2012 NSSC 271, 2012 NSSC 271

SUPREME COURT OF NOVA SCOTIA Citation: Manuele v. O ’ Connell , 2012 NSSC 271 Date: 20120719 Docket: Amh No. 075558 Registry: Amherst Between: Giuseppe (Joe) Manuele Applicant v. Ruth Marie O ’ Connell Respondent Judge: The Honourable Justice Arthur J. LeBlanc Heard: March 29, 2012, in Amherst, Nova Scotia Final Written Submissions: May 4, 2012 Decision: July 19, 2012 Counsel: Angela A. Walker, for the Applicant Lloyd I. Berliner, for the Respondent By the Court : Introduction

[ 1 ] This proceeding involves opposing applications to vary child support. The applications are brought under s. 17(1) of the Divorce Act , R.S.C., 1985, c. 3 (2nd Supp.), which permits the court to vary, rescind, or suspend, prospectively or retroactively, a support order or a custody order. Background [ 2 ] The parties married on September 2, 1989, and separated on June 1, 2005. There were three children of the marriage, all sons: A.R., born October 2, 1990; A.J., born July 20, 1992; and D.J., born April 4, 1994. The parties executed a separation agreement (the agreement) on January 26, 2007.

It was incorporated into a divorce judgment of the Quebec Superior Court (Family Division), issued that day, and registered in Nova Scotia in May 2011. [ 3 ] The

preamble to the agreement – designated as an “ integral ” part of the agreement at s. 1.1 – described the parties, and their respective financial situations, as follows: WHEREAS the MOTHER is presently unemployed as she is a stay-at-home MOTHER who has not been active in the job market for the entire duration of the marriage; WHEREAS the FATHER is a businessman who is also involved in the technology field as a national manager and earns an annual income of at least TWO HUNDRED AND TWENTY THOUSAND DOLLARS ($220,000.00); WHEREAS the parties have been freely discussing between themselves their financial situation and each of them, being aware of the means available to them to confirm all of the financial information they have exchanged, have chosen to divulge to the other all information without the necessity to further investigate, and this given their mutual trust in each other; . . . [ 4 ] The agreement dealt with custody, access, and support.

Paragraph 3.1 required Mr. Manuele to pay child support of $3,300 per month. He agreed in paragraph 3.2 to assume “ all additional expenses ” for the children, “ such as braces, glasses and medicines, ” and undertook to make an annual payment of $3,300. Paragraph 3.3 provided that Mr. Manuele “ alone shall be responsible for all of the children ’ s post-secondary expenses including tuition, books, and all co-curricular expenses; . . . ” He agreed to pay spousal support of $3,000 per month for 12 years, ending on December 31, 2018, or upon Ms. O ’ Connell remarrying: paragraphs 4.1 and 4.3. Mr.

Manuele could seek a variation in the event of a significant modification or decline in his financial situation: paragraphs 4.4 and 4.5. Support payments were indexed in accordance with

Article 590 of the Quebec Civil Code : s 5.1. The agreement also dealt with property division and related issues. [ 5 ] There is some debate as to the state of affairs after the end of the marriage. As part of the settlement, Mr. Manuele negotiated an agreement with Canada Revenue so that that the proceeds of the sale of the matrimonial home – which Ms. O ’ Connell received – were not garnished to satisfy a tax debt incurred during the marriage. Ms. O ’ Connell retained all of the matrimonial property. Mr. Manuele subsequently went through bankruptcy, while Ms.

O ’ Connell left the marriage with assets of $300,000 and no debts. (Mr. Manuele adds that a further matrimonial debt to the IRS, in the amount of $80,000, came to his attention after separation, and he took responsibility for it as well.) Ms. O ’ Connell claims in response that she was left with a $30,000 line of credit. [ 6 ] Ms. O ’ Connell has raised several issues relating to the negotiation and finalization of the agreement in 2007. I will address these points, although I note that Ms. O ’ Connell does not specifically suggest that the agreement should be set aside. Disclosure to the Quebec Court [ 7 ] Ms.

O ’ Connell says the arrangements respecting the allocation of property and debts were not disclosed to the judge who finalized the divorce. If these were considerations in determining child support, she submits, s. 15.1(5) of the Divorce Act required it to be disclosed before the court ordered an amount of child support other than the Guidelines amount. The Guidelines amount is the presumptive quantum of child support: s. 15.1(3). Subsection 15.1(5) permits the court to award an amount of child support other than

the Guidelines amount where the court is satisfied that “special provisions” in “a written agreement respecting the financial obligationsof the spouses, or the division or transfer of their property, directly or indirectly benefit a child, or that special provisions have otherwisebeen made for the benefit of a child” (s 15.1(5)(a)) and the application of the Guidelines “would result in an amount of child support thatis inequitable given those special provisions” (s 15.1(5)(b)). [8] Bateman, J.A. considered the meaning of “special provisions” in MacKay v.

Bucher, 2001 NSCA 120, stating that: [38] If the arrangement is out of the ordinary or unusual, plainly for the benefit of the child and reduces the need for support, thensuch is a special provision. She agreed generally with the definition in Hall v. Hall (1997), (BC SC), 30 R.F.L. (4th) 333 (B.C. Master), wherethe Master commented that “a ‘special provision’ must be one which, in whole or in part, replaces the need for the ongoing support forthe children. . . .” (para. 17) (emphasis in original). [9] Mr.

