Gioia v. Bissaillion, 2011 ONCJ 680

Sault Ste. Marie Registry No. 82/2010 DATE: 2011·III·21 CITATION: Gioia v. Bissaillion , 2011 ONCJ 680 ONTARIO COURT OF JUSTICE BETWEEN: ) ) KELLY GIOIA ) Carol A. Shamess, for Kelly Gioia ) — AND — ) ) JEFFERY BISSAILLION ) ) Lorna E. Rudolph, for Jeffery Bissaillion ) ) ) Heard on 21 June 2010; 12 August 2010; and 6 December 2010 [ 1 ] JUSTICE J. KUKURIN:— This is a decision on a motion to change (at Tab 1) brought by the applicant mother.

The motion claim is for variation of the child support provisions contained in domestic agreements between her and the respondent father. [ 2 ] This motion to change was filed in the Superior Court of Justice with a first court date of January 7, 2010. A jurisdictional oddity (in the view of some) is the statutory restriction of the power to vary the support provisions in a domestic contract to the Ontario Court of Justice, or to the Family Court of the Superior Court of Justice (in those parts of Ontario where it is established). There is no Superior Court of Justice — Family Court in Sault Ste. Marie.

Accordingly, the motion to change in this case should have been brought in the Ontario Court of Justice. [ 3 ] The Superior Court of Justice proceeding was, in fact, transferred to this court on April 22, 2010. However, prior to that date, the Superior Court made two consent orders. The first, dated December 14, 2009, was an order for mutual disclosure and production of certain financial information. The second, dated February 4, 2010, was a final child support variation order but was restricted to the period commencing January 1, 2010. Whether that order has any validity is academic in this case.

The parties are content with the terms of that order, and have been abiding by them. To address any jurisdictional deficiency, they have asked this court to make the identical order. [ 4 ] What essentially was transferred for a judicial decision by this court was the claim of the mother for retroactive variation of the child support provisions in effect at the time her motion was brought. [ 5 ] To better appreciate her motion claim, a review of the background of the parties is desirable. [ 6 ] The parties were married in 1989 and have two children, Brent, age 20, and Kasey, age 15.

The parties separated at the end of 2000. They entered into a separation agreement dated February 15, 2001. This agreement had numerous provisions, but the one dealing specifically with child support was in paragraph 9(1). It required the father to pay to the mother $600 per month for the two children commencing February 1, 2001, based on his then annual income of $42,300. This separation agreement also contained a provision in paragraph 9(2) requiring the father to provide the mother annually with a copy of his prior year’s tax return (by June 1) and the corresponding notice of assessment (by September 1).

The separation agreement also provided in paragraph 9(3) for termination of child support on the happening of certain contingencies. [ 7 ] The parties entered into an amending agreement dated August 16, 2003. This changed only paragraph 9(1) of the separation agreement and specifically confirmed all other terms and provisions.

Neither party attacks the validity of the separation agreement or of the amending agreement. [ 8 ] The amending agreement provides for the father to pay child support for the two children in the amount of $877 per month commencing January 1, 2003, based on his then annual income of $64,867. [ 9 ] The motion to change claim of the mother asks for a retroactive variation back to January 1, 2006 . Accordingly, this court is not concerned with what child support amount was appropriate for any period prior to January 1, 2006.

Moreover, since the parties have agreed on what the appropriate child support should be commencing January 1, 2010, the only period for which a judicial determination is being sought in this court is from January 1, 2006 to December 31, 2009. Conveniently, this period is comprised of four complete calendar years: 2006, 2007, 2008, and 2009. In addition, since those years have all come and gone, there should be no guess work in terms of the determinations of annual income.

Those figures should be readily available, or easily calculable, from the financial disclosure and productions required in cases such as this one. [ 10 ] In fact, the parties present a common position with respect to the father’s annual income over at least three of these four years. 2006 - $81,846 2007 - $90,375

2008 - $91,102 2009 - not produced by father Why the father had not produced his 2009 tax return by the commencement of hearing of this motion to change (June 21, 2010) was not disclosed. It had still not been produced as of the continuation dates (August 12, 2010 and December 6, 2010).

