Francis v. Baker (1998), 38 O.R. (3d) 509 (C.A.)

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  • Date: 2018

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Francis v. Baker*

38 O.R. (3d) 481

[1998] O.J. No. 924

Docket No. C27478

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Court of Appeal for Ontario,

Abella, Austin and Charron JJ.A.

March 10, 1998

 

*Vous trouverez traduction fran‡aise de la d‚cision … 38

O.R. (3d) 509.

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*Note:  An appeal to the Supreme Court of Canada (Lamer C.J., L’Heureux-Dub‚, Gonthier, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie JJ.) was dismissed on September 16, 1999. S.C.C. File No. 26562. This information was noted at 44 O.R. (3d) 736.   Full text of the SCC appeal is available at [1999] S.C.J. No. 52 in the SCJ database.

Family law — Support — Child support — Federal Child Support Guidelines — Table amounts in Federal Child Support Guidelines can only be reduced where child is age of majority or older, where paying spouse is not child’s parent, where there is split or shared custody or in cases of undue hardship

— Word “inappropriate” in s. 4(b) of Guidelines means “inadequate” — Table amount not to be reduced where paying parent earns more than $150,000 simply because amount exceeds child’s “needs” as determined in accordance with pre-Guideline jurisprudence — Federal Child Support Guidelines, SOR/97 -175.

Family law — Support — Spousal support — In accordance with separation agreement entered into in 1985 wife received support for herself and two children in amount of $2,500 per month — Wife sought to set separation agreement aside in 1988

— Trial took place in 1992 — Husband had income of $945,538 and assets totalling $78 million — Wife had struggled to get by — Trial judge estimated that wife would have been entitled to at least $5,000 per month in spousal support in 12 years since separation and awarded lump sum support in amount of $500,000 — Wife not to be deprived of support to which she was entitled merely because glacial pace of litigation resulted in substantial award — Trial judge took appropriate considerations into account — Lump sum represented retroactive compensation and accordingly constituted appropriate application of objectives set out in s. 15.2(6) of Divorce Act

— Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 15.2(6).

The parties were married in 1979 and separated in 1985, when the older of their two children was one-and-a-half years old and the younger was five days old. In accordance with a 1985 separation agreement, the wife received support for herself and the children in the total amount of $2,500 per month. She returned to teaching after the separation, and struggled to get by. The husband, a lawyer, purchased a multi-million dollar home after the separation and bought three luxury cars. The parties were divorced in 1987. In 1988, the wife sought to set aside the separation agreement on the grounds of duress and lack of financial disclosure on the part of the husband. The trial took place in 1997. By the time of the trial, the wife was earning $63,000 annually. The husband had an annual income of $945,538 and a net worth of $78 million.

The trial judge concluded that the separation agreement ought not to be set aside. However, she was satisfied that the wife was entitled to a variation of spousal support. Without explicitly saying so, she apparently found pursuant to s. 17 of the Divorce Act that there had been a material change in circumstances justifying a variation. She concluded that the wife would have been entitled to at least $5,000 per month as spousal support in the 12 years since the separation. Taking tax consequences into account, she awarded lump sum support pursuant to s. 15(7) (now s. 15.2(6)) of the Divorce Act in the amount of $500,000.

Pursuant to the Federal Child Support Guidelines, based on the husband’s income of $945,538, the husband was ordered to pay child support in the amount of $10,034 per month.

The husband appealed, arguing that the amount of child support was on its face inordinately high and well beyond the needs of the children. He suggested that such a substantial child support order amounted to spousal support disguised as child support, resulting in a windfall to the wife. He relied on s. 4 of the Guidelines, which provides that where the income of the spouse against whom a child support order is sought is over $150,000, child support is to be calculated by adding the Table amount for the first $150,000, whatever amount of the balance the court considers “appropriate” given the needs of the children and the means of the parents, and special expenses as delineated in s. 7 of the Guidelines.

 

Held, the appeal should be dismissed.

 

While the word “appropriate” appears, on the surface, to be wide in its discretionary reach, its particular meaning in s. 4(b) must be considered in the context of the Guidelines as a whole and the approach they mandate designating the Table amount as a starting point for the calculation of child support. Section 4(b) does not re-inject the budgetary method of child support calculations into the Guideline process where incomes exceed $150,000. If it did, all that would be required to deny the child of a wealthy parent access to the Table amount is the allegation of the paying spouse earning over $150,000 that the Table amount too generously meets the child’s needs and is therefore inappropriate. This would mean that under the Guidelines, children whose paying parent earned less than $150,000 would be entitled to a predictable, expeditious determination of their support, while those whose paying parent earned more than $150,000 would be subjected to the former, cumbersome process. The Guidelines tie child support to the paying parent’s income, even if that income is substantial.

There is no indication in the legislation that this connection was intended to diminish with the increasing wealth of a parent. Such an approach would negate the entire benefit of the Guidelines, the goal of which was to replace a haphazard and random method of child support assessment with a predictable one through the presumptive application of fixed income amounts designed to reflect a more equitable distribution of the post- separation economic realities of the parents.

Section 10 of the Guidelines is the primary section offering relief from the Table amount, but it is only available where severe financial consequences flow from the application of a facially neutral Table amount. Under s. 10(3), no reduction will be ordered where it creates a higher standard of living in the payor’s household than in the recipient’s. From this, one can logically infer that the intention of the Guidelines is to give primacy to the financial needs of the child’s household, not the payor’s. Under the Guidelines, the needs being addressed are those of the child’s household, not only the economies of the individual child. By and large, the Guidelines render irrelevant the debate about the point at which a child support order is, by virtue of its largesse, transformed into spousal support masquerading as child support. The artificial atomization of the needs of each family member for purposes of determining support entitlements rarely produced realistic assessments. Households tend to function as integrated economic and social units. This makes it more reasonable to determine what standard of living the household as a whole is entitled to enjoy.

Another economic goal reflected in s. 10 of the Guidelines is that children are entitled to live at the standard of living permitted by the available income, even if that means living better than their basic needs demand. There is a clear statutory attempt to equalize the standards of living between the payor’s household and that of his or her children so that there is as little financial disadvantage to children from the parents’ separation as necessary. The whole notion of what is a “reasonable” need of a child has been reformulated by the Guidelines. The “reasonableness” of a need is now a function of what the payor can afford.

