Horner v. Horner, 2004 CanLII 34381 (ON CA)

minicounsel

Footnotes

Section 2(1) of the Divorce Act defines a "child of the marriage" as "a child of two spouses or former spouses who, at the material time, (a) is under the age of majority and who has not withdrawn from their charge, or (b) is the age of majority or over and unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life".
Mr. Horner's 1994 T4 slip shows his income was $81,000. The tax return filed shows that his income was $111,000. There was no evidence as to why there is a discrepancy between the T4 slip and the tax return.
Julien D. Payne, in Child Support in Canada, 4th ed., (Kingston: Quicklaw, 2003) states at Part 11-11, "while s. 15.1 of the Divorce Act is silent on the question, the prevalent opinion in the case law is that permanent child support may be ordered to commence from a stipulated date prior to the divorce judgment but that the court will not ordinarily make an order retroactive to a date prior to the commencement of the divorce proceedings". Section 17(1) of the Act expressly empowers a court to retroactively vary an order for child support.

72 O.R. (3d) 561

[2004] O.J. No. 4268

Docket: C39173

Court of Appeal for Ontario,

Weiler, Rosenberg and Blair JJ.A.

October 21, 2004

Family law -- Support -- Child support -- Variation -- Father presenting mother with agreement amending separation agreement by cutting child support in half after son went to live with father while daughter remained with mother -- Mother signing amending agreement without independent legal advice -- Father failing to make full financial disclosure as required by Family Law Act -- Father knowing that support he was providing for daughter was not commensurate with support he provided for son -- Father breaching duty to put child's interests before his own -- Court having power to make subsequent increase in child support retroactive -- Family Law Act, R.S.O. 1990, c. F.3.

Family law -- Support -- Spousal support -- Variation -- After ten-year traditional marriage, parties agreeing that husband would make time-limited support payments to wife in amount of $400 per month -- Husband's income subsequently increasing substantially while wife's income remained low -- On application by wife for increased support, trial judge awarding her $1,750 monthly -- Award clearly wrong -- Amount of support based on deliberate under-reporting of husband's income, not taking wife's need and husband's standard of living into account, and falling below median of support awards in comparable cases -- Amount increased to $2,445 per month -- Application judge not erring in declining to make award retroactive or to end time-limited aspect of support.

The parties were married in 1984. They separated after cohabiting for approximately ten years, during which the wife stayed at home to care for the two children of the marriage while the husband finished his Bachelor of Commerce Degree and obtained a Master's degree in Business Administration. They entered into a separation agreement which provided for the payment of spousal support to the wife in the amount of $400 per month on a time-limited basis and child support in the amount of $500 per month for each child. The spousal and child support terms were stated to be subject to variation if a material change in circumstances occurred. The agreement was premised on the husband's income being $75,000 at the time, and contained clauses stating that each had made full and complete financial disclosure. The husband remarried. His wife held the position of Vice-President of Human Resources at the company which also employed the husband.

In 1997, the wife brought an application to increase child support based on a material change in circumstances; that is, the husband's increase in annual earnings from $75,000 to $92,064. The husband was ordered to pay $578 per month for each child. The husband obtained an engineering degree and advanced rapidly in his career to become Vice-President of Engineering and moved to Pittsburgh. The husband's 2001 U.S. individual income tax return indicated that his total income for that year was US$184,119. In 2000, he filed a joint income tax return with his wife indicating that their combined total income was US$620,433. The wife's income for 2001 was $26,329.47 without support and $43,329.47 with support.

The parties' son went to live with the husband in 1999, while their daughter remained with the wife. The husband presented the wife with a document [page562] amending the separation agreement by reducing child support by 50 per cent, or $578 per month, in recognition of the son's new place of residence. The wife signed this document without the benefit of independent legal advice. The wife came to realize, as a result of speaking to her son, that the husband's lifestyle and income had increased substantially. She notified the husband in April 2001 that she wished to obtain an immediate increase in support retroactive to January 1, 2000, the approximate date the husband was promoted to Vice-President of Engineering. When she did not obtain financial disclosure, she brought an application under the Divorce Act, R.S.C. 1985, c. 3 (2nd. Supp.) for increased spousal support for an indefinite time and for increased child support. She asked that both orders be made retroactive to January 1, 2000.

