,l68.00 - $850.00 leaves a shortfall of $318.00 [93] The total adjustment for Mr. Clarke’s arrears amount to $13,482.00, to which I add the allowable s. 7's of $600.00 Driver’sEducation for a total of $14,082.00 in total arrears. [94] Arrears are to be paid in full within thirty (30) days. Mr. Clarke may have some difficulty, but it is totally of his own making;it is not insurmountable nor will it impede his ability to pay ongoing maintenance, as I am cautioned Justice Bateman in Staples v.Callender, [2010] N.S.J. No. 317 and the Supreme Court of Canada in D.B.S. v.

S.R.G., 2006 SCC 37 , [2006] S.C.J. No. 37,at paras. 105 to 109: Conduct of the Payor Parent 105 This factor approaches the same concerns as the last one from the opposite perspective. Just as the payor parent's interest incertainty is most compelling where the recipient parent delayed [page278] unreasonably in seeking an award, the payor parent's interestin certainty is least compelling where (s)he engaged in blameworthy conduct.

Put differently, this factor combined with the last establishthat each parent's behaviour should be considered in determining the appropriate balance between certainty and flexibility in a givencase. 106 Courts should not hesitate to take into account a payor parent's blameworthy conduct in considering the propriety of a retroactiveaward. Further, I believe courts should take an expansive view of what constitutes blameworthy conduct in this context. I wouldcharacterize as blameworthy conduct anything that privileges the payor parent's own interests over his/her children's right to anappropriate amount of support.

A similar approach was taken by the Ontario Court of Appeal in Horner v. Horner (2004), (ON CA), 72 O.R. (3d) 561, at para. 85, where children's broad "interests" -- rather than their "right to an appropriate amount ofsupport" -- were said to require precedence; however, I have used the latter wording to keep the focus specifically on parents' supportobligations. Thus, a payor parent cannot hide his/her income increases from the recipient parent in the hopes of avoiding larger childsupport payments: see Hess v. Hess (1994), (ON SC), 2 R.F.L. (4th) 22 (Ont. Ct. (Gen. Div.)); Whitton v.

Shippelt(2001), 293 A.R. 317, 2001 ABCA 307; S. (L.). A payor parent cannot intimidate a recipient parent in order to dissuade him/her frombringing an application for child support: see Dahl v. Dahl (1995), 1995 ABCA 425 , 178 A.R. 119 (C.A.). And a payor parentcannot mislead a recipient parent into believing that his/her child support obligations are being met when (s)he knows that they are not.

107 No level of blameworthy behaviour by payor parents should be encouraged. Even where a payor parent does nothing active toavoid his/her obligations, (s)he might still be acting in a blameworthy manner if (s)he consciously chooses to ignore them. Put simply, apayor parent who knowingly avoids or diminishes his/her support obligation to his/her children should not be allowed to profit from such[page279] conduct: see A. (J.) v. A. (P.) (1997), (ON SC), 37 R.F.L. (4th) 197 (Ont. Ct. (Gen.

Div.)), at pp. 208-9;Chrintz. 108 On the other hand, a payor parent who does not increase support payments automatically is not necessarily engaging inblameworthy behaviour. Whether a payor parent is engaging in blameworthy conduct is a subjective question. But I would not deny thatobjective indicators remain helpful in determining whether a payor parent is blameworthy. For instance, the existence of a reasonablyheld belief that (s)he is meeting his/her support obligations may be a good indicator of whether or not the payor parent is engaging inblameworthy conduct.

In this context, a court could compare how much the payor parent should have been paying and how much (s)heactually did pay; generally, the closer the two amounts, the more reasonable the payor parent's belief that his/her obligations were beingmet. Equally, where applicable, a court should consider the previous court order or agreement that the payor parent was following.Because the order (and, usually, the agreement) is presumed valid, a payor parent should be presumed to be acting reasonably byconforming to the order.

However, this presumption may be rebutted where a change in circumstances is shown to be sufficientlypronounced that the payor parent was no longer reasonable in relying on the order and not disclosing a revised ability to pay. 109 Finally, I should also mention that the conduct of the payor parent could militate against a retroactive award. A court should thusconsider whether conduct by the payor parent has had the effect of fulfilling his/her support obligation.

For instance, a payor parent whocontributes for expenses beyond his/her statutory obligations may have met his/her increased support obligation indirectly. I am nots

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