Richards v. Richards

Richards v. Richards Court Supreme Court Date 2024-11-20 Citation 2024 NSSC 363 Docket SFH No. 1201-069683 Judge/Registrar/Adjudicator Forgeron, Theresa M. (Honourable Justice) Document Type Decision Decision Content SUPREME COURT OF Nova Scotia FAMILY DIVISION Citation: Richards v. Richards, 2024 NSSC 363 Date: 20241120 Docket: SFH No. 1201-069683 Registry: Halifax Between: Christian Richards Applicant v. Melodee Richards Respondent Judge: The Honourable Justice Theresa M. Forgeron Heard: September 23 and 24, 2024, in Halifax, Nova Scotia Oral Decision: November 20, 2024, in Halifax, Nova Scotia Written Release: November 29, 2024, in Halifax, Nova Scotia Counsel: Cheryl Arnold for the Petitioner, Christian Richards Judith Schoen for the Defendant, Melodee Richards By the Court: Introduction [1] This decision concerns competing variation applications filed by former spouses. [2] Christian Richards seeks to impute income to Melodee Richards, reduce spousal support through a step down order, and set a termination date because he believes that: • His legal obligation has been fulfilled as he has paid spousal support for over eight years. • Ms. Richards is underemployed and needs an incentive to work. • Ms. Richard’s financial circumstances have improved because of the increased equity in the former matrimonial home which he allowed her to retain post-divorce despite an order that it be sold. [3] In contrast, Ms. Richards seeks to increase, retroactively and prospectively, both spousal and child support based on an increase in Mr. Richard’s income since the last order issued. In determining income, Ms. Richards also wants me to impute income based on Mr. Richards’ personal use of a truck and cell phone maintained by the company he co-owns. [4] In addition, Ms. Richards states that neither a termination date nor a step down order should be granted given the strength of her compensatory and non-compensatory claims. Further, Ms. Richards disagrees with income being imputed to her, noting that her employment decisions were based on availability, life circumstances, and the children’s needs. She denies being underemployed. Issues [5] In this decision, I will decide the following seven issues: • Has a material change been proven? • What is the income of Ms. Richards? • What is the income of Mr. Richards? • What is the appropriate prospective child support order? • Should retroactive child support be granted? • What is the appropriate prospective spousal support order? • Should retroactive spousal support be granted? Background Information [6] After living together for about 3.5 years, the parties married in 2001; separated in December 2015; and divorced in 2017. Their cohabitation spanned almost 18 years. [7] Two children were born of the relationship - a son in 2002 and a daughter in 2008. Ms. Richards was the primary care parent both before and after separation. She was almost exclusively responsible for all nonfinancial aspects of the children’s lives. In 2002, both parties decided that Ms. Richards should remain out of the paid work force to care for the family. Therefore, Mr. Richards became almost solely responsible for the family’s financial welfare. [8] Mr. Richards is an electrician by trade. In about 2009, Mr. Richards assumed a 50% ownership interest in his employer’s company. To pay for his ownership interest, Mr. Richards took a reduced annual salary of $50,000, with all additional dividend earnings being redirected to the company. According to the share purchase agreement, Mr. Richards paid $300,000, subject to 8% interest, to acquire his shares. Just prior to the 2015 separation, Mr. Richards’ buy-in obligation was concluded. [9] After separation, the parties negotiated a resolution of the outstanding divorce issues. Salient portions of the September 2017 corollary relief order included: • A finding, for support purposes, that Mr. Richards earned an annual income of $142,000, composed of T4 earnings and dividend payments. • A requirement that Mr. Richards pay monthly child support of $2,146 and 50% of the children’s s. 7 expenses. • A requirement that Mr. Richards pay monthly spousal support of $3,700 for an indefinite term. • A review of spousal support was directed to occur by August 2022. • A recognition of the parties’ retroactive support agreement which confirmed spousal support payments were made from January 2016 to the date of the CRO. • An annual exchange of personal income tax returns by each party. • An annual exchange by Mr. Richards of his corporate tax return, year-end balance sheet, and statement of income. • The sale of the matrimonial home with the proceeds used to pay