The application judge found that the marriage was a traditional one and that the husband's upward progress started during the marriage and could not be separated from the marriage. He also found that there had been a material change in circumstances occasioned by the dramatic increase in the husband's salary from 1995 onwards. The application judge awarded the wife spousal support of $1,750 per month, but declined to set aside the time-limited provisions of the separation agreement, commenting that that was part of the fundamental bargain struck between the parties when the wife received more than an equal share of the family assets. He refused to make the award retroactive. He ordered that child support be paid in accordance with the Federal Child Support Guidelines, SOR/97-175, based on the husband's income. As he had done with spousal support, he ordered that the variation should take effect from the month after support was requested. The wife appealed.

Held, the appeal should be allowed.

The trial judge's award of spousal support was clearly wrong. The amount of spousal support was predicated on the husband's income being US$35,000 less than his acknowledged income for 2001. The husband was not forthright in his disclosure. The wife's proposed budget was reasonable, yet the application judge rejected the amount of support she requested without in any way commenting on it.

One of the factors the application judge was required to determine in fixing the quantum of support was the economic consequences arising from the wife's undertaking the bulk of work within the home. The husband clearly garnered an economic advantage by having the wife take on the bulk of domestic responsibilities, allowing him to raise his level of education, and eventually establish himself in the position he occupied today. The wife, on the other hand, in remaining in the home, was not able to benefit in the same manner when she went to find work in the labour market. In light of the fact that it is not always possible to determine the extent of the economic loss due to a spouse being out of the paid workforce, the court will consider need and standard of living as the primary criteria, together with the ability of the other party to pay. The application judge's reasons did not indicate how or to what extent he took into consideration the wife's need and the husband's standard of living in assessing econ omic loss.

In failing to take into consideration these contextual factors, the amount awarded by the application judge was below the median of support awards in comparable cases. The total amount of child and spousal support awarded to the wife represented just over 26 per cent of the husband's gross income. This figure was considerably below the median of awards for spousal support where there is split or shared custody of children, as well as generally where a spouse has the care of a child. Spousal support for the wife should be fixed at $2,445 per month, as requested by her. [page563]

The presumption of mutual interdependence and mutual support that exists between spouses during marriage no longer applies on marriage breakdown. The court will not presume that a fiduciary relationship exists between separated spouses, nor, in the absence of evidence, that one spouse is vulnerable to the other. If one spouse chooses to bargain away his or her right to support and that bargain was not unfair at the time it was made and not unfair at the time a spouse seeks to set it aside, the court will not intervene. This was not a case where the original separation agreement contained an implied term of financial disclosure; nor were the circumstances such that the wife was justified in relying on the husband for disclosure. The wife did not submit that, had the husband made proper financial disclosure at the time that the separation agreement was amended, she would have brought an earlier application for spousal support. The application judge did not err in declining to order retroactive support beyond

May 1, 2001. He also did not err in principle in declining to set aside the time-limited aspect of spousal support.

The agreement amending the child support provisions of the separation agreement was a domestic contract pursuant to s. 56(4) of the Family Law Act. Under that Act, if a party fails to disclose to the other party significant assets when the contract is made, the court may set aside the contract or a provision in it. There was thus a statutory duty to make financial disclosure at the time the amendment to the separation agreement was signed. The husband did not comply with that duty. He did not disclose his full compensation, and he also did not disclose that he was in receipt of a $100,000 loan that would be forgiven provided that he maintained his employment. This was a significant contingent asset. The husband engaged in, and continued to engage in, incomplete financial disclosure.

Neither the Act nor the Guidelines standing alone contain any provision giving the court jurisdiction to recalculate child support retroactively because of non-disclosure of the payor's increases in income. However, the court does have a broad power to order retroactive support under the Act and, at common law, the court is always free to intervene and to determine the appropriate level of support for a child. Unlike a spousal relationship, the parent-child relationship is one of presumed dependency in which the obligation of support arises at birth. The dependency of the child requires the parent to put the interests of the child first. The child's needs are determined with the objective of giving the children the same standard of living as that which they would have enjoyed had the family break-up not occurred. A parent whose income increases is presumed to know the law and to know that as his or her income increases, the child's needs, taking into account standard of living, will also increase. Children are to be treated equally, irrespective of whether they reside with their mother or their father.

