This 2011 judgement from the Ontario Superior Court of Justice stems from an application brought by the Applicant Father to vary a Divorce Order, which was granted in 2003, and a cross motion brought by the Respondent Mother, in which she alleged that the Applicant Father has been underpaying support since the above mentioned was granted.

The Applicant Father argued that the 2003 Divorce Order should be varied due to the fact that one child has been attending university away from home since 2009 and so he should only be paying full child support, as agreed to in the Order, during the summer months when the child is actually residing in the home with the Respondent Mother.

It should be noted that the Applicant Father was to contribute towards 71% of the total cost any special and extraordinary expenses of the two children, which include expenses relating to the children’s extracurricular activities, education, etc.

The Respondent Mother, in her cross motion, claimed that the Applicant Father had been underpaying support since the Divorce Order was granted in 2003.  The parties were able to agree on income amounts for the years 2004 to 2008 inclusive, which left his income for 2003, 2009 and 2010 in dispute.

The Respondent Mother claimed that in 2003 the child support agreed to was based on an income of $102,000.00; however, this amount failed to take into consideration a dividend that the Applicant Father received that year which increased his income to $158,420.00 for that year, as stated in his Income Tax Return.

In response to the Respondent Mother’s cross motion, the Applicant Father argued that she cannot pick and choose how to determine his income when it suits her.  He further argued that they had agreed to determine his income based on the actual billings of his company and so she could not then claim that his income needed to be determined based on what he declared to Revenue Canada.  In addition, the Applicant Father stated that when the Divorce Order was made, the Respondent Mother had counsel and was aware of the considerable retained earnings in the company, so she made an informed decision at the time about how his income would be determined.

Justice Sachs agreed with the Applicant Father’s argument and stated that typically income for child support purposes is based on income as declared for tax purposes, including dividends; however, the parties in this case chose not to use this method when calculating income.

Instead, they looked to the actual billings (before expenses) through the Applicant Father’s company, which more often than not resulted in a higher income being attributed to him.  As such, the judge determined that it would be unfair to use different methods of calculating income for different years for support purposes.

The parties were also able to agree that child support should only be paid for both children during the months that they are both residing at home with the Respondent Mother and when the eldest child returns to school, then support should only be paid for the one child who continues to reside at home.

In addition, the parties agreed that expenses should be shared proportionally between them in accordance with their incomes.  Therefore, Justice Sachs took into consideration the parties respective incomes from 2009 and 2010.

For 2009, the judge imputed income in the amount of $30,000.00 to the Respondent Mother.  Although she had no income that year as a result of her trying to start her own business, her earnings history suggested, according to Justice Sachs, that she could earn an income of approximately $30,000.00.

For 2010, the Respondent Mother’s income increased whereas the Applicant Father’s income decreased and so Justice Sachs made all necessary adjustments and determined that from 2004 to 2009 the Applicant Father underpaid child support whereas in 2010 and 2011 he had overpaid.

Then, Justice Sachs determined that the Respondent Mother failed to contribute towards expenses in proportion to her income for the years 2009, 2010 and 2011 thus resulting in her owing money to the Applicant Father which was credited towards the amount owing by him for child support.

Finally, Justice Sachs stated that with respect to the future, the parties are to continue to share post-secondary school expenses for both children in proportion to the parties’ incomes.  As well, the Applicant Father is to pay the Respondent Mother child support based on when the children are residing with her, as opposed to attending school and the parties are to provide each other with annual disclosure as to their incomes.