FAMILY DIVISION
Citation: Butt v. Butt, 2009 NSSC 199
Date: 20090625
Docket: 1209-000935 (SARD 022895)
Registry: Annapolis Royal
Between:
Robert Edward Butt
Applicant
v.
Patricia Lynn Butt
Respondent
Revised judgment: The original judgment has been corrected according to the erratum dated July 3, 2009. The text of the erratum is appended to this decision.
Judge: The Honourable Justice Arthur J. LeBlanc.
Heard: February 9, 2009, in Annapolis Royal, Nova Scotia
Counsel: Ronald D. Richter, for the applicant
Patricia Lynn Butt, self-represented
By the Court:
[1] This is an application for shared custody and an adjustment of child support.
[2] The parties are the parents of Adam Gerald Lewis Butt, born November 14, 1998. They were divorced on April 14, 2003. Both parties have remarried. The Applicant's new spouse has two children from a previous relationship, and the Respondent and her new spouse have one child.
[3] In April 2003 the parties were awarded joint custody of the child of the marriage, Adam Butt, pursuant to a Corollary Relief Judgment, the Respondent having primary care and the Applicant having access in accordance with a Separation Agreement that was incorporated in the judgment. The terms of access were varied by a Consent Interim Order in September 2007, whereby the parties agreed to increase the amount of time Adam spent with the Applicant. In May 2008, Adam expressed an interest in spending 50 per cent of the time with each parent, and the parties agreed to this arrangement. Prior to this agreement, when the Respondent had day-to-day care, she paid the costs of extra-curricular activities, such as sports, from her own funds.
[4] The Applicant is a career member of the Canadian Armed Forces. The Respondent is a bar manager, holding a temporary position which she has occupied for about one year. She took this position while her spouse took a short term job in Alberta. The Respondent expects to return to part-time employment, and her husband will return to his position as bar manager.
[5] Section 9 of the Federal Child Support Guidelines provides for shared custody. It states:
9. Where a spouse exercises a right of access to, or has physical custody 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 spouses;
(b) the increased costs of shared custody arrangements; and
(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.
[6] The Applicant has monthly income for Child Support Guidelines Purposes of $5711.00. He currently pays $595.00 per month in child support under the Federal Child Support Guidelines, the table amount for an annual income of $68, 500.00. He claims that this amount should be reduced because of the move to shared custody. He seeks a reduction to an amount equivalent to the set-off under s. 9(a) of the Guidelines. The respondent’s statement of financial information of October 2008 shows total monthly income of $2622.00, which would equal annual Guidelines income of $31, 500.00. The child support payable on that amount would be $280.00.
[7] In Contino v. Leonelli‑Contino, [2005] 3 S.C.R. 217, 2005 SCC 63, the Supreme Court of Canada held that determining support payable under s. 9 involves more than a simple set-off of incomes between the parties. Bastarache, J., for the majority, said, at paras. 49-51:
Hence, the simple set‑off serves as the starting point, but it cannot be the end of the inquiry. It has no presumptive value. Its true value is in bringing the court to focus first on the fact that both parents must make a contribution and that fixed and variable costs of each of them have to be measured before making adjustments to take into account increased costs attributable to joint custody and further adjustments needed to ensure that the final outcome is fair in light of the conditions, means, needs and other circumstances of each spouse and child for whom support is sought. Full consideration must be given to these last two factors.... The cliff effect is only resolved if the court covers and regards the other criteria set out in paras. (b) and (c) as equally important elements to determine the child support.
It should be noted here that the Table amounts are an estimate of the amount that is notionally being paid by the non‑custodial parent; where both parents are making an effective contribution, it is therefore necessary to verify how their actual contribution compares to the Table amount that is provided for each of them when considered payor parents. This will provide the judge with better insight when deciding whether the adjustments to be made to the set‑off amount are based on the actual sharing of child‑related expenses.
