STEVEN JOHN NICHOLSON, ) ) ) ) Jessica Schofield v. Seth Boulding, 2021 MBQB 214

Date: 20211013 File No.: FD 16-01-14427 (Winnipeg Centre) Cited as: Nicholson v. Nicholson Indexed as: 2021 MBQB 214 COURT OF QUEEN'S BENCH OF MANITOBA (FAMILY DIVISION) BETWEEN: STEVEN JOHN NICHOLSON, ) ) ) ) Jessica Schofield and Seth Boulding for the petitioner, petitioner, ) ) -and- ) ) LORENA LYNNE NICHOLSON, respondent. ) ) ) ) ) Wayne C. Rose , for the respondent, ) JUDGMENT DELIVERED : ) OCTOBER 13, 2021 THOMSON J. Introduction/Background [ 1 ] The issues between the parties relate principally to child support.

Their dispute is made somewhat complicated by the s.9 Child Support Guidelines Regulation , C.C.S.M. c. F20 (the “ Guidelines ”) analysis that must be undertaken and by the respondent’s request for a retroactive adjustment to child support. [ 2 ] The matter of the parties’ uncontested divorce is also before me. [ 3 ] The parties married on January 12, 1999, and separated on September 11, 2011.

They have four children: Brooke Ashley Nicholson, born April 2000; Courtney Lynne Nicholson, born March 2002; Rheanna Hope Nicholson, born July 2003; and, Austin Maurice Nicholson, born November 2005. [ 4 ] The parties entered into a written separation agreement, made October 20, 2011, which adds context to the issues the respondent, in particular, raises in these proceedings. That agreement formalized their “shared custody”, the parties’ stated intention being that the children spend no less than 40% of the time in the petitioner’s care.

The agreement also specifies the petitioner’s payment of $1,231 per month in child support for the then four minor children. This is the amount he paid through to August 2018, when his payments increased to $1,310. That amount remained unchanged to the date of trial. [ 5 ] Finally, after severance of issues, a consent final order was recently pronounced, on February 26, 2021, further addressing parenting time of the (then) two minor children, and leaving the issues referred to at paragraphs 1 and 2 for this trial. Austin is now the only minor child. Income of the Parties for Child Support

- Introduction [ 6 ] The initial task of the court, before setting out on the s. 9 analysis and assessing the request for retroactive adjustment, is to make determinations as to the parties’ total annual incomes in the requisite years, for child support purposes. [ 7 ] This preliminary undertaking is fairly straightforward. - The Law [ 8 ] The objectives of the Guidelines are set out at s. 1 : Objectives 1 The objectives of these guidelines are (

a) to establish a fair standard of support for children that ensures that they benefit from the financial means of both parents; (

b) to reduce conflict and tension between parents by making the calculation of child support orders more objective; (

c) to improve the efficiency of the legal process by giving courts and parents guidance in setting the levels of child support orders and encouraging settlement; and (

d) to ensure consistent treatment of parents and children who are in similar circumstances. [ 9 ] In determining each parent’s income for child support purposes, the Guidelines provide that: Calculation of annual income 16 A parent’s annual income is determined pursuant to sections 17 to 19 using the same sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency, adjusted in accordance with

Schedule III. - Analysis/Findings [ 10 ] The petitioner’s reported total income for the years 2016 to 2020 is as follows: Year Total Reported Income 2016 $102,741.49 2017 $104,836.29 2018 $108,186.30 2019 $124,941.57 2020 $113,620.80 [ 11 ] That income was comprised of employment income received in each year, to which should be added funds received as an honorarium in each of 2016 and 2017: Year Honorarium Funds Grossed-Up 2016 $12,350.00 $21,820.00 2017 $4,750.00 $8,392.00 [ 12 ] The parties agreed at the commencement of trial that the petitioner’s current income for support purposes is $114,816. [ 13 ] The respondent’s reported total income in the material time period is as follows: Year Total Reported Income 2016 $28,532.07 2017 $21,101.32

2018 $31,727.32 2019 $40,552.41 2020 $45,494.45 [ 14 ] In each month between October 2016 and July 2018, the respondent was in receipt of disability benefits of $853.77.

