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1.0 Scope of this paper
The purpose and format of this paper will be to review major areas and changes in the Child Support Guidelines, since my last update for a Law Society of Manitoba Continuing Education Seminar in January 1998. There will be some overlap.

The case references, usually cited using Quicklaw or eCarswell numbering, are organized in the sections allocated to each province, under which heading they are summarized, and then listed under major topics.

This paper will touch on the cases decided by the Supreme Court, and the various provincial appellate courts, with an emphasis on the Manitoba Court of Appeal and the Court of Queen's Bench decisions. I have mostly ignored the lower court decisions of the other provinces.

Some attention will be paid to the following topics:

1. The distinction between the Manitoba Child Support Guidelines and the Federal Child Support Guidelines;

2. Income determination issues such as imputing income, the disallowance of expenses or other deductions from gross income;

3. The continuing controversy over s.7 add-ons: extraordinary or special expenses;

4. The determination of shared custody and support in shared custody situations;

5. Support in the high income case, that is, where the payor's income exceeds $150,000.00; and

6. Standing in the place of a parent and support of the over 18 year old child.

2.0 Preliminary remarks
The Federal Child Support Guidelines, in effect now since May 1, 1997, were predicted to eliminate contested litigation in most cases, settle the issue of child support fairly, reform unfair taxation, and ensure that children were the central focus of the courts' and separating parents' financial plans for them. The child was to have the benefit of the lifestyle the parents could best afford to provide.

Support is based on the paying parent's income, and is determined by tables adjusted for each province. The tables, we are told, are the result of the application of a complex, mathematical, computer model, an algorithm which considers the important factors of taxation, costs of living, the spending patterns of intact families on their children, and other appropriate variables.

The Guidelines appear, anecdotally at least, to have been successful in reducing litigation. This has been achieved by very strictly limiting the courts' discretion. The "one size fits all" model, as one will readily appreciate, is often unfair to one of the parties, or the children.

Many of the issues that were initially controversial have now been more or less settled either by the Supreme Court of Canada or the provincial courts of appeal. Some hot issues remain.

3.0 Distinctions between the Manitoba and Divorce Act Guidelines:
3.1 What are the Manitoba guidelines?
The Manitoba Child Support Guidelines came into effect June 1, 1998 . In all but a very small minority of cases heard in Manitoba , this regulation under The Family Maintenance Act ( Manitoba ), and effectively registered by parliament, has usurped the use of the Federal Child Support Guidelines, which are a regulation under the Divorce Act ( Canada ).

3.2 When do you use the Federal Guidelines?
The Manitoba Guidelines will be used in all cases of divorce, separation and parentage where child support will be in issue. The only time we will continue to use the Federal Guidelines will be where one of the parents to the divorce resides in another province.

3.3 Does it really matter?
Fortunately, from a case precedent, or stare decisis, point of view, the two sets of guidelines are almost the same. The case law from other provinces will therefore often be more than helpful and influential, if not binding.

3.4 What are the major differences between the Manitoba and the Federal Guidelines?
a) Special Expenses - Who can apply?
Manitoba specifically limits the application for special expenses to the parent who has sole custody or primary care of the child. It also allows a non-parent who might apply for support, to apply for them as well. The Federal Guidelines allow "either parent" to apply.

The Manitoba law creates the anomaly, for example, that the parent who shares custody of a child cannot make a claim for expenses. This revision was presumably enacted to prevent the non-custodial parent, the less than 40% joint parent, or the access parent, from driving the "special expenses" train. In Penner v. Penner, however, Little J. found that the discretion under s. 9 (c) is broad enough to cover the anomaly in a "shared" custody situation, such that the 40% to 50% parent who pays for certain expenses may make the application.

b) Special Expenses - The basis for the award, generally
The Manitoba section allows the expenses to be "estimated", in contrast to the Federal version, which stipulates that the court can order payment of an amount for such costs, taking into account several factors. Nothing much turns on this distinction, it would seem, for in any case the evidence must be there.

c) Special Expenses - Differences in Health care expenses
Consider this example to illustrate the difference:

The primary parent claims heath care costs totaling $425.00, broken down as $200.00 for contact lenses, $50.00 for an eye exam, $75.00 for a dental bill, and the cost of insurance at $100.00 annually.

Under the Federal scheme, it would appear that only the lenses would be covered, that is, it is an individual item over $100.00. The Manitoba version seems to say that the total expense in this category, $425.00, would be covered,.

d) Financial Disclosure - Different filing requirements
In an apparent effort to conserve paper and to slim down the pink files, and thereby ease the provincial government's storage burden, Manitoba's law only requires that a sworn financial statement (Form 70d) and computer printouts from Revenue Canada for the preceding three years, be filed with the application for support or variation of support. The Federal statute requires complete returns to be filed with the application.

e) Financial Disclosure - Continuing Disclosure
Manitoba requires the same disclosure as under the Federal Guidelines, but instead of a filing requirement, the party must produce to the other side on demand, but need not file, the same information.

The Manitoba law also makes it clear that the information the court is supposed to use is current and that the parents have the clear obligation to provide it. The court can require additional information. The right to obtain disclosure is an annual one under the Manitoba regulation, but documents previously provided need not be re-supplied.

A Review of the Issues
4.0 Issues in determining income
The big issues in determining income are when to impute it, allegations of under-employment, and what expenses should be allowed, as reasonable, against income.

The cases are mostly fact-driven, but some principles have emerged.

The "underemployment" and "imputing income" issues are problematic. While a person may leave his or her employment legitimately, such as for "burnout", in Donovan v. Donovan, and take an earlier pension or take a severance package from an insecure job, McNulty v. McNulty, for examples, that does not mean that they can wait around for their ideal or perfect job while avoiding their responsibilities to support their children.

The court will usually expect a person to do their best to earn income now, using whatever skills or opportunities are available.

Manitoba cases on the determination of income have looked to payments to common law partners, as in Horvath v. Horvath, where the payment is not objectively justified or has the appearance of an income split.

Corporate profits, kept as retained earnings, can be imputed to a shareholder as in Goldberg v. Goldberg. Business losses taken against employment income are scrutinized carefully: Cooke v. Colomy.

A good check-list for the considerations respecting the legitimacy of capital cost allowance in Guidelines cases will be found in the Manitoba Court of Appeal's reasons in Andres v. Andres. Other expenses that the courts have scrutinized and added back consider the reliability of the income against which they are off-set.

5.0 Special expenses - Manitoba has a different view than most other provinces
Section 7 is a most confusing set of provisions, and the source of continuing controversy. As noted, the Manitoba Guidelines are different than the Federal provisions in this area.

The purpose of the section is to allow the court to add-on to the table amount an appropriate amount for certain specified expenses in controlled circumstances. These add-ons are for those expenses presumably not intended to be met by the table amounts. The table amounts are purported to cover the average expenses for the average family at a given income range. This is often a difference of degree, not kind.

The expense, although the court has the discretion to order otherwise, is usually allocated between the parents proportionately, based on their respective incomes. It should be noted that the proportion is determined after subtracting from each parent's income, the "threshold" amount, that is, the amount below which no support is payable. Some courts have added the table amount to the payee's income and deducted it from the payor before doing the math: Ness v. Ness (Man. Q.B.).

The more controversial issue has to do with defining what is "extraordinary". Manitoba 's leading case is Andries v Andries, which is discussed below. It posits a so-called objective test. The question, once reasonability and necessity are determined, is resolved by a review of the cost of the activity in relation to other costs of the same or similar activities.

The contrary approach, as found in Rains v. Rains, an Ontario Court of Appeal case, looks at the expense in relation to the family's finances to determine extraordinariness. Many of the other courts of appeal seem to prefer this approach - see McLaughlin v. McLaughlin (B.C.C.A.), or Raftus v. Raftus (N.S.C.A.) for examples.