out various debts, including a debt owed by Mr. Richards to CRA, with any sale surplus to be transferred to Ms. Richards. No surplus was anticipated because there was little equity in the home. [10] Following their divorce, Mr. Richards faithfully paid all support. In addition, he also paid other sums of money for the children when requested, such as $1,800 for a MacBook; $500 for summer clothes; the cost of the son’s drivers ed; winter coats in 2023; the son’s prom expenses; $6,313 for the son’s tuition over four years; and $800 for an overdue cable bill. Mr. Richards did not, however, meet his disclosure obligations. [11] Further, after the CRO issued, Mr. Richards consented to Ms. Richards retaining the home where she and children were living. In 2019, after Mr. Richards released his interest in the home, Ms. Richards secured financing to remove him from the mortgage covenants. In addition, Ms. Richards signed a promissory note for $14,784.11, which was due to Mr. Richards for the matrimonial debt. The note confirmed that this sum would be paid by March 1, 2021, and if not, then the home would be sold so the debt could be discharged. [12] Ms. Richards, however, did not pay $14,784.11 to Mr. Richards. The debt remains outstanding. Further, the matrimonial home was never listed for sale. [13] In March 2023, Ms. Richards once again renegotiated her mortgage. Despite increasing the mortgage principal by more than $60,000, no moneys were paid to Mr. Richards. Ms. Richards said that he effectively had forgiven her debt. Mr. Richards disagrees. [14] Ms. Richards said that she increased the mortgage principal to pay some of her debt, including $5,550 for the Capital One Mastercard; $2,700 for the Walmart Mastercard; $1,957 for the Hometrust Visa; and $19,491 for her car loan. She did not, however, pay out her CRA debt of $43,000; the Fairstone Financial debt of $12,500; or the CIBC LOC of $2,900. [15] On June 12, 2023, Mr. Richards filed his variation application. On August 2, 2023, Ms. Richards filed her first response documents. Other documents and the parties’ position letters were filed in advance of the variation hearing. [16] The variation hearing was held on September 23 and 24, 2024. Each of the parties testified and were cross-examined. Oral and written submissions were provided by counsel, including post-trial submissions. [17] On November 20, 2024, I gave my oral decision. Analysis Has a material change been proven? [18] I find that a material change has been proven for child support purposes. In particular, I note that Mr. Richards’ annual income increased from the $142,000 upon which his support obligations were based. [19] I also note that a material change need not be proven for spousal support purposes because the 2017 CRO contemplates a review. A review proceeds without proof of a material change in circumstances. What is the income of Ms. Richards? [20] Mr. Richards seeks to impute income to Ms. Richards because he believes that she should be earning more than she reports. He believes that Ms. Richards is under-employed and that such under-employment is not required by the children or by Ms. Richards’ reasonable educational or health needs. He is concerned that Ms. Richards has no incentive to earn more income given the amount of child and spousal support he pays. Mr. Richards states that Ms. Richards is only 48 years old and is capable of working full-time if she applies herself. [21] Ms. Richards disagrees. She notes that she has few marketable skills because the parties prioritized Mr. Richards’ career prior to their separation. As a result, he now owns 50% of an extremely profitable company. She, on the other hand, works for slightly more than minimum wage. She does not have a degree or diploma. She cannot afford to advance her education. In addition, she notes that even after separation, she was the parent who almost exclusively met the children’s nonfinancial needs. Furthermore, she spoke about thyroid related issues that she states have left her tired. [22] When deciding this issue, I must apply the following imputation principles: • My discretionary authority must be exercised judicially, not arbitrarily. A rational and solid evidentiary foundation, grounded in fairness and reasonableness, must be shown before I can impute income: Coadic v Coadic, 2005 NSSC 291. • The goal of imputation is to arrive at a fair estimate of income, not to arbitrarily punish the payor: Staples v Callender, 2010 NSCA 49. • The burden rests on the party making the claim, however, the evidentiary burden shifts if the other party asserts that their income has been reduced or that their income earning capacity is