The Table amounts can only be reduced in the following circumstances: where the child is the age of majority or older; where the paying spouse is not the child’s parent; where there is split or shared custody; or in cases of undue hardship. Otherwise, presumptive Table amounts can only be added to. “Inappropriate” in s. 4(b) means “inadequate”. Any other interpretation would render s. 4(a) irrelevant and the Guidelines meaningless. In this case, a reduction in the Table amount could only occur if the husband could bring himself within the “undue hardship” provisions of s. 10. The husband did not attempt to rely on undue hardship.

While the husband challenged entitlement to and quantum of spousal support, he gave no evidence to challenge its propriety. There was no reason to deprive the wife of the support to which she was found to be entitled merely because the glacial pace of the litigation resulted in a substantial award to her. The trial judge applied the correct principles. The lump sum represented retroactive compensation and was an appropriate application of the objectives set out in s. 15.2(6) of the Divorce Act.

Paras v. Paras, [1971] 1 O.R. 130, 2 R.F.L. 328, 14 D.L.R. (3d) 546 (C.A.), consd Other cases referred to Andrews v. Andrews (1980), 32 O.R. (2d) 29, 120 D.L.R. (3d) 252, 20 R.F.L. (2d) 348 (C.A.); Elliot v. Elliot (1993), 15 O.R. (3d) 265, 106 D.L.R. (4th) 609, 48 R.F.L. (3d) 237 (C.A.) [leave to appeal to S.C.C. refused (1994), 18 O.R.(3d) xvi, 3 R.F.L.(4th) 290n, 175 N.R. 324n]; Levesque v. Levesque (1994), 20 Alta. L.R. (3d) 429, 116 D.L.R. (4th) 314, [1994] 8 W.W.R. 589, 4 R.F.L. (4th) 375 (C.A.); Moge v. Moge, [1992] 3 S.C.R. 813, 81 Man. R. (2d) 161, 99 D.L.R. (4th) 456, 145 N.R. 1, [1993] 1 W.W.R. 481, 43 R.F.L. (3d) 345; Willick v. Willick, [1994] 3 S.C.R. 670, 125 Sask. R. 81, 119 D.L.R. (4th) 405, 173 N.R. 321, 81 W.A.C. 81, 6 R.F.L. (4th) 161

 

Statutes referred to

 

Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) (as am. S.C. 1997, c. 1), ss. 15.1(5), 15.2

Family Law Act, R.S.O. 1990, c. F.3 Rules and regulations referred to

Federal Child Support Guidelines, SOR/97 -175, ss. 1, 3, 4, 5,

7(1), 8, 9, 10

 

Authorities referred to

 

Davies, C., “The Emergence of Judicial Child Support Guidelines” (1995-96), 13 C.F.L.Q. 89

Rogerson, C., “Spousal Support After Moge” (1996-97), 14 C.F.L.Q. 281

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APPEAL from a judgment of Benotto J. (1997), 150 D.L.R. (4th) 547, 28 R.F.L. (4th) 437 (Ont. Gen. Div.), awarding child support and lump sum spousal support.

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Stephen M. Grant and Megan E. Shortreed, for appellant.

A.  Burke Doran, Q.C., and Stuart F. Kovinsky, for respondent.

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The judgment of the court was delivered by

 

ABELLA J.A.: — This case involves that rare category of family support claim: a claim for support from a spouse who has enough financial means to maintain comfortably the financial needs both of a former family and the requirements of his or her own post-separation household. In particular, this appeal is concerned with how to apply the Federal Child Support Guidelines [See Note 1 at end of document.] to a case under the Divorce Act [See Note 2 at end of document.] where the annual income of the paying parent is over $150,000. We have been advised by the parties that this is the first opportunity an appellate court has had to consider these Guidelines. They are attached as an Appendix for ease of reference.

 

Background

 

The parties married in 1979. They had two children, the first born in 1983, the second in 1985. In 1985, when his wife, Monica Francis, was in her eighth month of pregnancy with their second child, the father, Thomas Baker, told her he felt their marriage was in trouble. Their older child was then one-and-a- half years old. In July, 1985, five days after the birth of their second child, the father left.

The parties signed a separation agreement in December 1985, and were divorced in 1987. Ms. Francis retained ownership of a car and received $30,000 as her share of the proceeds of the former matrimonial home. She received a total of $2,500 in monthly support. At the time of the separation and divorce, Ms. Francis was a teacher and Mr. Baker was a lawyer. Mr. Baker’s abrupt departure caused Ms. Francis to return to work as a teacher in October 1985, significantly earlier than she had planned. She purchased a home for herself and the two children and, as found by the trial judge, has been struggling since 1985.

Mr. Baker, on the other hand, was in great financial health very shortly after the separation. He purchased and renovated a multi-million dollar home and bought three luxury cars. In 1987, he became president and chief executive officer of Seven – Up Canada Inc. It is undisputed that his lifestyle has been exceptionally lavish since the separation.

In 1988, Ms. Francis sought to set aside the separation agreement on the grounds of duress and the lack of financial disclosure on the part of Mr. Baker. The trial took place in 1997: see Francis v. Baker (1997), 150 D.L.R. (4th) 547 (Ont. Gen. Div.), per Benotto J.

 

THE TRIAL

 

By the time of the trial, the children were 11 and 13 years old. Ms. Francis was earning about $63,000 annually as a teacher. Her net worth was essentially the value of her pension. Mr. Baker’s financial statement, provided on the eve of the trial as a result of the compulsion of a court order, disclosed an annual income of $945,538 and a net worth of $78 million.

The trial judge found that Mr. Baker had not only been “paternalistic” and “malevolent”, but also “controlling and manipulative through the use of his money”. He had offered to give money for extra expenses to the children directly, a proposal the trial judge considered “unreasonable” and “unacceptable” given their ages. He had also offered to buy Ms. Francis a house worth $500,000 provided that it would stay in his name and she would not allow her parents, sisters, nieces or nephews to live there.

The trial judge dismissed two preliminary jurisdictional arguments raised by Mr. Baker. The first dealt with the 60-day “written notice” provisions under the separation agreement; and the second dealt with the propriety of the spousal support claim being brought pursuant to the Family Law Act, R.S.O. 1990, c. F.3. The first technical argument was dismissed as resulting in no prejudice to Mr. Baker. The alleged deficiency in the pleadings was corrected by permitting an amendment to the support claim merely bringing it under the Divorce Act. The trial judge was clearly averse to permitting further delays in a case which had already wandered through a pre-trial labyrinth for nine years.

The trial judge concluded that the separation agreement ought not to be set aside. But she awarded a lump sum in the amount of $500,000 to Ms. Francis as spousal support pursuant to s. 15(7) (now. s. 15.2) of the Divorce Act. Child support was awarded in the total amount of $10,034 per month from the date of the judgment, pursuant to the Federal Child Support Guidelines. Mr. Baker gave no evidence at the trial.

