) ) J.V. Applicant – v. –, 2010 ONSC 6720

CITATION : J.V. v. M.V., 2010 ONSC 6720 COURT FILE NO.: 30845/08 DATE: 2010-12-10 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) J.V. Applicant – and – M.V. Respondent ) ) ) ) ) ) ) ) ) On His Own Behalf V. Lailla Pavicevic, for the Respondent ) ) ) HEARD: November 30, December 1, 2 & 3, 2010 hourigan j. [ 1 ] The primary issues in this litigation are access, child support,

section 7 expenses and spousal support. The parties have agreed that they shall have joint custody of their child. Background [ 2 ] The parties began cohabitating in 1999 and were married on June 3, 2000. There is one child of the marriage, S.V. (d.o.b. March […], 2005). The parties began to live separately in the matrimonial home in or about April of 2008, and the respondent moved out of the matrimonial home on July 31, 2008. [ 3 ] At the time of her departure from the matrimonial home, the respondent made an allegation that the applicant had sexually assaulted S.V..

Specifically, she alleged that S.V. had told her that when the applicant was changing her diaper and applying cream, he inserted his finger in her vagina. On August 6, 2008, the applicant moved for an ex parte order in front of Justice Miller. Her Honour granted her temporary custody of S.V. pending the return of the motion on August 21, 2008, and ordered that in the interim the applicant have access to S.V. as approved by the Halton Children’s Aid Society. [ 4 ] On August 21, 2008, the parties appeared before Justice Snowie on the return of the respondent’s motion.

Justice Snowie ordered that the parties have joint custody of S.V., with equal access to both parties. In the course of her endorsement, Justice Snowie noted that it was clear to her that the child was not at risk in being with the applicant and that the allegations of sexual impropriety against him were unsubstantiated. [ 5 ] Justice Snowie further stated that there is a “real question as to whether the mother is attempting to alienate the child from father” and noted that, in her view, the mother had acted high-handedly in moving for the ex parte order.

Her Honour also ordered that the case be referred to the Office of the Children’s Lawyer. [ 6 ] Susan Peacey prepared a report on behalf of the Office of the Children’s Lawyer, dated February 2, 2009. In the course of her report, Ms. Peacey dealt with the allegations of sexual impropriety on behalf of the father and concerns regarding the father’s mental health. With respect to the allegation of sexual abuse, she stated that investigations by the Halton Regional Police and the Halton Children’s Aid Society determined that there were “no grounds to believe a criminal offence had occurred”.

She noted that when S.V. was interviewed by the Halton Children’s Aid Society the child demonstrated that her father used an upward movement with his hand on her vagina when changing her and placed his finger on her vagina. According to the report, S.V. stated that her mother made the same motion when she changed her. [ 7 ] With respect to the applicant’s mental health, Ms. Peacey reported that she had received a letter from his psychiatrist, Dr.

Jean Porter, indicating that she had been seeing the applicant since June of 2007 for anxiety and panic attacks and that she had diagnosed “panic disorder, generalized anxiety disorder with depressive symptoms and obsessive/compulsive disorder”. Dr. Porter stated that the applicant had made “substantial gains in managing his symptoms” and that there was no concern about the applicant’s ability to parent. [ 8 ] Ms. Peacey recommended that custody of S.V. be jointly shared between her parents. She also recommended equal parenting time for both parties, with frequent movement of S.V. between the parties. Ms.

Peacey testified at trial that given that S.V. was only three years old at the time of the report, she felt that the child should not be away from either parent for any extended length of time.

[ 9 ] Since the date of Justice Snowie’s order, the parties have entered into an access arrangement whereby S.V. stays with each parent on a week-about basis. In addition, the parties have agreed that the parent who does not have the child during a given week shall be entitled to two evening access visits. [ 10 ] The respondent testified that during 2009 the applicant on occasion requested that she look after S.V. during his access time because of his work commitments. However, she also testified that on occasion the applicant requested additional time with S.V. when he had availability in his

schedule and that she accommodated such requests. Positions of the Parties [ 11 ] The applicant wishes to maintain the status quo in terms of the access regime that is currently in place or, in the alternative, seeks an order that the access regime recommended in Ms. Peacey’s report be adopted. The applicant argues that no spousal support should be payable by either party. With respect to child support, he submits that given what he considers to be the relatively close incomes of the parties, no child support should be payable for the period 2008 to 2010.