The upshot, in Manitoba , is that applications for special expenses for activities, where the issue is whether or not they are "extraordinary", are rarely granted.

In Parniak v. Parniak, per MacInnes J. , January 28, 1999 , the court held that evidence will be required of the "ordinary" expenses for the activity and it is up to the parent requesting the contribution to make out the case for a finding that in this case the expense is "extraordinary".

6.0 Income over $150,000.00
Where the payor's income exceeds $150,000.00 annually, section 4 allows the court discretion to set an amount different than which a strict application of the tables would provide, for that portion of the amount attributable to the income over $150,000.00.

It should be noted that the amount payable for special expenses under section 7 is not affected by the application of this section.

Before departing from the strict application of the tables, the court must first form the opinion that the amount payable, respecting the excess, is "inappropriate". Then, the court may award:

...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 parent to contribute to the support of the children."

In the first year or so of the Guidelines, a number of the provincial superior court level decisions allowed for an amount less than the full table amount, applying reasoning related to the custodial parent's budget; the child's demonstrable needs; and the argument that the amounts payable were tantamount to spousal support.

The Supreme Court of Canada made short work of these arguments in Francis v. Baker, where the payor's income approached a million dollars annually and the monthly table amount was over $10,000.00. The court held that the Guidelines' presumptive award should be applied in most cases.

In Simon v. Simon, a case following on the heels of Francis , the Ontario Court of Appeal affirmed the high court's reasoning and its applicability to most cases. Here the payor was a professional athlete, an NHL hockey player, who was earning a very high income, but arguably one that would not be expected to continue. It held that the guideline amount was presumptive, overturning the trial decision in which less than the table amount was awarded based on the parties' agreement and the anticipated vagaries of the father's career. The lower court's further ruling, that part of the money payable was to be held in trust for the child, was also overturned.

7.0 Shared custody
The shared custody provisions of the guidelines raise a number of issues, none of which has been dealt with definitively in the case law. The issues that continue to be litigated are the calculation of time to determine if the parents each have the child for at least 40% of the time in the year; and then, having made that determination, how much support should be paid.

While occasionally courts have engaged in an hour by hour analysis, the real difficulty seems to lie in who gets credit for the time when the children are actually in the care of others, such as at school, or perhaps when they are asleep. No definitive rules have emerged at the appellate level, so far, dealing with the hour counting cases. The preferred approach, it is respectfully submitted, should be one of "assessment" not "computation", that there is a joint custodial arrangement. The remarks of Little J. in Penner v. Penner pointing to the spirit of the arrangement, rather than the details, seem to make sense.

In most cases, it appears, the amount of support payable is determined as if the situation were a split custody (section 8) arrangement, that is, by determining the difference in the amounts each would pay if the other had sole custody. Sometimes the court will adjust the result upwards or downwards, referring in passing to the "condition, means or other circumstances" umbrella for justification.

A different approach is endorsed in Penner v. Penner. In that decision, Little J., having found there to be a shared custody situation, noted that the finding did not necessarily dictate a departure from the table approach. Observing that the children were thriving in the arrangement and that each parent incurred significant costs of parenting, such that there was no question that there were increased costs of shared parenting, he chose to employ a modification of the so-called "Colorado Method".

His approach was that each parent should pay the other for that portion of the time that the other had the children, with an up-charge of 50% of the difference in that amount, to take account of fixed expenses.

8.0 Access and Support
Short of a "shared" or "split" custody situation, the Guidelines create the anomaly that whatever the custodial configuration, the amount payable is the same. Whether the payor has the children 39% or 0% of the time, and irrespective of the other parent's resources, there is no room to increase or decrease the amount, except in a case of "undue hardship".

The uninvolved parent, who rarely sees the children saves money by not having to pay the costs of feeding, entertaining, or otherwise providing care, and there is a corresponding financial and perhaps non-financial cost to the custodial parent. The more involved, but less than 40%, non-custodial parent, who sees the children more than average, frees the custodial parent's time and lightens the spending at that end.

In Block v. Baltimore, Guertin-Riley J. decided that there was no basis for a claim for added support due to the lack of access by the non-custodial parent, reasoning that, as the tables cover access up to 40%, that amount also includes the situation in which there is zero access.

9.0 Child of the marriage cases - Adult children
While not much has changed in determining who is a child of the marriage, there is some discussion of the support issues and for how long it might be payable. The cases, as expected, most often require the parents to contribute proportionately to their children's section 7 costs, usually the tuition and other costs of higher education.

The court will look to see if the child remains dependent, is appropriately studious, and makes a reasonable effort to contribute to his or her own situation. Some of the cases require the child to contribute, or are critical of unwise economic choices made by the child, meting out a result taking account of such factors: Horvath v. Horvath.

In Trottier v. Trottier, the Manitoba Court of Appeal did not require a father to support his 23 year old daughter in pursuit of a post graduate degree where the father/daughter estrangement was her unilateral decision, and there was no information about the child's expenses.

10.0 Standing in the place of a parent
The Supreme Court of Canada, in Chartier v. Chartier (1999) 43 R.F.L. (4th) 1, has removed the anomaly that prevailed in Manitoba respecting the in loco parentis situation. Previously, as articulated in Carrignan v.Carrignan [1990] 1 W.W.R. 641, a non-parent could withdraw from financial obligation in the post-separation period, unilaterally. The test is now whether there is evidence of the intention to form the relationship of parent and child. Once the relationship has been formed, it cannot be severed, any more than one between a child and the biological parents.

11.0 Variation of pre-1997 orders
Even though the Guidelines declare themselves, by their very enactment, to be a deemed material change of circumstance, the courts of several provinces have held that they are not bound to grant a variation on this ground.

The prevailing view, outside of Manitoba , seems to be that the courts maintain a discretion whether to vary an old order. This is exemplified in Wang v. Wang, from the British Columbia Court of Appeal, in which the court has refused the variation of a pre-Guidelines order, where the new table amount would mean a net decrease in the custodial parent's resources. Sherman v. Sherman, (Ont. C.A. ).

In Manitoba , the Court of Appeal, in Vandal v. Droppo, quoted Mercier A.C.J. with approval, that the court had no choice but to vary by virtue of the enactment of the Guidelines, notwithstanding his obvious reluctance to do so. The Saskatchewan Court of Appeal rejected the Wang approach in Dergousoff v. Schille.

12.0 Effect of Agreements
Where the parties have entered into an agreement, either one that pre-dates or follows the enactment of the Guidelines, the courts have attempted to honour them and keep them in place, but this is not an imperative.

The court will look at the situation and make a determination that the purposes of the Guidelines are not being defeated. The question usually turns on the question of "special arrangements" pursuant to s.15.1(5) or s.17(6.2) of the Divorce Act.

Thus, some cases have upheld lump sum child support arrangements where there is a subsequent change of custody, as in Hutchings v. Hutchings, and others have held the agreements are not binding on the courts.

13.0 Undue hardship
As expected, while there are a number of claims for undue hardship, under s. 10 of the Guidelines, there are few that succeed. A review of the case law turns up a number of decisions in which the payors have staked their claims in fuzzy logic or emotional considerations, often failing to provide complete or even basic financial disclosure.

The old law, respecting the role second families have on the payor's obligations to the first family, is still good and is readily recycled when considering hardship cases.

The hardship must be articulated, it must be undue, and then the court must examine the comparative standards of living, before it may exercise its discretion. There are several cases describing what is not an undue hardship and very few that actually grant relief of any significance. See for example: Ness v. Ness, in which Guertin Riley J., in an interim proceeding, found undue hardship and reduced the monthly payment, with the special expenses, from $985.00 by about $53.00 monthly.