Manuele submits that the agreement made “special provision” as contemplated in s. 15.1(5) by providing for a divisionof property and debt that provided Ms. O’Connell with an unequal division in her favour so that she could maintain the children in a newhome in Nova Scotia. This benefited the children and reduced their need for support. The court, it is submitted, should also be mindfulof the discretion relating to incomes over $150,000, and should therefore uphold the agreement as negotiated. [10] Subsections 15.1(7) and (8), though not referenced by the parties, also appear to be relevant here.

They provide that,notwithstanding the presumptive application of the Guidelines, a court “may award an amount that is different from the amount thatwould be determined in accordance with the applicable guidelines on the consent of both spouses if it is satisfied that reasonablearrangements have been made for the support of the child to whom the order relates.” ( s. 15.1(7)). In determining whether reasonablechild support arrangements have been made, “the court shall have regard to the applicable guidelines.

However, the court shall notconsider the arrangements to be unreasonable solely because the amount of support agreed to is not the same as the amount that wouldotherwise have been determined in accordance with the applicable guidelines.” ( s. 15.1(8)) [11] I am satisfied that the arrangement negotiated by the parties and confirmed by court order amounted to a special provision forsupport of the children. Ms. O’Connell received a favourable property settlement and a favourable arrangement with respect to

Section 7expenses. The overall arrangement that was negotiated made it possible for Ms. O’Connell to set up a new home for herself and thechildren, mortgage-free, in Nova Scotia. Disclosure of Income Information [12] As noted above, the parties agreed in the

preamble to the agreement that they had been “freely discussing between themselvestheir financial situation” and were each aware of the means available “to confirm all of the financial information they have exchanged” :s 1.1. The agreement stated that Mr. Manuele earned an annual income of “at least $220,000.00.” Ms. O’Connell says this figure wasbased on undocumented representations by Mr. Manuele.

She states that prior to his application to vary, which triggered this proceeding,he did not make financial disclosure or inform her that his financial situation “had changed from that represented at the time of theagreement.” [13] It is not disputed that Mr. Manuele was the sole income earner during the marriage. It is also not disputed that the family livedvery comfortably. According to Mr. Manuele, during the marriage he typically earned more than $400,000 per year. Ms.

O’Connellclaims that she was not aware of their financial situation during the marriage, to the extent that she did not know there was a lien on theirhouse until a real estate agent told her. Mr. Manuele disputes this, pointing out that Ms. O’Connell had access to their joint account andwas familiar with their lifestyle. [14] Mr. Manuele introduced correspondence from his Montreal counsel to Ms. O’Connell’s in order to show that there had been anexchange of information about his income at the time of the agreement. In a letter dated 30 October 2006, Mr. Manuele’s lawyer, MariaBattaglia, wrote to Ms.

O’Connell’s lawyer, Carolle Tremblay, stating that “. . . for the year 2006 given Mr Manuele’s commissions,bonus and automobile reimbursement he expects to earn approximately $350,000.00 . . .” A second letter, dated 26 January 2007 (thedate of the agreement) attached Mr. Manuele’s year-end earning statement, showing gross pay for 2006 of $367,107.79. These letterswere admitted into evidence not for the truth of their contents, but to establish that Mr. Manuele had disclosed his income when the

agreement was being negotiated. [ 15 ] Ms. O ’ Connell said she did not remember seeing the January 26 letter before she signed the agreement. She had not spoken to her Montreal lawyer since the divorce. There is no explanation of why, if the January 26, 2007, letter was received after the execution of the agreement and was inconsistent with the parties ’ intentions (or, more particularly, with Ms. O ’ Connell ’ s state of knowledge), there was no issue raised by her counsel at the time. [ 16 ] There is no automatic requirement for a child support payor to provide income information to the recipient.

Subsection 25(1) of the Federal Child Support Guidelines, SOR 97/175 , provides: Continuing obligation to provide income information 25.

(1) Every spouse against whom a child support order has been made must, on the written request of the other spouse or the order assignee, not more than once a year after the making of the order and as long as the child is a child within the meaning of these Guidelines, provide that other spouse or the order assignee with (

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

b) as applicable, any current information, in writing, about the status of any expenses included in the order pursuant to subsection 7(1); and (

c) as applicable, any current information, in writing, about the circumstances relied on by the court in a determination of undue hardship. [ 17 ] Income disclosure is mandatory where the recipient makes a written request, which Ms. O ’ Connell never did. The parties agreed in the

preamble of the agreement “ to divulge to the other all information without the necessity to further investigate. ” To the extent that this provision purported to waive Ms. O ’ Connell ’ s right to receive information about Mr. Manuele ’ s income on request, it is negated by s 25(8) of the Guidelines, which provides that a “ provision in a judgment, order or agreement purporting to limit a spouse ’ s obligation to provide documents under this

section is unenforceable. ” Ms. O ’ Connell could have requested information about Mr. Manuele ’ s income, and would have had the benefit of the enforcement mechanisms of

Section 25 in order to do so. She did not do so. [ 18 ] I cannot find that Mr. Manuele omitted to do anything that he was required to do by not providing Ms. O ’ Connell with income information. Moreover, I do not accept the allegation that the description of Mr. Manuele ’ s income as “ at least $220,000.00 ” was a misrepresentation. It was accurate on its face. I am also satisfied that specific information respecting Mr. Manuele ’ s actual income for 2006 was provided to Ms. O ’ Connell or her counsel at the time of the agreement.

Is A.R. still a child of the marriage? [ 19 ] The Divorce Act defines a “ child of the marriage ” at s. 2.(1), as . . . a child of two spouses or former spouses who, at the material time, (

a) is under the age of majority and who has not withdrawn from their charge, or

(

b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from theircharge or to obtain the necessaries of life; . . . [20] A.R., the oldest son, who was 21 years old at the time of the hearing, left university in the spring of 2011 (in April at thelatest), and had not returned to school in March 2012 (Mr Manuele’s original position was that A.R. left school in February, but in thecourse of the hearing he appeared to agree that April could be regarded as the relevant date).

