Abelman v. Abelman, 2017 ONSC 1810
After eight years of marriage and two children, the parties separated in February 2004.
The parties entered into a separation agreement that included a shared custody arrangement and waived child support.
“Life went on.”
Both parties met and married new partners.
The father became a partner in his architectural firm, paying half a million dollars to gain a nine percent interest in the organization.
One child left to attend university away from home and the younger child spent time in both family homes.
The fallout from the mother’s second marriage’s breakdown left her financially strained.
The mother brought a motion to change the terms of child support to entitle her to financial assistance from her first ex-husband.
The judge determined that the father would pay the mother for child support dating back to January 1st, 2014. This was based on the judge’s assessment that there had been a change in circumstances as of January 1st, 2014. At the time that the original agreement was made, the mother’s finances were melded completely with those of her new husband. However, on or around January 1st, 2014, the mother’s second marriage broke down and the father incorporated a company to purchase partnership units in his firm. The court held that both of these events qualified as material changes.
The father, since buying into the partnership, was earning $136,000 per year. The father argued that section 12 of the Schedule III of the Federal Child Support Guidelines was relevant to this case – that the money he was earning was required by the partnership for capitalization and therefore deductible for the purposes of support payments.
The judge disagreed with the father’s contentions, and indicated that simply because his corporation was earning the income rather than him personally was not a wide enough of a distinction. Capitalization, the judge noted, is money needed to operate the business on a daily basis, not purchase a capital asset (like a portion of the partnership). The judge further indicated that in order to be successful, the father must persuade the court that his income was otherwise properly required by the partnership for purposes of capitalization.
Therefore, the father was disallowed from building up his assets at the expense of child support. The court ordered that the father pay the mother monthly installments of child support as well as arrears.