The husband well knew at the time that the lifestyle he was providing for his son was not similar to the payment he was making for his daughter's support. The daughter's needs were not met by the support paid by the husband after the amending agreement was signed, although the husband clearly had the ability to pay. The husband engaged in blameworthy conduct by putting his own self-interest over the interests of the child and by not providing complete financial disclosure. A retroactive child support increase would not impose an unreasonable or unfair burden on the husband. The wife's delay in seeking increased child support on behalf of the daughter was explained by the husband's non-disclosure of his financial circumstances at the time the amending agreement was signed. Even if the wife did not have a reasonable explanation for the delay in bringing the application, a parent's inaction in requesting disclosure and in bringing an application for increased child support should not of itself be allowed to tr ump the making of an order predating the application that would be in the interests of a child that is [page564] otherwise fair and reasonable. The application judge did not have regard to the criteria for awarding retroactive support in considering when the variation order should start. He erred in principle in not making child support retroactive to January 1, 2000.

APPEAL from the judgment of Killeen J. of the Superior Court of Justice, dated October 23, 2002, allowing in part an application to vary spousal and child support.

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(4th) 456, 81 Man. R. (2d) 161, 145 N.R. 1, 43 R.F.L. (3d) 345, [1993] 1 W.W.R. 481; Richardson v. Richardson , 1987 58 (SCC), [1987] 1 S.C.R. 857, 17 C.P.C. (2d) 104, 38 D.L.R. (4th) 699, 77 N.R. 1, 22 O.A.C. 1, 7 R.F.L. (3d) 304; Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, 50 C.B.R. (3d) 163, 98 C.L.L.C. 210-006, 154 D.L.R. (4th) 193, 221 N.R. 241, 36 O.R. (3d) 418n, 33 C.C.E.L. (2d) 173 (sub nom. Ontario Ministry of Labour v. Rizzo & Rizzo Shoes Ltd., [cf2 4]Adrien v. Ontario Ministry of Labour); Ross v. Ross (1995), 1995 6228 (NB CA), 430 A.P.R. 147, 168 N.B.R. (2d) 147, 16 R.F.L. (4th) 1 (C.A.); Royston v. Royston, [2003] O.J. No. 849 (S.C.J.); S. (L.) v. P. (E.) (1999), 1999 BCCA 393, 50 R.F.L. (4th) 302, 175 D.L.R. (4th) 423, 67 B.C.L.R. (3d) 254 (C.A.) [Leave to appeal to S.C.C. refused (1999), 252 N.R. 194n]; S.E.C. v. G.P. (2003), 2003 2028 (ON SC), 41 R.F.L. (5th) 250, [2003] O.J. No. 2744 (S.C.J.); Savidis v. Savidis , 2003 CarswellOnt 4042 (S.C.J.); Tedham v. Tedham (2003), 44 R.F.L. (5th) 204, 2003 BCCA 600, 20 B.C.L.R. (4th) 56, [2003] B.C.J. No. 2554 (C.A.), supp. reasons 2004 BCCA 101, [2004] B.C.J. No. 331, 5 R.F.L. (6th) 218 (C.A.); Underwood v. Underwood (1995), 1995 17840 (ON SCDC), 11 R.F.L. (4th) 361 (Ont. Div. Ct.), revg in part (1994), 1994 7576 (ON SC), 113 D.L.R. (4th) 571, 3 R.F.L. (4th) 457 (Ont. Gen. Div.); [page565] Walsh v. Walsh (2004), 2004 36110 (ON CA), 69 O.R. (3d) 577, 46 R.F.L. (5th) 455, [2004] O.J. No. 254 (C.A.), supp. reasons 2004 24259 (ON CA), [2004] O.J. No. 1443 (C.A.); Whitton v. Shippelt (2001), 23 R.F.L. (5th) 437, 2001 ABCA 307 (C.A.); Willick v. Willick , 1994 28 (SCC), [1994] 3 S.C.R. 670, 119 D.L.R. (4th) 405, 173 N.R. 321, 125 Sask. R. 81, 81 W.A.C. 81, 6 R.F.L. (4th) 161 Statutes referred to Divorce Act, R.S.C. 1985, c. 3 (2nd. Supp.), ss. 2, 15.1, 15.2, 17 [as. am.] Family Law Act, R.S.O. 1990, c. F.3, s. 56 Rules and regulations referred to Federal Child Support Guidelines, SOR/97-175, ss. 1(d), 3 (1) (a), 8, Sched. I, s. 5. Authorities referred to Payne, J.D., Child Support in Canada, 4th ed. (Kingston: Quicklaw, 2003)