ANALYSIS

Child support

This appeal raises questions of statutory interpretation which, despite the uniqueness of the legislation, can be resolved by resort to the usual tools: the purpose, context, and language of the legislative provision.

The objectives of the Guidelines are set out in s. 1 with definitive clarity:

(a)  to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation;

(b)  to reduce conflict and tension between spouses by making the calculation of child support orders more objective;

(c)  to improve the efficiency of the legal process by giving courts and spouses guidance in setting the levels of child support orders and encouraging settlement; and

(d)  to ensure consistent treatment of spouses and children who are in similar circumstances.

In the text distributed by the federal government in March 1996 accompanying the New Child Support Package, the remedial purposes of the Guidelines are explained as follows:

. . . [O]ur present child support system has not always been able to ensure that . . . children receive the financial support they deserve from both parents. Child support awards are varied and unpredictable, sometimes inadequate, and too often unpaid.

Recognizing the need for fundamental change, federal, provincial and territorial officials have worked together through the Federal/Provincial/Territorial Family Law Committee (the “Family Law Committee”) to develop a co- ordinated approach to child support reforms.

. . . . .

. . . [T]oo often, the child’s right to be financially supported by both parents is clouded by the hurt and hostility that follows the breakdown of the parents’ relationship. These proposals are designed to make sure that the child’s interests come first. Protecting the child’s right to an appropriate level of support from parents — paid in full and on time — is at the heart of this package of reforms.

The Federal Child Support Guidelines came into force on May 1, 1997. The strict application of these Guidelines results in Mr. Baker being required to pay child support in the amount of $10,034 monthly. Mr. Baker does not suggest that the quantum ordered is an incorrect amount under the Federal Child Support Table. His complaint is that the amount is, on its face, inordinately high and well beyond the reasonable needs of the children. He suggests that such a substantial child support order amounts to spousal support disguised as child support, resulting in a windfall for Ms. Francis.

The explanations of when and how to apply the Table amounts to children under the age of majority are found in ss. 3 and 4 of the Guidelines. Section 4 of the Guidelines deals with incomes exceeding $150,000; s. 3 deals with incomes below this amount. While s. 4 is the section at issue in this appeal, it is nonetheless instructive to examine how incomes below $150,000 are treated.

The relevant portions of s. 3 state: Presumptive Rule

3(1) Unless otherwise provided under these Guidelines, the amount of a child support order for children under the age of majority is

(a)  the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought; and

(b)  the amount, if any, determined under section 7. [See Note

3 at end of document.] (Emphasis added)

Three aspects of this provision are noteworthy. The first is that the marginal heading beside s. 3(1) is “Presumptive Rule”. The second is that the only relevant income for determining the Table amount is that of the parent from whom child support is sought. And the third is that any special expenses for health or education as set out in s. 7 of the Guidelines are in addition to the Table amount.

This means that, unless contradicted by other parts of the legislation, a child under the age of majority is entitled to the amount stipulated in the Table from the paying parent plus any exceptional expenses found to be appropriate under s. 7 of the Guidelines. In other words, the Table amount is fixed; only the special expenses are subject to judicial review and endorsement. This is the presumptive approach and analysis.

Section 4 of the Guidelines forms the statutory basis of Mr. Baker’s argument that the amount ordered is inappropriate. This section provides:

4. Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order is

(a)  the amount determined under section 3; or

(b)  if the court considers that amount to be inappropriate,

(i)       in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;

(ii)     in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and

(iii)   the amount, if any, determined under section 7.

As is evident from the language of the section, when the payor’s income is over $150,000, s. 4(a) stipulates that the amount of child support is in accordance with s. 3, namely, the Table amount plus provable special expenses.

Pursuant to s. 4(b), however, another approach appears to be available for incomes exceeding $150,000. Section 4(b) permits the court, if it considers the Table quantum to be “inappropriate”, to calculate child support by adding three amounts:

(i)       the Table amount for the first $150,000;

(ii)     whatever amount of the balance the court considers appropriate given the needs of the children and the means of the parents; and

(iii)  special expenses as delineated in s. 7.

In summary, s. 4 mandates a particular scheme for incomes over $150,000. The court can order either:

(a)  the amount stipulated in the Table (in this case a monthly total of $10,034) plus any provable special expenses; or

(b)  the Table amount for the first $150,000, plus two additional calculations:

(i)  an amount reflective of the children’s needs and each spouse’s ability to pay, and

(ii)  any special expenses found to be payable pursuant to s. 7 of the Guidelines for such things as child care, medical insurance, health care, educational needs, or extracurricular activities.

On its face, as Mr. Baker points out, s. 4(b) seems to offer an alternative approach to the presumptive application of the Table amount.

Mr. Baker’s argument is that the effect of s. 4(b) is to require a budgetary analysis of the children’s needs to determine if the Table amount is “inappropriate” whenever the payor’s income exceeds $150,000. This requires, he suggests, the application of the Paras v. Paras, [1971] 1 O.R. 130, 2 R.F.L. 328 (C.A.) analysis traditionally used by courts, in assessing quantums of child support. This approach, found at p. 135 O.R., p. 332 R.F.L., can be summarized as follows:

1.     Arrive at a sum which is adequate to care for, support and educate the children.

2.     Divide this sum in proportion to the respective incomes and resources of the parents.

3.     Direct payment of the appropriate proportion by the parent not having custody.

The continuing necessity for the budgetary scrutiny mandated by Paras is reinforced, according to Mr. Baker, by the language of s. 15.1(5) [See Note 4 at end of document.] of the Divorce Act, which permits a court to award a different amount from the Guidelines if special provisions have otherwise been made for the child, rendering the Guideline amount “inequitable”.

In essence, Mr. Baker’s argument is that the combined existence of the adjectives “inappropriate” in s. 4(b) of the Guidelines and “inequitable” in s. 15.1(5) of the Divorce Act, necessarily triggers the exercise of judicial discretion. Such discretion, in turn, requires a comparative budgetary review pursuant to Paras. Consequently, although she did in fact consider the contents of Ms. Francis’ budget, albeit one for 1996 rather than for 1997, the trial judge erred, according to Mr. Baker, in using the budget to rationalize the Table amount, rather than using it to determine what the appropriate quantum of child support would have been in spite of the Table.