He spent time out of the province, beforereturning to live with his mother. At the time of the hearing, in March 2012, A.R. was working full-time (apparently on commission) asa fitness trainer in Halifax, and was living on his own. Mr. Manuele submits that his child support obligation to A.R. ended when A.R.left university. Ms O’Connell agrees that A.R. withdrew from parental charge in April 2011, but says he became a child of the marriageagain when he returned to live with her in Amherst and decided to return to school. He lived with her between October 2011 andFebruary 2012.

She says A.R. has applied to the Nova Scotia Community College and that he intends to return to school in September2012. No documentary evidence was offered in support of this claim. Mr Manuele agrees that A.R. would be a child of the marriageagain if he returned to school. [21] The determination of whether a child over the age of majority is a child of the marriage was considered in Cole v. Cole (1995), (NS FC), 143 N.S.R. (2d) 378, 1995 CarswellNS 79 (Fam.

Ct.), where Daley, J. considered the law on whether achild of the marriage is “unable to withdraw from the charge of their parents under the rubric of other cause or to obtain the necessities oflife.” After reviewing a list of general principles, he said, at para. 14: Generally, these cases demonstrate that a child may be a child of the marriage on proof that the child is in preparation for his/her futureindependence by the reasonable, active pursuit of education within the limits and wishes of the child, an intention to continue or return toeducation or because of the local prevailing unemployment circumstances over which the child may have no control.

These policies andinterpretations require some planning by the child, the parent with whom the child resides and some questioning by the parent who isexpected to provide maintenance. Difficulties arise when there are no plans and no communication and lead to contests as have occurredhere. They also arise when the child expects to be treated as an adult but chooses to act contrary to good sense and without concern forthe contribution of parent(s). [22] The Court of Appeal held in MacLennan v.

MacLennan, 2003 NSCA 9, that: “. . . a child at or over the age of majority isnot automatically a child of the marriage for the purposes of support simply by virtue of being a full time undergraduate universitystudent, although . . . it must be shown that the child is unable to withdraw himself or herself from parental charge.” Cromwell, J.A. (ashe then was) noted that judges in such cases may “. . . draw reasonable, common sense inferences from the proven facts and take intoaccount notorious facts such as that post secondary education is expensive, well paid part time employment for full time students isscarce and that the demands of full time course work limit the time available for part time work: . . .” (para. 40).

He said it would not bean error to make child support conditional on the child returning to school where the evidence supported the conclusion “. . . that hewould be a child of the marriage if that condition were met. While generally the ‘material time’ for the purposes of determining thechild's status is the time of trial . . . in the case of a conditional order premised on foreseeable future events to occur, or not, in knowncircumstances, the material time is the time, if ever, at which the condition is fulfilled.” (para. 44).

In such a situation, it was notnecessary for the trial judge to refuse to deal with child support; rather, this was a “pragmatic and just” method of removing the need forfurther proceedings (para. 46). In Nelson v. Nelson, 2005 NSSC 5, where the parties’ daughter had dropped out of university, thenresumed full-time study, Warner, J. said, following MacLennan, that: “A child who loses her entitlement to support is not disentitled tosupport forever and can regain her entitlement.” (para. 27). [23] In MacPhee v.

Ryan, 2002 NSSF 53, the parties’ son had withdrawn from university, but was about to begin attending adifferent university. Wilson, J. applied the guidelines, as the son was living with the mother and attending a local university, though hewas over the age of majority. He also held that the son could reasonably be required to contribute $2,500 per year toward his owneducation expenses. In determining

Section 7 expenses in Bury v. Beaton, 2012 NSSC 37, Wilson, J. directed that the son, who wasentering his second year of university, would be required to “. . . contribute 2/3 of any income earned towards his university expenses,which are to be deducted before apportionment.” in the event he found work (para. 26). [24] I am satisfied that A.R. has been unable to withdraw from parental charge in the months since he left university, and that heshould be regarded as a child of the marriage until September 2012.

Thereafter, he will remain a child of the marriage if he enrolls in apost-secondary educational program, such as the culinary program at the Community College, and attends as a full time student. Failingthat, the amount of support will be based on two children effective September 2012. Retroactive Child Support

[ 25 ] The relevant considerations on an application for retroactive child support were considered in D.B.S. v. S.R.G. , 2006 SCC 37 , where Bastarache, J., for the majority, stated that retroactive orders for child support, while not exceptional, are also not presumptive. Courts “ must be open to ordering retroactive support where fairness to children dictates it, but should also be mindful of the certainty that fairness to payor parents often demands ” (paras. 5 – 6).

Under the Child Support Guidelines, “ . . . a payor parent who does not increase his/her child support payments to correspond with his/her income will not have fulfilled his/her obligation to his/her children. ” (para. 54). Even where the payor has complied with the Guidelines order, it is “ . . . based upon a specific snapshot of circumstances which existed at the time the order was made. For this reason, there is always the possibility that orders may be varied when these underlying circumstances change . . . ” (para. 64).

A parent adhering to a separation agreement “ . . . that has not been endorsed by a court. . . ” has less expectation of certainty than a parent following a court order (para. 77). Generally, however, an agreement between the parents is entitled to considerable weight, as Bastarache, J. noted at para. 78: . . . courts should recognize that these agreements were likely considered holistically by the parents, such that a smaller amount of child support may be explained by a larger amount of spousal support for the custodial parent.