George F. McFadyen, for appellant. Denis E. Burns, for respondent.

The judgment of the court was delivered by

WEILER J.A.: --

I. Overview

1The appellant, Irene Horner, brought an application pursuant to s. 15.2 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) (the "Act") for spousal support for an indefinite period of time. As part of her application she sought to set aside the time-limited support provision in her separation agreement and sought increased support. Pursuant to s. 17(1) of the Act, she also applied to vary a prior order for child support. She asked that both spousal support and support for the child of the marriage, who resided with her, be made retroactive for a period of 15 months prior to her letter requesting support. The other child of the marriage was residing with Mr. Horner.

2The application judge awarded spousal support based on Mr. Horner's increased income of US$149,000. He declined to order support indefinitely and declined to make spousal support retroactive for the period requested. Instead, he ordered that the support be paid from the month following Ms. Horner's request for support. In relation to child support, the application judge varied the previous order and ordered that support be paid in accordance with the Federal Child Support Guidelines, [page566] SOR/97-175 based on Mr. Horner's income. As he had done with spousal support, the application judge ordered that the variation should take effect from the month after support was requested.

3For the reasons that follow, I am of the opinion that the amount of spousal support awarded by the application judge was clearly wrong. A combination of factors leads me to this conclusion. The amount the application judge awarded was based on Mr. Horner's income of US$149,000 instead of his acknowledged income of at least US$184,119. In addition, the application judge did not find Ms. Horner's budget unreasonable or criticize it in any way, yet he did not award the amount of support she requested. He noted that Ms. Horner had made a contribution to Mr. Horner's career advancement during the marriage but his award does not appear to reflect this consideration. The amount awarded is below the median of awards made in cases involving similar circumstances. With respect to the duration of support and the extent to which the support awarded should be retroactive, I would dismiss the appeal as I am of the opinion that the trial judge committed no further error in principle in relation to spousal support.

4In relation to the issue of retroactivity of child support, I take a different view. The basis for child support is not the same as the basis for spousal support. In a spousal support situation, the spouse from whom support is being claimed is not required to put the interests of the claimant spouse first. In relation to child support the overall purpose of the Guidelines requires a parent to put the interests of the child first in terms of financial support. See Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250, 177 D.L.R. (4th) 1, at paras. 38-39. As I will explain in more detail later, if the child is a "child of the marriage" ¹ within the meaning of the Act, putting the interests of the child first requires a parent not to act in his or her own self-interest at the expense of the child. Further, as recognized in Francis v. Baker, supra, at paras. 38-39, putting the interests of the child first also requires a parent to ensure that a divorce from his or her spouse affects the child a s little as possible. Translating this purpose into practical terms, children of a marriage are entitled to be treated equally irrespective of the parent with whom the child resides. In this case, it is clear that Mr. Horner knew that the support he was providing for his [page567] daughter's needs was not commensurate with the support he provided for his son who resided with him and that he acted in his own self-interest in not paying appropriate support for his daughter. Further, the trial judge erred in not considering the criteria for awarding retroactive support. As a result, I would allow the appeal with respect to child support and would order that the Guideline amount of child support be paid as requested from January 1, 2000.

II. The Background to the Appeal

5The basic facts are not in dispute. The appellant and respondent started living together in 1983 and were married on December 7, 1984. At the time of their marriage, Ms. Horner was 32 years old and was working as a medical secretary. Mr. Horner was 27 years old and was working for Novacor, a subsidiary of Nova Chemicals.