compromised by ill health or the needs of children: MacLellan v MacDonald, 2010 NSCA 34; and MacGillivary v Ross, 2008 NSSC 339. • I am not restricted to actual income earned, but rather, I may look to income earning capacity, having regard to subjective factors such as age, health, education, skills, and employment history. I must also look to objective factors when assessing what is reasonable and fair in the circumstances: Smith v Helppi, 2011 NSCA 65. • A party's decision to remain in unremunerative employment; or to adopt an unrealistic or unproductive career; or to create a self‐induced reduction in income may result in income being imputed: Smith v Helppi, supra. • The test to be applied when determining whether a person is intentionally under‐employed is reasonableness, which does not require proof of a specific intention to undermine or avoid a support obligation: Smith v Helppi, supra. [23] Although these principles were developed in the child support context, I find that they are equally applicable to the spousal support context. [24] In deciding this issue, I acknowledge that Ms. Richards remained out of the paid work force until January 2021, when she was hired by Superstore as a personal shopper. In 2021, Ms. Richards earned $11,654; in 2022, she earned $14,055; and in 2023, she earned $11,661. In 2024, Ms. Richards’ income increased as more shifts became available. Her 2023 annual employment income will likely exceed $20,000. [25] After applying the law to the evidence, I find that income should be imputed to Ms. Richards for three reasons. First, Ms. Richards did not expend as much time as was reasonable in seeking employment. She limited her job searches to accommodate the children’s school schedule. Given the children’s ages, it was not reasonable for Ms. Richards to limit her employment search in such a manner. Ms. Richards should have sought employment well before 2020. [26] Second, Ms. Richards has an obligation to become self-sufficient. The parties have been separated since 2015. A decision made while the children were young and the marriage intact is not a reasonable justification for failing to take more robust steps towards self-sufficiency. [27] Third, Ms. Richards did not prove that her health issues would reasonably interfere with her ability to work. [28] As a result, I find that Ms. Richards’ income should be imputed. However, when imputing income, I recognize that she has limited employment skills. During the marriage, Ms. Richards was a primary care mother who sacrificed her career and education in favour of Mr. Richards and the family. She has no advanced diplomas or degrees. Job opportunities, at this stage, are correctly based on an hourly rate of about $15 to $20. [29] I impute an annual income of $28,000 as an accurate reflection of Ms. Richards’ income earning capacity, based on her skills, work experience, and probable employment opportunities. What is the income of Mr. Richards? [30] Ms. Richards seeks to impute income to Mr. Richards for both child and spousal support purposes. In addition to his T4 income and adjusted dividend payments, she seeks to impute income for his personal use of the company truck and cell phone. [31] Section 18 of the Child Support Guidelines allows a judge to lift the corporate veil when satisfied that a payor’s line 150 income does not fairly reflect all income available for child support purposes, as noted by Van den Eynden JA in Ward v Murphy, 2022 NSCA 20: [117] I now turn to the s. 18 analysis, which the judge used to determine whether pre-tax corporate income should be attributed to Mr. Ward for the purpose of determining his child support obligations. Section 18 allows a judge to lift the corporate veil if satisfied income under s. 16 (the payor’s Line 150 income) does not fairly reflect all income available for child support purposes. This is particularly important in the case of a sole shareholder (as is the case here) because that shareholder has the ability to control the income of the corporation. [32] It may be appropriate to pierce the corporate veil and impute additional income to the payor where the court is satisfied that the parent is using a closely-held company to pay for personal expenses. As Beaton JA (dissenting in part) wrote in Ward v. Murphy, supra: [44] Section 18 is a tool designed for a specific purpose. It permits a judge to look into the financial circumstances of a company by “piercing the corporate veil”. As stated in Aubin v. Petrone, 2020 ABCA 13: [37] The concept of the corporate veil enters family law most frequently on questions of child support. The first step in determining child support is determining the