The consent order for the prospective child support commencing January 1, 2010 was apparently based on the father’s annual income amount for 2008, namely $91,020. [1] [ 11 ] While the increases in the father’s annual income for the years 2006, 2007, 2008, 2009 represent the material changes in circumstances that the mother relies upon for her claim in this motion to change, those are not the only ones. The other change is the start of Brent’s post secondary education in September 2008. Brent registered as a full-time student in the Faculty of Social Sciences at the University of Western Ontario.

His academic year ran from September to April of the following year. While the exact start and end dates are not the first or the last days of these months, I am satisfied that Brent has an eight month academic year for purposes of the child support issues in this case. [ 12 ] What the mother seeks in her motion is for a table amount of child support for the two children commensurate with the proper paternal annual income amount for the times that both children were residing with her.

For the times that Brent was at university, she seeks a table amount for Kasey only, and an amount pursuant to section 7(1)(e) [2] and section 7(2) [3] of the Child Support Guidelines , O. Reg. 391/97, as amended, for Brent. [ 13 ] The father concedes that some variation of the child support provisions of the 2003 amending agreement is appropriate. However, he opposes retroactivity going back to January 1, 2006. He argues that, if a retroactive child support order is made, it should go back only to January 1, 2009.

In addition, there is a motion (at Tab 14) of the father asking that any retroactivity commence only on October 19, 2009, an even later date. That motion has not been argued, and presumably is awaiting a determination by this court. [ 14 ] By far the greater argument of the father has been with respect to the section 7(3) special expenses child support for Brent sought by the mother. This argument raises a plethora of issues. Of the aggregate of the expenses which the mother insists are referable to Brent’s post-secondary education, which do not qualify under section 7(1)(e)? Which are excessive in amount?

Which are unnecessary? Which are not sufficiently proven? [ 15 ] Moreover, the argument over this portion of the claim extends to a different level. Brent had just turned age 18 when he started Year I of his university education. He had some summertime earnings in the summer of 2008. His 2008 income is unknown. He also worked in the summer of 2009, from May 25 to August 25. His 2009 summertime income totalled about $4,500. How much of Brent’s own earnings should the court expect that he would apply to his post-secondary education expenses?

There is no easy answer to this. [4] [ 16 ] Of even greater significance, in this case, is the fact that Brent has qualified for, and has received, funding through the Serpent River First Nation Education Department. This was a substantial grant for the 2008-2009 year, namely, $17,646. For 2009- 2010, the funding amount is not known with certainty. [5] This is not a loan; it is a non-repayable grant. According to the evidence, it is intended to cover residence, tuition, books and transportation during the academic year.

It seems logical to me that the entirety of this band funding should be applied to Brent’s post-secondary educational expenses. [ 17 ] The mother’s contention is that Brent’s post-secondary educational expenses for any calendar year are comprised of: (

a) the total of what she herself paid that she claims relates to Brent’s educational needs; (

b) the total of the funding from the band; and (

c) withdrawals by Brent from a joint account held with his mother and transferred to his sole account. [6] [ 18 ] For the calendar year 2008, she calculates his post-secondary expenses to have been $24,667. For the calendar year 2009, she calculates these to be $20,813. [ 19 ] Obviously, Brent’s post-secondary educational expenses can differ significantly from year to year. [7] How can the court come to a figure that is variable, particularly where there is a dispute as to the reasonableness of some expense items, or whether they qualify at all as “post-secondary educational”.

Inherent in the mother’s proposed method of calculation is a need for judicial rulings, on an annual basis, on each item of expense that she claims to be a legitimate section 7(1)(

e) expense. It almost goes without saying that this exercise can only be done retroactively each year, after the total expense items have been identified. [ 20 ] I do not believe that this was the kind of judging that was contemplated by the Child Support Guidelines . This is more an exercise in accounting than in judging. In this case, the amounts sought from the father, as a contribution to post-secondary educational expenses for Brent, are relatively modest.

