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Francis v. Baker, [1999] 3 S.C.R. 250

 

Thomas Bruce Baker                                                                        Appellant

 

v.

 

Monica Frieda Francis                                                                      Respondent

 

Indexed as:  Francis v. Baker

 

File No.:  26562.

 

1999:  April 27; 1999:  September 16.

 

Present:  Lamer C.J. and L’Heureux‑Dubé, Gonthier, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie JJ.

 

on appeal from the court of appeal for ontario

 

Family law -- Divorce -- Maintenance -- Federal Child Support Guidelines -- Meaning of word “inappropriate” in s. 4(b) of  Guidelines -- Father with annual income of $945,000 ordered to pay $10,000 per month in child support for his two children -- Whether trial judge properly exercised discretion to award Table amount of child support applicable to father’s income -- Whether downward variation of Table amounts permissible where paying parent has annual income exceeding $150,000 -- Federal Child Support Guidelines, SOR/97-175, s. 4(b).

 


 The parties were married in 1979.  At that time, the appellant was employed as a lawyer in a large Toronto law firm while the respondent worked as a high school teacher.  The parties’ first child was born in 1983.  The appellant left the family in July 1985 when their second child was five days old.  The respondent returned to work full-time three months later.  The parties divorced in 1987.  In 1988, the respondent applied for an increase in child support.  At trial, nine years later, she amended her pleadings to include a claim for child support pursuant to the Federal Child Support Guidelines, which were to come into effect shortly and were intended to apply to all pending child support orders.  The respondent earned $63,000 per year at the date of trial.  Under the terms of a separation agreement, she also received $30,000 per year in child support payments from the appellant.  The appellant earned $945,538 per year and his net worth is estimated at $78,000,000.  The trial judge exercised her jurisdiction under the Divorce Act  to award the respondent the Table amount of child support applicable to the appellant’s income or $10,034 per month for both children.  The Court of Appeal dismissed the appellant’s appeal.  The court concluded that the word “inappropriate” in s. 4(b) of the Guidelines must mean “inadequate” and, consequently, that no downward variation of the Table amounts was permissible under this section.  In the alternative, the court found that even if paying parents earning more than $150,000 could argue for reductions in child support awards under s. 4, the trial judge did not abuse her discretion in finding that the Table amount was not inappropriate in the circumstances of this case.

 

Held:  The appeal should be dismissed.

 


A proper construction of s. 4 of the Guidelines requires that the word “inappropriate” be broadly defined to mean “unsuitable” rather than merely “inadequate”, leaving the courts the discretion to both increase and reduce the amount of child support prescribed by its strict application.  Conflicting authority at the appellate level on the proper interpretation of the provision can be resolved by applicable principles of statutory interpretation.  Pursuant to a purposive interpretation of s. 4 -- that is, the grammatical and ordinary meaning of the word “inappropriate” within the scheme and objectives of the Guidelines --  there is no ambiguity in its language.  With respect to the broader context, the interpretation that the word “inappropriate” means “inadequate” for the purposes of s. 4 is inconsistent with the established principle that where the same word is used on multiple occasions in a statute, one is to give the same meaning to that word throughout the statute.  Further, a proper construction of s. 4 requires that the objectives of predictability, consistency and efficiency on the one hand be balanced with those of fairness, flexibility and recognition of the actual “condition, means, needs and other circumstances of the children” on the other.  A broad interpretation of the word “inappropriate” in s. 4 does not deny children of high income parents any of the intended benefits of the Guidelines because these have not displaced the Divorce Act , which clearly dictates that maintenance of the children, rather than household equalization or spousal support, is the objective of child support payments.  In order to recognize that objective, as well as to implement the fairness and flexibility components of the Guidelines’ objectives, courts must therefore have the discretion to remedy situations where Table amounts are so in excess of the children’s reasonable needs that they no longer qualify as child support.

 


Parliament intended that there be a presumption in favour of the Table amounts.  Guideline figures can only be increased or reduced under s. 4 if the party seeking such a deviation has rebutted that presumption of appropriateness.  The evidence in its entirety must be sufficient to raise a concern that the applicable Table amount is inappropriate.  Only after examining all of the circumstances of the case, including the factors expressly listed in s. 4(b)(ii), should courts find Table amounts to be inappropriate and craft more suitable child support awards. 

 

Parliament did not choose to create a blanket rule requiring custodial parents to produce child expense budgets in all cases where s. 4 of the Guidelines is invoked. Trial judges must determine on a case-by-case basis whether such budgets will be required.  In the present case, there was no improper exercise of discretion.  While child expense budgets may be required under s. 4 in order to allow for a proper assessment of the children’s needs, custodial parents need not justify each and every budgeted expense.  Child expense budgets constitute evidence on which custodial parents can be cross-examined, but their inherent imprecision must be kept in mind.  Furthermore, the unique economic situation of high income earners must be acknowledged.  A proper balance is struck by requiring paying parents to demonstrate that budgeted child expenses are so high as to exceed the generous ambit within which reasonable disagreement is possible.