Therefore, it is often unwise for courts to disrupt the equilibrium achieved by parents. However, as is the case with court orders, where circumstances have changed (or were never as they first appeared) and the actual support obligations of the payor parent have not been met, courts may order a retroactive award so long as the applicable statutory regime permits it: . . . [ 26 ] Bastarache, J. noted that none of these factors is decisive. For instance, he said: 99 . . . it is entirely conceivable that retroactive support could be ordered where a payor parent engages in no blameworthy conduct. . . .

At all times, a court should strive for a holistic view of the matter and decide each case on the basis of its particular factual matrix. [ 27 ] Mr. Manuele seeks a retroactive variation of child support payable back to April 2011. He seeks a credit representing the difference between the amount for three children and the amount for two, on the basis that A.R. was not a child of the marriage in the interim. My finding on this point has been dealt with above. I am satisfied that A.R. remains a child of the marriage until September 2012, and thereafter only if he is enrolled in an educational program. As such, Mr.

Manuele ’ s variation application must fail. [ 28 ] Ms. O ’ Connell also seeks a variation, arguing that Mr. Manuele has fallen short of his support obligations, due to his “ previously undisclosed increase in income, ” which she submits is the relevant change in circumstances. I have already dealt with the allegation that Mr. Manuele acted inappropriately by not disclosing his income; there is no basis for such a conclusion. I accept that in some respects the parties circumstances have changed, however; their sons have all entered higher education, and Ms.

O ’ Connell is arranging a move while still proposing to maintain a home for the sons.

Delay in Bringing the Application [ 29 ] The first consideration identified by Bastarache, J. was unreasonable delay in making the application: “ The circumstances that surround the recipient ’ s choice (if it was indeed a voluntary and informed one) not to apply for support earlier will be crucial in determining whether a retroactive award is justified. ” The court, however, “ should not hesitate to find a reasonable excuse ” where there is a possibility of vindictive behaviour by the payor, or “ . . . where the recipient parent lacked the financial or emotional means to bring an application, or was given inadequate legal advice . . . ” (para. 101).

A reasonable excuse is unlikely to be found where a recipient “ . . . knew higher child support payments were warranted, but decided arbitrarily not to apply. . . . ” (para. 101). Delay will likely be unreasonable where the payor “ informs the recipient parent of income increases in a timely manner, and who does not pressure or intimidate him/her . . . ” (para. 102). [ 30 ] The separation agreement was concluded in January 2007. Each year, Mr. Manuele recalculated and increased his payments in accordance with the agreement. He submits that by acting in accordance with this agreement in this way, Ms.

O ’ Connell invited him to believe that his obligations were being met. Ms. O ’ Connell ’ s position appears to be that there was no delay because she was not aware of the increase in Mr. Manuele ’ s income until he filed his variation application. I have found that Mr. Manuele provided information about his 2006 income to Ms. O ’ Connell, through her lawyer, on two occasions, the second being on the day the agreement was signed. He

was not obliged by the agreement or by legislation to provide her with updated income information unless she requested it. Further, I cannot accept Ms. O ’ Connell ’ s

interpretation of the phrase “ at least $220,000, ” in a context where she was familiar with the family ’ s standard of living during the marriage. As such, I am satisfied that the timing of Ms. O ’ Connell ’ s application amounts to a delay.

Blameworthy Conduct by the Payor [ 31 ] As to the second factor to consider on a retroactive child support application, Bastarache, J. held that courts “ should not hesitate to take into account a payor parent's blameworthy conduct in considering the propriety of a retroactive award. ” Courts should take “ an expansive view of what constitutes blameworthy conduct, ” which Bastarache, J. characterized as “ anything that privileges the payor parent's own interests over his/her children's right to an appropriate amount of support. ” Examples of blameworthy conduct would be hiding income increases from the recipient in hopes of avoiding larger support payments, or misleading the recipient to believe that the payor ’ s obligations are being met, when in fact they are not (para. 106).

Even where the payor is not actively attempting to avoid their obligations, it will still be blameworthy behaviour to consciously ignore them (para. 107). But this does not mean that a payor parent who does not increase their payments in accordance with their rising income will necessarily be engaging in blameworthy conduct. Bastarache, J. said, at paras. 108 – 109: Whether a payor parent is engaging in blameworthy conduct is a subjective question. But I would not deny that objective indicators remain helpful in determining whether a payor parent is blameworthy.

For instance, the existence of a reasonably held belief that (s)he is meeting his/her support obligations may be a good indicator of whether or not the payor parent is engaging in blameworthy conduct. In this context, a court could compare how much the payor parent should have been paying and how much (s)he actually did pay; generally, the closer the two amounts, the more reasonable the payor parent’s belief that his/her obligations were being met. 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 by conforming to the order. However, this presumption may be rebutted where a change in circumstances is shown to be sufficiently pronounced that the payor parent was no longer reasonable in relying on the order and not disclosing a revised ability to pay. Finally, I should also mention that the conduct of the payor parent could militate against a retroactive award. A court should thus consider whether conduct by the payor parent has had the effect of fulfilling his/her support obligation.

For instance, a payor parent who contributes for expenses beyond his/her statutory obligations may have met his/her increased support obligation indirectly. I am not suggesting that the payor parent has the right to choose how the money that should be going to child support is to be spent; . . . But having regard to all the circumstances, where it appears to a court that the payor parent has contributed to his/her child’s support in a way that satisfied his/her obligation, no retroactive support award should be ordered. [ 32 ] Ms. O ’ Connell submits that Mr. Manuele failed to disclose increases in his income.