This is where discretion comes into play. The court retains the discretion to modify the set‑off amount where, considering the financial realities of the parents, it would lead to a significant variation in the standard of living experienced by the children as they move from one household to another, something which Parliament did not intend. As I said in Francis v. Baker, [[1999] 3 S.C.R. 250] one of the overall objectives of the Guidelines is, to the extent possible, to avoid great disparities between households. It is also necessary to compare the situation of the parents while living under one roof with the situation that avails for each of them when the order pursuant to s. 9 is sought. As far as possible, the child should not suffer a noticeable decline in his or her standard of living. Still, it is not a discretion that is meant to set aside all rules and predictability. The court must not return to a time when there was no real method for determining child support....
[8] Section 9(b) requires the court to determine if an increase in costs results from a change in custody. Bastarache, J. said, at paras. 52-53:
What should the courts examine under this heading? Section 9(b) does not refer merely to the expenses assumed by the payor parent as a result of the increase in access time from less than 40 percent to more than 40 percent, as argued in this Court. This cannot be for at least two reasons. First, it would be irreconcilable with the fact that some applications under s. 9 are not meant to obtain a variation of a support order, but constitute a first order.... Second, as mentioned earlier, the Table amounts in the Guidelines do not assume that the payor parent pays for the housing, food, or any other expense for the child. The Tables are based on the amount needed to provide a reasonable standard of living for a single custodial parent.... This Court cannot be blind to this reality and must simply conclude that s. 9(b) recognizes that the total cost of raising children in shared custody situations may be greater than in situations where there is sole custody.... Consequently, all of the payor parent’s costs should be considered under s. 9(b). This does not mean that the payor parent is in effect spending more money on the child than he or she was before shared custody was accomplished. As I discuss later in these reasons, it means that the court will generally be called upon to examine the budgets and actual expenditures of both parents in addressing the needs of the children and to determine whether shared custody has in effect resulted in increased costs globally. Increased costs would normally result from duplication resulting from the fact that the child is effectively being given two homes.
A change in the actual amount of time a payor parent spends with a child will therefore give rise under s. 9(b) to an inquiry in order to determine what are, in effect, the additional costs incurred by the payor as a result of the change in the custodial arrangement. I say this because not all increases in costs will result directly from the actual amount of time spent with the child. One parent can simply assume a larger share of responsibilities, for school supplies or sports activities for example. For these reasons, the court will be called upon to examine the budgets and actual child care expenses of each parent. These expenses will be apportioned between the parents in accordance with their respective incomes.
[9] Implicit in this provision is the fact that in certain situations it may be more expensive to raise a child under shared custody than otherwise would be the case. I must consider the budgets and the actual expenditures of both parents incurred to respond to the needs of the child. I have already found that the parties’ annual incomes for Guidelines purposes are as follows:
Applicant: $68, 500.00
Respondent: $31, 500.00
Total: $100, 000.00
[10] The ratio of the income of the parties rounds to 69:31.
[11] The parties agree that the Respondent pays the greater proportion of the expenses for Adam. The total monthly child care expenses come to $2085.31. The Applicant has been paying $993.31 for monthly child care expenses and the Respondent has been paying $1092.00. These figures are not disputed by the parties. Proportionally, based on a 69:31 ratio, the Applicant should be paying $1438.86, while the Respondent should be paying $646.35. On the first analysis, then, the Applicant should pay the Respondent $445.55 per month ($1438.86 less $993.31 = $445.55). This would equalize the parties’ expenses at $1092.00.
[12] There was no evidence that the Respondent’s fixed or variable costs decreased with shared custody. Nor is there any evidence that the Applicant's actual expenses increased because of the change to shared custody. The child had actually moved prior to the filing of the application. In her affidavit, the Respondent claims that there was no change in her fixed and variable costs. This is a change from a joint custody arrangement with primary care to the respondent to a shared custody arrangement. It is important to keep this circumstance in focus when considering this application. Bastarache, J. pointed out that this was a relevant factor to consider in the context of an application to decrease monthly child support.