 


 The appellant has failed to demonstrate that the trial judge improperly exercised her discretion to award the Table amount on the facts of this case.  In order to obtain a new trial, the appellant must meet that burden.  The appellant’s sheer size argument is unacceptable given the presumption in favour of the Guideline figures, the fact that Parliament did not create an additional distinction within the high income earning group, and finally the fact that focussing solely on the size of the child support payment disregards one of the factors relevant to the appropriateness inquiry, the needs of the children.  Parliament did not choose to impose a cap or upper limit on child support payments, and the appellant has advanced no reason why this Court should do so.  The trial judge properly considered all of the circumstances of the case in awarding the respondent additional discretionary expenses.

 

Cases Cited

 

Considered:  Dergousoff v. Dergousoff (1999), 177 Sask. R. 64; Chartier v. Chartier, [1999] 1 S.C.R. 242; referred to:  Paras v. Paras (1971), 2 R.F.L. 328; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; R. v. Zeolkowski, [1989] 1 S.C.R. 1378; Thomson v. Canada (Deputy Minister of Agriculture), [1992] 1 S.C.R. 385; Shiels v. Shiels, [1997] B.C.J. No. 1924 (QL); Plester v. Plester (1998), 56 B.C.L.R. (3d) 352; Lucia v. Martin, [1998] B.C.J. No. 1798 (QL); Levesque v. Levesque (1994), 116 D.L.R. (4th) 314; Bellenden v. Satterthwaite, [1948] 1 All. E.R. 343.

 

Statutes and Regulations Cited

 

Divorce Act, R.S.C., 1985, c. 3 (2nd Supp .), s. 26.1(2)   [ad. 1997, c. 1, s. 11].

 

Federal Child Support Guidelines, SOR/97-175, ss. 1, 3, 4, 7, 21.

 

Authors Cited

 

Canada.  House of Commons Debates, vol. VII, 2nd sess., 35th Parl., November 6, 1996,  p. 6197.

 

Canadian Oxford Dictionary.  Edited by Katherine Barber.  Toronto:  Oxford University Press, 1998, “inappropriate”.

 

Driedger, Elmer A.  Construction of Statutes, 2nd ed.  Toronto:  Butterworths, 1983.

 

Driedger on the Construction of Statutes, 3rd ed. by Ruth Sullivan. Toronto: Butterworths, 1994.


 

 

Robert & Collins Super Senior.  Paris:  Dictionnaires Le Robert, 1995, “indiqué”.

 

 

 

APPEAL from a judgment of the Ontario Court of Appeal (1998), 38 O.R. (3d) 481, 157 D.L.R. (4th) 1, 34 R.F.L. (4th) 317, dismissing an appeal from a judgment of Benotto J. (1997),150 D.L.R. (4th) 547, 28 R.F.L. (4th) 437, [1997] O.J. No. 2196 (QL).  Appeal dismissed.

 

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

 

Nicole Tellier and Kelly D. Jordan, for the respondent.

 

The judgment of the Court was delivered by

 

 


1                                   Bastarache J. -- The present case involves the interpretation of s. 4 of the Federal Child Support Guidelines, SOR/97-175 (“the Guidelines”), which applies in cases where the paying parent has an annual income of more than $150,000.  Section 4(a) stipulates that child support is to be calculated in accordance with s. 3, that is, the Guidelines’ Table amounts apply.  Table amounts are included in a schedule to the Guidelines.  They set out predetermined child support figures which have been calculated based on the premise that parents spend a fixed percentage of their income on their children.  The applicable Table amount in any given case is a function of the income of the paying parent and the number of children the award is to cover.  Pursuant to s. 4(b) where a court considers the Table amount to be “inappropriate”, it is to award the Guidelines figure in respect of the first $150,000 of the paying parent’s income, plus an amount it considers to be appropriate for the balance of the paying parent’s income, having regard to the condition, means, needs and other circumstances of the children as well as the financial ability of each spouse to contribute to the support of the children.  In all cases, other sections of the Guidelines, such as the s. 10 undue hardship provisions and the s. 7 special expense provisions, may subsequently permit deviation from applicable Table amounts.  The issue raised in this appeal is whether the trial judge abused her discretion in finding that it was not inappropriate for the appellant, who has an income of $945,538 per annum, to pay the Table amount applicable to his income level.

 

I.  Facts

 

2                                   The appellant (father) and the respondent (mother) married in 1979.  At that time, the appellant was employed as a lawyer in a large Toronto law firm while the respondent worked as a high school teacher.

 

3                                   The parties’ first child, Lauren, was born in November 1983.  The respondent became pregnant with their second child within a year of Lauren’s birth.  The parties planned for the respondent to stay at home for one year following the birth of their second child and then return to teaching on a part-time basis.

 


4                                   When the respondent was eight months pregnant with their second child, the appellant informed her that their marriage was in trouble.  He left the family in July  1985 when their second daughter, Leslie, was five days old.  The respondent was left to care for the couple’s two young children on her own.  She has had custody of both children since that time.

 

5                                   The parties obtained a divorce in 1987.

 

6                                   The trial judge found that the respondent had been struggling financially since the date of separation.  For example, she was forced to return to work on a full-time basis when the couple’s youngest child was only three months old, contrary to the parties’ original intentions.

 

7                                   With her share of the proceeds from the sale of the matrimonial home, the respondent was able to purchase a more modest home for herself and the children. Nevertheless, the respondent gave evidence that her limited resources have forced her to live in inadequate surroundings.