In my view, although the word “inappropriate” appears, on the surface, to be wide in its discretionary reach, its particular meaning in s. 4(b) must be considered in the context of the Guidelines as a whole and the approach they mandate designating the Table amount as a starting point for the calculation of child support.

I acknowledge that s. 4(b) appears to authorize a court to diverge from the Table amounts. I am not persuaded, however, that s. 4(b) re-injects the budgetary method of child support calculations into the Guideline process where incomes exceed $150,000. This would mean that in every case of a paying parent earning over of $150,000, and for the sake of determining what portion of the excess should be available to the children, the old Paras formula would apply, with all its attendant budgetary requirements and substantive inconsistencies.

If Mr. Baker’s submission is correct, all that would be required to deny the child of a wealthy parent access to the Table amount is the allegation by a paying spouse earning over $150,000 that the Table amount too generously meets the child’s needs and is therefore inappropriate. This would mean that under the Guidelines, children whose paying parent earned less than $150,000 would be entitled to a predictable, expeditious determination of their support, while those whose paying parent earned more than $150,000 would be subjected to the former, cumbersome process.

The Guidelines tie child support to the paying parent’s income, even if that income is substantial. There is no indication in the legislation that this connection was intended to diminish with the increasing wealth of a parent. Such an approach would negate the entire benefit of the Guidelines. It is difficult to imagine that the intention of the legislature was to burden uniquely the children and custodial parents of wealthier spouses by subjecting them to an approach which retains the methodological complexity of the world dominated by Paras, and offers so little of the predictability of the new system.

One of the primary goals of the legislation is, in fact, to avoid this complexity and to help parents resolve child support issues as expeditiously as possible. The designated beneficiaries of this expedition are children, regardless of their parents’ income.

The entire reform reflects an unchallengeable perception that child support was, too often, randomly assessed and gratuitously disputed. [See Note 5 at end of document.] The solution proposed via these Guidelines was to replace the haphazard with the predictable, through the presumptive application of fixed amounts designed to reflect a more equitable distribution of the post-separation economic realities of the parents.

It is not surprising, given the intention to impose certainty, that the Guidelines offer few exceptions to their formulaic application.

The first exception, s. 3(2), is where the child is the age of majority or over. With an adult child, the court is authorized to apply either the Table amount, or, if the court considers the Guideline “approach” to be “inappropriate”, then a more flexible needs and means analysis can be undertaken. The generally different situation for adult children justifies the possibility of treating them differently from children under the age of majority when assessing support.

An exception to the strict application of the Guidelines is also made under s. 5 where the spouse from whom child support is sought, is not the child’s parent and another parent has a legal duty to pay support.

Under s. 8, where each spouse lives with one or more of the family’s children, and under s. 9, in cases of shared custody, variations from the full Table amount are also possible.

Most importantly, in s. 10 there is an overriding discretion to vary the Table amount in order to avoid undue hardship to a spouse or child.

Sction 10 states:

10(1) On either spouse’s application, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.

(2)  Circumstances that may cause a spouse or child to suffer undue hardship include the following:

(a)  the spouse has responsibility for an unusually high level of debts reasonably incurred to support the spouses and their children prior to the separation or to earn a living;

(b)  the spouse has unusually high expenses in relation to exercising access to the child;

(c)  the spouse has a legal duty under a judgment, order or written separation agreement to support any person;

(d)  the spouse has a legal duty to support a child, other than a child of the marriage, who is

(i)  under the age of majority, or

(ii) the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life; and

(e)  the spouse has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability.

 

(3)  Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other spouse.

(4)  In comparing standards of living for the purpose of subsection (3), the court may use the comparison of household standards of living test set out in Schedule II.

(5)  Where the court awards a different amount of child support under subsection (1), it may specify, in the child support order, a reasonable time for the satisfaction of any obligation arising from circumstances that cause undue hardship and the amount payable at the end of that time.

(6)  Where the court makes a child support order in a different amount under this section, it must record its reasons for doing so.

It seems to me that s. 10 is the primary section offering relief from the Table amount, but it is only available where severe financial consequences flow from the application of a facially neutral Table amount. If debts, other legal support obligations, or the expenses of exercising access, create an undue burden on the paying spouse, there is a discretion to reduce the amount of child support payable.

It is worth noting, however, that under s. 10(3), no reduction will be ordered where it creates a higher standard of living in the payor’s household than in the recipient’s. From this, one can logically infer that the intention of the Guidelines is to give primacy to the financial needs of the child’s household, not the payor’s. [See Note 6 at end of document.] Even in the face of other legal obligations, the payor is not permitted to reduce the Table amount to an extent that it gives his own household a financial advantage over that of the children.

This section reflects two economic aspirations of the Guidelines, neither of which enjoyed universal application before the introduction of this new statutory support scheme. The first is that the needs being addressed are those of the child’s household, not only the economies of an individual child. This is a significant and, in my view, long overdue reform.

By and large, the Guidelines render irrelevant the debate about the point at which a child support order is, by virtue of its largesse, thereby transformed into spousal support masquerading as child support. That debate represents an academic conversation from an era when the prevailing pretence was that one could separate the economic well-being of children from that of the parent with whom they lived.

The artificial atomization of the needs of each individual family member for purposes of determining support entitlements rarely produced realistic assessments. When family members live together as part of a household, it is almost impossible to dissect which aspect of a particular expense is directly attributable to a particular individual’s needs. Households tend to function as integrated economic and social units. This makes it more reasonable to determine what standard of living the household as a whole is entitled to enjoy. To parse a household into an individual member’s percentage, instead of acknowledging that it is the allotted total that determines living standards, makes the process unrealistic.

It is worth remembering, although its philosophical aims did not appear to survive judicial application with the same vigour as did the “needs and means” analysis, that even in Paras, Kelly J.A. explicitly accepted that the need to try to maintain the children in as good a standard of living as they would have enjoyed had there been no marital dissolution, might mean a financial benefit to the custodial parent (at pp. 134 -35 O.R., p. 332 R.F.L.):

. . . [T]he objective of maintenance should be, as far as possible, to continue the availability to the children of the same standard of living as that which they would have enjoyed had the family breakup not occurred.

. . . . .

Generally speaking, such a formula would tend to preserve a higher standard of living in the home in which the children are supported at the expense of some lessening of the standard of living of the other parent, thus creating indirectly a benefit to the parent who continues to support the children.

 

(Emphasis added)

 

The second economic goal reflected in s. 10 is that children are entitled to live at the standard of living permitted by the available income, even if that means living better than their basic needs demand. There is a clear statutory attempt to equalize the standards of living between the payor’s household and that of his or her children so that there is as little financial disadvantage to children from the parents’ separation as necessary. [See Note 7 at end of document.]