income of the payor parent. Where a payor parent obtains his or her income from a closely-held corporation, the Federal Child Support Guidelines, SOR/97-175, enable courts to look past the corporate veil to determine whether the parent is using a company to disguise income, for example by splitting income with a non-arm’s-length party, by paying for personal expenses, or by unnecessarily leaving earnings in the company rather than drawing them out as income: Cunningham v Seveny, 2017 ABCA 4 at paras 25-27. [Emphasis added] [33] Further, when a shareholder receives benefits that are expensed through a closely-held corporation, the court has the discretionary authority to gross up the value of those benefits to reflect any tax advantage. As is noted, in part, by Julien Payne and Marilyn Payne in Child Support Guidelines in Canada, 2022, at p 205: The Federal Child Support Guidelines base support payments on the payor’s gross taxable income. One of the objectives of the Guidelines is to ensure “consistent treatment” of those who are in “similar circumstances.” Thus, there are provisions to impute income where a parent is exempt from paying tax, lives in a lower taxed jurisdiction, or derives income from sources that are taxed at a lower rate. Where a parent pays substantially less tax or no tax on income received, the income must be grossed up for the purpose of determining the amount of child support to be paid. This is the only way to ensure the consistency mandated by the legislation. [34] In addition, in footnote 4 of Ward v Murphy, supra, Van den Eynden JA stated: [4] As a general statement, gross up of personal expenses paid by corporation are non-controversial, as it reflects the pre-tax value. … [35] Ms. Richards states that Mr. Richards income is at least as follows: Year Income 2020 $260,427 2021 $356,338 2022 $183,005 2023 $195,088 2024 $195,088 [36] These amounts are based on Mr. Richards’ employment and adjusted dividend income, together with an additional annual amount of $23,738 for his personal use of the company truck and cell phone, and grossed up for the tax advantage. The $23,738 figure can be broken down as follows: • Personal use of motor vehicle $21,870. • Personal use of cell phone $1,868. [37] Although Mr. Richards agreed that there was some personal use of the company truck and cell phone, he felt his personal use of the truck was actually quite limited. [38] In deciding this issue, I find that Mr. Richards’ line 15000[i] income does not fairly reflect all income available for child support purposes. Further, pursuant to s. 18 of the CSG, I find that Mr. Richards’ share of the pre-tax corporate income should be increased by about $9,000 and then included as income for Mr. Richards, because: • $9,000 roughly represents 50% of the motor vehicle and cell phone expenses which I find, based on the evidence, equates to the percentage of Mr. Richards’ personal use. • Mr. Richards drives a 2024 Ford F150 which was purchased for about $80,000, although Mr. Richards was uncertain if the truck was purchased outright or financed. All of the vehicle’s expenses are paid by the company. No expenses are paid by Mr. Richards. Only Mr. Richards drives this vehicle. He does not own another vehicle, although his wife does. • Mr. Richards has exclusive use of a cell phone which is entirely expensed through the company. Mr. Richards does not own another cell phone. • Mr. Richards did not prove that the motor vehicle and cell phone expenses do not have a personal component. • Mr. Richards did not prove that an additional $9,000 in PTCI was not available for child support purposes based on the questions outlined at para 153 of Ward v Murphy, supra. [39] I further find that the $9,000 should be grossed up by about 35%, as neither Mr. Richards nor the company will be taxed on this amount. [40] Therefore, I find that an additional $12,000 should be added to Mr. Richards’ employment and adjusted dividend income to produce an annual income for support purposes of: Year Income 2020 $248,689 2021 $344,600 2022 $171,267 2023 $183,350 2024 $183,350 What is the appropriate prospective child support order? [41] The table amount of child support is to be increased to reflect Mr. Richards’ income, which produces a monthly payment of $2,388 effective November 1, 2024, and continuing monthly thereafter. Should retroactive child support be granted? [42] Ms. Richards seeks retroactive child support from 2020 onward. She notes that Mr. Richards did not provide her with his income information and that she and the children have a significant need. Although Mr. Richards acknowledges his lack of disclosure, he said that he did not