 

8                                   The respondent earned $63,000 per year at the date of trial.  Under the terms of a separation agreement, she also received $30,000 per year in child support payments from the appellant.  These support payments were taxable income to the respondent.

 

9                                   The appellant has prospered since the parties’ separation.  By 1987, he was the president and chief executive officer of a major corporation.  He owns several luxury cars, as well as a 10-12,000 square foot home on The Bridle Path in Toronto.  He earned $945,538 per year at the date of trial and his net worth is estimated at $78,000,000.  According to the trial judge, the appellant “lives the lifestyle of the multi-millionaire [that] he is”.


 

10                               The respondent commenced proceedings in 1988.  She applied, inter alia, for an increase in child support.  A trial took place in 1997, nine years after the action was commenced and 12 years after the parties’ separation.  On the third day of trial, March 26, 1997, the respondent amended her pleadings to include a claim for child support pursuant to the Guidelines, which were to come into effect on May 1, 1997, and were intended to apply to all pending child support orders.

 

11                               The appellant did not file a financial statement until he was compelled by court order to do so immediately before the commencement of the trial.  Such an order can be made under the Guidelines’ provisions which deal with the financial disclosure obligations of both custodial and paying spouses.  The appellant called no evidence at trial.

 

12                               The respondent filed actual and proposed monthly child expense budgets in October 1993.  According to the actual budget, the respondent was spending $2,518.47 per month on the children at that time.  Expenses of $7,850.82 were set out in the proposed budget.  In November 1996, the respondent produced a second financial statement which listed expenses for her family unit.  According to this statement, the family’s actual monthly expenses were $10,833 and the family’s proposed monthly budget was $17,106.66.  Due to the appellant’s failure to file a timely financial statement, all of the respondent’s financial statements were prepared without the benefit of the appellant’s financial information.

 


13                               The trial judge exercised her jurisdiction under the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp .), to award the respondent the Table amount of child support applicable to the appellant’s income.  This amounted to $10,034 per month for both children.  The Court of Appeal dismissed the appellant’s appeal.

 

II.  Judicial History

 

A. Ontario Court of Justice (General Division) (1997), 150 D.L.R. (4th) 547

 

14                               Benotto J. noted that the determination of whether the Table amount is inappropriate under s. 4 can only be made by looking at all of the circumstances of the case.  She then proceeded to consider the financial ability of each of the parties to contribute to the support of the children, the condition, means, needs and other circumstances of the children, and the objectives of the Guidelines.

 

15                               According to Benotto J., the assessment of children’s “needs” is influenced by the financial position of their parents.  The lifestyle the children enjoy with the wealthier parent and the lifestyle the children would have enjoyed with both parents had there been no separation are also relevant to the concept of need.  What may be an extraordinary expense in a family of modest means may be a typical expense in a wealthier family.  Accordingly, the higher the level of wealth enjoyed by the parents, the more inappropriate the consideration of basic need becomes.  The reasonableness of discretionary expenses replaces the concept of need.

 


16                               Benotto J. reviewed the pre-Guidelines model for assessing children’s post-separation needs whereby custodial parents prepared child expense budgets.  She concluded that under the Guidelines, budgets are de-emphasized, and the focus is instead on the paying parent’s income.  Budgets are only relevant in certain exceptional circumstances, such as cases, like the present appeal, in which the paying parent’s income exceeds $150,000 per annum.

 

17                               Benotto J. found the ratio of apportionment of the family’s expenses between the respondent and the children set out in the respondent’s 1993 budget to be reasonable.  She noted that no such apportionment was submitted with the respondent’s 1996 budget but found the proposed expenses for the family unit set out in this later budget were reasonable.  She then applied the 1993 apportionment ratios to the 1996 proposed family expenses and concluded that the respondent incurred annual child expenses of $76,700.  She then added $25,000, the annual cost of the children’s private school education, to this figure.  Benotto J. found that the resulting figure of slightly over $100,000 did not include the level of discretionary expenses that might be appropriate for children whose father is in the financial category of the appellant.  She also noted that the respondent’s budgets were prepared without the benefit of the appellant’s financial information.  Benotto J. concluded that when those factors were considered, the respondent’s child expenses were in accordance with the Table amount applicable to the appellant’s income level.

 


18                               Benotto J. rejected the appellant’s argument that the Guidelines figure would amount to a windfall for the respondent, stating that she had no doubt that the money would be spent on the children.  She also noted that it was only fitting that the children benefit from the appellant’s wealth when they were with both parents.

 

19                               Benotto J. also rejected the appellant’s proposal that he pay expenses directly to or on behalf of the children, noting her disapproval of the appellant’s desire to keep money for the children out of the hands of the respondent.  She also accepted the respondent’s evidence that the appellant is “controlling and manipulative through the use of his money” and specifically noted that a “with prejudice” offer made by the appellant to the respondent was “paternalistic, malevolent and controlling”.

 

20                               Benotto J. concluded that the Table amount applicable to the appellant’s income level was not inappropriate.  The appellant was therefore ordered to pay monthly child support in the amount of $10,034 commencing May 1, 1997.