Starting in 2011, he submits that child support should be payable based upon the parties’ incomes as reflected in their Notices of Assessment. [ 12 ] The respondent seeks a change in the access scheduled whereby the applicant will have access every second weekend, one overnight access visit per week and one evening access visit per week. She also seeks retroactive child support, the repayment of half of certain

section 7 expenses and retroactive spousal support. Analysis Access [ 13 ] Counsel for the respondent advised the Court that it was not her client’s position that access should be reduced by reason of the allegations of sexual impropriety on the part of the father. Rather, she said that evidence was led at trial on the issue to refute any allegation that her client had acted in a high handed manner in moving for the ex parte order and to establish that she had reasonable grounds for taking action to protect her daughter.

Despite this fact, the allegation was repeatedly raised by counsel during the course of trial, although tellingly not during her cross-examination of the applicant. [ 14 ] Another recurrent theme in the trial was the applicant’s mental health. Again the respondent’s counsel took the position that his alleged mental health issues were not being relied upon as a basis to limit the applicant’s access. However, she also argued that by reducing access the applicant’s stress would be reduced. [ 15 ] I found the approach taken by the respondent’s counsel on these issues to be distasteful and irresponsible.

She played a shell game where allegations were raised when she thought it was to her client’s advantage and then removed from the table when she was asked if she was relying on the allegations to limit the applicant’s access. [ 16 ] I have no concerns regarding the father’s ability to parent S.V.. In particular, I have no concerns with respect to the allegation of sexual impropriety or his mental health issues. [ 17 ] The sexual impropriety allegation was fully investigated by the Children's Aid Society and the Halton Regional Police and no charges were laid.

Despite this fact counsel for the respondent relied upon a reference in a letter dated June 8, 2007 from the applicant’s psychiatrist, Dr. Porter. In that letter, Dr. Porter states that she was advised by the applicant that he had been sexually abused as a child and that he has “a fear of doing something similar to children, although nothing has ever occurred”. Dr. Porter testified at trial that this was an obsessive thought only and that the applicant does not continue to have this thought.

She also noted that the applicant has not engaged in any inappropriate sexual behaviour. [ 18 ] The evidence with respect to the applicant’s mental health makes clear that the issues he is dealing with do not in any way impact on his ability to parent. In her most recent report, dated October 12, 2010, Dr. Porter states: He has resourcefully and consistently pursued and maintained his treatment and his symptoms are totally manageable for him and they have never in any way affected his parenting or employment.

Essentially, any change that would have occurred since the report to Susan Peacey, on December 15, 2008, would only be in a positive direction with regard to the patient’s level of functioning and his parenting and other functional mobilities. From the time that I have known him he has exhibited normal and strong parental feelings and concerns for both his daughter and son. He has consistently maintained parenting and there have never been any concerns that I have had about his parenting and, in fact, I have been impressed by the fact that he’s a devoted, responsible and caring patient. ...

His mental health issues and symptoms are under control and have not, and do not, affect him in any adverse way in the areas of parenting or employment. [ 19 ] The real concern raised by the respondent, to the extent that it can be discerned, is that given the applicant’s busy work schedule, S.V. would have more stability in her daily life if his access was limited. She produced at trial a calendar for 2009 which contains handwritten notes which she states indicates occasions where she looked after S.V. despite the fact that her husband was entitled to have access during those periods.

She stated that this has not regularly occurred in 2010 and, as noted above, she testified that on occasion her husband asked for additional time with S.V. when he was not scheduled to have access with her and that she agreed to those

requests. [ 20 ] I do not believe that it would be in the best interests of S.V. to change the current access regime. The respondent has made vague allegations that S.V. is not happy and that on occasion she throws temper tantrums. However, such behaviour is hardly unexpected from a five-year old and, in any event, cannot be tied directly or indirectly to the current access regime. [ 21 ] In contrast, both the applicant and his father, with whom he currently resides, testified that they believe S.V. to be a happy and well adjusted child who is thriving under the current access regime.

This evidence is consistent with the testimony of Micheline Henri-Daze Administrator and Assistant Supervisor at S.V.’s daycare. Ms. Henri-Daze testified that S.V. has adapted very well to the daycare environment and interacts well with other children and the teaching staff. She further stated that there are no behavioural or learning difficulties with the child. [ 22 ] I see no reason to make any change to the current access regime and note that equal timesharing between the parties is entirely consistent with the recommendation of Ms. Peacey.

Support [ 23 ] The determination of support issues is complicated by the lack of clear evidence from either party regarding their incomes during the relevant periods. [ 24 ] The applicant is a real estate agent. His tax returns show that he has claimed business expenses for such items as advertising, motor vehicle expenses and management and administrative fees which significantly reduce his net income for tax purposes.