behave in a blameworthy fashion given the many financial concessions he provided throughout the years. [43] Foundational legal principles applicable to retroactive variation requests were reviewed in DBS v SRG, 2006 SCC 37; Michel v Graydon, 2020 SCC 24; and Colucci v Colucci, 2021 SCC 24: • In DBS, supra, Bastarache J confirmed that parents who do not increase their child support payments to correspond with their income do not fulfill their obligation to their children, at para 54. • In Michel v Graydon, supra, Brown J held that a parent should not profit from knowingly paying inadequate support or from making inadequate or delayed disclosure, at paras 32 and 33. • In Michel v Graydon, supra, Martin J held that because a disproportionate number of single mothers and their children live in poverty, and poverty negatively affects access to justice, a holistic response is required, at paras 94, 96 and 100. • In Colucci v Colucci, supra, Martin J noted that information asymmetry is both connected to the determination of effective notice and the presumptive period of retroactivity at para 7. She further stated that information asymmetry results in two distinct burdens. For payee parents, effective notice only requires the broaching of an increase. In contrast, a payor parent seeking a decrease must provide reasonable proof of income at paras 86 to 88. [44] In Colucci v Colucci, supra, Martin J confirmed the applicable test where a payee seeks a retroactive increase in child support: [114] It is also helpful to summarize the principles which now apply to cases in which the recipient applies under s. 17 to retroactively increase child support: a) The recipient must meet the threshold of establishing a past material change in circumstances. While the onus is on the recipient to show a material increase in income, any failure by the payor to disclose relevant financial information allows the court to impute income, strike pleadings, draw adverse inferences, and award costs. There is no need for the recipient to make multiple court applications for disclosure before a court has these powers. b) Once a material change in circumstances is established, a presumption arises in favour of retroactively increasing child support to the date the recipient gave the payor effective notice of the request for an increase, up to three years before formal notice of the application to vary. In the increase context, because of informational asymmetry, effective notice requires only that the recipient broached the subject of an increase with the payor. c) Where no effective notice is given by the recipient parent, child support should generally be increased back to the date of formal notice. d) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors continue to guide this exercise of discretion, as described in Michel. If the payor has failed to disclose a material increase in income, that failure qualifies as blameworthy conduct, and the date of retroactivity will generally be the date of the increase in income. [Emphasis added] [45] In applying this legal test, I first note that a material change in circumstances was proven based on the increases in Mr. Richards’ income. [46] Second, Mr. Richards did not provide his personal income tax or corporate income information as ordered. Given information asymmetry, Ms. Richards had no knowledge of Mr. Richards’ actual income, which had increased, and substantially so, especially in 2020 and 2021. [47] Third, although Ms. Richards did not formally ask for an increase in child support before the application was processed, she nevertheless asked Mr. Richards for money because of the difficult financial circumstances that she and the children were experiencing. [48] Fourth, the presumptive date of retroactivity would be unfair after balancing the four modified DBS factors: • Ms. Richards did not seek to vary the order until after Mr. Richards commenced his application. • Mr. Richards engaged in blameworthy conduct in that he did not provide his income information as ordered. Indeed, the corporate information was not forthcoming until after his application was being processed. • On the other hand, Mr. Richards also made three financial concessions after the CRO issued. First, he released his interest in the home. Second, he did not demand repayment of the debt. Third, when asked, he provided additional money and goods to the children. • Ms. Richards incurred a substantial amount of debt because she was unable to meet all the financial needs of the children. Ms. Richards proved a need for retroactive child support. • Ms. Richards has always prioritized the children’s needs and will do so in the