 

B. Ontario Court of Appeal (1998), 38 O.R. (3d) 481

 

21                               Abella J.A. for the court indicated that cases like the present which involve issues of statutory interpretation are best resolved by resort to the usual tools:  the purpose, context and language of the legislative provision.

 

22                               Abella J.A. examined how incomes below $150,000 are treated under s. 3 of the Guidelines, and made specific note of the words “Presumptive Rule” which appear as a marginal note beside that section.  She concluded that, unless contradicted by other parts of the legislation, children are entitled to the amount of support stipulated in the Guidelines plus any special expenses found to be appropriate under s. 7.


 

23                               Abella J.A. next turned to the treatment of incomes over $150,000 under s. 4 of the Guidelines.  She noted that s. 4(a) stipulates that child support be calculated in accordance with s. 3, that is, the Guidelines amount (plus special expenses).  Pursuant to s. 4(b), however, where a court considers the Table amount to be “inappropriate”, child support is to be calculated by adding three amounts:  the Guidelines figure for the first $150,000 of the paying parent’s income; an amount that the court considers appropriate for the balance of the paying parent’s income with regard to the condition, means, needs and other circumstances of the children, and the financial abilities of the spouses; and an amount for special expenses pursuant to s. 7.

 

24                               Abella J.A. rejected the appellant’s argument that s. 4(b) necessitates a return to the pre-Guidelines budgetary calculation of child support in accordance with the formula set out in Paras v. Paras (1971), 2 R.F.L. 328 (Ont. C.A.).  According to Abella J.A., such an approach would deny children whose parents earn more than $150,000 per annum access to the predictable, expeditious Guidelines determination of their support.

 


25                               By reviewing how few exceptions the Guidelines permit to the application of the Table figures, Abella J.A. emphasized that the Guidelines are intended to create predictability and certainty.  In reviewing one such exception, s. 10 which deals with “undue hardship”, Abella J.A. identified what she referred to as the first economic goal of the Guidelines:  that primacy is to be given to the children’s household over that of the paying parent.  According to Abella J.A., this focus on the children’s household, rather than simply the children’s basic needs, means that child support is not merely spousal support in disguise.  To this end, she reasoned that the economic well-being of children cannot be separated from that of the parent with whom they live because households tend to function as integrated economic and social units.

 

26                               Abella J.A. found that s. 10 also highlights a second economic goal of the Guidelines:  that children are entitled to live at the standard permitted by all available income, even if that means living better than their basic needs demand.  In her opinion, the Guidelines attempt to equalize the household living standards of paying parents and their children so that separation will create as little financial disadvantage for children as possible.

 

27                               Abella J.A. opined that the Guidelines create a whole new concept of “reasonableness” in the assessment of children’s needs in that the focus has shifted from actual expenses to an examination of how much the paying parent’s income will permit the children’s standard of living to resemble that of the paying parent.  The reasonableness of need is therefore now a function of what the paying parent can afford, not what would have been considered reasonable under the Paras budgetary formula.  Accordingly, Abella J.A. concluded that there is no more need for budgets containing estimated child expenses because reasonable needs are now attributed by the figures set out in the Guideline Tables.  Furthermore, the Table amounts are not rendered “inappropriate” under s. 4(b) just because they permit children to enjoy substantially higher standards of living than strict budget evaluations of their needs would have warranted under the Paras formula.

 


28                               Abella J.A. found that the Table figures can only be reduced under certain sections of the Guidelines which apply 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; and where there is undue hardship.  Otherwise, presumptive Table amounts can only be increased.  As a result, Abella J.A. concluded that the word “inappropriate” in s. 4(b) must mean “inadequate” and, consequently, that no downward variation of the Table amounts is permissible under this section.

 

29                               In the alternative, Abella J.A. found that even if she was incorrect and paying parents earning more than $150,000 could argue for reductions in child support awards under s. 4, the trial judge did not abuse her discretion in finding that the Table amount was not inappropriate in the circumstances of this case.

 

III.  Issues

 

30                               1. Was the Ontario Court of Appeal correct in its interpretation of s. 4 of the Federal Child Support Guidelines?

 

2. Did the Ontario Court of Appeal err in upholding the discretion of the trial judge to award the Table amount of child support applicable to the appellant’s income?

 

IV.  Relevant Statutory Provisions

 

31                               Federal Child Support Guidelines, SOR/97-175

 

                                                          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.

 

                                          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.

 

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.

 

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.

 

                                               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.

 

                                                                   . . .

 

(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).

 

Divorce Act, R.S.C., 1985, c. 3 (2nd Supp .)

 

26.1  (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.

 


V.  Analysis

 

A.  Was the Ontario Court of Appeal correct in its interpretation of section 4 of the

      Federal Child Support Guidelines?