There is a better manner of dealing with this issue in this motion. [ 21 ] The presumptive rule in section 3(1) [8] of the Guidelines applies to children under the age of majority. Both children were under the age of majority until September 1, 2008. The presumptive rule sets out the amount of support to be the table amount and the

section 7 amount, if any. There was no

section 7 amount claimed until 2008. [ 22 ] This presumptive rule does not automatically end when a child reaches the age of majority. In fact, a fair reading of section 3(2)(a) [9] suggests that this rule continues to apply unless the court considers the amount of support determined by this rule to be inappropriate. In such a case, the court is given an alternative manner in section 3(2)(b) [10] by which it may determine the amount of support for an adult child. [ 23 ] My reading of

section 3 of the Guidelines suggests that there is some onus on the parties seeking to utilize section 3(2)(

b) to

persuade the court that the method in section 3(2)(a), that is the presumptive rule, is somehow inappropriate. [ 24 ] I am not so persuaded. Likely this is because neither party has argued that the presumptive rule is inappropriate. The mother is very clear that she is not advocating the judicial application of section 3(2)(b). What she is advocating, however, is not the classic application of the presumptive rule. [ 25 ] The first question to decide is whether support should be ordered retroactively.

If that is answered in the affirmative, the next immediate question is the date in the past to which the support should be made retroactive. [ 26 ] The starting point for the determination is section 31(1) [11] . This codifies the obligation of every parent to provide support for his or her child to the extent that he or she is capable of doing so. [ 27 ] The Child Support Guidelines , in combination with section 33(11) FLA [12] addresses, for most cases, what “to the extent that the parent is capable of doing so” means in terms of actual dollars.

The Guidelines created tables of monthly child support amounts that are tied to the annual incomes of the persons who were to pay the support. These table amounts made the quantification of child support much more predictable, much more uniform, and much more equitable for the majority of cases.

For those cases where unusual, atypical or extraordinary circumstances existed, the Guidelines permitted child support orders in different amounts than were prescribed by the Child Support Guideline Tables . [13] [ 28 ] In the present case, it is not disputed that the father’s annual income increased substantially from 2003 ($64,867) to 2006 ($81,846), and to amounts in excess of $90,000 in subsequent years.

This was sufficient to constitute a material change in circumstances, the threshold required for a variation. [ 29 ] The issue of retroactive support variation has acquired a prominent position in our jurisprudence in the past decade or so.

Ultimately, the Supreme Court of Canada gave its attention to this issue in a group of cases decided in 2006. [14] [ 30 ] With respect to date of retroactivity , after some judicial discussion on the pros and cons of choosing the date of application, the date of formal notice, the date of effective notice, or the date when child support should have increased, the Supreme Court adopted the date of effective notice as the general rule.

However, it recognized, in the following excerpt, that the general rule should not always apply: “The date when increased support should have been paid, however, will sometimes be a more appropriate date from which the retroactive order should start. This situation can most notably arise when the payor parent engages in blameworthy conduct. Once the payor parent engages in such conduct, there can be no claim that (s)he reasonably believed his/her child’s support entitlement was being met.

This will not only be the case where the payor parent intimidates and lies to the recipient parent, but also where s(he) withholds information. Not disclosing material change in circumstances – including an increase in income that one would expect to alter the amount of child support payable – is itself blameworthy conduct. The presence of such blameworthy conduct will move the presumptive date of retroactivity back to the time when circumstances changed materially.

A payor parent cannot use his/her informational advantage to justify his/her deficient child support payments.” [ 31 ] The final pronouncement of the Supreme Court on this issue is captured in the following paragraph in the D.B.S. case: “The proper approach can therefore be summarized in the following way: payor parents will have their interest in certainty protected only up to the point when that interest becomes unreasonable. In the majority of circumstances, that interest will be reasonable up to the point when the recipient parent broaches the subject, up to three years in the past.

However, in order to avoid having the presumptive date of retroactivity set prior to the date of effective notice, the payor parent must act responsibility: (s)he must disclose the material change in circumstances to the recipient parent. Where the payor parent does not do so, and thus engages in blameworthy behaviour, I see no reason to continue to protect his/her interest in certainty beyond the date when circumstances changed materially. A payor parent should not be permitted to profit from his/her wrongdoing.” [ 32 ] How does this relatively recent jurisprudence apply in this case?