6The marriage was a traditional one in the sense that Ms. Horner stayed home to care for the two children of the marriage: Samantha, born April 30, 1985, now 19, and Sean, born April 7, 1987, now 17. In addition to working at Nova Chemicals full-time, Mr. Horner attended school part-time in the evening. He finished his Bachelor of Commerce degree and then obtained a Master's degree in Business Administration. He was promoted to a position in Human Resources with the company.

7After cohabiting approximately ten years, they separated in December 1993, and entered into a separation agreement on March 3, 1995. Each had independent legal advice.

A. The Separation Agreement

8Clause 5 dealt with spousal support and reads as follows:

SPOUSAL SUPPORT

5.1 The Husband shall pay to the Wife commencing February 1, 1995 for her support the sum of $400 per month until the Wife:

(a) remarries; or

(b) dies; or

(c) the Husband pays to the Wife an amount of not less than $50,000 by monthly instalments of $400 together with the Consumer Price increase as set out in paragraph 7.1 hereof.

These payments shall be made until the month of April, 2005, and shall continue thereafter if either child of the marriage is in attendance on a full time basis at an educational institute. The Husband acknowledges that his liability for payment of spousal support may exceed the minimum amount of $50,000. [page568]

9Clause 6 of the agreement provided support for each of the children at $500 per month per child for a total of $1,000 per month until the happening of certain events, none of which are germane to this appeal.

10Clause 7 of the agreement provided that spousal and child support was to be indexed to reflect changes in the Statistics Canada Consumer Price Index (all items) for Toronto, for each year, using 1981 as a base year. The index was then 174.0.

11Clause 9 of the agreement contained an acknowledgment that in 1994, Mr. Horner had made periodic payments of support totalling $28,800 and stated that the payments were to be considered as having been made pursuant to the agreement. The support payments were to be deducted by the husband and included by the wife in her calculation of income tax. The husband was to reimburse the wife for the amount by which her tax increased for 1994, only.

12Clause 12 of the agreement provided that the provisions respecting spousal and child support in paras. 5 and 6 of the separation agreement respectively, could be varied if a material change in circumstances occurred and read as follows:

MATERIAL CHANGE

12.1 Only paras. 5 or 6 may be varied if there is a material change in circumstances. If such change occurs the Husband or Wife seeking the variation shall give to the other written notice of the variation he or she is seeking, and the Husband and the Wife shall then confer personally or through their respective lawyers to settle, what, if any variation should be made.

12.2 If no agreement is reached within thirty (30) clear days after notice has been given under subsection (1) variation relating to custody, access, and support for the Spouse and Children may be determined at the instance of either the Husband or the Wife in a court proceeding under the Family Law Act, the Children's Law Reform Act or the Divorce Act.

13Clause 14 provided that the husband would transfer his interest in the matrimonial home that was held in joint tenancy to the wife.

14In clause 17 the parties agreed that neither would be entitled to share or to receive any benefits of any kind in the other's company pension plan, deferred profit sharing plan and registered retirement savings plan. Since the wife was not working outside the home at the time and had not done so throughout the marriage, this clause was primarily for the benefit of the husband. They also agreed not to make a claim on the other's federal government pension plan.

15The home was still subject to a mortgage totalling $33,000 and the agreement provided that the wife was to make [page569] all mortgage payments, taxes and insurance premiums relating to it. The husband was to be solely responsible for other loans totalling approximately $29,500, including a second mortgage.

16The agreement was premised on the husband's income being $75,000 at the time ² and contained clauses stating that each had made "full and complete financial disclosure of his or her financial circumstances to the other".

17In a letter dated November 2, 1994, addressed to Ms. Horner's lawyer, Anne E. McFadyen, Mr. Horner's lawyer, Peter Westfall, explained that Mr. Horner was prepared to transfer to his wife equity worth $66,950, comprised of his share of the equity in the matrimonial home and its contents, plus a car and small bank account. In exchange, Ms. Horner was to transfer to her husband equity worth $26,942 comprised of her share of the equity in her husband's RRSP, his pension and some Suncor shares.