For example, his 2008 Income Tax Return shows gross business income of $116,801 and net income of $38,174. [ 25 ] The parties entered into minutes of settlement dated October 13, 2010, pursuant to which the applicant was to make certain disclosure, including third party documentary evidence in support of his claimed management expenses, salaries paid, advertising costs and automobile expenses. Despite this agreement, very limited disclosure has been made by the applicant. His car lease has been produced.

He has also produced a document entitled Detailed Record of Commissions earnings from his employer Sutton Group- Summit Realty Inc. which shows income for 2008 and part of 2009. [ 26 ] Unfortunately, the evidence regarding the respondent’s income is also less than satisfactory. As will be discussed below, the respondent worked as an exotic dancer until July 31, 2008 but reported none of her income from that work for tax purposes. She has also not fully reported her tips from her work as an aesthetician. [ 27 ] The parties have taken different approaches in calculating income.

The applicant submits that I should accept as accurate his income as reported in his Income Tax Returns and should gross up the respondent’s income to reflect unreported income. In contrast, the respondent submits that I should average the parties’ income and apply the averages for the purposes of calculating child support. [ 28 ] I turn first to the applicant’s submissions on income. For 2008 he urges me to accept his declared net income of $38,174 and attribute an income of $39,541 for the respondent.

This latter figure consists of $20,541 reported on her Income Tax Return, unreported income as an exotic dancer of $15,000 which was deposited to the couple’s joint account and tips of $4,000. [ 29 ] For 2009, again, the applicant submits that I should accept his declared net income of $10,608. He attributes an income to the respondent of $25,191, consisting of her reported income of $21,191, plus tips of $4,000. [ 30 ] For 2010, despite the fact he has provided no documentation with respect to his income, the applicant submits that I should accept that his income is the same as last year’s, being $10,608.

He submits that his wife’s income totals $15,244.50. This figure is calculated by adding the respondent’s employment income from her work at a spa of $2,527, plus Employment Insurance Benefits of $7,440 and income from her current job of $4,770.80. He adds to this sum $500 for undeclared tips. [ 31 ] The respondent takes a different approach to fixing income. She submits that the applicant’s income should be averaged for the last three years for which the court has income information.

However, she does not accept the applicant’s position regarding his net pay as reflected in his Income Tax Returns and says that his gross income should be reduced by only 33% for expenses.

She submitted that the court should accept the following calculation: Gross Net Less 33% Expenses 2007 $129,781 $35,397 $86,953.27 2008 $116,801 $38,174 $78,256.67 2009 $ 53,070 $10,608 $35,556.90 2010 Unknown Unknown Unknown Average 2007-2009 $ 99,884 $28,060 $66,922.28 [ 32 ] The respondent urges me to fix the applicant’s income at $66,922.28 for 2008, 2009 and 2010. [ 33 ] With respect to her own income, the respondent submits that I should average her income over the last three years.

For 2010, she calculates an income of $14,744.50 (being $2,527 from employment income from the spa, $7,440 in Employment Insurance Benefits

and $4,777.50 in employment income from her current employer). For 2009, she submits that I should accept her income as reflected in her revised filing with Revenue Canada, being $21,191. For 2008, she submits that her income should be fixed at $20,541 as represented to Revenue Canada, plus $15,000 as the approximate amount she says she deposited into the parties’ joint bank account, for a total amount of $35,541. The respondent then averages this income and comes up with a figure of $23,825.50.

She adds a sum of $3,000 to that average to reflect undeclared tip income from aesthetics work and additional money received from exotic dancing which was not deposited into the couple’s joint bank account. Thus, the respondent submits that I should fix her income for child support purposes at $26,825 per annum for 2008, 2009 and 2010. [ 34 ] While it may be practical to average annual incomes in situations where a party’s income varies widely from year to year, it is not appropriate to utilize an average in the circumstances of this case.

Averaging income would lend to highly artificial and inaccurate income figures. For example, for 2009 the respondent would have me impute to the applicant an average income of $66,922.28. Such a figure exceeds even his gross income of $53,070.

Similarly, for 2010 the respondent’s counsel submits that I should impute an average income of $26,825 for her client when her actual income is likely more in the range of $17,000. [ 35 ] In my view, the best approach for fixing income for the purpose of child support calculations in this case is to try to determine on the available evidence the parties’ actual income and not engage in an artificial averaging exercise.