 

32                               When leave to appeal to this Court was granted in this case, the Ontario Court of Appeal was the only appellate court that had dealt with the interpretation of s. 4 of the Guidelines.  However, as of April 9, 1999, there is now conflicting authority at the appellate level on the proper interpretation of this section of the Guidelines.  On that date, the Saskatchewan Court of Appeal released its judgment in Dergousoff v. Dergousoff (1999), 177 Sask. R. 64.  In Dergousoff, the court considered whether a non-custodial parent who earned more than $200,000 per year would have to pay the Table amount for his four children.  The trial judge had declined to deviate from the Table figure, noting Abella J.A.’s decision in the present case.  However, on appeal, Cameron J.A. (Tallis J.A. concurring) found himself unable to agree with Abella J.A.’s conclusions, “particularly the meaning the court ascribed to the term ‘inappropriate’” (p. 82).  Instead, he concluded that the word “inappropriate” in s. 4 of the Guidelines means “unsuitable”.  At pp. 82-83, he stated:

 

The word “inappropriate” is the opposite of “appropriate”, both relative terms having to do with something which is either unsuited or suited to the occasion or purpose at hand.  Since in this instance, the term “inappropriate” modifies the word “amount”, used in the sense of a specified sum of money, the term speaks to an unsuitable amount: to a sum of money which, while specified for the purpose, is in fact unsuited to that purpose.  Hence, to speak of an inappropriate amount of money is to speak of a sum which either exceeds or falls short of the purpose.  If it exceeds the purpose it is inappropriate to the extent of the excess; if it falls short of its purpose, it is inappropriate to the extent of the shortfall.  If it does neither, the amount is appropriate.

 


Cameron J.A. found the Table amount to be “inappropriate” on the facts in Dergousoff and reduced the child support award accordingly.

 

33                               It falls to this Court to resolve this appellate divergence in approach to s. 4 of the Guidelines.

 

1.  Applicable Principles of Statutory Interpretation

 

34                               In Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Iacobucci J. adopted the following passage from Driedger’s Construction of Statutes (2nd ed. 1983), at para. 21:

 

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

 

Iacobucci J. went on to state at para. 22 that every Act shall receive “such fair, large and liberal construction and interpretation” as will best attain the objects of the Act.  More recently in Chartier v. Chartier, [1999] 1 S.C.R. 242, I confirmed that this is also the proper approach to the interpretation of family law related legislation.

 

35                               Proper statutory interpretation principles therefore require that all evidence of legislative intent be considered, provided that it is relevant and reliable.  Accordingly, the starting point to a purposive interpretation of s. 4 is to determine the grammatical and ordinary meaning of the word “inappropriate” within the scheme and objectives of the Guidelines.


 

36                               The appellant points to the Canadian Oxford Dictionary (1998) definition of “inappropriate”, at p. 712, as being “not appropriate” or “unsuitable”.  As noted above, in Dergousoff, supra, Cameron J.A. also used the term “unsuitable” to describe the meaning of the word “inappropriate”.  Abella J.A. also recognized at p. 490 that the ordinary or plain meaning of “the word ‘inappropriate’ appears, on the surface, to be wide in its discretionary reach”.  I agree that the ordinary meaning of this word is “unsuitable”.  This view is further reinforced by reference to the French text of s. 4 of the Guidelines which reads:  “si le tribunal est d'avis que ce montant n'est pas indiqué” (emphasis added).   The English equivalents of the term “indiqué” given in Le Robert & Collins Super Senior (1995) are “advisable”, “suitable”, and “appropriate”.  I find no ambiguity in the language of s. 4 of the Guidelines.

 


37                               Nor do I think that the plain language of s. 4 leads to an absurd result.  Turning to the broader context, the word “inappropriate” is also found in s. 3(2)(b) of the Guidelines, which deals with children over the age of majority.  Abella J.A. acknowledges, at p. 491 of her reasons, that for the purposes of s. 3(2)(b) “inappropriate” means that “a more flexible needs and means analysis can be undertaken”.  This statement would seem to indicate that she agrees that trial judges have the discretion to both increase and reduce Guideline figures under s. 3(2)(b).  Yet despite the similarity between the wording of ss. 3(2)(b) and 4, Abella J.A. finds that the word “inappropriate” means “inadequate” for the purposes of s. 4 and therefore authorizes only increases from the Table amounts in cases where the paying parent has an income of more than $150,000 per annum.  With respect, such an interpretation is inconsistent with the established principle that where the same word is used on multiple occasions in a statute, one is to give the same meaning to that word throughout the statute: see R. v. Zeolkowski, [1989] 1 S.C.R. 1378,  at p. 1387; Thomson v. Canada (Deputy Minister of Agriculture), [1992] 1 S.C.R. 385, at p. 400; Driedger on the Construction of Statutes (3rd ed. 1994), at p. 163.

 

38                               Principles of statutory interpretation further suggest that the language of a statute be read so as to best reflect its stated objectives.  The objectives of the Guidelines are set out in s. 1.  Additionally, when introducing the Guidelines bill to Parliament for third reading, the Minister of Justice explained that its overall purpose was “to ensure that the interests of the children are put first in terms of financial support when families separate”.  He went on to explain the tension between the competing objectives of the Guidelines in Hansard as follows:

 

In this way, child support awards can be consistent, fair and predictable.  Yet at the same time, the objective of consistency always has to be balanced with the need to have sufficient flexibility to deal with individual circumstances.

(House of Commons Debates, vol. VII, 2nd sess., 35th Parl., November 6, 1996, at p. 6197.)   

