J. Q.B. A.D. 1988 No. 246 J.C.Y. IN THE QUEEN`S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF YORKTON BETWEEN: KATHERINE ANNE FISHER and WAYNE STANLEY GERRARD A. Phillips, Q.C. for the petitioner M.J. Baumgartner for the respondent FIAT WILKINSON J. October 22, 1998 [1] This is an application to vary maintenance under TheFederal Child Support Guidelines [Divorce Act Regulations,SOR/97-175] in respect of two children, Jessilyn Jae GerrardFisher, born March 18, 1981 and Javan William Gerrard Fisher,born June 3, 1982. There are two issues:1. determination of income for the father, afarmer who has also been employed at theEsterhazy potash mine on a full-time basissince May of 1997; and2. whether the expenses of the eldest childattending Grade XII at Western ChristianCollege in Dauphin, Manitoba constituteextraordinary expenses for secondary schooleducation pursuant to s. 7(1)(d) of theGuidelines. [2] The mother currently earns $27,600 per annum from employment with computer consulting firm. The father`s income from 1995 to the current date is set out below. He made projections with respect to his 1998 farm income and expenses: Year Employment Unemployment Farm gross Farm net Total Income Insurance Income Income Income 1995 15,694 9,250 18,534 (2,369) (22,575) 1996 5,340 7,068 48,799 3,901 16,309 1997 20,654 59,629 (376) 20,396 1998 31,022 35,185 (21,664) (to July 15) (projected) [3] The father explains his reduced farm income as due to poor yields. He has no inventory of grain on hand and all his expenses of $56,849 are purportedly for the current crop year. At the mine, his hourly rate of pay for straight time is $20 per hour which includes $4.50 per hour production bonus which is not paid on overtime. He worked substantial overtime at the mine in 1998 but that ceased in July and the father says that mine production slows down in the fall and he anticipates being laid off in October. He says he has significant vehicle expenses for travelling 192 km (round trip) to the mine from his farm in Yorkton every workday, for 16 workdays per month. These expenses total $1,409.81 per month and include vehicle depreciation. He says these expenses were not deducted from income in 1997 but he has since received accounting advice and he believes some of these expenses may be deductible on an allocation of 1/3 to personal use, 1/3 to employment expenses and 1/3 to farm expenses. He says if he is laid off he might be entitled to some employment insurance benefits after the waiting period but his income in 1998 might reasonably be less than in 1997 given his anticipated farm losses. He says support should be determined based on his 1997 income. [4] The mother argues that the most reliable indicator of true income is the 1998 year because of the significantly higher amount he earned at the mine. She says that income should be determined by projecting his income at straight wages until October 15, 1998, thereby giving recognition to the possibility of lay-off and the reduction in overtime. Accordingly, she added to his year-to-date earnings the additional sum of $11,420 calculated at $20 per hour multiplied by 12 hours per day, multiplied by 16 days per month to arrive at projected employment income for 1998 of [5] As to farming expenses for 1998, the mother says that gas and repairs are overstated by $3,000 in comparison to the three previous taxation years. There are $2,000 in expenses for horse which is the step child`s pet. There are $3,633 in capital payments ($2,233 for machinery and $1,400 for land) which are claimed as operating expenses. If these are added back to income, the projected farm loss is reduced to $13,030.89 and the total adjusted income for the year would be $29,411. She argues there should be further adjustments to farm income for capital cost allowance claimed with 15 to 25 percent of the capital cost allowance being added back. [6] It has been stated in numerous cases that the objective under the Guidelines is to find the most reliable and the fairest indicator of income. In this situation there have been significant changes in the sources of income. But if the situation with respect to employment income improved in 1998 over 1997, it was the reverse in the farming situation with 1997 being significantly better year. I consider itfair and reasonable to take an average of the 1997 andprojected 1998 income. The preceding years are not significant because the father`s current employment at the mine commenced in May of 1997. [7] In determining the father`s 1998 income, the mother`s arguments are persuasive. make an adjustment in the calculations so that the hours of work over three months total 480 hours regular time (160 hours per month) at $20 per hour for total additional pay of $9,600. This results in projected income of $40,622 for 1998. [8] With respect to travelling expenses, it may well be that some portion is deductible. But the father received accounting advice and that should have been submitted in evidence to explain the basis for the deduction and to establish the actual amount qualifying for the deduction. In the absence of such evidence, and where no deduction has been made in the past, am not prepared to consider it. [9] With respect to farm expenses, the mother has set out reasonable basis for disallowing certain expenses. The claims for gas and repairs are significantly