This amounts to blameworthy conduct, she argues, because the change in his income (to an amount of over $400,000) was “ sufficiently pronounced ” that it was no longer reasonable for him to rely on the order and not disclose his “ revised ability to pay. ” She cites MacPhee v. O ’ Leary , 2010 NSSC 124 , where the payor parent had not disclosed his revised ability to pay. However, in that case the payor was required to provide financial information under the separation agreement and corollary relief judgment, which he had not read (paras. 3, 8). [ 33 ] Mr. Manuele says there is no evidence of blameworthy conduct.

There is no evidence that Ms. O ’ Connell requested financial disclosure and that he refused to provide it. He cites Baldwin v. Funston , 2007 ONCA 38 , where the court denied a retroactive child support order where the separation agreement did not require the payor to disclose increases in his income. In that case, however, the court held that the failure to disclose constituted blameworthy conduct, in view of the magnitude of the increase (paras. 18-19). Mr. Manuele also cites Hanrahan-Cox v. Cox , 2011 NSSC 182 , where B. MacDonald, J. commented, at paras. 54-55: . . .

Too much emphasis has been placed on his comment “ ... courts should take an expansive view of what constitutes blameworthy conduct in this context. I would categorize as blameworthy conduct anything that privileges the payor parents own interests over his/her children’s right to an appropriate amount of support.” These words must be interpreted with the assistance of the examples he later provides about what may or may not be considered blameworthy conduct.

He says: [106] . . . thus, a payor parent cannot hide his/her income increases from the recipient parent in the hopes of avoiding larger child-support payments:. . . . A payor parent cannot intimidate a recipient parent in order to dissuade him/her from bringing an application for child support . . . And a payor parent cannot mislead a recipient parent into believing that his/her child-support obligations are being met when (

s) he knows that they are not.

[107] . . . Even where a payor parent does nothing active to avoid his/her obligations, (

s) he might still be acting in a blameworthy manner if (

s) he consciously chooses to ignore them. Put simply, a payor parent who knowingly avoids or diminishes his/her support obligation to his/her children should not be allowed to profit from such conduct: . . . [108] On the other hand, a payor parent who does not increase support payments automatically is not necessarily engaging in blameworthy behaviour . . . (emphasis added by B.

MacDonald, J.). [ 34 ] What a person knows or should be taken to know about his or her income does have relevance to the question about "blameworthy" conduct but there must also be evidence of attempts to "hide" that income, or to "mislead" another about that income or evidence of "intimidation" or "knowing avoidance or diminishment" of a support obligation. It is said that ignorance of the law is no excuse but I have already made a finding that the father did not realize the dividend amounts paid to his new partner and to his children must be added back to his income. [ 35 ] I have already held that Mr.

Manuele did not act in a blameworthy manner by representing that his income was other than what it actually was. The agreement contemplated that his income could increase, and, further, information about his actual income at the time had been provided to Ms. O ’ Connell ’ s counsel. With certain alleged exceptions, Mr. Manuele complied with his obligations under the agreement. In these circumstances, I am not satisfied that he acted in a blameworthy manner by not reporting increases in his income. Further, given the information about his 2006 income that was conveyed to Ms.

O ’ Connell ’ s counsel, I am not satisfied that the increase that occurred was one that would be of sufficient magnitude to alert him that circumstances had changed. Circumstances of the Children [ 36 ] The third factor identified by Bastarache, J. in D.B.S. was the past and present circumstances of the child. He said, at paras. 111 and 113: A child who is currently enjoying a relatively high standard of living may benefit less from a retroactive award than a child who is currently in need.

As I mentioned earlier, it is a core principle of child support that, after separation, a child’s standard of living should approximate as much as possible the standard (s)he enjoyed while his/her parents were together. Yet, this kind of entitlement is impossible to bestow retroactively. Accordingly, it becomes necessary to consider other factors in order to assess the propriety of a retroactive award. Put differently, because the child must always be the focus of a child support analysis, I see no reason to abstract from his/her present situation in determining if a retroactive award is appropriate.

Because the awards contemplated are retroactive, it is also worth considering the child’s needs at the time the support should have been paid. A child who underwent hardship in the past may be compensated for this unfortunate circumstance through a retroactive award. On the other hand, the argument for retroactive child support will be less convincing where the child already enjoyed all the advantages (s)he would have received had both parents been supporting him/her: see S. (L.).

This is not to suggest that the payor parent’s obligation will disappear where his/her children do not “need” his/her financial support. Nor do I believe trial judges should delve into the past to remedy all old familial injustices through child support awards; for instance, hardship suffered by other family members (like recipient parents forced to make additional sacrifices) are irrelevant in determining whether retroactive support should be owed to the child.

I offer these comments only to state that the hardship suffered by children can affect the determination of whether the unfulfilled obligation should be enforced for their benefit. [ 37 ] Mr. Manuele says a variation would be of no benefit to the sons, and that it would impede his ability to pay for their educational costs. He argues that such an order would simply be a redistribution of wealth.

He also takes the view that it is an unfortunate consequence of the timing of the separation – which occurred around the time he was going through bankruptcy – that none of the family members enjoy the standard of living they did during the marriage. Nevertheless, he notes, the sons are attending university debt-free and are able to travel. [ 38 ] Ms.