I find that the father has not acted responsibly by his failure to provide to the mother copies of his complete income tax returns and notices of assessment by the dates he was required to do so pursuant to paragraph 9(2) of the separation agreement. This default on his part persisted with respect to the documents he was obligated to produce in each of the years from 2006 to 2010.

His obligation under paragraph 9(2) actually continues, and he remains in default in 2010 of producing his documents relating to the 2009 calendar year. [ 33 ] The father’s position in this case is that his obligation to produce arises from the amending agreement of August 2003 which contains the following sentence: “The child support shall be reviewable on an annual basis upon production of the husband’s income tax return in accordance with the Child Support Guidelines .” He claims that his financial production obligation under the Guidelines is determined by

section 25. [15] This obligation, he argues, is triggered only by a written request of the mother, and requires only tax returns for the three years preceding the written request, together with any current financial information, including any relating to undue hardship. He insists that the written request of the mother was only made in September 2009. The order of production made in Superior Court was dated December 14, 2009. His production obligation was to provide his 2006, 2007 and 2008 tax returns.

He claims that he did so, albeit in 2010, and therefore was in compliance with the amending agreement, the Guidelines , and the December 14, 2009 Superior Court order. [ 34 ] I reject this argument. Firstly, the separation agreement from 2001 has continued to be the valid and subsisting contract between the mother and the father to date, except for paragraph 9(1). The amending agreement varied the terms of paragraph 9(1) only. This is clear from the plain wording of the amending agreement.

To emphasize that all other terms of the separation agreement were to continue as valid and enforceable terms, the parties specifically provided for this:

“The parties confirm all other terms of the separation agreement.” The provisions for financial disclosure and production were contained in paragraph 9(2) of the separation agreement, not in paragraph 9(1). [ 35 ] Secondly,

section 25 of the Guidelines would have no applicability to the financial production obligations of the father. These provisions only apply to a parent “ against whom an order for the support of a child has been made ”. No child support order had ever been made against the father.

His child support obligations had their genesis in a domestic agreement, not a court order. [ 36 ] It is abundantly clear from a comprehensive view of the two agreements, that annual production of the father’s financial information was contemplated, and that annual changes in child support were a distinct possibility dependent on the financial information to be provided by the father. The father had a positive obligation to make such disclosure and production. In fact, he had annual deadlines. There was no obligation on the mother. It was her right under their contract to be provided with them annually.

His annual production of these documents was not contingent on her making a request, written or otherwise. [ 37 ] The evidence satisfies me that the father defaulted in his financial production obligations for the years 2006 through to 2010. Certainly, he has since produced his 2006, 2007 and 2008 tax returns, but did not produce these until 2010, well past the respective production deadlines. In fact, he had not even prepared or filed (with Canada Revenue Agency) returns for 2007 and 2008 until 2010, so he could not possibly produce copies when he should have. This renders his position even more tenuous.

How could there be any annual reviews when he was delinquent in producing the very documents on which annual reviews were almost totally dependent? [ 38 ] There are other factors that have some bearing on this issue. The mother asked the father in 2007 for his income information. He produced a 2007 compensation statement from his employer effective April 1, 2007, setting out the father’s total base salary, plus bonus, as $74,489. In actual fact, his 2007 salary turned out to be $90,375.

However, he did not disclose to the mother that the information he had provided earlier was incorrect, nor did he provide the correct amount. [ 39 ] The mother deposes in her evidence that she “requested a tax return from the respondent each year since our divorce in 2003 and he failed to produce one until the court ordered production ...” The father nowhere in his evidence contradicts this evidence of the mother.

Nor can the father, who is under a contractual obligation to provide a copy of his tax return annually to the mother, choose not to file a tax return with Canada Revenue Agency in order to circumvent such obligation. [ 40 ] In

summary, the father’s conduct in failing to comply with his financial production obligations as far back as 2003 is, in the circumstances, “blameworthy conduct” as phrased by the Supreme Court of Canada. This, in my view, justifies moving the presumptive date of retroactivity back to the time when the circumstances changed materially. Since there is no evidence before me of annual income of the father prior to 2006, and since no claim is being made which predates the year 2006, the presumptive date for retroactive variation is January 1, 2006. [ 41 ] On May 1, 2006, the Child Support Guideline tables changed.