In fact, the whole notion of what is a “reasonable” need of a child has been reformulated by the Guidelines. It is less the actual expense that matters; it is more the extent to which the payor’s income permits the child to approximate the payor’s own standard of living. The “reasonableness” of a need is now a function of what the payor can afford, not what would have been reasonable under the Paras formula. There is, on the whole, no more need for budgets containing estimated expenses. These estimates have been replaced by presumed expenses calculated to reflect “deemed” reasonableness, based on the payor’s income.

The arbitrariness and underestimations due to budget estimates was criticized in the Alberta Court of Appeal decision in Levesque v. Levesque, [1994] 8 W.W.R. 589, 20 Alta. L.R. (3d) 429. It is, in fact, partially in response to Levesque, as well as to the “hidden costs” discussion by L’Heureux-Dub‚ J. in Willick, that these Guidelines were imposed. Budgets estimating the reasonableness of a child’s needs have now been replaced by Table amounts under the Guidelines attributing reasonableness, and the definition of reasonable needs contemplated by the Paras analysis has been similarly supplanted.

The purpose of the Guidelines is to enhance the child’s post- separation standard of living to approximate, as far as possible, what that standard would have been had the parents continued living together. Just because children may be enjoying in their own household a substantially higher standard of living than a strict budget evaluation of their needs would have warranted under the Paras formula, does not render the Table amount “inappropriate”.

In summary, then, based on the preceding legislative context, in my opinion, the Table amounts can only be reduced in the following circumstances: where the child is the age of majority or older; where the paying spouse is not the child’s parent; where there is split or shared custody; or in cases of undue hardship. Otherwise, presumptive Table amounts can only be added to. This means that “inappropriate” in s. 4(b) means “inadequate”. Any other interpretation would render s. 4(a) irrelevant and the Guidelines meaningless.

While the resulting support may seem too high to Mr. Baker based on former approaches to child support, these higher amounts are exactly what the Guidelines were intended to generate. The rhetoric, but not necessarily the impact, of child support jurisprudence emphasized the primacy of the child’s standard of living. The Guidelines are designed to turn this rhetoric into entitlement. Any reduction from the Guidelines can only occur if a payor like Mr. Baker is able to bring himself or herself within the “undue hardship” provisions of s. 10. Mr. Baker, not surprisingly, did not rely on undue hardship.

Mr. Baker is exceptionally wealthy. No one quarrels with his right to enjoy the lifestyle his accumulated wealth permits.

But in the enjoyment and distribution of his resources, he is obliged by law to factor in sufficient consideration for his children so that their standard of living suffers as little from the separation as possible.

If I am wrong, however, and any paying parent earning in excess of $150,000 can argue that the Table amount should be reduced even without evidence of undue hardship, or without any of the other exceptions listed in the Guidelines, then I am nonetheless satisfied that the trial judge was entitled to conclude, on the facts of this case, that the Table amount was appropriate. Mr. Baker gave no evidence at trial. The onus was on him, as the party alleging the impropriety of the Table amount, to satisfy the court that the amount was inappropriate. I see no basis, therefore, for interfering with the trial judge’s conclusion that Mr. Baker did not discharge that burden.

 

Spousal Support

 

The trial judge rejected Mr. Baker’s submissions that the language of the separation agreement reflected a waiver of spousal support. It is hard to quarrel with this conclusion when one examines the language of the December 21, 1985 separation agreement dealing with support:

 

5. SUPPORT

 

5.1 The husband shall pay to the wife for the support of herself and the children of the marriage the following amounts:

(a) commencing on the 1st day of August, 1985 and on the 1st day of each subsequent month until the closing date, the sum of $5,000.00 per month plus such further and other mounts as the wife and the husband by mutual agreement determine that she requires for the support of the children and herself, it being acknowledged and agreed that payment of $4,000.00 per month of such sum shall be satisfied by payment by the husband of an equivalent amount on account of mortgage payments and other expenses relating to the matrimonial home . . .

(b) commencing on the 1st day of the month immediately following the month in which the closing date occurs, and on the 1st day of each subsequent month, the sum of $1,250.00 per month per child (making a total of $2,500.00 per month) plus such further and other amounts as the wife and the husband by mutual agreement determine that she requires for the support of the children and herself until one of the following occurs:

(i) the child ceases to reside full time with the wife, and “reside full time” includes the child living away from home to attend an educational institution, pursue summer employment or vacation but otherwise maintaining a residence with the wife;

(ii) the child becomes 18 years of age and ceases to be in full time attendance at an education institution;

(iii) the child becomes 22 years of age . . . (Emphasis added)

The reference to support throughout is for Ms. Francis and the children. Far from releasing any right to spousal support, Ms. Francis entered into an agreement which expressly preserved it, receiving $2,500 monthly as combined spousal and child support.

The trial judge, satisfied of Ms. Francis’ entitlement to a variation of spousal support, ordered a lump sum payment of $500,000 in accordance with the mandate in s. 15(7) (now s. 15.2(6)) of the Divorce Act, and with the conceptual grid outlined in the Supreme Court analysis by L’Heureux-Dub‚ J. in Moge v. Moge, [1992] 3 S.C.R. 813, 99 D.L.R. (4th) 456.

In examining the respective economic consequences of the marriage and its dissolution, the trial judge stated at pp. 560-61:

There is perhaps no more illustrative fact of the relative economic consequence of the marriage than the situation the spouses were in a short time after the separation. The wife was working as a teacher, raising two children alone, living in a high crime area, without sufficient money for luxuries. The husband had bought a Ferrari, Porsche and BMW and was renovating a 10-12,000 square foot home on the Bridle Path.

. . . . .

Her life was not easy. Her evidence, which I accept, disclosed the difficulty she faced. . . . To say that her child raising responsibilities did not affect her career earning potential is naive. One cannot possibly devote her time to the children as she has, while achieving maximum potential. Ms Francis is a bright woman. I have no doubt that her career path would have been entirely different and more lucrative, but for the children. . . .

Ms Francis has not received adequate support these last 12 years since the separation. With the clear discrepancy that existed in the incomes of the spouses very shortly after the separation, she would have been entitled to “top up” support.

Without explicitly saying so, the trial judge appears to have found that pursuant to s. 17 of the Divorce Act, there has been a material change in circumstances justifying a variation.