CASES
14.0 Case list by Jurisdiction - alphabetically
SUPREME COURT OF CANADA
Francis v. Baker [1999] S.C.J. No. 52
Income over $150,000.00

In Francis v. Baker, the payor earned in the range of $945,000.00 annually compared to the custodial parent's $63,000.00 at the time of the trial. He had been living a lavish lifestyle while paying support for his daughter of $30,000.00 per year pursuant to the divorce settlement.

The lower court and Ontario Court of Appeal applied the strict table amount of $10,034.00 per month child support. The father appealed to the Supreme Court.

The high court found that the sheer size of the table amount was not determinative, as parliament had set no cap. The court further declared that the presumptive rule is that the Guidelines should be applied.

The court reasoned that the threshold question of whether the amount was "inappropriate" can mean that the amount is too high or too low. A court, in reviewing the situation, will require clear and compelling reasons to depart from the Guidelines.

To qualify as "inappropriate", the custodial parent's budget must be one that "exceeds the ambit within which reasonable disagreement is possible." The court was critical of the budgets tendered in evidence in these kinds of cases, concluding that they were not very helpful, more like wish lists than factual reporting. As such, a budget was not determinative and would not always be required. The judge hearing the case will decide if it is needed.

The court noted that the lifestyle issues of the very wealthy are unique and that the consequential enhancement of the recipient parent's lifestyle was unavoidable. The court explained that it is simply too difficult to separate the circumstances of the child from the household in which he or she lives.

ALBERTA APPEAL CASES

Ennis v. Ennis [2000] A.J. No. 75 Alta C.A.
Determination of income

The employer's contributions to the husband's pension are not a taxable benefits under the Income Tax Act, and no income was imputed on this account.

Special expenses - Parties' agreement

The father, who earned $73,560.00, compared to the wife's $18,000.00, annually, was required to pay his proportionate share of medical expenses, notwithstanding their written agreement that he only pay 1/2, because of the gross disparity in their incomes.

retroactivity

The norm is to make support retroactive to the date of the application. Where the claim predates the application, there must be exceptional circumstances, such as to attach blameworthiness to the payor and reasonable diligence by the payee in pursuing a remedy.

Hanmore v. Hanmore [2000] A.J. No. 171 Alta. C.A.
undue hardship

Father who remarried, with two children of the new relationship and a non-working wife, was earning $39,200.00. He received a monthly contribution from his father-in law of $3 - $500.00. There was no evidence of why his new wife is not working. The mother has two children of the marriage and earned $23,800.00. The court of appeal rejected his claim for undue hardship [para. 17]:

The hardship must be more than awkward or inconvenient. It must be exceptional, excessive, or disproportionate in the circumstances. Further, it is not sufficient that the payor spouse has obligations to a new family or has a lower household standard of living than the payee spouse. The applicant must specifically identify the hardship which is said to be undue. A general claim regarding an inability to pay or a generic reference to the overall expense of a new household will not suffice.

Rolls v. Rolls [2000] A.J. No. 28, Alta. C.A.
Income was imputed at $125,000.00 and the table amount of support ordered accordingly.

In the place of a parent

The court refused a deduction from the table amount of support ordered, but not necessarily being paid by the natural father for two of the three children, where the mother made reasonable efforts to obtain the support.

special expenses

The Alberta Court of Appeal follows the thinking in Raftus, that at this level of support, the expenses for lessons and other activities are not extraordinary, but expenses for braces were included as extraordinary.

Laird v. Laird [2000] A.J. No. 18, Alta C.A.
variation of pre-guidelines order

The question of whether the court has a discretion to refuse a variation of a pre-guidelines order, is resolved following the reasoning in Wang and Sherman, that the guidelines are merely:

…a triggering mechanism to permit a review of the circumstances to see where there is a sufficient change under the jurisprudence on "change of circumstances" that a variation should be made in the support payments.

Here, the father was paying $3,600.00 per month under old the order, and was now earning $85,000.00 which would mean a Guidelines amount of $1,427.00. The court held that it did have the discretion and declined to vary [para 21]:

Rather a court is directed to review the existing order to determine if circumstances have changed materially and whether the order is reasonable when viewed in conjunction with the guidelines. This requires the court to consider the previous order with reference to the Guidelines. It does not require the court to automatically apply the guidelines.

BRITISH COLUMBIA APPEAL CASES

Baker v. Baker [1999] B.C.J. No. 1605, B.C.C.A.
Variation

Following Wang, the guidelines are not applied automatically to every application to vary. The court has a discretion, and must first find a change of circumstance applicable to a family member. It should then consider if the prior arrangements are unreasonable when compared to arrangements that would flow from the application of the Act.

Dornik v. Dornik [1999] B.C.J. No 2498 B.C.C.A.
Determination of income

Just because Revenue Canada has allowed expenses does not make them reasonable. The case was remitted back to the trial division.

Duncan v. Duncan [1999] B.C.J. No 2201 B.C.C.A.
effect of agreement

The parties' agreement, in which the mother gave up her claim to a share of an inheritance, was followed by the lower court, putting complete financial responsibility on father for the children in his custody.

Father claims support arguing that the Guidelines are mandatory. The court accepted that s.17(6.2) of the Divorce Act applied, as father did not claim he could not support the children and he pledged the inheritance for the children's benefit. The court said [para. 12]:

The obligations of parents to children are paramount and prevail over any agreement between the parents when the financial needs of the children are in conflict with the agreement.

In this case, there was no conflict between the needs of the children and the terms of the agreement:

Fung Sunter v Fabian [1999] B.C.J. No. 1263 B.C.C.A.
Effect of agreement

The parties entered into an agreement which did not form part of the divorce order. As this was then an application for an original order, it was held that the agreement did not bar the court's discretion in setting of child support under the guidelines.

Hutchings v. Hutchings [1999] B.C.J. No. 2897, B.C.C.A.
effect of agreement for lump sum

In 1993, on divorce, mother paid a lump sum of $12,000.00 for child support for two children in the physical custody of their father. One child, in August 1998, then went to live with mother. The trial judge ordered no refund of the lump sum and calculated support on split custody basis.

The court of appeal accepted that the mother's lump sum payment was a final settlement of her child support obligation, and that pursuant to s.17(6.2) of the Divorce Act, there was no continuing obligation on her, this not being a case of need. The father was required to pay support for one child at his table amount under the Guidelines.

McLaughlin v. McLaughlin (1998) 167 D.L.R. (4th ) 39, B.C.C.A.
Special expenses

Specifically rejecting the Andries approach, Prowse J. , said that to determine what is extraordinary:

The court should take into consideration the combined income of the parties, as well as the nature and amount of the individual expense, the nature and number of the activities, any special needs or talents of the children, and the overall cost of the activities. The list is not intended to be exhaustive, as considerations may arise in other cases which may also be relevant.

This approach is approved of, in obiter, by the Ontario Court of appeal in Andrews v. Andrews (1999) 50 R.F.L. (4th) 1.

Razutis v. Garrett [1999] B.C.J. No. 410 B.C.C.A.
Father gave up his job and lived on an inheritance. He had no income and wished to vary an order, made pre-Guidelines, to delete arrears. He had spent his inheritance and didn't find work, paid no support, lived with his sister, and borrowed money from her.

Retroactivity

The court considered Andries and concluded that retroactivity under the Guidelines should not go back before they were enacted. The norm is that variations can go back to the date of the application.

Impute income

The court held that [para. 26]

… child support is based on earning capacity not actual income, particularly when reasonable efforts to obtain employment are not made by someone with capital assets or where the evidence suggests some undisclosed source of funds.