[13] Subsection 9(c) of the Guidelines requires me to consider the means, needs and other circumstances of the parties. Bastarache, J. stated at paras. 54-55 of Contino:
It is clear then that not every dollar spent by a parent in exercising access over the 40 percent threshold results in a dollar saved by the recipient parent... Indeed, irrespective of the residential arrangement, it is possible to presume, in the absence of evidence to the contrary, that the recipient parent's fixed costs have remained unchanged and that his or her variable costs have been reduced only modestly by the increased access. Thus, when no evidence is adduced, the court should recognize the status quo regarding the recipient parent.
The analysis should be contextual and remain focussed on the particular facts of each case. For example, an application that represents a variation of a prior support arrangement, will usually raise different considerations from a s. 9 application where no prior order or agreement exists. In the former case, the recipient parent, when he or she first got custody, may have validly incurred expenses based on legitimate expectations about how much child support would be provided. These expenses should be taken into consideration and a court should have proper regard to the fixed costs of the recipient parent.
[14] Bastarache, J. added that s. 9(c) provides the court with a broad discretion in conducting an analysis of the resources and the needs of both parents and the children, noting that the table amounts used in simple set-off are not presumptively applicable and that the assumptions they hold must be verified against the facts found in a particular application (para. 68). He added that “the objectives of the Guidelines mentioned earlier, requiring a fair standard of support for the child and a fair contribution from both parents” are very important considerations. Furthermore, the court will be especially concerned with the standard of living of the child in each household and the ability of each parent to absorb the costs required to maintain the appropriate standard of living in the circumstances”. It is necessary to consider the difference in the net worth between the parties (paras. 78-79).
[15] In Contino, the Court determined that under s. 9(a) the set-off amount was $128.00. The father monthly expenses attributable to the child were $1814.00, and the mother’s expenses were $1916.95. There was a large amount of duplication with regard to fixed cost. Bastarache, J. noted that both of these factors point to the need for significant adjustments to the set-off amounts. The ratio of income between the parties of 56:44. As such, the father ought to be responsible for 56 percent of the total child-related expenditures, $2089.33, and the mother ought to be responsible for 44 percent, or $1641.62. The father, who was already contributing $1,814.00, would be required to pay the mother $275.33. It was also relevant, under s. 9(c), that the father’s net worth was $255,750 and the mother’s $190,651. Bastarache, J. concluded, at paras. 79-80:
The set‑off amount under s. 9(a) is $128, but, as I have just noted, other circumstances and the evidence presented under s. 9(c) requires that it be adjusted. Based only on the sharing of child‑related expenditures apportioned against the income of the parents, the father would be required to pay the mother a sum of $275.33 per month. Furthermore, examining all the costs of both parents, I have found no evidence that the fixed or variable costs of the mother decreased in any way following the shared custody arrangement; on the other hand, there is no evidence that the extra time devoted by the father or, more generally, the change brought to the custodial arrangement, has resulted in any increase in the father’s actual expenses. Because this s. 9 application represents a variation from a long‑standing financial status quo upon which the mother incurred valid expenses on behalf of this child, these realities are important considerations. As mentioned earlier, the means and conditions test in s. 9(c) requires that I also consider the difference in net worth between the parents, which is $65,099, and the general ability of each parent to absorb increased costs.