The income received by her (including gross-up) is: Year Disability Benefits Gross-up 2016 (October-December) $2,507.00 $3,311.00 2017 $10,029.00 $15,927.00 2018 (January-July) $5,850.00 $7,722.00 [ 15 ] The respondent’s current income was agreed at trial to be $52,500. [ 16 ] Accordingly, I find the total annual income of the petitioner for support purposes in the requisite years to be as follows: Year Total Annual Income 2016 $124,561.00 2017 $113,944.00 2018 $108,186.30 2019 $124,941.57 2020 $113,620.80 2021 $114,816.00 [ 17 ] With respect to the respondent, she admitted not being employed on a full-time basis in 2016, 2017 and 2018.

In light of her current employment situation, and without ascribing a specific financial consequence, I conclude she probably should have been earning more income (even on a less than full-time basis) if she had assumed that position sooner.

She appears to have been able to meet her financial needs in that period because of her receipt of tax-free government benefits, about which I will have more to say yet. [ 18 ] In all the circumstances, I conclude her total income for support purposes, taking into account only the gross-up of non-taxable disability income (not the tax-free government benefits), to be as follows: Year Income for Support Purposes 2016 $31,811.00 2017 $33,482.00 2018 $39,449.00 2019 $40,552.41 2020 $45,494.45 2021 $52,500.00 Section. 9 Analysis: “Condition, Means, Needs, and Other Circumstances” - The Law [ 19 ] The applicable

section of the Guidelines reads as follows: Shared custody 9 Where each parent exercises a right of access to, or has physical custody or care and control of a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account (

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

(

b) the increased costs of shared custody arrangements; and (

c) the condition, means, needs and other circumstances of each parent and of any child for whom support is sought. [20] The Supreme Court of Canada outlined the analysis to be followed in applying s. 9 of the Guidelines in Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 SCR 217: 27 The three factors structure the exercise of the discretion. These criteria are conjunctive: none of them should prevail (see Wensley, atp. 90; Payne and Payne, at p. 254; Jamieson v. Jamieson, [2003] N.B.J. No. 67 (QL), 2003 NBQB 74, at para. 24).

Consideration shouldbe given to the overall situation of shared custody and the costs related to the arrangement while paying attention to the needs, resourcesand situation of parents and any child. This will allow sufficient flexibility to ensure that the economic reality and particularcircumstances of each family are properly accounted for. It is meant to ensure a fair level of child support. ….. 39 The specific language of s. 9 warrants emphasis on flexibility and fairness.

The discretion bestowed on courts to determine the childsupport amount in shared custody arrangement calls for the acknowledgment of the overall situation of the parents (conditions andmeans) and the needs of the children. The weight of each factor under s. 9 will vary according to the particular facts of each case… [21] Contino, supra, also confirms that in applying the analysis, a court is required to, “… depart from the set-off amount or makeadjustments to it if it is inappropriate in light of the factors considered under ss. 9(

b) and 9(c)” (para. 41). [22] The Manitoba Court of Appeal has recently applied Contino, supra, in Smederovac v. Eichkorn, 2020 MBCA 57 ,reminding us that: [35] The purpose of

section 9 is not to equalize household incomes, but rather to make adjustments for any significant and appreciablevariations in household standards of living and the financial realities of the parties, including the ability to absorb costs related tomaintaining a similar standard of living… [23] A final comment: receipt of government benefits by a parent is not included in determining income for child support purposes. But, the receipt of these benefits is considered as part of the s. 9(

c) analysis (see, for example, Gannon v. Gannon, 2014 NSSC 113). - Analysis/Findings [24] In this particular case, it is clearly inadequate simply to compare the parties’ reported incomes (even as I have adjusted them) toarrive at a proper disposition of child support; such a comparison fails to reflect the actual monies available to each. The peculiar facts ofthis case must be accounted for. [25] The parties have had a shared parenting arrangement; however, the respondent has claimed all child-related benefits as if shewere the primary care parent of all four children, when she was not.