B. After the Separation Agreement

18Following the separation agreement, on July 20, 1995, a divorce was granted where no corollary relief was sought. Ms. Horner later returned to court in order to obtain an order that would make her child support tax-free. The same year, 1995, Mr. Horner was transferred to Calgary. In September 1995, he remarried. His current wife, Marilyn, is Vice-President of Human Resources at Nova.

19In 1997, Ms. Horner brought an application to increase child support based on a material change in circumstances that is, the husband's increase in annual earnings, from approximately $75,000 when their separation agreement was signed, to $92,064. Justice Brockenshire ordered that Mr. Horner pay support for Samantha and Sean in the amount of $1,156 per month, or $578 per child commencing November 1, 1997. All other terms of the agreement were to remain in full effect.

20Mr. Horner took an engineering degree and advanced rapidly in his career to become Vice-President of Engineering with Nova. In 1999, Sean came to live with him. Shortly afterwards, he moved to Pittsburgh at the request of his company where he currently resides.

21Mr. Horner's 2001 U.S. individual income tax return indicates that his total income for that year was US$184,119. In [page570] 2000, he filed a joint income tax return with his wife indicating that their combined total income was US$620,433. Mr. Horner's gross income for this year was US$150,215. However, neither income figure, for 2001 or 2000, includes a value for the stock options Mr. Horner receives as part of his income.

22After their separation, Ms. Horner took a one-year refresher course in computer applications. She then worked at Hogan Pharmacy an average of 22 hours a week. In 2000, she took a full-time job at Ingram's Home Health Care for an hourly wage of $11.50. Her income for 2001 was $26,329.47 without support. With her support payments it was $43,329.47.

C. The Amending Agreement

23In 1999, when their son Sean moved to Calgary to reside with his father, the parties signed a document entitled "Alteration to Our Separation Agreement", on June 25. This was a letter, drafted by Mr. Horner to Ms. Horner, which reads as follows:

To: Irene Horner

Alteration to Our Separation Agreement

In light of our mutual agreement that Sean will reside full time with myself effective 08.05.99, the following understanding will apply:

I will pay the costs of moving Sean to Calgary.
I will pay for 4 return trips to Sarnia per year the timing and duration of which are to be mutually agreed to. More than 4 trips per year can be accommodated provided they are at your expense.
If Sean subsequently decides he wishes to reside again in Sarnia, I will pay the costs to return him and his belongings.
Effective 08.15.99, I will reduce the child support payment by 50 [per cent] or $578 per month in recognition of his new place of residence. If subsequently he decides to return to live with you, child support for him will be reinstated. Under these circumstances it is agreed there is no claim nor basis for retroactivity.
For income tax purposes, Sean will be considered as my full time dependent as of 09.01.99.
I waive any right to claim financial support from you for Sean's living expenses provided all of the above stated conditions are accepted as is.

I would appreciate it if you could signify your acceptance of this understanding by returning a signed copy to me as soon as possible.

24Ms. Horner signed this document without the benefit of independent legal advice or financial disclosure. At the time of this amending agreement, Mr. Horner's annual income had increased substantially and was approximately $134,291. The [page571] actual amount payable for support for one child pursuant to the Federal Child Support Guidelines, SOR/97-175 (the "Guidelines"), using Mr. Horner's income, was $1,002 per month minus the small offsetting amount that Ms. Horner would have had to pay Mr. Horner for the support of Sean. The Guideline amount is more than double what Mr. Horner proposed to pay under the amending agreement. After the amending agreement was signed, the total amount of support paid by Mr. Horner was $978 per month comprised of spousal support of $400 plus child support of $578.

D. The Application for Support

25Due to the financial difficulty Ms. Horner was experiencing in supporting herself and her daughter with her limited gross monthly income of $2,977.33, Ms. Horner notified Mr. Horner on April 26, 2001 that she wished to obtain an immediate increase in support retroactive to January 1, 2000. She had not had an increase in support since 1995, despite the fact the agreement provided support was to be adjusted annually for cost of living. She requested retroactive support because, as a result of her son living with Mr. Horner and visiting her, she realized that Mr. Horner's lifestyle and income had increased substantially. The date to which retroactive support is requested is the approximate date Mr. Horner was promoted to Vice-President of Engineering.