The result is that the 2006 monthly child support amounts predating May 1, 2006 were different from those from May 1, 2006 and following. [ 42 ] My finding based on the evidence is that the appropriate child support that should have been paid is the following: Year Father’s Annual Income Monthly Table Amount No. Of Months Subtotal Annual Total 2006 81,846 1,050 x 4 4,200 1,181 x 8 9,448 13,648 2007 90,375 1,285 x 12 15,420 2008 91,102 1,295 x 12 15,540 2009* 91,102 1,295 x 12 15,540 [ 43 ] The father’s actual annual income for 2009* remains undetermined.

He has not provided his 2009 tax return or notice of assessment. Pursuant to section 19(1)(f) [16] of the Guidelines the court can impute income to the father in these circumstances. Alternatively, the court can rely on the prior year’s income as a predictor of the following year’s income. I also note that the parties have agreed that the father’s 2008 annual income amount should be the basis for the child support payable by him for 2010.

I have little difficulty, in these circumstances, in determining his 2009 annual income to be the same as that for 2008 for purposes of this motion to change. [ 44 ] In 2008, Brent had four months of university education (September to December). In 2009, he had eight months (January to April and September to December). In making child support awards under the Guidelines ,

section 7 special expenses can be, and very often are, ordered in addition to table amounts. In this case it is difficult to quantify what these

section 7 expenses total on a calendar year basis. Moreover, for purposes of arriving at an amount for which the mother and father must bear some responsibility, there must be deducted the funding from the band (which is provided on an academic year basis rather than a calendar year basis). Also, there should be deducted the amount that Brent should be contributing towards these expenses from his own earnings. [ 45 ] When all is said and done, I agree with the submissions of the mother that the (net) amount of section 7(1)(

e) expenses for Brent are quite modest in relation to the incomes of his parents. I infer that the only “debt” [17] resulting from Brent’s pursuit of a post- secondary education is that incurred by his mother in providing for things not covered by band financing or by his own resources. She is really asking this court through a

section 7 expense award, to require the father to reimburse her for a portion of what she has spent out of her own pocket (or purse). This is not an outrageous demand.

[ 46 ] For 2008, the mother claims she has expended approximately $5,000. For 2009, she has no actual calculation. My view is that what the band provides plus $5,000 represents a global annual amount that should be sufficient to meet Brent’s post-secondary education expenses. He should be able to contribute $1500 from his own earnings. [18] This leaves $3,500 to be shared by the mother and the father. I agree that the ratio determined by section 7(2) is roughly 51 percent (father) and 49 percent (mother) at least for the year 2008. I am prepared to extrapolate that ratio to 2009.

Accordingly, the father should pay $1,785 towards such expenses annually. I am not inclined to divide these over the eight months of Brent’s academic year. Rather, I would rather make such

section 7 expenses payable in monthly amounts of $148.75 over the entire 12 months. For the calendar year 2008, however, these

section 7 special expenses should commence only on September 1, 2008. [ 47 ] Commencing January 1, 2010, the child support provisions of the Superior Court order dated February 4, 2010 became operative (or alternatively, an order of this court which would mirror the provisions of that order). [ 48 ] The mother quantified her claim for retroactive support from Jan 1, 2006 to Dec 31, 2009 at $17, 241.91. The result of my decision is that the father was underpaying what he should have been paying by way of child support in each of those four years by different amounts in each of those years.