These include the Canada Child Benefit in the following amounts: Year Canada Child Benefit2016 $18,256.612017 $16,443.002018 $15,405.502019 $10,259.46 [26] She also received disability benefit payments for the parties’ son, Austin: Year Disability Benefit2016 $2,730.002017 $2,771.002018 $2,832.00 2019 $2,886.00

[ 27 ] In respect of that same child, the respondent received a further significant retroactive amount covering a period prior to the parties’ separation. The documentary evidence disclosed receipt of some $18,000 for the period July 2006 to June 2015.

The respondent testified that this was one of four payments received by her in 2016, totaling in excess of $32,000 (tax-free). [ 28 ] None of these foregoing funds intended for the parties’ son was shared with the petitioner to benefit this child in the time-period when he was in the petitioner’s care (even particulars of which were not shared with the petitioner until shortly before trial). [ 29 ] The respondent’s tax returns also confirm that for the years 2016 to 2020 she claimed the “Family Caregiver” credit and the “disability amount transferred from a dependent” (likely, she said, also on a retroactive basis): Year Family Caregiver Amount Disability Amount Transferred from a Dependent 2016 $2,121.00 $12,668.00 2017 $2,150.00 $12,846.00 2018 $2,182.00 $13,039.00 2019 $2,230.00 $13,325.00 [ 30 ] The respondent’s responding submission seems to be that the petitioner bears responsibility for failing, or electing not, to assert his claim to a share to some of these benefits.

This is in discord with the evidence I received and, in any event, ignores the court’s concern for fairness of result as between the parties, and the realities of how their children have been supported by them. [ 31 ] The respondent also received rental income in respect of an investment property, in amounts that are difficult (and, in the larger context of this case, unnecessary) for the court to quantify, due to her vague testimony and generally spotty documentary disclosure. [ 32 ] Her suggestion that purchase of the property was actually intended to create a form of trust for the benefit of Austin is rejected by the court, as it is unsupported by the type of documentary evidence to be expected in such a situation. [ 33 ] In that regard, I also observe that her evidence and disclosure regarding the RESP for the two eldest children, Brooke and Courtney (the balance of which she said is roughly $70,000), and concerning their university-related expenses, was similarly deficient. [ 34 ] While she was able to point to documentation confirming the withdrawal of $48,500 from the RESP between July 2018 and November 2020, and the reinvestment of about $20,000, the respondent could not specifically account for the expenditure of the balance of some $28,000 (deposited into her chequing account).

The few documents she did produce respecting university-related expenses could not be traced to that balance; but, even if fully credited, fail to account for some $16,000 of the total.

These findings also bear on her request for, and my disposition of, on-going support for the adult children, as set out later. [ 35 ] This pattern of incongruities between specific, known (documented) dollar amounts, and non-specific (undocumented or improperly documented) expenditures, was repeated in the evidence of the income earned by Brooke and Courtney as measured against the respondent’s testimony about their monthly budgets; they did not add up. [ 36 ] In reference particularly to s. 9 (b), the respondent has put forward (as has the petitioner) a budget which does not demonstrate (or seek to assert) increased costs of a shared parenting. [ 37 ] And partnered with my assessment of the condition, means, needs, and other circumstances of each and their children under s. 9(c), the evidence fails to establish that the petitioner ought to be, or ought to have been, called upon to pay any higher level of support for his children than he actually does, or did. [ 38 ] At the risk of conflating my s. 9 analysis with the third component of this decision (that is, the consideration of the retroactive support claim of the respondent), in the earlier years it was also inappropriate that the petitioner pay the straight set-off amount in light of the parties’ respective means, needs, and other circumstances.

And, in the two most recent years, he has paid more than the off-set amount in any event, as set out further below. [ 39 ] The petitioner’s written submission demonstrates a differential in the parties’ taxable incomes whereby the respondent enjoyed a higher percentage of the net monthly cash in each of the requisite years, as follows: Year Percentage of total Cash Resources – Petitioner Percentage of Total Cash Resources - Respondent 2016 48.62% 51.38% 2017 44.64% 55.36% 2018 45.00% 55.00% 2019 47.60% 52.40% 2020 46.23% 53.77%

2021 45.30% 54.70% [ 40 ] His counsel’s detailed comparison of what amounts in support the petitioner actually paid, and what would be payable on a straight set-off basis (and excluding the retroactive payment received by the respondent in 2016, above), is also instructive.