 


39                               Based on the wording of s. 1 and the legislative history, a fair description of the purpose of the Guidelines is to establish fair levels of support for children from both parents upon marriage breakdown, in a predictable and consistent manner.  They are designed to ensure, as I said in a different context in Chartier, supra, at para. 32, “that a divorce will affect the children as little as possible”, or as the Minister said, to put children first.  Indeed, s. 4(b)(ii) itself emphasizes the centrality of the actual situation of the children by expressly requiring that the “condition, means, needs and other circumstances of the children” be considered in the assessment of an appropriate amount of support payable in respect of income over $150,000.  In my opinion, it is not at all clear from the statute or the words of the Minister that any single element of this general legislative purpose is to be given more weight than any other, and certainly not more weight than the actual circumstances in which the children find themselves.  While Abella J.A. is correct to point out that predictability, consistency and efficiency are among the Guidelines’ objectives, these are not the only considerations.  I thus respectfully disagree with the Court of Appeal’s suggestion that these legislative objectives dictate that child support awards can never be reduced under s. 4.

 

40                               A proper construction of s. 4 requires that the objectives of predictability, consistency and efficiency on the one hand, be balanced with those of fairness, flexibility and recognition of the actual “condition, means, needs and other circumstances of the children” on the other.  Furthermore, this balancing must take into account the ordinary meaning of the word “inappropriate”, as well as its use elsewhere in the statute.  In my opinion, the plain language of s. 4 is consistent with such an interpretation.  Accordingly, the word “inappropriate” in this section must be broadly defined to mean “unsuitable” rather than merely “inadequate”.  Courts thus have the discretion to both increase and reduce the amount of child support prescribed by the strict application of the Guidelines in cases where the paying parent has an annual income exceeding $150,000.  I would note that the respondent did not take issue with this interpretation in either her written or oral submissions.

 



41                               I add one final comment.  As noted above, Abella J.A. was concerned with the differential treatment of children.  In my respectful opinion, a broad interpretation of the word “inappropriate” in s. 4 does not deny children of high income parents any of the intended benefits of the Guidelines.  The plain wording of s. 4(b)(i) dictates that these children can predictably and consistently expect to receive, at a minimum, the Table amount for the first $150,000 of their parents’ income.  They can further expect that a fair additional amount will be awarded for that portion of income which exceeds $150,000.  Indeed, even this latter figure lends itself to a degree of predictability and consistency in that the closer the paying parent’s income is to the $150,000 threshold, the more likely it is that the Table amount will be awarded.  In my opinion, child support undeniably involves some form of wealth transfer to the children and will often produce an indirect benefit to the custodial parent.  However, even though the Guidelines have their own stated objectives, they have not displaced the Divorce Act , which clearly dictates that maintenance of the children, rather than household equalization or spousal support, is the objective of child support payments.  Section 26.1(2) of the Act states that “[t]he 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).  While standard of living may be a consideration in assessing need, at a certain point, support payments will meet even a wealthy child’s reasonable needs.  In some cases, courts may conclude that the applicable Guideline figure is so in excess of the children’s reasonable needs that it must be considered to be a functional wealth transfer to a parent or de facto spousal support.  I wholly agree with the sentiment of Abella J.A. that courts should not be too quick to find that the Guideline figures enter the realm of wealth transfers or spousal support.  But courts cannot ignore the reasonable needs of the children in the particular context of the case as this is a factor Parliament chose to expressly include in s. 4(b)(ii) of the Guidelines.  Need, therefore, is but one of the factors courts must consider in assessing whether Table amounts are inappropriate under s. 4.  In order to recognize that the objective of child support is the maintenance of children, as well as to implement the fairness and flexibility components of the Guidelines’ objectives, courts must therefore have the discretion to remedy situations where Table amounts are so in excess of the children’s reasonable needs so as no longer to qualify as child support.  This is only possible if the word “inappropriate” in s. 4 is interpreted to mean “unsuitable” rather than merely “inadequate”.

 

2.  Establishing Inappropriateness

 


42                               When child support is calculated under s. 4(b), the express wording of s. 4(b)(i) does not permit deviation from the Guideline figures for the first $150,000 of the paying parent’s income.  Of course, the application of other sections of the Guidelines, such as the s. 10 undue hardship provisions and the s. 7 special expense provisions, may subsequently permit deviation from this figure.  For that portion of the paying parent’s income over $150,000, the strict Guidelines amount is immediately open to review; under s. 4(b)(ii) any amount attributable to income above the $150,000 threshold can be reduced or increased by a court if it is of the opinion that the amount is inappropriate having regard to the condition, means, needs and other circumstances of the children, and the financial abilities of the spouses.  Nevertheless, based on the ordinary meaning of the provision, its context in the overall child support scheme, and the purposes of the Guidelines, I find that in all cases Parliament intended that there be a presumption in favour of the Table amounts.  I agree with Abella J.A. that the words “Presumptive Rule” found in the marginal note beside s. 3 of the Guidelines are relevant in this regard.  Accordingly, the Guideline figures can only be increased or reduced under s. 4 if the party seeking such a deviation has rebutted the presumption that the applicable Table amount is appropriate.  Counsel for the appellant conceded this point in oral argument.