Based on the financial information she received from Mr. Baker, including information of an annual income of $1. 9 million in 1991, of $212,000 in 1992, and the accumulation of assets eventually totalling $78 million, the trial judge concluded that Ms. Francis would have been entitled at least to $5,000 per month as spousal support in the 12 years since the separation, making a total of $750,000 by the time of the trial.

Ms. Francis claimed and was awarded lump sum support. The amount, $500,000, reflected the amount that should have been paid as spousal support over the years. This amount was calculated taking the tax consequences into account.

Mr. Baker challenged the quantum — and the entitlement — but gave no evidence to challenge its propriety. Nor was there evidence of the kind of prejudice to him often associated with a lump sum award: Elliot v. Elliot (1993), 15 O.R. (3d) 265, 48 R.F.L. (3d) 237 (C.A.).

I see no reason to deprive Ms. Francis of the support to which she was found to be entitled merely because the glacial pace of the litigation resulted in a substantial award to her. The principles relied on by the trial judge were sound and have received consistent endorsement in recent years from the Supreme Court of Canada. [See Note 8 at end of document.] These principles include an acknowledgement that child care can generate an economically disadvantaging impact, that these economic consequences can have lifetime tenure, and that the financial well-being of the custodial parent is inextricable from that of the children in his or her care.

The available evidence disclosed a net worth of $78 million for Mr. Baker. This makes the $500,000 lump sum to Ms. Francis a very modest reflection of the consequences of her contribution to the needs — emotional, financial, logistic, social, practical and psychological — of the household for which she found herself responsible after the separation. It is a reasonable gesture of financial recognition for the economic disadvantages her parental responsibilities inevitably caused, and assists in promoting an independent lifestyle for her in a manner which offers her and the children the possibility of a less dramatically different standard of living from that experienced by the children when they are with their father.

The lump sum represents retroactive compensation, and, accordingly, is an appropriate application of the objectives as set out in s. 15.2(6) of the Divorce Act.

This award is, in my view, fully supported by the evidence.

 

Costs

 

There is also an appeal by Mr. Baker from the order that Ms. Francis be awarded one-half of her costs on a party-and-party scale. The following are the trial judge’s reasons for the costs order:

Neither party served a Rule 49 offer. The defendant submits that success was divided and there should be no costs. The plaintiff’s request to set aside the separation agreement was denied. To this extent, success was divided. However, in light of the defendant’s huge accumulation of wealth shortly after the separation agreement was signed, the plaintiff was not acting unreasonably in pursuing her claim. Also, she was successful in increasing child support and in being awarded spousal support. She should have a contribution to her costs. The conduct of the defendant does not warrant solicitor and client costs. In all of the circumstances, Ms. Francis shall have one-half of her costs on a party and party scale.

Usually the trial judge is in the best position to fix costs. However, this is one of those rare instances where that is not the case. The length of the litigation and the number of interim motions make it appropriate that the costs be assessed.

I see no basis for interfering with this exercise of discretion: see Andrews v. Andrews (1980), 32 O.R. (2d) 29 at p. 36, 20 R.F.L. (2d) 348 at p. 357 (C.A.).

Nor can I see any basis for interfering with the conclusions reached by the trial judge to dismiss the preliminary jurisdictional objections made by Mr. Baker with respect to the claim for spousal support.

I ould dismiss the appeal with costs.

Appeal dismissed.

 

APPENDIX His Excellency the Governor General in Council, on the recommendation of the Minister of Justice, pursuant to section

26.1  [S.C. 1997, c. 1, s. 11] of the Divorce Act [R.S., c. 3 (2nd Supp.), hereby establishes the annexed Federal Child Support Guidelines.

 

FEDERAL CHILD SUPPORT GUIDELINES OBJECTIVES

1.  The objectives of these Guidelines are

(a)  to establish a fair standard of support for children that ensures that they continue to benefit from the

financial means of both spouses after separation;

(b)  to reduce conflict and tension between spouses by making the calculation of child support orders more objective;

(c)  to improve the efficiency of the legal process by giving courts and spouses guidance in setting the levels of child support orders and encouraging settlement; and

(d)  to ensure consistent treatment of spouses and children who are in similar circumstances.

 

INTERPRETATION

 

2(1) The definitions in this subsection apply in these Guidelines.

“Act” means the Divorce Act.

“child” means a child of the marriage.

“income” means the annual income determined under sections 15 to 20.

“order assignee” means a minister, member or agency referred to in subsection 20.1(1) of the Act to whom a child support order is assigned in accordance with that subsection.

“spouse” has the meaning assigned by subsection 2(1) of the Act, and includes a former spouse.

“table” means a federal child support table set out in Schedule I.

 

(2)  Words and expressions that are used in sections 15 to

21 and that are not defined in this section have the meanings assigned to them under the Income Tax Act.

 

(3)  Where, for the purposes of these Guidelines, any amount is determined on the basis of specified information, the most current information must be used.

 

(4)  In addition to child support orders, these Guidelines apply, with such modifications as the circumstances require, to

(a)  interim orders under subsections 15.1(2) and 19(9) of the Act;

(b)  orders varying a child support order;

(c)  orders referred to in subsection 19(7) of the Act; and

(d)  recalculations under paragraph 25.1(1)(b) of the Act.

(5)  For greater certainty, the provisions of these Guidelines that confer a discretionary power on a court do not apply to recalculations under paragraph 25.1(1)(b) of the Act by a provincial child support service.

 

AMOUNT OF CHILD SUPPORT

 

3(1) Unless otherwise provided under these Guidelines, the amount of a child support order for children under the age of majority is

(a)  the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought; and

(b)  the amount, if any, determined under section 7.

(2)  Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is

(a)  the amount determined by applying these Guidelines as if the child were under the age of majority; or

(b)  if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.

(3)  The applicable table is

(a)  if the spouse against whom an order is sought resides in Canada, the table for the province in which that spouse ordinarily resides at the time the application for the child support order or for a variation order in respect of a child support order is made or the amount is to be recalculated under section 25.1 of the Act; and

(b)  if the spouse against whom an order is sought resides outside of Canada, or if the residence of that spouse is unknown, the table for the province where the other spouse ordinarily resides at the time the application for the child support order or for a variation order in respect of a child support order is made or the amount is to be recalculated under section 25.1 of the Act.

 

4.  Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order is

(a)  the amount determined under section 3; or

(b)  if the court considers that amount to be inappropriate,

(i)  in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;

(ii) in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and

(iii)  the amount, if any, determined under section 7.

 

5.  Where the spouse against whom a child support order is sought stands in the place of a parent for a child, the amount of a child support order is, in respect of that spouse, such amount as the court considers appropriate, having regard to these Guidelines and any other parent’s legal duty to support the child.