26Not having received financial disclosure by August 2001, Ms. Horner issued a Notice of Application under s. 17(1) of the Act, seeking an order to vary child support, and make it retroactive to January 1, 2000, as well as an order requiring Mr. Horner to provide his 1998, 1999 and 2000 income tax returns including his T4 slips from all sources, as well as information concerning his current year-to-date income, forthwith.

27The financial statement also indicated that Ms. Horner had total assets of $138,000 and debts of $61,600, putting her net worth at $76,400. Her mortgage was $55,000, a substantial increase from the amount of the first mortgage she assumed on separation of $38,750.

28Ms. Horner's proposed budget was $5,423.03 per month according to her financial statement. To meet this proposed budget she required an increase in support of $2,445.70 per month. The increases in the proposed budget were modest. For example, her budget proposed to increase her household repairs and maintenance from $1,000 per year to $1,200, and from no money available for a family vacation to $2,500 per year for a family vacation. Her weekly budget for food was $100 per week for groceries, and her proposed budget upped this to $125 per week. [page572] For meals outside the home, her actual budget was $20 per week and her proposed budget was $50 per week. Similarly, her financial statement indicated that she needed more money for Samantha's clothing, and proposed raising her actual budget of $100 a month for children's clothing to $200 per month. She proposed the same amount of $200 per month for clothing for herself. She indicated that she was putting $100 a month into an RRSP and that under her pr oposed budget this was to remain the same.

E. Mr. Horner's Counter-Application

29On September 14, 2001, Mr. Horner gave notice of a counter-application. The counter-application sought support and interim support for Sean on the basis of Ms. Horner's income, including income imputed to her. Further, it asked that such support be retroactive if the court awards retroactive support to Ms. Horner and sought costs on a solicitor and client basis.

30The financial statement Mr. Horner filed in support of his counter-application was not accurate. In his financial statement, Mr. Horner indicated that his total assets were US$417,000, with total debts of US$301,500, and that he has a net worth of US$115,500. Under the land category, Mr. Horner indicated that his half of the matrimonial home is worth US$275,000 and he listed only one car, the 1972 Buick Riviera that he had kept from his previous marriage. In a responding affidavit, Ms. Horner noted that Mr. Horner drove an Acura SUV, and later a new Lexus, and that his wife drove a Mercedes.

31Mr. Horner also indicated that he had a $100,000 loan in his financial disclosure. On cross-examination he admitted that the loan is really a benefit because it is forgivable if he remains with the company for a period of time.

32In the Notes to the Financial Statement, Mr. Horner states that his expenses are estimated and include the total expenses for his wife and Sean as well. While Mr. Horner acknowledged that his wife contributes to the household expenses, he failed to explain what percentage she contributes.

33The financial statement summary states that Mr. Horner has gross monthly income of $12,423.62, that his actual monthly budget is $15,074.14 and that this leaves him with a monthly deficit of $2,650.52. Again, as Mr. Horner included his wife's expenses and failed to include what percentage his wife contributes, this figure is not accurate.

34During the cross-examination on his affidavit in support of his application, Mr. Horner initially stated that he received no other compensation other than his rate of pay of $148,000 per [page573] year. He then admitted he participated in a profit-sharing plan worth up to 6 per cent of his salary and in addition, received a management incentive worth up to 35 per cent of his base salary depending on company performance and individual contribution. Having worked in Human Resources, he could scarcely have misunderstood the meaning of compensation. In addition, Mr. Horner has a pension to which his employer contributes, although he declined to state what the amount was. He also receives stock options as part of his compensation. His financial statement does not disclose the value of the stock options nor any details pertaining to their exercise. Thus, in addition to the financial statement being inaccurate respecting his assets, the income portion of his financial statement is also inaccurate.

III. Judgment of Justice Killeen

35Justice Killeen heard Ms. Horner's application and Mr. Horner's counter-application on October 23, 2002. Written submissions regarding costs were filed November 13, 2002. Killeen J. ordered that Ms. Horner have custody of Samantha with liberal access for Mr. Horner, while Mr. Horner would have custody of Sean, with reasonable access for Ms. Horner, including four visits to Sarnia each year to be paid for by Mr. Horner. This portion of the order is not being appealed.