O ’ Connell says the debt she has incurred to cover living expenses – some $73,000 – has reduced her ability to provide for the sons “ in a manner consistent with that which they would have expected prior to the separation. ” She compares the situation to MacDougall v. MacDougall , 2005 NSSF 23 , where the payor concealed income and the recipient was forced to encroach on capital to support the children (para. 91). By contrast, in Baldwin , supra, the payor ’ s income rose from $60,000 in 1994 to more than $1 million in

2000. However, the recipient delayed bringing the application for over five years, and was not forced to encroach on capital, and was therefore denied a retroactive order (paras. 22-25). [ 39 ] Mr. Manuele also says Ms. O ’ Connell ’ s debt is attributable to home renovations, and that any additional payments would go to renovations on her partner ’ s home in Cape Breton. Ms. O ’ Connell had no mortgage on the Amherst house. She said the renovations had been “ cautious. ” She argues that it is speculative to consider what she will be left with when it sells.

In view of the surrounding circumstances, I am not satisfied that this debt places the sons in less beneficial circumstances. [ 40 ] I am not satisfied that the evidence establishes any significant ill-effects to the sons ’ welfare or standard of living, now or in the past, that would result from not ordering a retroactive variation. While the child ’ s post-divorce living standard “ should approximate as much as possible ” the standard of living during the marriage, the evidence established that Mr. Manuele ’ s income is not comparable to the highest points it reached during the marriage.

Hardship [ 41 ] Finally, Bastarache, J. said in D.B.S. , the court should apply “ a broad consideration of hardship is also appropriate in determining whether a retroactive award is justified. ” (para. 114). A retroactive award may trigger hardship in circumstances where a prospective award would not have that effect. He said, at paras. 115-116: . . . For instance, the quantum of retroactive awards is usually based on past income rather than present income; in other words, unlike prospective awards, the calculation of retroactive awards is not intrinsically linked to what the payor parent can currently afford.

As well, payor parents may have new families, along with new family obligations to meet. On this point, courts should recognize that hardship considerations in this context are not limited to the payor parent: it is difficult to justify a retroactive award on the basis of a “children first” policy where it would cause hardship for the payor parent’s other children. In short, retroactive awards disrupt payor parents’ management of their financial affairs in ways that prospective awards do not. Courts should be attentive to this fact.

I agree with Paperny J.A., who stated in D.B.S. that courts should attempt to craft the retroactive award in a way that minimizes hardship (paras. 104 and 106). Statutory regimes may provide judges with the option of ordering the retroactive award as a lump sum, a series of periodic payments, or a combination of the two: see, e.g., s. 11 of the Guidelines. But I also recognize that it will not always be possible to avoid hardship. While hardship for the payor parent is much less of a concern where it is the product of his/her own blameworthy conduct, it remains a strong one where this is not the case. [ 42 ] Ms.

O ’ Connell submits that any hardship that would be incurred by Mr. Manuele should be given little weight on account of his failure to disclose his increase in income. Further, she suggests that his expenses indicate a relatively luxurious lifestyle for his second family, “ at the expense of his first family. ” Mr. Manuele says there is no evidence that Ms. O ’ Connell would suffer any hardship if her retroactive variation application is denied. Conclusion on Retroactive Support [ 43 ] I am not satisfied that Ms. O ’ Connell has established that a retroactive variation of child support is justified.

I see no basis to attribute blameworthy conduct to Mr. Manuele, though I conclude that Ms. O ’ Connell ’ s application was not brought in a timely manner. I am not convinced that any hardship will arise from the lack of a retroactive order, or that the sons ’ circumstances will be adversely impacted. Prospective Child Support [ 44 ] The Child Support Guidelines provide two methods by which the table amount can be adjusted in the present circumstances.

Firstly, pursuant to s. 3(2)(b), the court may adjust the amount for a child of the age of majority or older, “ having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child. ” The middle son, A.J., has been attending university since 2010, and lives in a rented apartment, where he remained during the summer of 2011. The youngest son, D.J., is expected to begin university in the Fall of 2012. The oldest son, A.R., was not enrolled as a student at

the time of the hearing. Both A.R. (born 1990) and A.J. (born 1992) have reached the age of majority (19 in Nova Scotia), while D.J.will reach it in April 2013. [45] With respect to the two older sons, I believe the most effective approach in this case is to adjust the amount of child supportunder s. 3(2)(b) “having regard to the condition, means, needs and other circumstances of the child and the financial ability of eachspouse to contribute to the support of the child.” The youngest son, D.J., remains below the age of majority, and so the table amountremains a starting point. However,

Section 4 of the Guidelines must also be considered, pursuant to the Nova Scotia table. Where apayor spouse has income of more than $150,000,

section 4 provides that the amount of the child support order shall be: (

a) the amount determined under

section 3; or (

b) if the court considers that amount to be inappropriate, (

i) in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under theage of majority to whom the order relates; (ii) in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition,means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute tothe support of the children; and (iii) the amount, if any, determined under

section 7. [46] The onus is on Mr. Manuele to establish that the table amount is inappropriate in the circumstances. The word “inappropriate”in s. 4(

b) means “unsuitable,” not merely “inadequate.” As such, courts “have the discretion to both increase and reduce the amount ofchild support prescribed by the strict application of the Guidelines in cases where the paying parent has an annual income exceeding$150,000”: Francis v. Baker, (SCC), [1999] 3 S.C.R. 250, at para. 40. [47] Mr. Manuele proposes to pay the costs of tuition, books, rent, food, and a monthly living allowance, as well as assisting withthe cost of summer accommodation for the two younger sons, as well as for A.R. should he return to school.