 

43                               The recognition of a presumption in favour of the Guideline figures does not compel a party seeking a deviation from this amount to testify or call evidence.  No unfavourable conclusions should be drawn from this decision.  Indeed, in some cases, such a party may not be able to provide relevant evidence.  Parties seeking deviations from the Table amounts may simply choose to question the evidence of the opposing party.  Whatever tactics are used, the evidence in its entirety must be sufficient to raise a concern that the applicable Table amount is inappropriate. To this end,  I agree with Lysyk J. of the British Columbia Supreme Court in Shiels v. Shiels, [1997] B.C.J. No. 1924 (QL), at para. 27, that there must be “clear and compelling evidence” for departing from the Guideline figures.

 

44                               While there must be an “articulable reason” for displacing the Guideline figures (see, for example, Plester v. Plester (1998), 56 B.C.L.R. (3d) 352 (S.C.), at para. 153), relevant factors will, of course, differ from case to case.  I note, however, my agreement with MacKenzie J. in Plester, supra, as well as Cameron J.A. in Dergousoff, supra, that the factors relevant to determining appropriateness which Parliament expressly listed in s. 4(b)(ii), that is, the condition, means, needs and other circumstances of the children, and the financial abilities of both spouses, are likewise relevant to the initial determination of inappropriateness.  Only after examining all of the circumstances of the case, including the factors expressly listed in s. 4(b)(ii), should courts find Table amounts to be inappropriate and craft more suitable child support awards.

 


45                               The task of determining whether Guideline figures are inappropriate under s. 4 must be undertaken by courts armed with all of the necessary information.  Given that, as I explained above, children’s needs are one of the factors to be considered in assessing appropriateness under s. 4, child expense budgets which provide some evidence, albeit imperfect, of the children’s needs will often be required in contested cases where the paying parent earns more than $150,000 per annum.  This is consistent with s. 21(4) of the Guidelines, which requires custodial parents to provide certain financial information within a specified time after learning that the paying parent’s annual income exceeds $150,000.  As with the mandatory s. 21(4) financial disclosure, the special circumstances of high income parents may also dictate that custodial parents provide child expense budgets.  However, unlike the forms of financial disclosure expressly required under s. 21(4), Parliament did not choose to create a blanket rule requiring custodial parents to produce child expense budgets in all cases where s. 4 of the Guidelines is invoked.  I would therefore leave it to the discretion and experience of trial judges to determine on a case-by-case basis whether such budgets will be required.  Indeed, in cases where the paying parent’s income does not greatly exceed the $150,000 threshold, the trial judge may conclude that the added cost and delay of requiring a budget cannot be justified.

 


46                               In the present case, it would of course have been preferable for the trial judge to proceed with fully current child expense figures, rather than performing a complex extrapolation from the respondent’s prior financial statements.  There was, however, no improper exercise of discretion.  Trial judges are not required to adjust child support orders to be in line with submitted budgets.  To the contrary, the Guidelines confer broad discretion on trial judges to consider a number of factors of which the children’s needs are but one.

 

47                               I also acknowledge that, as Abella J.A. pointed out, there are admittedly inherent problems with child expense budgets.  Indeed, in Dergousoff, supra, Cameron J.A. made the following apt comments, at p. 86:

 

Unfortunately, such statements in general have become notoriously unreliable and been largely discredited as “wish lists,” artificially tailored, as they so often are, to the preconceived end of showing that monthly expenses outrun monthly income.  This is not so much a commentary on the mother’s statement as it is upon the practice of treating such statements as argument rather than evidence.

 


48                               It is clear that “preparation of a budget is not an exact science”:  Lucia v. Martin, [1998] B.C.J. No. 1798 (QL) (S.C.), at para. 16, and that the custodial parent is prone to overestimating or underestimating the amounts, because “[t]ypically, the custodial parent has little experience in the pricing of child-rearing in a separated household, or at all”:  Levesque v. Levesque (1994), 116 D.L.R. (4th) 314 (Alta. C.A.), at p. 322.  Nevertheless, there is nothing objectionable per se about recognizing that trial judges have the discretion to require custodial parents to produce child expense budgets in cases in which s. 4 of the Guidelines is invoked.  Along with other factors, these budgets speak to the reasonable needs of the children, a factor expressly included in s. 4(b)(ii).  What is objectionable, however, is that in the pre-Guidelines jurisprudence, custodial parents often had the burden of proving the reasonableness of each budgeted expense on a balance of probabilities.  As explained above, under the Guidelines, custodial parents are entitled to the Table amount unless that amount is shown to be inappropriate.  It follows that, while child expense budgets may be required under s. 4 in order to allow for a proper assessment of the children’s needs, custodial parents need not justify each and every budgeted expense.  Courts should be wary of discarding the figures included in their budgets too quickly.  They should, however, make allowances for any obvious duplication of expenses or other readily apparent anomalies.

 

49                               While child expense budgets constitute evidence on which custodial parents can be cross-examined, their inherent imprecision must be kept in mind.  Where one figure is overestimated, it is possible that another is underestimated.  Furthermore, as the trial judge recognized and counsel for the appellant conceded in oral argument, the unique economic situation of high income earners must be acknowledged.  Child expenses which may well be reasonable for the wealthy may too quickly be deemed unreasonable by the courts.  Of course, at some point, estimated child expenses can become unreasonable.  In my opinion, a proper balance is struck by requiring paying parents to demonstrate that budgeted child expenses are so high as to “excee[d] the generous ambit within which reasonable disagreement is possible”:  Bellenden v. Satterthwaite, [1948] 1 All E.R. 343 (C.A.), at p. 345.