Of course this task is complicated by the failure of the applicant to make full financial disclosure and the respondent’s practice of deliberately under-reporting her income for tax purposes. [ 36 ] The applicant’s gross income for 2008 was $116,801. I am not prepared to accept as accurate the net income he claimed on his Income Tax Return of $38,174.37. I start with his net pay of $109,295.01 listed in his Detailed Record of Commission Earnings. I further deduct the sum of $23,192 for automobile expenses.

The remaining expenses, excluding management and administration fees total $8,322.42, and include amounts for advertising, meals and entertainment, telephone and utilities. While I am satisfied that at least some of these expenses are legitimate, I am unable to quantify the precise amount due to the applicant’s failure to disclose back up documentation. I am reducing these expenses by half and deducting the sum of $4,161.21 from the applicant’s income. [ 37 ] There remains the sum of $23,317.08 claimed as management and administration fees.

I believe that there is overlap between this figure and the total sum of $22,269 deducted by Sutton Group-Summit Realty Inc. as transaction fees and accounts receivable. Unfortunately, the true nature of the expenses deducted by his employer was never explained by the applicant. I am prepared to further reduce the applicant’s income by $5,000 for management and administration fees. The result of the inclusion of these expenses is net income for the applicant for 2008 of $76,941.80. [ 38 ] For the respondent for 2008, I start with her reported income of $20,541.

I add to that an amount for her undeclared income from exotic dancing. The respondent testified that approximately $15,000 of that income was deposited to the couple’s joint bank account and she earned a further unspecified amount which she kept in cash. In addition, an amount needs to be added to reflect undisclosed tip income from her work as an aesthetician. I have no reliable evidence as to the specific quantity of either of these latter sums. I will add $5,000 for undisclosed exotic dancing income and $5,000 for undisclosed aesthetician tips.

I fix the respondent’s income at $45,541 for 2008. [ 39 ] For 2008, the calculation of off-setting child support obligations is as follows: Applicant Respondent Off-Set Income $76,942 $45,541 $275 x 5 months = Child Support $ 695 $ 420 $1,375 Payable Monthly Therefore, for 2008 the applicant owes the respondent the sum of $1,375 for child support. [ 40 ] For 2009, again I am not prepared to accept the applicant’s net income as claimed in his Income Tax Return.

The Detailed Record of Commission Earnings produced for that year is only for the period June 1, 2009 to September 21, 2009, and is therefore of no utility in the calculation of the applicant’s earnings. I will accept his claim of gross business income of $53,000 and his motor vehicle expenses of $21,453. With respect to the balance of the expenses claimed (totalling $21,009.26), I will reduce those by half as I have no documentary support for any of them. The result is a net income of $21,112.37. [ 41 ] The respondent’s income for 2009 on her revised Income Tax Return is $21,191.

I add to this figure $4,000 for undeclared tips, for a total income of $25,191. [ 42 ] The off-set of child support obligations for 2009 is as follows: Applicant Respondent Off-Set Income $21,112.37 $25,191.00 $ 31 x 12 months = Child Support $ 181.00 $ 212.00 $ 372.00 Payable Monthly Therefore, for 2009, the respondent owes the applicant $372 for child support.

[ 43 ] The applicant’s income for 2010 presents an even more difficult challenge. The only evidence at trial on this issue was his statement that he believes that he is earning about the same amount as last year. No documentary evidence was presented whatsoever regarding his actual earnings or the business expenses he intends to claim. In the circumstances, I fix his net income for 2010 at $45,000. In arriving at this figure, I reluctantly accept his estimate of income but I am prepared to allow only a very modest amount for expenses. [ 44 ] The respondent’s income for 2010 is much clearer.

It consists of employment and Employment Insurance Benefits of $14,744.50. I add to this $1,000 to reflect tips received in her work as an aesthetician during the first part of the year and $1,200 for Universal Child Care benefit payments.

I fix her income for 2010 at $16,945. [ 45 ] The calculation of off-set child support obligations for 2010 are as follows: Applicant Respondent Off-Set Income $45,000 $16,945 $268 x 12 months = Child Support $ 415 $ 147 $3,216 Payable Monthly Therefore, for 2010, the applicant owes child support to the respondent of $3,216. [ 46 ] The net result for the years 2008, 2009 and 2010 is that the applicant owes the respondent $4,219 for retroactive child support. [ 47 ] On a go forward basis, I set child support in accordance with the incomes that I have fixed for the parties in 2010.