He says he cannot paythese amounts while also paying the table amount of child support. If he is required to pay child support directly to Ms. O’Connell, herequests a reduced table amount, with Ms. O’Connell being responsible for the costs of residence, food and expenses. He argues that hischild support obligation should continue on the basis of an income of $220,000. He has assumed “essentially full responsibility” for allSection 7 expenses, although such expenses would normally be shared, as well as all of the access costs. [48] In

summary, Mr. Manuele proposes to pay child support for D.J. of $1,709 per month as long as D.J. lives with his mother,until he begins attending university. At that point, Mr. Manuele would pay all of the two younger sons’ educational expenses directly,providing a monthly amount (“in keeping” with the amount of child support) for rent, food, and expenses, as well as paying the full costsof tuition, books and necessaries, such as laptop computers. He would continue to pay all access costs. [49] Mr. Manuele also says the sons should contribute to their own expenses from summer income.

They would not be required topay for their tuition, books or university costs, nor would he expect them be work during the academic year. He cites Scott v. Scott,2004 NBCA 99, where the father earned $259,000 and a daughter who was attending university was required to contribute to the cost ofher education from summer earnings. In Nelson v. Nelson, supra, Warner, J. noted the reasonableness of requiring the student, who willget the most direct benefit, to contribute to the cost of her own education, even if this meant borrowing for that purpose (paras. 35-38).

Iagree in principle that adult children of the marriage should contribute to their own expenses to whatever extent is reasonably possiblefrom summer earnings, although I hesitate to assign a specific amount. [50] Ms. O’Connell seeks ongoing child support for all three sons at the table amount, based on an income of $375,000. She agreesthat the table amount should be reduced by 50 per cent during the months that the sons are attending university, as suggested in Lu v.Sun, 2005 NSCA 112. Mr.

Manuele’s position is that the table amount should be eliminated, and that he should pay the post-secondaryexpenses directly to the sons. Alternatively, she suggests that she receive full payments during the entire year, out of which she would

directly pay the post-secondary costs, with the exception of tuition, room and board, books, and university fees. Ms. O ’ Connell says the table amount (under s 4(

a) of the Guidelines) is appropriate because Mr. Manuele ’ s annual income is some $375,000 USD, while she is unemployed and has no source of income save spousal support. She says this should not oblige her to assume the entire cost of room and board, which she argues are a component of post-secondary expenses that are covered by Mr. Manuele ’ s obligations under the agreement. At most, she says room and board would be shared proportionally. [ 51 ] Ms. O ’ Connell cites D.M.C.T. v. L.K.T. , 2007 NSFC 22 , affirmed at 2008 NSCA 61 , application for leave to appeal dismissed, [2008] S.C.C.A.

No 457, where the court held that “ reasonable needs ” should be interpreted in the light of the means and circumstances of the parents as well as the child. Mr. Manuele says D.M.C.T. is distinguishable , given the far greater income gap in that case. Ms. O ’ Connell concedes the factual distinction, but says D.M.C.T. emphasizes the presumption in favour of the table amount, as do Hollenbach v. Hollenbach , 2000 BCCA 620 , and Niles v. Munro , 2010 NSSC 221 . Paying Child Support Directly to the Sons [ 52 ] Mr. Manuele requests an order that child support be paid directly to the sons. Ms.

O ’ Connell says it is not reasonable or necessary for support to be paid directly to the boys, noting that the recipient parent is intended to be a conduit for support for the children: Doane v. Colford , 2006 NSSC 28 . Mr. Manuele says Doane is distinguishable on the basis that the children in that case were all under the age of 19. [ 53 ] The court has the discretion to order support paid directly to the child: see Lu v.

Sun , supra, at para. 87 , where the Court of Appeal refused to disturb the trial judge ’ s decision not to order support paid directly to a daughter over the age of majority who was attending university. Such orders have been made for children over the age of majority who were enrolled in university programs: see James v. James, 2008 BCSC 975 , where the court ordered direct payments to a daughter who spent limited time living with mother in the months when she was not attending university (paras. 37-41), MacArthur v. MacArthur , 2004 NSSF 57 , at paras. 20-21 , and Nelson v.

Nelson , supra, where Warner, J. ordered direct payments to a daughter who did not live with either parent when she was not attending university. The parties ’ son had been accepted into a community college program. Warner, J. ordered the father to pay educational expenses to the son or directly to the school. He did not specify this with respect to living expenses ( Nelson at paras. 32, 53-54, 66 ). [ 54 ] Ms. O ’ Connell says the cases cited by Mr. Manuele are distinguishable.

The parties in MacArthur were in financial difficulty, and it was “ unfeasible ” to expect the father to assist in the costs of post-secondary education; in addition, the court ordered a further payment to the mother as table child support. In Nelson the daughter did not live with either parent. By contrast, Ms. O ’ Connell maintains a home for the sons to return to. She denies that they are likely to begin spending more time with their father. Mr. Manuele notes that Ms O ’ Connell plans to move from Amherst to Cape Breton, and says there is no evidence that the sons will be living with her and her partner there.

This reinforces the logic of ordering support to be paid to the sons directly. If she continues to receive the child support payments (at a 50 per cent rate), he argues that she should be required to pay for the sons ’ rent and groceries. [ 55 ] In response to the suggestion that if he were paying support directly to the sons, they would become responsible for seeking income disclosure and for enforcement, Mr. Manuele says disclosure will not be necessary, since he proposes to pay the expenses as needed.

Any fluctuation will therefore arise not from changes in his income, but in response to the sons ’ needs for funds for tuition, books, rent, computers and spending money. More generally, he denies Ms. O ’ Connell ’ s suggestion that he has refused to provide payments for expenses that he does not wish to pay for. He argues that it would be appropriate to make the order for direct payments without a provision for enforcement, given that there is no evidence of past missed payments or intention to deprive the children of child support.