Rebak v. Rebak [1998] B.C.J. No 2824 B.C.C.A.
Special expenses

The husband earned $100,800.00 and worked abroad for periods of time. The wife, who was earning $43,000.00, was offered a better job. She claimed that because of its demands and the travel involved, she needed a live-in nanny to look after the two children. The parties had used a nanny during the marriage and the court held that the family's finances were such, even though lower now than during the marriage, that she should be allowed the expense.

Shankland v. Harper [1999] B.C.J. No. 97 B.C.C.A.
Variations - applicability of guidelines to pre-1997 arrears

The parties were divorced in 1988 and the husband was ordered to pay support of $400.00 per month. He fell into arrears. They reconciled and later separated. He applied for a variation based on the Guidelines coming into force. A variation order was made September 11, 1997 in which the judge assessed the amount that should have been paid from 1992 to 1997. The court said [para. 20]:

The conclusion is inescapable that Parliament intended all variation orders, retroactive or prospective, to be in accordance with the Guidelines. Once the Chambers judge determined Mr. Shankland was entitled to a variation of the divorce order, he was obliged to apply the Guidelines.

Van Deventer v. Van Deventer [2000] B.C.J. No. 37 B.C.C.A.
determination of income

Despite lower court findings that the husband's income was $1,500.00 per month, the court of appeal re-assessed the evidence to determine his income to be $6,500.00 per month.

Special expenses

The son's private school education was a matter of consent during cohabitation and nothing had changed, so the expense was therefore reasonable and necessary. Daycare was also necessary and reasonable as mother was now working full-time and could not expect her mother to look after both children.

Van Gool v. Van Gool 1998 B.C.J. No. 2513, B.C.C.A. (see also 1999 B.C.J. No. 683)
imputing Income

Mother had custody of child born prior to the marriage; father had custody of the two children of the marriage. The issue was whether mother, who worked part-time 20 hours weekly, was intentionally underemployed. In answer to why she did not seek additional employment she cited the need to be available to her 13-year old child, but there were no pressing needs respecting him.

Any available jobs would be at the low end of the wage scale, but [para. 33]

… this court has never sanctioned the refusal of a parent to take reasonable steps to support his or her children simply because they could not obtain interesting or highly paid work.

She made no effort to get more or better work, training or upgrading, despite the court's direction that she do so. The court determined she could work ten more hours per week and imputed income at that level.

Undue hardship

The Guidelines amounts are a floor, not a ceiling, so that to go below them requires a stringent criterion and cogent evidence. The mere fact that the payor has a child of a prior relationship to support, and her standard of living will be less that father's, are not enough to make a finding of hardship.

Wang v. Wang 1998 B.C.J. No. 1966, B.C.C.A.
Here the only change in circumstances was the enactment of the Guidelines. The application of the Guidelines would mean a decrease to the payee of $1,200.00 per month and an increase to the payor of about $519.00 due to the tables provision and the change in taxation.

The original provision had been by agreement. The court indicated it respected the reasonable arrangements of the parties and therefore has a discretion to vary or not. In determining not to grant the variation, the court said [para. 48]:

In every case the asserted benefits of the new regime must be balanced with the factors favouring the agreement or previous order, lest the purpose of the new policy be undermined.

MANITOBA APPEAL & QUEEN'S BENCH CASES
Andres v. Andres [1999] M.J. 103, Man. C.A. per Huband, Helper and Monnin JJ.A.
This decision canvases the law respecting depreciation and unreasonable deductions of expenses. It sets out a useful checklist of considerations.

determination of income - deduction of mortgage payments from rental income

The trial judge had allowed the husband to deduct the full amount of his mortgage payments from his gross rental income. The Court of Appeal held that this included repayment of principal, which is not deductible as an expense. Under the Income Tax Act, only the interest portion is deductible.

Capital cost allowance in trucking business.

The husband also had income from trucking, and deducted debt repayment, interest and long term amortization (depreciation), putting himself in a loss position.

The court endorsed the following:

[para. 29] In summary, if one can extrapolate a summary, it would appear that the following are factors that have been considered in deciding whether or not CCA deductions should be imputed back into income:

1. Was the CCA deduction an actual expense in the year?

2. Was the CCA deduction greater than or less than the cost of acquisitions during the same time period?

3. Was the CCA deduction greater than or less than the repayments of principal with respect to chattels in question?

4. Was the CCA deduction the maximum allowable CCA deduction?

5. Was it necessary to take the CCA deduction in that year?

6. How much of a loss in a business year resulted in that year?

7. Are the chattels for which the CCA was claimed truly needed for business purposes?

8. Do the chattels for which the CCA was claimed truly depreciate?

9. Is it foreseeable that future chattel purchases will not be required?

10. Is there a pattern of spending which establishes a greater real income than income tax returns indicate?

11. If the children were living with the spouse, would they benefit from the actual income earned by the spouse?

12. Is there a dire need for child support?

[para. 30] It does not appear as if a general rule can easily be established as to when CCA expenditures should be imputed back into income as each case must be decided on its own merits. The business of the individual seeking to maintain the deduction must be scrutinized as well as the equipment on which the deduction is being claimed. I also accept that when one looks at the business, it is part of the assessment to evaluate what CCA claims have been made in past years, as well as the justification advanced by the party making the claim.

The court, unhappy with the husband's financial disclosure, determined that it was not reasonable for him to deduct all of his CCA from his income, and imputed to him 75% of the depreciation.

Andries v. Andries [1999] M.J. 103 Man. C.A. , per Twaddle, Lyon and Monnin JJ.A.
This case is an important decision on two issues, retroactivity of the Guidelines, and special expenses under s. 7. It should be noted that the court's position on extra expenses is at odds with other appellate court decisions in the country, and the issue may have to be determined by the Supreme Court.

Special expenses:

The cost of the child's school sports of $180.00 and for travel to baseball games in neighbouring towns, of $500.00 annually, were allowed as "extraordinary" at trial. The Appeal Court disallowed the school sport expenses, but allowed that the cost of travelling to play baseball was a marked departure from what might reasonably be expected. Because, however, part of the expense included the mother, it was not disproportionately high and was therefore not allowed.

The court observed that [para. 11]:

Explanatory notes attached to the Guidelines tell us that the tables are based on economic studies of average spending on children in families at different income levels in Canada . This means that the support payable by a non-custodial parent when taken from the tables allows for all ordinary expenses of child-rearing.

It further noted that a trial judge only has a modicum of discretion to determine if the expense is necessary and reasonable, but must otherwise require the non-custodial parent to contribute to special expenses [para. 13].

Twaddle J. A. reviewed the approach taken across the country in the year since the Guidelines were enacted and concluded that the determination of extraordinary expenses required an examination of what an ordinary expense included. He rejected the approach in Rains v. Rains [1997] O.J. No. 2516 (O.C.J. General Division) which held that some part of the expense would be included in the table amount, so that an extraordinary expense would be one that was disproportionately high.

Twaddle J.A. said the flaws here were that the payor's income was accounted for twice using that kind of analysis, once in the assessment of the reasonability of the expense and again in determining if it was disproportionately high. It also meant that the payor would be paying twice for the same activity, firstly, through the table portion and, secondly, in the extra portion.

He preferred the approach in Moss v. Moss 1997 M.J. No 299 (Nfld. S.C), which requires that the expense be examined objectively, that is, without reference to the payor's means. He said that [para. 27]:

…an expense for an extracurricular activity is extraordinary only where it is out of proportion to the usual costs associated with that particular activity. For example, if the average cost of downhill skis is $500.00, then $500.00 for downhill skis would not be an extraordinary expense, but $1,000.00 would be.

He gave, as a further example, the special child, whether gifted or requiring extra held, who might go to camp [para 30]:

In determining whether this cost is extraordinary, one must compare the costs of attending that camp with the average cost of attending summer camps in general. If it is in the same range, the expense should be categorized as extraordinary.