Year Support Paid Support Payable (based on straight set-off) 2016 $14,472 ($1,206 per month) $1,853 2017 $14,472 ($1,206 per month) $1,646 2018 $15,088 (the equivalent of $1,257.33 per month over the course of the calendar year) $1,410 per month based on four children and $1,197 per month based on three children 2019 $15,720 ($1,310 per month) $1,440 per month based on three children 2020 $15,720 ($1,310 per month) $1,173 per month based on three children and $908 per month based on two children 2021 $1,310 per month) $812 per month based on two children and $518 per month based on one child [ 41 ] I add here that I do not accept the submissions, and the work-ups in particular, filed by the respondent seeking to recast the quantification of the parties’ support obligations; the methodology and the underlying assumptions (exclusion of the respondent’s receipt of government benefits, including the lump sum amount received in relation to Austin) are faulty, and rejected by the court. [ 42 ] Regarding the respondent’s request that a set-off continue to be paid while the eldest children continue to attend university, there are ample funds in the RESP (contributions for which have been made by both parties, consistent with the terms of the Separation Agreement) to address their financial needs.

The monthly payment of $1,310 being made by the petitioner when the trial was concluded is fair in all of the circumstances, and should have been continued to the end of June 2021. What the petitioner has paid on account of child support over the relevant time period, paired with this disposition to June 30, 2021, is proper. [ 43 ] His obligation from July 1, 2021 ought to continue, but in the amount of $518 per month, the figure noted above, until further order or agreement.

Retroactive Adjustment to Child Support [ 44 ] Acknowledging some redundancy in my so saying, what has been paid as child support by the petitioner was and remains fair and, taken together with the following additional analysis, also answers the respondent’s request for (an upward adjustment to) retroactive child support. - The Law [ 45 ] The analysis to be followed in considering a request for retroactive child support is outlined in D.B.S. v.

S.R.G. , 2006 SCC 37 , [2006] 2 SCR 231 , and focuses on four factors: 1. whether the recipient has supplied a reasonable excuse for the delay (see paras. 100-104); 2. the conduct of the payor parent (see paras. 105-109); 3. the circumstances of the children (see paras. 110-113); and, 4. the hardship the retroactive award might entail (see paras. 114-116). [ 46 ] While the Supreme Court of Canada has considered the issue again more recently in Michel v. Graydon , 2020 SCC 24 , that was

in the context of a variation rather than an initial proceeding specifically in relation to a child that was no longer a child of the marriagefor child support purposes. The Court was clear in Michel, supra, that the application of D.B.S., supra, to an initial application (such asthe case at bar) has been problematic, but left a resolution for another day; the law as it stood prior to Michel, supra, then remainsunchanged. [47] The Manitoba Court of Appeal applied the analysis set out in D.B.S., supra, in Johnson v. Mayer, 2016 MBCA 41 .

Indismissing the appeal, the Honourable Madam Justice Steele concluded: [19] In keeping with the Supreme Court of Canada’s direction in DBS (at para 99), the trial judge took a holistic view of the matter, anddecided the case on the basis of its particular factual matrix.

It is sufficient for our purposes to agree with the trial judge that, given thecircumstances of this child in this case, the fact that the child would obtain no benefit from a retroactive award, and the fact that therecipient parent has no reasonable excuse for the delay, that this is not an appropriate case for the award of retroactive child support. [48] More recently, the Manitoba Court of Appeal applied the analysis set out in D.B.S., supra, in Sydor v.

Keough, 2019 MBCA 119 dismissing the appeal on this ground and affirming the finding of the trial judge that there would not be any benefit to the childof a retroactive award. The court affirmed the trial judge’s analysis in particularly recognizing the importance of predictability andcertainty in family members (paras. 28-31). [49] There is an important distinction between the analyses to be undertaken when a parent seeks child support prospectively versusone where a parent seeks to adjust retroactively.

This was confirmed by the court in D.B.S., supra: 96 Unlike prospective awards, retroactive awards can impair the delicate balance between certainty and flexibility in this area of thelaw. As situations evolve, fairness demands that obligations change to meet them. Yet, when obligations appear to be settled, fairnessalso demands that they not be gratuitously disrupted. Prospective and retroactive awards are thus very different in this regard.