Section 7 Expenses “ all additional expenses ” : para 3.2 [ 56 ] Ms. O ’ Connell raises an issue under para. 3.2 of the agreement, which provides that “ all additional expenses for the children such as braces, glasses and medicines shall be assumed by the father. The father undertakes to pay the amount of $3,300 every year payable no later than August 1st of each year. ” According to Ms. O ’ Connell, this provision does not limit Mr.

Manuele ’ s contribution to $3,300, but obliges him to cover “ all additional expenses. ” She describes varying medical expenses from year to year, ranging from a high of $8560 in 2008 to a low of $1500 in 2009, and a total of $14,060 between 2008 and 2010. After Mr. Manuele ’ s contributions of $3,300 per annum, she says he owes her $4,160.

[ 57 ] Mr. Manuele says that certain of the expenses claimed by Ms. O ’ Connell were for herself, while others were for non-essential or elective expenses, such as chiropractic treatment. He also claims that part of the cost of wisdom teeth extraction was apparently reimbursed. Taking these deductions into account, he says Ms. O ’ Connell ’ s total medical expenses have been $15,751.32, while he has paid $16,650 during the relevant period. Moreover, he says, chiropractic treatment for the sons is a matter of medical treatment on which he should be consulted. [ 58 ] Ms. O ’ Connell maintains that Mr.

Manuele ’ s obligation to pay medical expenses is not limited to those he deems to be “ essential. ” Since the children received chiropractic treatment before the separation, she says, they are entitled to expect it after separation. Mr. Manuele submits that Ms. O ’ Connell ’ s evidence at trial was that he had provided her with every payment she requested, and that she did not cite any specific requests and refusals. He also argues that the claim should be dismissed because it was only raised after Mr. Manuele commenced the variation application. A

Section 7 claim was disallowed on this ground in DeCarufel v. Prest , 2010 NSSC 170 , where the applicant commenced an application in July 2009. Gass, J. said, at para. 29, that it was “ not reasonable to include expenses not contemplated and agreed upon and expect a sharing of those expenses retroactively. Nor is the court prepared to go beyond July 2009, given that the Respondent was paying the agreed sum and no particulars were provided before then. ” Mr. Manuele also submits that Ms.

O ’ Connell has failed to minimize expenses, as she testified that she did not know whether the sons ’ chiropractic costs could be covered by their Dalhousie medical insurance. ” [ 59 ] Ms. O ’ Connell also submits that the expenses Mr. Manuele refers to cover the period between 2008 and 2011, while his payments are meant to cover the period since 2007. As such, she claims, he has contributed not $16, 650, but $13,200. She says that when the 2011 expenses ($5,894) are added to the $14,060 already referenced for 2008-2010, the total is $19,954. [ 60 ] I agree that Mr.

Manuele ’ s obligation under para. 3.2 are not limited to $3,300 per annum. However, he is not obliged to fund services that have not been established to be medically necessary, such as voluntary chiropractic treatments. Post-Secondary Education: para 3.3 [ 61 ] There is an issue as to whether Mr. Manuele ’ s obligation under para 3.3 of the agreement to pay for “ all of the children ’ s post-secondary expenses including tuition, books, and all co-curricular expenses ” requires him to pay for food, rent and spending money.

He cites the definition of “ co-curricular ” in the Merriam-Webster Dictionary, where it is defined as “ being outside of but usually complementing the regular curriculum. ” He also cites examples of “ co-curricular activities ” in a labour arbitration case as swimming and museum trips: C.U.P.E., Local 2745 v. New Brunswick (Board of Management) (2010), 191 C.L.R.B.R. (2d) 150 , 2010 CarswellNB 641 (N.B.L.E.B.) , at para. 19 . On this basis, Mr.

Manuele argues, “ co-curricular expenses ” would “ relate to “ school-based activities undertaken under the supervision of the school. ” It would not encompass living expenses such as rent and groceries. In short, he submits that he should not be required to assume the full burden of paying for the sons ’ living expenses (in addition to “ formal schooling costs ” such as tuition, books and computers) while also making direct child support payments to Ms. O ’ Connell. [ 62 ] Ms. O ’ Connell argues that the agreement requires Mr.

Manuele to pay for “ all ” post-secondary expenses, “ not just those he feels are necessary or those which he wishes to pay. ” While she suggested that Mr. Manuele has refused to pay for various expenses that she categorized as post-secondary expenses, such as groceries and furniture, she also gave evidence that he had never refused to pay amounts she requested. [ 63 ] I am satisfied that the responsibility for post-secondary expenses obliges Mr. Manuele to assist the sons in paying for their accommodations, including furnishings. Conclusions on Child Support [ 64 ] Mr.

Manuele will continue to be responsible to pay the post-secondary education costs he has identified for each son who is enrolled and in attendance as a full-time student. This includes rental and incidental expenses. In addition, while the sons are students and are using Ms. O ’ Connell ’ s residence as a permanent home, he will be required to pay an additional amount to Ms. O ’ Connell to reflect the ongoing incidental expenses associated with her situation as the local parent.

I would set the amount at $1000 per month if all three sons are students; $750 per month if two of them are students; and $400 per month if one is a student. This reduced amount is

intended to reflect Mr. Manuele ’ s assumption of most of the

Section 7 expenses. [ 65 ] The new child support order will be effective from the date of this decision. Conclusion [ 66 ] Nothing in this decision affects any potential application respecting spousal support. [ 67 ] The parties shall bear their own costs. LeBlanc, J.