future. • Mr. Richards did not prove that he will experience hardship if he is ordered to pay a retroactive award. [49] I therefore grant the retroactive child support request as of January 2020: Income Due Paid Difference 2020 $248,689 $3,172 $2,146 $1,026 x 12 = $12,312 2021 $344,600 $4,323 $2,146 $2,177 x 12 = $26,124 2022 $171,267 $2,243 $2,146 $ 97 x 12 = $ 1,164 2023 $183,350 $2,388 $2,146 $ 242 x 12 = $ 2,904 2024 $183,350 $2,388 $2,146 $ 242 x 10 = $ 2,420 Total $44,924 [50] From this amount, a credit of $14,784 is granted for the amount due on the promissory note, for which a release shall be provided by Mr. Richards. [51] Therefore, Mr. Richards owes Ms. Richards $30,140 in retroactive child support, payable in three equal installments on January 15, March 15, and May 15, 2025. What is the appropriate prospective spousal support order? [52] Ms. Richards seeks to increase prospective spousal support to $4,600 per month. In contrast, Mr. Richards seeks a step down order, with a termination date. [53] In determining this issue, I must examine the evidence in concert with the objectives and factors outlined in the Divorce Act, from which I make the following findings: • The relationship was a lengthy one; the parties cohabited for about 18 years. • The relationship was traditional. The parties mutually decided that Ms. Richards would not work outside the home. Instead, she almost exclusively cared for the children so that Mr. Richards’ career could be prioritized. For example, Ms. Richards was not even able to advance with selling Tupperware because Mr. Richards could not commit to being home for one evening per week. • Mr. Richards’ ability to pursue his career and business opportunities occurred because Ms. Richards almost exclusively cared for the children. • The parties diverted $300,000, at 8% interest, from Mr. Richards’ annual earnings so that Mr. Richards could buy a 50% interest in his employer’s business. • Mr. Richards obtained a significant economic advantage as a result of the roles the parties adopted during the marriage. In contrast, Ms. Richards suffered a corresponding economic disadvantage. • Post-separation, Ms. Richards continued to almost exclusively care for the children by ensuring all their nonfinancial needs were met. For example, since separation, the children have never stayed overnight with their father. • Ms. Richards experienced significant economic hardship following the marriage breakdown. Ms. Richards has gone increasingly in debt. This occurred because she has limited employment skills, no marketable employment history, poor budgeting skills, and only made half-hearted efforts to find meaningful employment. The only equity she amassed is from the increase in the value of her home, which is market driven. • Ms. Richards was only able to accumulate equity because Mr. Richards agreed that she could retain the family home. Mr. Richards did not force the home’s sale despite the provisions of the CRO and promissory note. • Mr. Richards earns a significant income and has a secure financial base. He also lives with a spouse with whom he can share expenses. Further, since separation, Mr. Richards continues to maintain 50% ownership of a prosperous business, and also lives in a home that he recently listed for over $1 million. • Although the CRO contemplated a review of spousal support, paragraph 19 also confirmed that spousal support would continue to be payable “for an indefinite term.” • Ms. Richards has not meaningfully engaged in measures to increase self-sufficiency. She limited her job search efforts. She should have sought employment at or around separation. Instead, she did not seek employment until 2020. As a result, income was imputed to her. • Ms. Richards is 48 years old and was 39 years old at separation. [54] Given these findings, I conclude that Ms. Richards has a strong compensatory claim to spousal support. In addition, she has proven a non-compensatory claim given the significant disparity in the parties’ income earning capacities and financial circumstances. The strength of these claims is somewhat diminished by Ms. Richards’ failure to take reasonable steps towards self-sufficiency. [55] In determining the amount, I have examined the incomes and expenses of the parties, as well as the SSAG. For these purposes, I note that Ms. Richards has an income earning capacity of $28,000, while Mr. Richards’ current income is $183,350. In the past, Mr. Richards’ annual income fluctuated between $171,267 and $344,600. Based on current income, SSAG spousal support rates vary from a low of $3,496 to a high of $4,768. The spousal support range is between nine and 18 years. [56] I