 

6.  In making a child support order, where medical or dental insurance coverage for the child is available to either spouse through his or her employer or otherwise at a reasonable rate, the court may order that coverage be acquired or continued.

 

7(1) In a child support order the court may, on either spouse’s request, provide for an amount to cover the following expenses, or any portion of those expenses, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense, having regard to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

 

(a)  child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b)  that portion of the medical and dental insurance premiums attributable to the child;

(c)  health-related expenses that exceed insurance reimbursement by at least $100 annually per illness or event, including orthodontic treatment, professional

counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d)  extraordinary expenses for primary or secondary school education or for any educational programs that meet the child’s particular needs;

(e)  expenses for post-secondary education; and

(f)  extraordinary expenses for extracurricular activities.

(2)  The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.

(3)  In determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.

 

8.  Where each spouse has custody of one or more children, the amount of a child support order is the difference between the amount that each spouse would otherwise pay if a child support order were sought against each of the spouses.

 

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.

 

10(1) On either spouse’s application, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.

 

(2)  Circumstances that may cause a spouse or child to suffer undue hardship include the following:

(a)  the spouse has responsibility for an unusually high level of debts reasonably incurred to support the spouses and their children prior to the separation or to earn a living;

(b)  the spouse has unusually high expenses in relation to exercising access to a child;

(c)  the spouse has a legal duty under a judgment, order or written separation agreement to support any person;

(d)  the spouse has a legal duty to support a child, other than a child of the marriage, who is

(i)  under the age of majority, or

(ii) the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life; and

(e)  the spouse has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability.

 

(3)  Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other spouse.

 

(4)  In comparing standards of living for the purpose of subsection (3), the court may use the comparison of household standards of living test set out in Schedule II.

 

(5)  Where the court awards a different amount of child support under subsection (1), it may specify, in the child support order, a reasonable time for the satisfaction of any obligation arising from circumstances that cause undue hardship and the amount payable at the end of that time.

 

(6)  Where the court makes a child support order in a different amount under this section, it must record its reasons for doing so.

 

ELEMENTS OF A CHILD SUPPORT ORDER

 

11.  The court may require in a child support order that the amount payable under the order be paid in periodic payments, in a lump sum or in a lump sum and periodic payments.

 

12.  The court may require in the child support order that the amount payable under the order be paid or secured, or paid and secured, in the manner specified in the order.

 

13.  A child support order must include the following information:

(a)  the name and birth date of each child to whom the order relates;

(b)  the income of any spouse whose income is used to determine the amount of the child support order;

(c)  the amount determined under paragraph 3(1)(a) for the number of children to whom the order relates;

(d)  the amount determined under paragraph 3(2)(b) for a child the age of majority or over:

(e)  the particulars of any expense described in subsection 7(1), the child to whom the expense relates, and the amount of the expense or, where that amount cannot be determined, the proportion to be paid in relation to the expense; and

(f)  the date on which the lump sum or first payment is payable and the day of the month or other time period on which all subsequent payments are to be made.

 

VARIATION OF CHILD SUPPORT ORDERS

 

14.  For the purposes of subsection 17(4) of the Act, a change of circumstances is

(a)  in the case where the amount of child support includes a determination made in accordance with the applicable table, any change in circumstances that would result in a different child support order or any provision thereof;

(b)  in the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either spouse or of any child who is entitled to support; and

(c)  in the case of an order made before May 1, 1997, the coming into force of section 15.1 of the Act, enacted by section 2 of chapter 1 of the Statutes of Canada, (1997).

 

INCOME

 

15(1) Subject to subsection (2), a spouse’s annual income is determined by the court in accordance with sections 16 to

20. (2) Where both spouses agree in writing on the annual income of a spouse, the court may consider that amount to be the spouse’s income for the purposes of these Guidelines if the court thinks that the amount is reasonable having regard to the income information provided under section 21.

 

16. Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by Revenue Canada and is adjusted in accordance with Schedule III.

 

17(1) Where the court is of the opinion that the determination of a spouse’s annual income from a source of income under section 16 would not provide the fairest determination Of the annual income from that source, the court may determine the annual income from that source

(a)  where the amount in respect of the source of income has increased in each of the three most recent taxation years or has decreased in each of those three years, to be the amount from that source of income in the spouse’s most recent taxation year;

(b)  where the amount in respect of the source of income has not increased or decreased as described in paragraph (a), to be the average of the amount received by the spouse from that source of income in the three most recent taxation years, or such other amount, if any, that the court considers appropriate; or

(c)  where the spouse has received a non-recurring amount in any of the three most recent taxation years, to be such portion of the amount as the court considers appropriate, if any.

 

(2)  Where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.

 

18(1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in section 17 and determine the spouse’s annual income to include

(a)  all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b)  an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

 

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances.

 

19(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:

(a)  the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;

(b)  the spouse is exempt from paying federal or provincial income tax;

(c)  the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;

(d)  it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;

(e)  the spouse’s property is not reasonably utilized to generate income;

(f)  the spouse has failed to provide income information when under a legal obligation to do so;

(g)  the spouse unreasonably deducts expenses from income;

(h)  the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income; and

 

(i)  the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.

(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.

 

20. Where a spouse is a non-resident of Canada, the spouse’s annual income is determined as though the spouse were a resident of Canada.

 

INCOME INFORMATION

 

21(1) A spouse who is applying for a child support order and whose income information is necessary to determine the amount of the order must include the following with the application:

 

(a)  a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years;

 

(b)  a copy of every notice of assessment or re-assessment issued to the spouse for each of the three most recent taxation years;

 

(c)  where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse’s employer setting out that information including the spouse’s rate of annual salary or remuneration;

 

(d)  where the spouse is self-employed, for the three most recent taxation years

(i)  the financial statements of the spouse’s business or professional practice, other than a partnership, and

(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm’s length;

 

(e)  where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years;

 

(f)  where the spouse controls a corporation, for its three most recent taxation years

(i)  the financial statements of the corporation and its subsidiaries, and

(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length; and

 

(g)  where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements.

 

(2)  A spouse who is served with an application for a child support order and whose income information is necessary to determine the amount of the order, must, within 30 days after the application is served if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court, as well as the other spouse or the order assignee, as the case may be, with the documents referred to in subsection (1).

 

(3)  Where, in the course of proceedings in respect of an application for a child support order, a spouse requests an amount to cover expenses referred to in subsection 7(1) or pleads undue hardship, the spouse who would be receiving the amount of child support must, within 30 days after the amount is sought or undue hardship is pleaded if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court and the other spouse with the documents referred to in subsection (1).