Retroactive orders of support

Retroactive variation for a pre-Guidelines period should be determined on the principles that were then applicable, not under the Guidelines.

Bayliss v. Bayliss [2000] M.J. 52, Man. Q.B. , per Mykle J.
Impute income

The parties made a joint lifestyle decision and the husband gave up his employment with Hydro working up north. The family moved south to farm. The farm was not successful and the parties separated. The husband, who hoped to continue farming, was not well employed.

The wife wanted income imputed on the basis of his old or similar employment, which was probably available. The court found that this would be at a cost of his relationship with children. The court held that "to impute income equivalent to a northern station hydro rate at this point would be an attempt to rewrite history and would not be appropriate in the circumstances."

Block v. Baltimore March 13, 2000 , Man. Q.B. , per Guertin- Riley J.
Undue hardship

The reduction in support, due to the ineligibility of one the two children for support, is not undue hardship; nor is the prospect of the payee having to sell her home and live in an apartment with the remaining child; nor is the fact that the father appears to exercise little access.

The court commented that [para. 11]:

But clearly the creators of the Guidelines contemplated such matters when, in the normal course, courts were given discretion to stray from the guidelines only where a non-custodial parent had the child for more than 40 percent of the time. That is, the access parent cannot assert higher costs to him or her and concomitantly lower costs to the custodial parent until the sharing has reached 40 percent. Thus, I can only conclude that in those cases where access was exercised for less than 40 percent of the time, and this must surely include zero percent of the time, higher costs to the custodial parent and lower costs to the access parent were part of the calculation. Were it otherwise, how simple to have dealt with it.

Cooke v. Colomy, [1998] M.J. No. 223, per Little J.
Determination of income

On this application for variation of child support, the father wanted the deductibility of his losses, as a freelance musician, from his other employment income, as allowed by the Income Tax Act. As the business had not shown a profit in recent history, the court disallowed the expenses.

The "hope" that this will become a reliable addition to income was not realistic. The court indicated it would have allowed a loss, if this were a one time event and there had been a history of profit earnings, but in this case the pursuit was found to be more of "a leisure choice, a hobby or entertainment…"

Donovan v. Donovan , [1999] M.J. No. 451 Man. Q.B. , per Allen J.
Impute income

Father, a policeman who retired due to "burn out", wanted to write screenplays, arguing that in future he could be quite successful. He had not worked except at screenwriting in the 5 months since retirement. His income had changed from employment income of $63,682.00 down to $27,282.00 from his pension.

He had been in litigation over support of another child, a few months before retirement, and was ordered to pay $563.00 per month. He did not claim "burn out" then.

The court was not prepared to determine that he was intentionally underemployed, that is, it was legitimate for him to quit being a police officer. It did hold, however, that there was no evidence that this "burn out" prevented him from working at other remunerative employment.

At age 50, he appeared capable of working and there was no evidence he could not work at some, likely well-paying, career, given his background. The support issue could not wait for him to become a successful screen-writer. The court accepted that he could get security guard work at $8.00 per hour, at least, and found that he could earn enough which, topping up his pension income, would put him back in the same position as previously. The court, therefore, imputed $36,000.00 in income to him.

shared custody - support

The custody arrangement was 50/50. The court held that [para. 16]:

For this longstanding custodial arrangement, I find that the difference between the amount each parent would pay if there were a tradition custody arrangement is the most relevant consideration to take into account when settling support. Placing the most weight on this factor will best meet the Guidelines objective of "establishing a fair standard of support for children that ensures they benefit from the financial means of both parents", as set out in section 1(a).

Friesen v. Brown [1999] M.J. No. 318, Man. Q.B. per Allen J.
Shared custody - support

The court granted father sole custody, but factually care and control was a shared custody situation. He earned $35,000.00 and mother earned $29,000.00. Father lived with his parents. Until now he had been paying $200.00 per month. Mother's table amount would be $242.00 per month. She was ordered to pay $100.00 per month. She has another child and the husband's means were seen to be greater than hers, as he lives with his mother and works part time. The court was prepared to assume the existence of added costs of shared custody without specific evidence in this case.

Goldberg v. Goldberg [1998] M.J. No. 536, Man. Q.B. , per Allen J.
Determination of income

Husband's disclosure was confusing and incomplete. He showed 1997 income of $176,000.00, adjusted, and corporate income of $88,000.00, adjusted. In 1996 his income was $102,591.00 and in 1995 was $113,343.00. The company had retained earnings in the range of $200,000.00.

The wife argued the corporate income should be added to his declared income, for a total of $267,000.00. The husband argued that his dividend in the previous year was a one time event, and that the corporation needed to retain its earnings for new expenses and working capital. The husband, who was now unable to work due to mental heath difficulties, claimed there were increased expenses due to his incapacity and anticipated lower revenues for the corporation.

The court found that the financial statements showed considerable retained earnings, which could be used for further dividends. The court also imputed part of the corporation's pre-tax earnings, although it allowed some portion for new expenses and some to maintain working capital. It declared his income to be $201,996.00.

Income over $150,000

Support was payable at the table amount, given the wife's budget shortfall and the previous lifestyle of the parties.

Extraordinary expenses

The court declined to follow the husband's argument that high-end support included the costs of private schooling. The court held, in this pre-Andries decision, that the guidelines do not distinguish between low and high-end awards where additional expenses are concerned.

Horvath v. Horvath [1999] M.J. 399 Man Q.B. , per Allen J.
Imputing income

On this variation application, a dentist, whose common law wife was his office assistant, had income imputed to him where he had, since the trial, increased her wages by $10,000.00. That raise brought her just to the level where the next marginal tax rate kicked in. The court accepted that this was an income split.

It also disallowed a portion of the "office cleaning" wage paid to her children, where they did not have access to the money and the amount seemed high. The court also added back the telephone line at home, owned by the common law wife and for which the dentist paid rent, which he paid through his office.

Child over 18

Retroactive variation

The 19 year old son, who was not going to school, was held not to be a child of the marriage. While he had left school in June 1998, the court did not terminate support until August 1999, refusing the requested retroactive variation on the basis that the money had been paid, there was no flexibility in mother's budget, and the delay in getting to court was rooted in the husband's failure to provide financial disclosure. If the son returns to school, father will pay the table amount, 50% of tuition and books with mother and child each paying 25% of such costs.

The parties' 22 year old daughter is a child of the marriage. She had left school after grade 12, took a course and worked, and then returned to school. She earned $17,000.00, which she spent on her vehicle and other personal expenses. The court was critical of her failing to save for her education and set support at $500.00 per month for her. It also allocated the expense for tuition and books as 50% payable by the father, and 25% by each of her and her mother.

Hrabluik v. Hrabluik [1999] M.J. 472 Man. Q.B. , per Clearwater J.
Impute income

Despite an order for it, the husband produced sparse disclosure and was required to testify under subpoena. The court described the husband's income tax approach by saying "It would be an understatement to say that the husband has taken an aggressive approach to the deduction of expenses for business purposes". It imputed income of about $12,000.00 by questioning expenses for his home-operated business, which pays significant rent, and depreciated a vehicle and equipment that also had personal value.

Retroactive support

Although the parties separated many years ago, and a petition was issued in 1991, it was not served until October 28, 1997 . The order for disclosure was served March 12, 1998 . These proceedings were finally heard in June 10, 1999 . The wife claimed support for two children, now each over 18 and no longer children of the marriage.

Following Andries, the court ordered support retroactive to the date of service of the petition.