The cumulative amount of his underpayment according to my calculations is $15, 416. [19] [ 49 ] There remain a few loose ends. Firstly, the motion of the respondent father (at Tab 14) which asks for a retroactive support date of October 19, 2009 is dismissed. Secondly, the mother has a motion at Tab 10. It asks for an order fixing arrears from January 1, 2006 to December 31, 2009 in the amount of $17,241.91. This motion is also dismissed and for several reasons. I have not accepted the mother’s quantification of section 7(1)(

e) post-secondary educational expenses. More importantly, there is no statutory requirement for this court to “fix arrears of support”, so far as I know, and in absence of such obligation, I decline to do so. What this court can do is retroactively vary a support provision filed pursuant to

section 35 of the Family Law Act . Whatever arrears of support may be created as a result of a support variation order is not within the mandate of this court in this proceeding to pronounce upon. It is especially not so when support obligations and support payments pre-date the period of time to which the variation order pertains. It is evident that the mother has placed enforcement of her support entitlement into the hands of the Director, FRO. This is an agency which is designed to record accruals of support, payments of support and amounts of support arrears at any given time.

It should, theoretically, be able to pinpoint to the penny the arrears, if any, that may exist with respect to the support obligation of the father and the entitlement of the mother. [ 50 ] There is the nagging question of what becomes of the separation agreement terms once a child support variation order is made. The argument, on one side, may well be that the mother has chosen the court as her source of entitlement of support, and thereby relinquishes her rights under her prior domestic contracts.

On the other side, the argument is that only the terms of the domestic contract that have been superseded by, or are inconsistent with the terms of the court order, become operative, and any remaining terms survive. [20] How does this affect the father’s obligation to provide ongoing financial disclosure? Paternal financial disclosure and production have played a major role in this case. Is this to be governed in the future by section 9(2) of the separation agreement, or is it to be determined by

section 25 of the Child Support Guidelines ? The mother’s motion does seek an order for mutual exchanges of tax returns and notices of assessment by May 1 annually. This claim, if made into a court order, would be different than either the terms of paragraph 9(2) of the separation agreement or

section 25 of the Child Support Guidelines . Such ongoing disclosure and production provisions are conspicuously absent in the consent order obtained in the Superior Court that purports to deal with prospective child support from January 1, 2010. A similar question arises with respect to paragraph 9(3) of the separation agreement. This provides for termination of support obligation on the happening of certain contingencies. What, for example, will happen when Brent turns age 22? His plan, according to the evidence, is to attend law school after he finishes his four years of undergraduate university education.

He will turn age 22 long before he is finished school. Will section 9(2) apply to terminate the father’s child support obligations for Brent on his 22 birthday? It might be prudent to clarify these matters now to avoid potentially expensive litigation later. [ 51 ] The penultimate matter is a decision on the claims made by each parent with respect to payments on arrears that may result from any variation order in this case. The mother wants arrears paid at the rate of $500 per month. The father asks the court to order that he pay these, if any should result, at $150 per month.

I interpret the mother’s claim as a request for minimum monthly payments on arrears and the father’s claim as a request for an order for maximum monthly payments on arrears. Quite frankly, I am not entirely sure what the authority is for this court to make either of the orders sought with respect to payments on arrears. My inclination would be to order payments of $250 per month on arrears anticipating that the arrears created by a variation order in this case will be substantial. This would continue so long as the father had ongoing child support obligations for both children.

Once his support obligations for one of the children terminates, my expectation is that he would be required to pay a larger amount on account of arrears until they are discharged completely. [21] [ 52 ] These Reasons are not my order in this case. They are meant to let the parties know what I propose to order formally. In that regard, I propose also to give my usual directions with respect to costs, should any party seek costs. 21 March 2011 Justice John Kukurin

(

a) a new financial statement; or (

b) an affidavit saying that the information in the last statement has not changed and is still true. (

e) xpenses for post-secondary education; (

a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the parent or spouse against whom the order is sought; and (

b) the amount, if any, determined under

section 7. (

a) the amount determined by applying these guidelines as if the child were under the age of majority; or (

a) the documents referred to in subsection 21 (1) for any of the three most recent taxation years for which the parent or spouse has not previously provided the documents; (

b) as applicable, any current information in writing about, (

i) the status and amount of any expenses included in the order pursuant to subsection 7 (1), and (ii) any loan, scholarship or bursaries the child has received that affect the expenses referred to in subclause (i); and (

c) as applicable, any current information, in writing, about the circumstances relied on by the court in a determination of undue hardship. (

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