 

 

B.  Did the Ontario Court of Appeal err in upholding the discretion of the trial judge

      to award the Table amount of child support applicable to the appellant’s income?

 


50                               In his written submission, the appellant states that: “The sole issue for consideration on this appeal is the meaning of s. 4 of the Federal Child Support Guidelines, that is, when a payor’s income exceeds $150,000.”  Counsel for the appellant also made comments to the same effect in oral argument.  I disagree.  Having clarified the principles which should inform assessments of the appropriateness of child support awards under s. 4 of the Guidelines, this Court must still determine whether the appellant has met his burden of showing that the trial judge in the present case improperly exercised her discretion in holding that the Table amount was appropriate.  This should not be confused with a de novo review of the fitness of the child support amount awarded by the trial judge, a review this Court will not undertake on its own initiative.  The nature of the secondary issue in this appeal stems from the fact that Abella J.A. upheld the trial judgment on other grounds and held, in the alternative, that even if her definition of  the word “inappropriate” was incorrect, the trial judge was entitled to conclude that the Table amount was appropriate in the circumstances of this case.  In other words, Abella J.A. would not have varied the quantum of child support awarded by the trial judge even if she had reached a different conclusion on the first issue in this appeal.  Accordingly, this Court’s decision about whether or not the appellant has demonstrated that the trial judge improperly exercised her discretion to award the Table amount on the facts of this case will ultimately determine the outcome of the present appeal.

 

51                               The appellant made only one statement in his factum that could be taken as a challenge to the trial judge’s exercise of discretion.  The remainder of the appellant’s written arguments surround Abella J.A.’s definition of the word “inappropriate”.  Yet in his prayer for relief, the appellant asks that this Court overturn the decision of Abella J.A. and order a new hearing.  This request fails to recognize that, given Abella J.A.’s disposition of the appeal, a new hearing does not automatically result from a finding that the Court of Appeal was incorrect in its definition of inappropriateness.  In order to obtain a new trial, the appellant still has the burden of demonstrating that the trial judge improperly exercised her discretion to award the Table amount on the facts of this case.

 


52                               The appellant made the argument that the sheer size of the Guidelines amount in the present case renders it prima facie inappropriate in his written submission, but made no further reference to it in his oral presentation to this Court.  Nevertheless, I would note my agreement with the decision of both the trial judge and the Court of Appeal to reject this argument.  In effect, the appellant would have this Court put the onus on custodial parents to justify the appropriateness of the Guideline figures in certain high-income child support cases.  Such an approach is unacceptable for a number of reasons.  First, as explained above, the plain wording of s. 4, its context in the overall child support scheme, as well as the purposes of the Guidelines, indicate that Parliament intended that there be a presumption in favour of the Guideline figures.  Second, Parliament saw fit to distinguish paying parents with incomes over $150,000 per annum from paying parents with incomes less than that amount.  Had Parliament intended that there be an additional distinction within the high income earning group between cases where the sheer size of the Table amount renders it prima facie inappropriate and cases where it does not, it certainly could have created an additional category.  The appellant has failed to convince this Court that it should arbitrarily create such a category on its own initiative.  Finally, focussing solely on the size of the child support payment disregards one of the factors relevant to the appropriateness inquiry, the needs of the children.  If children do have actual needs equal to or greater than the applicable Guidelines amount, I see no reason to disallow this payment simply because it involves a large sum of money.  The appellant is in effect asking this Court to impose a cap or upper limit on child support payments.  Parliament did not choose to impose such a cap, and the appellant has advanced no reason why this Court should do so.  For these reasons, the appellant’s sheer size argument fails to convince me that the trial judge abused her discretion in awarding the Table amount on the facts of this case.


 

53                               In oral argument, the appellant raised a second challenge to the trial judge’s exercise of discretion.  According to the appellant, the trial judge erred in awarding the respondent discretionary expenses above the figures listed in her budget.  The appellant disputes the existence of a proper evidentiary foundation for such an award.  I disagree.  The trial judge noted that the respondent’s budgets were prepared without the benefit of the appellant’s financial information, and that they did not include the level of discretionary expenses that might be appropriate for children whose father is in the financial category of the appellant.  Also referred to in the trial judgment is the fact that the appellant himself leads a lavish lifestyle and spares no expense on the children when they are with him.  In my opinion, the trial judge properly considered all of the circumstances of the case in awarding the respondent additional discretionary expenses.  Accordingly, the appellant has failed to show that the trial judge’s decision to increase discretionary expenses was an abuse of her discretion.

 

VI.  Disposition

 

54                               The Court of Appeal’s interpretation of the word “inappropriate” is not upheld; downward variation of the Guideline figures is permissible under s. 4.  However, the appellant has failed to demonstrate that the trial judge erred in refusing to exercise her discretion in this manner.  Therefore, the appeal is dismissed with costs to the respondent.

 

Appeal dismissed with costs.

 


Solicitors for the appellant:  Gowling, Strathy & Henderson, Toronto.

 

Solicitors for the respondent:  Nicole Tellier, Toronto; Watson & Jordan, Toronto.

 

 

 

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