 

(4)  Where, in the course of proceedings in respect of an application for a child support order, it is established that the income of the spouse who would be paying the amount of child support is greater than $150,000, the other spouse must, within 30 days after the income is established to be greater than $150,000 if the other spouse resides in Canada or the United States or within 60 days if the other spouse resides elsewhere, or such other time limit as the court specifies, provide the court and the spouse with the documents referred to in subsection (1).

 

(5)  Nothing in this section precludes the making of rules by a competent authority, within the meaning of section 25 of the Act, respecting the disclosure of income information that is considered necessary for the purposes of the determination of an amount of a child support order.

 

22(1) Where a spouse fails to comply with section 21, the other spouse may apply

(a)  to have the application for a child support order set down for a hearing, or move for judgment; or

(b)  for an order requiring the spouse who failed to comply to provide the court, as well as the other spouse or order assignee, as the case may be, with the required documents.

 

(2) Where a court makes an order under paragraph (1)(a) or (b), the court may award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings.

 

23.  Where the court proceeds to a hearing on the basis of an application under paragraph 22(1)(a), the court may draw an adverse inference against the spouse who failed to comply and impute income to that spouse in such amount as it considers appropriate.

 

24.  Where a spouse fails to comply with an order issued on the basis of an application under paragraph 22(1)(b), the court may

(a)  strike out any of the spouse’s pleadings;

(b)  make a contempt order against the spouse;

 

(c)  proceed to a hearing, in the course of which it may draw an adverse inference against the spouse and impute income to that spouse in such amount as it considers appropriate; and

 

(d)  award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings.

 

25(1) Every spouse against whom a child support order has been made must, on the written request of the other spouse or the order assignee, not more than once a year after the making of the order and as long as the child is a child within the meaning of these Guidelines, provide that other spouse or the order assignee with

(a)  the documents referred to in subsection 21(1) for any of the three most recent taxation years for which the spouse has not previously provided the documents;

(b)  as applicable, any current information, in writing, about the status of any expenses included in the order pursuant to subsection 7(1); and

(c)  as applicable, any current information, in writing, about the circumstances relied on by the court in a determination of undue hardship.

 

(2)  Where a court has determined that the spouse against whom a child support order is sought does not have to pay child support because his or her income level is below the minimum amount required for application of the tables, that spouse must, on the written request of the other spouse, not more than once a year after the determination and as long as the child is a child within the meaning of these Guidelines, provide the other spouse with the documents referred to in subsection 21(1) for any of the three most recent taxation years for which the spouse has not previously provided the documents.

 

(3)  Where the income information of the spouse in favour of whom a child support order is made is used to determine the amount of the order, the spouse must, not more than once a year after the making of the order and as long as the child is a child within the meaning of these Guidelines, on the written request of the other spouse, provide the other spouse with the documents and information referred to in subsection (1).

 

(4)  Where a spouse or an order assignee requests information from the other spouse under any of subsections

(1)  to (3) and the income information of the spouse is

used to determine the amount of the child support order, the requesting spouse or order assignee must include the documents and information referred to in subsection (1).

 

(5)  A spouse who receives a request made under any of subsections (1) to (3) must provide the required documents within 30 days after the request’s receipt if the spouse resides in Canada or the United States and within 60 days after the request’s receipt if the spouse resides elsewhere.

 

(6)  A request made under any of subsections (1) to (3) is deemed to have been received 10 days after it is sent.

 

(7)  A court may, on application by either spouse or an order assignee, where the other spouse has failed to comply with any of subsections (1) to (3)

(a)  consider the other spouse to be in contempt of court and award costs in favour of the applicant up to an amount that fully compensates the applicant for all costs incurred in the proceedings; or

(b)  make an order requiring the other spouse to provide the required documents to the court, as well as to the spouse or order assignee, as the case may be.

 

(8)  A provision in a judgment, order or agreement purporting to limit a spouse’s obligation to provide documents under this section is unenforceable.

 

26.  A spouse or an order assignee may appoint a provincial child support service to act on their behalf for the purposes of requesting and receiving income information under any of subsections 25(1) to (3), as well as for the purposes of an application under subsection 25(7).

 

COMING INTO FORCE

 

27.  These Guidelines come into force on May 1, 1997.

 

Notes

Note 1:  SOR/97-175.

Note 2:  R.S.C. 1985, c. 3 (2nd Supp.), as am. by S.C. 1997, c. 1.

Note 3:  7(1) In a child support order the court may, on either spouse’s request, provide for an amount to cover the following expenses, or any portion of those expenses, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense, having regard to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

(a)     child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b)     that portion of the medical and dental insurance premiums attributable to the child;

(c)     health-related expenses that exceed insurance reimbursement by at least $100 annually per illness or event, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d)     extraordinary expenses for primary or secondary school education or for any education programs that meet the child’s particular needs;

(e)     expenses for post-secondary education; and

(f)     extraordinary expenses for extracurricular activities.

Note 4:  15.1(5) Notwithstanding subsection (3), a court may award an amount that is different from the amount that would be determined in accordance with the applicable guidelines if the court is satisfied

(a)     that special provisions in an order, a judgment or a written agreement respecting the financial obligations of the spouses, or the division or transfer or their property, directly or indirectly benefit a child, or that special provisions have otherwise been made for the benefit of a child; and

(b)     that the application of the applicable guidelines would result in an amount of child support that is inequitable given those special provisions.

Note 5:  See Christine Davies, “The Emergence of Judicial Child Support Guidelines” (1995-96), 13 C.F.L.Q. 89.

Note 6:  The Hon. Allan Rock stated in Parliament when this legislation received Third Reading:  “The objective, first and foremost, is to ensure that the interests of the children are put first in terms of support when families separate.”   House of Commons Debates, provisions related to Bill C-41, An Act to Amend the Divorce Act, the Family Orders and Agreements Enforcement Assistant Act, the Garnishment, Attachment and Pension Diversion Act, and the Canada Shipping Act, per Hon. Allan Rock (November 6, 1997) at 6197.

Note 7:  This approach too was promoted by Kelly J.A. in Paras, supra (at p. 134 O.R., p. 331 R.F.L.), and by Sopinka J. in Willick v. Willick, [1994] 3 S.C.R. 670, 119 D.L.R. (4th) 405.

Note 8:  See Carol Rogerson, “Spousal Support after Moge” (1996-97), 14 C.F.L.Q. 281.

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