This means that I must now consider the impact of a new support order on the standard of living of the child under s. 9(c). I cannot ignore the fact that, in this case, I am dealing with a variation order and not a first time order. Up until this litigation, by way of settlement, for a number of years, the mother was receiving over $500 from the father (an amount that was not adjusted in 1999 even though the father’s income rose to $83,527.58). Finally, while the motions judge refused to consider this fact, it is clear from the record that the mother moved to a new house in 2000 because she believed it was in the child’s best interest, in the reasonable expectation that she would continue to receive $563 a month or more from the father. This expense, which was not challenged as inappropriate by the father, has to be considered part of the contextual analysis which includes consideration of the financial conditions and means of the mother. The purchase of the new home created some financial difficulties for the mother since she had to collapse a significant amount of her RRSPs (and consequently pay income tax on what she cashed in). She was legitimately relying on the support payment she was receiving from the father pursuant to the earlier arrangements made between them. He could not have ignored that. In light of these factors, I have come to the conclusion that the child support must be set at $500 per month. I see no reason to question the view of the Court of Appeal that the facts of this case do not substantiate a retroactive order.
[16] In assessing net worth in the present case, the Applicant maintains that I should ignore the value of his pension. I see no basis to exclude it. Certainly it would be considered in a claim for spousal support, or in a division of matrimonial assets. The parties’ assets are as follows:
Applicant Respondent
Residence $168,000.00 $106,500.00
Vehicle $25,000.00 $3,300.00
Household contents $35,000.00 $7,825.00
Bank account $2500.00 $1199.00
Securities $5,500.00
Pension value $48,600.00
Total: $284,600.00 $118,824.00
[17] The balance of assets favours the Applicant by a ratio of substantially more than two to one. The Respondent has debts of $145,500.00. The Applicant did not provide a listing of his debts and liabilities. The Respondent did not provide much detail in her statement of property. The Applicant did not provide a list of debts and liabilities. Consequently, it is impossible to determine the net worth of each party or to draw and conclusions therefrom.
[18] I am satisfied that the combined household income of the Applicant is in excess of $93, 000.00, compared with less than $37, 000.00 for the Respondent’s household. I am mindful that in addition to Adam, the Respondent has one additional child.
[19] I am required to take into account the ratio of income of the parents and the amount of expenditure incurred for the child on a monthly basis. In Plourde v. Morin, 2005 NSSC 332, Gass, J. interpreted s. 9(b) as dealing primarily with the increased costs for both parents to set up and maintain a household. She stated that the parties had a pre-existing arrangement because they had agreed to shared custody from the outset. She adjusted the amount of child support to take into account the increased costs of one of the parties. She noted that s. 9(c) “must be considered against the backdrop of the facts of this particular case” (para. 27). She acknowledged that “the recipient parents’ costs would have remained, for the most part, unchanged, insofar as the three children are concerned. Those costs were the foundation for the current consent order” (para. 28). Gass, J. referred to Justice Bastarache’s comments at para. 68 of Contino, supra:
Section 9(c) vests the court a broad discretion for conducting an analysis of the resources and needs of both the parents and the children. As mentioned earlier, this suggests that the Table amounts used in the simple set‑off are not presumptively applicable and that the assumptions they hold must be verified against the facts, since all three factors must be applied. Here again, it will be important to keep in mind the objectives of the Guidelines mentioned earlier, requiring a fair standard of support for the child and fair contributions from both parents. The court will be especially concerned here with the standard of living of the child in each household and the ability of each parent to absord the costs required to maintain the appropriate standard of living in the circumstances.
[20] And at para. 70:
The actual spending patterns of the parents have already been considered under s. 9(b). These factors are helpful, the last one being particularly useful for the exercise of discretion in a predictable manner. As I indicated above, financial statements and/or child expenses budgets are necessary for a proper evaluation of s. 9(c).
[21] Gass, J. fixed the set-off amount at $786.00.
[22] In this case, the original agreement between the parties provided that primary care of Adam would be with the Respondent, resulting in the Respondent receiving the child tax benefit.
[23] Both parties reside with new spouses and will have income to contribute to the actual ongoing expenses. The Applicant has two more children in his household and the Respondent has one more. There is no evidence that the Applicant’s monthly expenses have increased on account of the increase in the number of children in his home, although it is fair to infer that Adam’s presence up to 50 per cent of the time will mean increased food costs. The Respondent has increased costs on account of extracurricular expenses on her own without contribution from the applicant.