Commencing January 1, 2011, therefore, the applicant shall pay the respondent $268 per month in child support. [ 48 ] With respect to

section 7 expenses, the applicant consents to pay 50% of the amounts claimed by the respondent since separation. This amounts to a payment owing by the applicant to the respondent of $1,706.14. On consent, the parties will split future

section 7 expenses on an equal basis. [ 49 ] I now turn to the respondent’s claim for spousal support. She seeks retroactive support dating back to July 31, 2008 and ongoing support for the next two years. [ 50 ] A court charged with fixing the income of parties for the purposes of establishing an appropriate level of child support must be mindful of its parens patriae obligations and must strive to fix a fair amount even in the face of incomplete financial disclosure. No such imperative exists in the context of a spousal support calculation.

Where a claim is made for spousal support, the moving party has the onus of establishing a need for such support and the ability of the proposed party to pay support. [ 51 ] The respondent has not met her onus. Specifically, she has not satisfied me that she has a need for spousal support currently or that she has had a need in the past. [ 52 ] For the period 2008 to 2010, I do not have sufficient information to establish her actual income. While I was prepared to estimate her income for child support purposes, I will not do so for the purpose of calculating spousal support.

With regard to her current income, the respondent has not satisfied me that she is incapable of earning a higher income. She was laid off from two aesthetics jobs which paid her considerably more than her current position doing clerical work for her partner’s company because she refused to work in the evenings on the grounds that it would interfere with her time with her daughter. This would seem to me to be a deliberate economic choice made by the respondent which should not be borne by the applicant by way of the payment of spousal support.

Moreover, at trial only the vaguest of evidence was given by the respondent regarding efforts by her to find work in the aesthetics field. Disposition [ 53 ] In conclusion, the following final orders shall issue: (

i) The parties shall have joint custody of their child S.V. (d.o.b. March […], 2005) . (ii) S.V. will reside with her parents on a week about basis. The party with whom S.V. is not residing may have two visits per week with her with a maximum duration of 3 hours each and may have phone contact with her between the hours of 6 p.m. and 7 p.m. each evening. (iii) For Christmas 2010, S.V. shall be with her father from Christmas Eve at 9 a.m. to 2 p.m. Christmas Day and shall be with her mother from 2 p.m. Christmas Day to 9 a.m. December 30, 2010.

For the balance of the Christmas holiday S.V. shall be in the care of her father. The reverse of these arrangements shall be in place for Christmas 2011 and shall rotate each year. (iv) March break shall be split equally between the parties or may be rotated yearly if the parties so chose. (

v) The parties will rotate access at Thanksgiving and Easter access each year. In 2011 for Thanksgiving, S.V. shall be with her father from 9 a.m. Sunday to 9 a.m. Thanksgiving Monday. For Easter in 2011 S.V. shall be in the care of her father from 9 a.m. on Good Friday to 6 p.m. on Easter Saturday. (vi) Both parties shall be entitled to attend S.V.’s school and sports events.

(vii) For S.V.’s birthday, the parent who is not with S.V. shall have right to a four hour access visit either the day before or the day after the birthday. (viii) The regular

schedule shall apply during summer holidays except that each party may have up to two weeks consecutively with S.V.. (ix) If a party intends to take S.V. out of the country, that party shall provide 20 days written notice to the other parent. Neither party shall remove S.V. from the country without the written permission of the other party, which permission shall not be unreasonably withheld. The parties shall jointly maintain S.V.’s passport. (

x) The applicant shall pay the respondent $4,219 for retroactive child support and $1,706.14 for retroactive

section 7 expenses. (xi) On consent, the parties will split future

section 7 expenses on an equal basis. (xii) Commencing January 1, 2011 the applicant shall pay off-set child support of $268 per month to the respondent. (xiii) The parties shall exchange tax returns each year by May 15 and Notices of Assessment within ten days of the receipt of same. (xiv) The respondent’s claim for spousal support is dismissed. (xv) A Support Deduction Order shall issue. (xvi) All other claims are dismissed. [ 54 ] If the parties cannot agree on the issue of costs, I will entertain brief written submissions.

Costs submissions are due from the applicant January 5, 2011 and are not to exceed five pages. The respondent may file responding submissions not to exceed five pages within seven days of the receipt of the applicant’s submissions. Any reply submissions shall be filed within three days of the receipt of the responding submissions and shall not exceed two pages. HOURIGAN J. Released: December 10, 2010 CITATION : J.V. v. M.V., 2010 ONSC 6720 COURT FILE NO.: 30845/08 DATE: 2010-12-10 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: J.V. Applicant – and – M.V. Respondent REASONS FOR JUDGMENT HOURIGAN J.

Released: December 10, 2010