Prospective awards serve to define a new and predictable status quo; retroactive awards serve to supplant it. [50] In D.B.S., supra, the Court succinctly explained the concerns with respect to delay by the recipient parent: 102 Not awarding retroactive child support where there has been unreasonable delay by the recipient parent responds to two importantconcerns. The first is the payor parent’s interest in certainty.

Generally, where the delay is attributable to unreasonableness on the partof the recipient parent, and not blameworthy conduct on the part of the payor parent, this interest in certainty will be compelling. Notably, the difference between a reasonable and unreasonable delay often is determined by the conduct of the payor parent. A payorparent who informs the recipient parent of income increases in a timely manner, and who does not pressure or intimidate him/her, willhave gone a long way towards ensuring that any subsequent delay is characterized as unreasonable: compare C. (S.E.) v. G. (D.C.).

Inthis context, a recipient parent who accepts child support payments without raising any problem invites the payor parent to feel thathis/her obligations have been met. 103 The second important concern is that recipient parents not be encouraged to delay in seeking the appropriate amount of support fortheir children. From a child’s perspective, a retroactive award is a poor substitute for past obligations not met. Recipient parents mustact promptly and responsibly in monitoring the amount of child support paid: see Passero v. Passero, (ON SC),[1991] O.J. No. 406 (QL) (Gen. Div.).

Absent a reasonable excuse, uncorrected deficiencies on the part of the payor parent that areknown to the recipient parent represent the failure of both parents to fulfill their obligations to their children. [Emphasis added.] - Analysis/Findings [51] Under the first factor, the respondent is responsible for delay in seeking her relief, initially by failing to file her Answer untilmore than three years after the Divorce Petition was filed. [52] Much more significant is her failure to make timely or complete documentary and financial disclosure, which has, at points, beenegregious, and adds texture and context to the consideration of delay in the process. [53] As the respondent failed to make timely or complete disclosure as required by the Rules, this necessitated the petitioner having toserve a Demand for Financial Information, a Request to Admit, and Questions on Interrogatories, including shortly before trial.

In thenormal course, disclosure would have been made years earlier, properly during the case management process, when the court (and theparties’) resources are focused on seeking an understanding of the relevant evidence, and a resolution of the issues without the need for atrial. [54] The respondent’s delay in making disclosure in these proceedings is further animated by the remarkable motion brought by her,seeking to reopen the trial weeks after closing her case, and the adjournment for the submission of written argument.

She effectivelysought to testify afresh, and to refer to, and have accepted as exhibits, additional documentation that she had never disclosed for trial(much less produced to the petitioner to utilize in the preparation and presentation of his case) to bolster or rehabilitate her position. (Idismissed that motion, with separate oral reasons for decision.) [55] The second factor to be considered is the petitioner’s conduct. There is no significant evidence with which to characterize the

petitioner or his conduct as worthy of any blame. [ 56 ] The third factor is the circumstances of the children.

In this case the facts include that: - the three eldest children are over the age of 18 and are not living with either parent ; - the arrangement in place since 2016 has inflicted no financial hardship upon any one of them; - that arrangement actually put disproportionate cash into the hands of the respondent each month; - funds remain available in the RESP for the older children; and, - the petitioner continues to pay child support. [ 57 ] Only the fourth factor , namely, the hardship of a retroactive award, fails to weigh completely in the petitioner’s favour. [ 58 ] The features of this particular case lend an aura of perversity to the respondent’s overarching submissions.

The retroactive award sought by her would, in effect, be a windfall when considered in light of funds she received in relation to their son’s retroactive disability payments and upon her claims to Revenue Canada as a primary care parent when she was not. It would also serve to reward her inaction and non-disclosure, both of which tended to delay and frustrate the process. [ 59 ] To conclude, this is not an appropriate case for a retroactive adjustment to child support in the respondent’s favour.

Further, or alternatively, the petitioner has more than satisfied, in the former and in the latter years, his s. 9 support obligation, having regard to the parties’ and the children’s means, needs, and other circumstances. The Divorce [ 60 ] All statutory requirements having been met, I also hereby pronounce a divorce judgment. COSTS [ 61 ] Failing agreement, costs may be spoken to. J.