[24] In his Statement of Financial Information – prepared when Adam was spending 50 per cent of his time with him, and accounting for actual expenses for Adam – the Applicant claims monthly expense of $6662.16, leaving a surplus after tax of $14.59, which I round to $15.00. This figure includes the payment of $595.00 in child support.
[25] The Respondent’s Statement of Financial Information shows a deficit of $344.38 before tax. When she returns to part-time work, her monthly deficit will be over $1000.00. In calculating the Respondent’s deficit, the child support she is receiving has not been included, but $135.25, representing Adam’s portion of the child tax benefit, has been included as part of her total monthly income.
[26] I find that while making a child support payment of $595.00, the Applicant has a surplus, based on his Statement of Financial Information of September 2008. This is unlike the situation in Plourde, where the applicant was realizing a deficit. According to her Statement of Financial Information of October 2008, the Respondent is experiencing a deficit of $344.38. Any reduction in monthly child support will result in an increased deficit. If the Applicant were to continue to pay monthly child support of $595.00, the Respondent would still be in a deficit position.
[27] The circumstances here are different from those in Plourde. There is a great disparity in the assets of the parties, with the Applicant having a greater value of assets than of the Respondent. There is significant disparity between the parties’ individual and household incomes. There is a significant monthly deficit being experienced by the Respondent, and a modest surplus by the Applicant.
[28] Based only on the sharing of child expenditures apportioned against the income of the parents, the Applicant would be required to pay the Respondent $445.55 per month. This does not end the analysis, however. The Applicant resides with his wife and her two children and has shared custody of Adam. Including child support, he has monthly expenses of $6291.54. The Respondent has a total monthly expenditures of $3236.88. She lives with her husband, their new child and shares custody of Adam. In my opinion, reviewing the expenditures, the Applicant has a higher standard of living.
[29] I am not prepared to reduce the monthly child support to a simple set-off of the table amount. I have considered the amount of the expenses incurred for Adam by both parents and I have considered the level of income of both parents as well. While I accept that the Applicant’s food budget would have increased because of the additional time Adam spends with him, there was no specific amount offered. I am prepared to recognize increase in food costs of roughly $25.00 per week, averaging $100.00 per month. The amount of the monthly payment will take this into account.
[30] After considering all of the evidence, I order that the custody arrangement between the parties be classified as shared custody. I am awarding child support to the Respondent in the amount of $540.00 per month, payable effective April 1, 2009. In addition, the Respondent shall continue to receive the Child Tax Credit in relation to Adam. In the event this payment is made directly to the Applicant, he is directed to pay an amount to the Respondent to avoid any net loss to her.
J.
Date: 20090703
Docket: 1209-000935 (SARD 022895)
Registry: Annapolis Royal
SUPREME COURT OF NOVA SCOTIA
FAMILY DIVISION
Citation: Butt v. Butt, 2009 NSSC 199
BETWEEN:
Robert Edward Butt
Applicant
v.
Patricia Lynn Butt
Respondent
ERRATUM
Revised judgment: The original judgment has been corrected according to this erratum dated July 3, 2009.
HEARD: February 9, 2009 in Annapolis Royal, Nova Scotia
DECISION: June 25, 2009
COUNSEL: Ronald D. Richter, for the applicant
Patricia Lynn Butt, self represented
Erratum:
Paragraph 30 should read as follows:
“After considering all of the evidence, I order that the custody arrangement between the parties be classified as shared custody. I am awarding child support to the Respondent in the amount of $540.00 per month, payable effective April 1, 2009. In addition, the Respondent shall continue to receive the Child Tax Credit in relation to Adam. In the event this payment is made directly to the Applicant, he is directed to pay an amount to the Respondent to avoid any net loss to her.”
J.