higher than in previous years and no explanation is offered. The capitalpayments for land and machinery, and the costs of the step-child`s pet should properly be excluded. [10] With respect to capital costs allowance, the father had previously rented equipment from his father and his 1996 return shows and expense of $4,000 for machine rental paid. In 1997 he acquired equipment of his own, including Chevrolet half-ton, GM Yukon, and one-third share in two other pieces of farm equipment, grain vac and Morris air seeder. Theacquisition of the equipment and the claiming of capital costallowance in these circumstances, in lieu of rentingequipment, is not patently unreasonable. [11] possible exception is the GM Yukon acquired in 1997 at cost of $43,175. For the purposes of s. 19(1)(g) of the Guidelines, an expense may be unreasonable because the acquisition of the item that generates the expense is unreasonable in all of the circumstances. In the father`s income bracket, and in the context of his obligation to support his children, the acquisition of $43,000 vehicle is an extravagance of significant proportions. Furthermore, his allocation of one-half the cost to farming use may be questionable given the distances travelled to and from the mine during the course of his employment. The acquisition of that vehicle gave rise to capital cost allowance claim of $1,833 in 1997 and at depreciation rate of 20 percent would have provided capital cost allowance claim of $1,650 in 1998. The farm income will be adjusted in 1997 and 1998 by adding back 25 percent of the capital cost allowance for this [12] The adjusted income for 1998 is: Employment 40,622.00 Farm (12,618.50) Total: 28,003.50 [13] The adjusted income for 1997 is $22,111. The average of the 1997 and 1998 income is $24,370. The Table amount for two children on gross annual income of $24,370 is $347 per [14] With respect to the extraordinary cost of post- secondary expenses, the mother says Jessilyn has been attending high school at Western Christian College in Dauphin, Manitoba. Her school fees are $7,000 per year and the members of the church congregation contributed $3,028. The information presented falls short of the standard the Court requires in advancing claim for extraordinary expenses. There are indications, in the only complete tax return the mother filed, that she claimed $205 for tuition fees and education amounts transferred from child in 1996. Pursuant to s. 7(3) of the Guidelines, the Court must take into account any tax benefits or credits relating to the claimed expense. Having regard tothe criteria in s. 7 of the Guidelines, there is no evidencewhy the child attends high school there, why the expense isnecessary in relation to the child`s best interests or whetherthe child has any means to contribute to the expense. Thataspect of the claim is refused, but with leave to return theissue to the Court with appropriate supporting materials. [15] In summary, the respondent whose gross annual incomeis determined to be $24,370 shall pay to the petitioner forthe support of the two children the Table amount of $347 permonth payable on the first day of September, 1998 and on thefirst day of each and every month thereafter until furtherorder. [16] There will be no order as to costs.
FIAT. An application to vary maintenance for two children under the Federal Child Supprt Guidelines. At issue were the determination of the father's income and whether the expenses of the eldest child attending Grade 12 in Manitoba constituted extaordinary expenses for secondary school education pursuant to s7(1)(d). The father's reduced farm income was explained as due to poor crop yields. He anticipated being laid off from his work at the mine in October. He claimed significant vehicle expenses for his travel to work. The mother contested many of his expenses as being overstated. HELD: The respondent's child support obligation was $347 per month. 1)It was fair and reasonable to take an average of the 1997 and projected 1998 income. The preceeding years were not significant because the father's current income at the mine commenced in May 1997. Travelling expenses would not be considered in the absence of the accounting advice to explain the basis for the deduction and to establish the actual amount and where no deduction has been made in the past. No explanation was offered for why the claims for gas and repairs were significantly higher than in previous years. The capital payments for land and machinery and the costs of the stepchild's horse were excluded. In the circumstances the acquisition of equipment and capital cost allowance, in lieu of renting, was not patently unreasonable. The farm income was adjusted in 1997 and 1998 by adding back 25 percent of the capital cost allowance for the new truck. The acquisition of a $43,000 vehicle was an extravagance given his income bracket and his obligation to support his children. His allocation of one-half its cost to farming was questionable given the distances tavelled during his employment at the mine. 2)There was no evidence why the child attended high school in Manitoba, why the expense was necessary in relation to the child's best interest and whether the child had any means to contribute. Leave was given to return the matter to the Court with the appropriate supporting materials.  3)No order as to costs.