therefore order Mr. Richards to pay spousal support to Ms. Richards in the monthly amount of $4,100 commencing January 1, 2025, and continuing monthly thereafter. For the balance of the year, Mr. Richards must continue to pay $3,700 per month in spousal support. [57] In addition, Ms. Richards is advised to seek full time employment, improve budgeting skills, create a meaningful employment plan, and start retirement savings. [58] Further, although I appreciate Mr. Richards’ desire to finalize his support obligation, a termination date is not warranted based on the facts. The legislative requirement to promote economic self-sufficiency is a qualified one, given the legislative use of the words “in so far as practicable” and “within a reasonable period of time.” Because of the nature of Ms. Richards’ strong compensatory and non-compensatory claims, a termination date would be inappropriately based on speculation. Instead, the parties will continue to have access to s. 17 of the Divorce Act. Should retroactive spousal support be granted? [59] Ms. Richards seeks a lump sum payment of $71,770, which Mr. Richards disputes. [60] In Kerr v Baranow, 2011 SCC 10, Cromwell J reviewed principles to be applied to retroactive variation claims: • “[S]imilar considerations to those set out in the context of child support are also relevant to deciding the suitability of a “retroactive” award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse”: para 207 • “… [I]n spousal support cases, these factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support”: para 207. • “Spousal support has a different legal foundation than child support. A parent-child relationship is a fiduciary relationship of presumed dependency and the obligation of both parents to support the child arises at birth. … Child support is the right of the child, not of the parent seeking support on the child’s behalf…”: para 208 • “… [T]here is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legal obligation to look out for the separated spouse’s legal interests. Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support: …’; para 208. [61] I find that Ms. Richards has only proven entitlement to a lump sum payment of $6,500, for five reasons. First, notice is an issue. Although a review was scheduled for 2022, it did not proceed. Other than seeking help from time to time, Ms. Richards did not formally ask to increase spousal support. Formal notice was provided in 2023. [62] Second, although he did not provide his income information, Mr. Richards faithfully paid all support obligations. In addition, he voluntarily released his interest in the home to Ms. Richards and did not insist on its sale despite the provisions of the CRO and promissory note. As a result, Ms. Richards has financially benefitted from the increased equity in the home. [63] Third, neither party provided the other with their income tax returns. Mr. Richards also did not provide his corporate income information until after the variation proceeding was processed. Mr. Richards earned significantly more income than stated in the CRO, especially in 2020 and 2021. By 2020, Ms. Richards should have been earning about $28,000 per year. [64] Fourth, Ms. Richards has a need for retroactive support. Mr. Richards has a corresponding ability to pay. [65] Given these circumstances, but especially the lack of notice and the financial benefit flowing to Ms. Richards as a result of retaining the home, I order a lump sum payment of $6,500, which will not be taxable or tax deductible. This amount is calculated based on a January 2023 retroactive payment date, less a reduction for the tax neutral nature of the lump sum. The retroactive payment is due on December 15, 2025. Conclusion [66] I grant Ms. Richards’ application to retroactively vary the child and spousal support provisions of the CRO. Mr. Richards will pay prospective child support in the monthly amount of $2,388 and retroactive child support of $30,140, payable in three equal installments on January 15, March 15, and May 15, 2025. [67] Further, effective January 2025, Mr. Richards will pay prospective spousal support of $4,100 per month, together with a retroactive payment of $6,500 due on December 15, 2024. [68] Ms. Schoen is to draft the variation/review order. [69] The parties are urged to come to an agreement on costs. If they are unable to do so, Ms. Richards should provide her written submissions by December 20, 2024, and Mr. Richards should provide his submissions by January 20, 2025. Counsel are thanked for their professional approach during the proceeding. Forgeron, J. [i] The former line 150 is now designated as line 15000 in the T1 General.