Irwin v. Irwin [1999] M.J. 160 Man. Q.B. per Yard J.
Agreement of the parties

The parties' agreement for support was not accepted by the court. They had agreed to keep the provisions of the Interim Order at $450.00 per month, taxable, for two children, one now 18 and attending school away from home, the other in Winnipeg . The court ordered the table amount of $575.00 per month, non-taxable.

Kramer v. Kramer , [1999] M.J. No. 338, Man. Q.B. , per Diamond J.
Undue hardship

Husband remarried, adopted his new wife's 2 children, and they had another child. He claimed hardship, but did not provide adequate, current, disclosure.

Because he failed to establish evidence of hardship, it was not necessary to inquire into the comparison of standards of living. The court held that [para. 9] "… the assumption of new responsibilities for children subsequent to the divorce in itself does not automatically result in a finding of undue hardship".

Special expenses

The wife's claim for her day-care expense was adjusted for reasonability, where she didn't earn very much and the child, although registered for full time, attended only about 3/5 of the time. The court allowed that fraction of the cost.

The court mentioned that the cost of subsidized day-care went up because mom refused to disclose her new husband's income, but made no adjustment on that account.

McNulty v. McNulty, [1998] M.J. No 518, Man. Q.B. , per Guertin-Riley J.
Underemployment

Father, who was earning $33,000.00, at age 45 and after 24 years of employment, took an offered severance package. He was now earning about $11,400.00 as a truck driver, net.

The court held it was reasonable for him to take the severance package in these circumstances, the employment with CN having become uncertain and insecure. His current employment was held to be less than his potential, but there was no evidence to support how more employed he could be. While he had certain skills, such as mechanics and welding, he did not have the paper qualifications.

Unreasonable expenses

The court looked at his deductions from income and held that the meals expense of $3,300.00 and some of his truck expenses were unreasonable. His income was raised to $16,417.00.

Monney v. Monney, (1999) 44 R.F.L. (4th) 264, 133 Man. R. (2d), Man. Q.B. , per Allen J.
Unreasonableness of expenses

The onus is on the person challenging the expense.

Special provision in agreement or order

A provision in an agreement for sole occupancy is not a special arrangement for child support within the meaning of section s.15.1(5) of the Divorce Act. It may be a psychological benefit, but the section requires a financial benefit.

Ness v. Ness , [1998] 6 W.W.R. 404, Man. Q.B. , per Guertin-Riley J.
Undue hardship

In this interim proceeding, father claimed undue hardship by reason of his assumption of the family debt on separation of $35,000.00, at a cost of $712.00 per month. The husband earned a gross income of $55,115.00 annually, leaving him with $3,000.00 net monthly, while the wife earned $22,300.00 with net of $1,464.00 monthly. Using the tables, he would pay $725.00 per month, plus his share of the cost of nursery and day-care for the two children. His share, at 60%, would be $260.00, bringing the total to $985.00 per month.

The court looked at the dictionary to determine that hardship is "privation" which means "a want of the comforts or necessaries of life", and held that the circumstances of this case amounted to a hardship.

This was based on an analysis of the income of the husband and his expense for the debt: net income of $3,000.00, less debt of $712.00 and less support of $985.00 would leave him with $1,303.00 monthly, which the court found was insufficient for a reasonable lifestyle for a single man, with joint custody, who earns $55,000.00 per year.

Having found undue hardship, the court then looked to determine the appropriate amount. Assessing the mother's budget in light of the Manitoba Agriculture Family Living Costs and The Costs of Raising a Child, the judge concluded that the support payment would be $625.00 per month basic and 71% of day-care for a total of $932.60.

Proportionate share of special expenses

In determining the parties' proportionate shares of the day care expense, the court adjusted the parties' incomes by adding the table amount to the wife's income and subtracting it from his income to determine the apportionment. This approach has been followed by Little J. in Weisbrodt v. Butler 1998 CarswellMan 269.

Parniak v. Parniak, (1998)133 Man. R. (2d) 118, Man. Q.B. , per MacInnes J.
Following Andries, the court in looking at the claim for extraordinary expenses discussed the onus of proof:

[para. 32]: The onus of proving that the expenses in question are extraordinary lies in this case upon the petitioner who is seeking such payment.

[para. 33] In my view, she has failed to meet the onus. There is no evidence as to what ordinary expenses are for figure skating, dance or soccer. Without that, it is impossible to determine whether the expenses claimed or any part of them are extraordinary for the specified activities and in my view, it would be inappropriate for the court to attempt to decide this issue allegedly on the basis of judicial notice. As well, while individual judges, on the basis of personal experience, might be able to determine the issue that is neither useful nor appropriate as a standard for decision.

Penner v. Penner [1999] M.J. No. 88 Man. Q.B. , per Little J.
Shared custody - determination

This case deals with three issues relative to shared custody: the determination of the time; the amount of support payable; and the right of the non-primary parent to be credited for special expenses.

The parties' agreement in 1994 allocated care and control of their twin boys primarily to the mother, specifically allocating school time to her. Father and mother each argued, on an hour by hour analysis, whether there was, or was not, in fact shared parenting. Each of the parents was highly involved with the children.

The court noted that the assessment of the 40% threshold is not a precise calculation and quotes the reasoning in Spanier v. Spanier (1998) 40 R.F.L. (4th) 329:

It is disruptive and artificial and certainly not in the best interests of the child to dwell on partial percentage points. In many areas of the law, judges are required to assess amounts, not calculate them, because it is recognized that a precise numerical calculation is impossible. In my view, a situation where access has been generous, flexible, largely unspecified and unrecorded is one of them.

The court held that in this case "…the existing arrangement is, and has been, in spirit one of shared custody. It is accordingly appropriate that the order be altered to reflect that.

Shared custody - support

In determining support, the court applied what it termed a modification to the "Colorado Method", which attempts to include consideration of the time shared as well as the increased costs of shared custody. The analysis provided that father, who had the children 40% of the time, would pay 60% of his table amount, while mother, with 60% of the time, would pay 40% of her table amount. The difference was then grossed up by 50% to meet the fixed costs that shared custody entailed.

Notwithstanding the provision in Manitoba 's section 7, allowing only the sole or primary parent to claim extra expenses, the court held that the provisions of section 9 were broad enough to include such claim by the other parent. Here, mother was required to contribute a proportionate share of the private school costs paid by father through a trust. The court further considered the mother's loss of the "married equivalent" income tax deduction to be offset by father's payment of extracurricular activities.

Smith v. Riach [1999] M.J. No. 52 Man. Q.B. , per Schulman J.
Extra expenses

The parties set up an RESP by agreement in 1996, requiring the wife to pay $100.00 monthly out of the support payment. On application to vary, the parties' incomes having changed, the court declined to order the father to contribute to the RESP.

The court declined to say the day-care expense was unreasonable, based on the combined earnings of the parties and mother's longstanding relationship with the day-care.

Smith v. Smith, [1999] M.J. No. 74 ( Man. Q.B. ), per Hamilton J.
Impute income

The court imputed income, where, in addition to his regular job, father earns income from curling winnings and endorsements. The court allowed some expenses, but because there is no tax on the income, grossed up the income amount by 40%. The court imputed income appropriately and ordered ongoing disclosure.

Smith v. Smith, [1999] M.J. No. 154 Man Q.B. , per Allen J.
The husband, who is a lawyer, had experienced a downturn in his income. His books were confusing. He was drawing $3,000.00 per month, essentially being supported by his common law wife.

Impute Income

The court refused to impute income on the basis that he could be a corporate counsel or move to a rural practise, but did impute income based on past history and an analysis of the records available, unclear as they were.

Extra expenses

The husband was not required to contribute to the son's education expenses. The family arrangement had been to pay the son's first year's tuition and books and thereafter it would be the child's responsibility. This had occurred. The second son's expenses for first year were charged to the husband as to 83%, which the husband had failed to pay as per the arrangement. The amount due was charged against the husband's marital property entitlement.

Tack v. Fournier, [1998] 135 Man. R. (2d) 123, Man. Q.B. , per Little J.
Currency conversion

The court declined to use a 7-year average rate, but took into account current exchange rates in assessing the value of U.S. income.

Undue hardship

The payor claimed hardship based on his inability to pay a prior support order to his prior family, an obligation in respect of which he was consistently in arrears. The court said about the claim for undue hardship [para. 14]:

Such claims are rare. It ought to be rarer still that a court exercises discretion in favour of a payor who has been less than scrupulous in furnishing the required disclosure.

Trottier v. Bradley , 1999] 138 Man. R. (2d) 106, Man. C.A. , per Scott C.J.M., Philp and Twaddle JJ.A.
Child of the marriage

The parties, who divorced in 1985, had agreed that the father would pay support for the children while over the age of 18 "as long as the child is living with the wife and attending a college or university on a full-time basis".

The daughter who had graduated from the University of Manitoba with her B.A. Honours degree was entering a doctoral program at Simon Fraser University .

The father's application to terminate support was denied at the Queen's Bench level, following Newman v. Thompson , (1997) 118 Man. R. (2d) 177 (Man. C.A.), but the Court of Appeal held that his obligation was terminated. The complete estrangement of the daughter and father was found to be her unilateral decision. Further, the court commented [para. 7]:

There has been a complete failure to provide essential facts concerning the ongoing and future circumstances, financial and otherwise, of the daughter. It is critical for the court to have this background to determine both the question of entitlement and need.

Vandal v. Droppo [1999] M.J. No. 262, Man. C. A. , per Scott , C.J.M., Lyon and Kroft, JJ.A.
On this application to vary old order so that the payee could take advantage of the tax savings, the payor claimed undue hardship as he would no longer be able to contribute to the children's education fund.

Variation

Undue hardship

Mercier A.C.J. declared that the Guidelines create the right to vary and he had no choice but to grant the variation as [para 12]:

… under these guidelines, and I have no discretion, the guidelines are themselves considered to be a material change in the circumstances that's deemed to have occurred when someone applies under it. The only issue is determining the amount of income and then looking at the schedule, the number of children, and it's a pure mathematical decision.

The court of appeal in upholding his decision remarked, somewhat ironically, it is submitted [para. 13]:

No matter how beneficial to the children would be the continuation of their father's voluntary payments, their potential termination cannot be considered in determining whether an undue hardship for the appellant has been created that would justify deviation from the Guidelines. The Guidelines were designed to provide certainty with respect to the amount of child support paid to the parent primarily responsible for the care of the children. They are based on prescribed formulae rather than good sense and flexibility. The Guidelines are not intended to provide much in the way of discretion for a trial judge.

NEW BRUNSWICK APPEAL CASES

Parent v. Pelletier [1999] N.B.J. 391 N.B.C.A.
Variation

Although the Guidelines are intended to be uniform, the court has discretion on variations to avoid decisions that are manifestly unfair.

NOVA SCOTIA APPEAL CASES

Raftus v. Raftus [1998] 37 R.F.L. (4th) 59, N.S.C.A.
Special expense

This case sets up the contrary view to Andries:

[para. 28] Assessing an expense objectively, to determine whether it is "extraordinary", as is advocated by the respondent, will unquestionably reduce litigation in this area. Relatively few expenses would qualify. To that extent the goals of reducing conflict and tension between the spouses and promoting efficiency will be achieved. On the other hand, a further objective of the Guidelines is to ensure that children continue to benefit from the "financial means of both parents" after separation. The relevance of financial means to the payment of add ons is expressly stated in the opening words of s. 7. Indeed s. 26.1(2) of the Divorce Act, which underlies the Guidelines, provides:

(2) The guidelines shall be based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation.

[Emphasis added]

It is thus, in my view, appropriate and necessary when determining whether the expense fits within the "extraordinary" requirement of s. 7(1)(f) to assess it, subjectively, in accordance with the parents' incomes, using "income" as defined in the Guidelines. The definition of "extraordinary" invites a comparison to what is usual. A relatively modest expense for a child's extracurricular activity may be "extraordinary" for parents who are living at a very low income level, but trivial for those with generous incomes. In this regard, there is no "usual" that cuts across income levels. There must be some attempt by the court to measure "extraordinary" in accordance with a norm. An income based, presumptive, capacity to pay is the foundation of the Guidelines. The Table amounts are to this extent, subjective not objective. But all payors with equivalent nominal incomes do not necessarily have the same ability to pay support. The Guidelines through the Table amounts, establish an income based threshold level of child support, but by means of s. 7 expressly recognize that ability to pay is linked not just to income but to the broader concept of "financial means". It is most consistent with the structure of the Guidelines, in my view, to assess the "extraordinary" nature of the expense, subjectively. For this purpose I would use the parent's joint incomes. This is not to require that, at this stage, the judge go into a detailed investigation of the financial "means" of the parents. That analysis occurs when the Court, having determined that the expense is extraordinary, considers its reasonableness.

[para. 29] To limit successful claims under s. 7(1)(f) to those circumstances where the expense is a highly unusual or specialized one, when compared with those undertaken by most children, irrespective of family income would no doubt reduce litigation on this issue. It would not, however, give a proper balance to the stated objectives of the Guidelines, in that it would improve efficiency and reduce conflict and tension at the expense of fairness. The cost of a child's activity which may not qualify as extraordinary for parents with high incomes, may well be extraordinary in the context of parents with relatively low incomes. A child of the lower income parents would have no opportunity, under the objective test, to have a judge consider, for example, whether he or she should receive modest additional support to underwrite participation in community hockey, notwithstanding that the payors' financial means might permit it. Should the child be denied a legitimate opportunity to participate in this activity, assuming it is found to be reasonable and necessary, simply because it would require an exercise of discretion by a judge?

[para. 30] It is fundamentally fair, in my view, to take a somewhat expansive approach to "extraordinary" in view of the fact that the introductory words to s. 7 limit the actual payment of the expense to those situations where it is found to be both reasonable and necessary, taking into account the financial means and other circumstance of the parties. On the other hand, I agree that to define "extraordinary" too broadly, will promote futile litigation. A definition of "extraordinary" which is related to joint incomes strikes a fair balance. This will call for an exercise of judicial discretion. In my view, notwithstanding the hope that the Guidelines will result in a reduction of litigation over child support, it is impossible to avoid a case by case analysis when a s. 7 application is made.

Montgomery v. Montgomery [2000] CarswellNS 1, N.S.C.A.
Impute income

A government employee who went to law school on a part time basis and obtained his degree sought relief during his articling year when his income could be reduced. Income was imputed to him as his choice was determined not to be reasonable:

[para. 25] Section 19 does not establish any restriction on the court to imputing income only in those situations where the applicant has intended to evade child support obligations, or alternatively, recklessly disregarded the needs of his children in furtherance of his own career aspirations.

[para. 26] The critical word, in my view, is the word "reasonable". It is only the "reasonable" educational ... needs of the spouse" which should be taken into account.

Wilcox v. Snow, [1999] Carswellns 408, N.S.C.A.
Determination of income

The onus on the applicant who is a businessperson to vary a child support order is to prove that the deductions he takes from income are reasonable.

[para. 26] Where, as here, the respondent is applying to vary an existing child support order, he bears the onus of proof. As a self-employed businessman he cannot, simply, file with the court a copy of his most recent income tax return, and expect that his net business income for tax purposes will be equated with his income for child support purposes. That is what the respondent did in this case. It is not enough. The businessman must demonstrate, among other things, that the deductions which were made from the gross income of the business, in the calculation of his net business income, should, reasonably, be taken into account in the determination of his income for the purpose of calculating his obligation to pay child support.

ONTARIO APPEAL CASES

Sherman v. Sherman [1999] 45 R.F.L. (4th) 424, Ont. C.A.
Variation

Follows Wang, that the enactment of the guidelines does not properly constitute a change of circumstances.

Simon v. Simon [1999] 46 O.R. (3d) 349, Ont. C. A.
Income over $150,000.00

The parties had entered an agreement, in 1994, calling for the father to pay $2,200.00 monthly when he was earning $180,000.00. By the time of the trial his income had jumped to one million dollars per year, U.S. , for two years. The court ordered a payment of $5,000.00 monthly, of which $1,000.00 was to be paid into trust for the child.

The Court of Appeal, following the Supreme Court decision in Francis v. Baker, ordered him to pay the guideline amount of $9,215.00 and deleted the trust provision, reiterating that there is a presumption in favour or the table amounts.

SASKATCHEWAN APPEAL CASES

Dergousoff v. Schille, [1999] 10 W.W.R. 633, Sask. C.A.
variation

The Saskatchewan Court of Appeal, in a reasoned analysis, rejects the Wang approach for one that says the court has no choice but to vary where the change is the enactment of the Guidelines and to do so in accordance with the Guidelines. It also disagreed with the Ontario Court of Appeal's reasoning in Francis v. Baker.

Holtskog v. Holtskog, [1999] 47 R.F.L. (4th) 162, Sask. C.A.
Undue Hardship

The court declined a finding of undue hardship, but then required the payee parent to contribute to the cost of access. The court of appeal overturned this provision on the basis that such an order couldn't be made absent a finding of hardship.

 

15.0 Case list by issue
15.1 retroactivity
Andries v. Andries [1999] M.J. No. 103 Man. C.A.

Ennis v. Ennis, [2000] A.J. No. 75, Alta C.A.

Horvath v. Horvath, [1999] M.J. No. 399, Man Q.B.

Hrabluik v. Hrabluik, [1999] M.J. No. 472, Man. Q.B.

Razutis v. Garrett , [1999] B.C.J. No. 410, B.C.C.A.

15.2 Effect of Agreements
Irwin v. Irwin , [1999], M.J. No. 160, Man. Q.B.

Fung Sunter v. Fabian, [1999] B.C.J. No. 1263, B.C.C.A.

Ennis v. Ennis, [2000] A.J. No. 75, Alta C.A.

Duncan v. Duncan , [1999] B.C.J. No 2201, B.C.C.A

Monney v. Monney, (1999) 44 R.F.L. (4th) 264, 133 Man. R. (2d), Man. Q.B.

Hutchings v. Hutchings, [1999] B.C.J. No. 2897, B.C.C.A.

15.3 Variation
Baker v. Baker, [1999] B.C.J. No. 1605, B.C.C.A.

Dergousoff v. Schille, [1999] 10 W.W.R. 633, Sask. C.A.

Desjardins v. Desjardins, [1999] M.J. No. 70, Man. C.A.

Laird v. Laird, [2000] A.J. No. 18, Alta C.A.

Parent v. Pelletier [1999] N.B.J. 391 N.B.C.A.

Shankland v. Harper, [1999] B.C.J. No. 97, B.C.C.A.

Sherman v. Sherman [1999] 45 R.F.L. (4th) 424, Ont. C.A.

Vandal v. Droppo, [1999] M.J. No. 262, Man. C. A.

Wang v. Wang, [1998] B.C.J. No. 1966, B.C.C.A.

15.4 Shared custody
Donovan v. Donovan , [1999] M.J. No. 451, Man. Q.B.

Friesen v Brown [1999] M.J. No. 318, Man Q.B.

Penner v. Penner, [1999] M.J. No. 88, Man. Q.B.

15.5 Section 7 - extraordinary expenses
Andries v. Andries, [1999] M.J. 103 Man. C.A.

Goldberg v. Goldberg , [1998] M.J. No. 536, Man. Q.B.

Kramer v. Kramer , [1999] M.J. No. 338, Man. Q.B.

McLaughlin v. McLaughlin , (1998) 167 D.L.R. (4th ) 39, B.C.C.A.

Ness v. Ness , [1998] 6 W.W.R. 404, Man. Q.B.

Parniak v. Parniak, (1998) 133 Man. R. (2d) 118, Man. Q.B.

Raftus v. Raftus [1998] 37 R.F.L. (4th) 59, N.S.C.A.

Rebak v. Rebak, [1998] B.C.J. No 2824, B.C.C.A.

Rolls v. Rolls, [2000] A.J. No. 28, Alta. C.A.

Smith v. Riach, [1999] M.J. No. 52, Man. Q.B.

Smith v. Smith, [1999] M.J. No. 154, Man Q.B.

Van Deventer v. Van Deventer [2000] B.C.J. No. 37 B.C.C.A.

15.6 Over $150,000 income
Francis v. Baker [1999] S.C.J. No. 52

Goldberg v. Goldberg [1998] M.J. No. 536, Man. Q.B.

15.7 Determination of income - Imputing income - Reasonableness of expenses
Andres v. Andres [1999] M.J. 103, Man. C.A.

Bayliss v. Bayliss [2000] M.J. 52, Man. Q.B.

Cooke v. Colomy [1998] M.J. No. 223, Man. Q.B.

Donovan v. Donovan , [1999] M.J. No. 451, Man. Q.B.

Dornik v. Dornik [1999] B.C.J. No 2498, B.C.C.A.

Ennis v. Ennis [2000] A.J. No. 75, Alta C.A.

Goldberg v. Goldberg [1998] M.J. No. 536, Man. Q.B.

Horvath v. Horvath [1999] M.J. 399, Man Q.B.

Hrabluik v. Hrabluik [1999] M.J. 472 , Man. Q.B.

McNulty v. McNulty, [1998] M.J. No 518, Man. Q.B.

Monney v. Monney, (1999) 44 R.F.L. (4th) 264, 133 Man. R. (2d), Man. Q.B.

Montgomery v. Montgomery [2000] CarswellNS 1, N.S.C.A.

Razutis v. Garrett [1999] B.C.J. No. 410, B.C.C.A.

Smith v. Smith, [1999] M.J. No. 154, Man Q.B.

Smith v. Smith, [1999] M.J. No. 74, Man. Q.B.

Van Deventer v. Van Deventer , [2000] B.C.J. No. 37, B.C.C.A.

Van Gool v. Van Gool , [1998] B.C.J. No. 2513, B.C.C.A. (see also [1999] B.C.J. No. 683)

Wilcox v. Snow, [1999] Carswellns 408, N.S.C.A.

15.8 Child of the marriage
Horvath v. Horvath [1999] M.J. 399 Man Q.B.

Trottier v. Bradley , [1999] 138 Man. R. (2d) 106, Man. C.A.

15.9 In place of a parent
Rolls v. Rolls [2000] A.J. No. 28, Alta. C.A.

15.10 Undue hardship
Block v. Baltimore March 13, 2000 , Man. Q.B.

Hanmore v. Hanmore [2000] A.J. No. 171 Alta. C.A.

Holtskog v. Holtskog, [1999] 47 R.F.L. (4th) 162, Sask. C.A.

Kramer v. Kramer , [1999] M.J. No. 338, Man. Q.B.

Ness v. Ness , [1998] 6 W.W.R. 404, Man. Q.B.

Tack v. Fournier, [1998] 135 Man. R. (2d) 123, Man. Q.B.

Vandal v. Droppo [1999] M.J. No. 262, Man. C. A.

Van Gool v. Van Gool 1998 B.C.J. No. 2513, B.C.