36Killeen J. found that the combined income of Mr. Horner and his current wife was "somewhere around $620,433 U.S. or $837,000 Cdn.". For purposes of the application, he concluded Mr. Horner's annual income for 2002 was US$149,000 or CDN$225,000. Killeen J. noted that there was a "clear-cut 'material change-of-circumstances' proviso in the agreement permitting the wife to seek a variation order or agreement, as the case may be".

37In relation to child support, Killeen J. ordered that Mr. Horner pay child support for Samantha in the amount of $1,610 per month and that Ms. Horner pay $236 per month for child support for Sean, based on her income of $26,488 pursuant to both the split custody provisions, and s. 3(1)(a) of the Guidelines. The amount Ms. Horner was ordered to pay was set off against Mr. Horner's payment, with the result that Mr. Horner was required to pay net child support of $1,374 per month, retroactive to May 1, 2001, the beginning of the month after Ms. Horner requested increased support and financial disclosure from Mr. Horner. Ms. Horner appeals this portion of the trial judge's order and seeks child support in the amount of $1,481 per month retroactive to January 1, 2000.

38With regard to spousal support, Mr. Horner was ordered to pay $1,750 per month, instead of the $3,500 per month sought. [page574] The order was made retroactive to May 1, 2001, to continue under the formula set out in para. 5.1 of the separation agreement. According to the agreement, spousal support payments are to be paid until April 2005, and to continue thereafter if either child of the marriage is at school on a full-time basis.

39In his reasons for judgment, Killeen J. declined to set aside the time-limited portion of the agreement. He found that when the parties separated, "Mr. Horner earned about $75,000 or so. By 1995, when the agreement was concluded, he earned $81,975 or so." Killeen J. noted that Ms. Horner "got her husband's interest in the matrimonial home and some other credits". Further, he stated that, "[s]he may have ended up with about $40,000 more than her husband overall and the quid pro quo was that the husband protected his pension and got the benefit of a time-limited spousal support order to run for roughly 10 years" (emphasis added).

40When considering the amount of spousal support, Killeen J. weighed the factors and objectives set out in s. 15.2(4) and (6) of the Act and concluded that:

[W]hile Mr. Horner has undeniably improved his educational skills since the separation, and thereby enhanced his job and salary within his company, nevertheless , his upward progress clearly started well back in the 1980s and cannot be separated from the marriage and arrangements made with his wife as to how their marriage would be structured.

The Agreement should not be overridden, in my view, on the time-limited nature of support. That was part of the fundamental bargain between the parties and should be respected, absent unusual circumstances not present here. Thus, the spousal support, at the new rate, will continue under the formula set out in para. 5.1 of the Agreement.

41On January 10, 2003, Killeen J. issued an endorsement, ordering Mr. Horner to pay Ms. Horner one-half of full partial indemnity costs, fixed at $1,500 plus taxable disbursements and GST. Significantly, Killeen J. noted, "[t]he application hearing itself took roughly one-half day and I note that Mr. Horner was not forthcoming through the proceedings with accurate information on his full financial position in recent years in the United States."

IV. Analysis

A. Standard of review

42In Hickey v. Hickey, 1999 691 (SCC), [1999] 2 S.C.R. 518, 172 D.L.R. (4th) 577, at paras. 10-12, the Supreme Court reaffirmed that when reviewing an award of support made pursuant to the Act, appellate [page575] courts must give considerable deference to judges at first instance because of the fact-based and discretionary nature of support. The court emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong. Nor is the court entitled to set aside the award at first instance simply because it would have made a different award or balanced the various factors differently.

43The issues raised by the appellant, namely, whether, in view of the amending agreement, Ms. Horner should make a contribution towards child support for Sean, the extent to which child support for Samantha should be retroactive, the quantum of spousal support, the extent to which it should be retroactive, and whether spousal support should not be time limited, must all be considered bearing in mind the standard of review.

B. Spousal support

44 Section 15.2(1) of the Act provides that a court of competent jurisdiction may make an order requiring a spouse to pay to the other spouse a lump sum for support, periodic sums, or both, as the court thinks reasonable. The factors to be considered by a court pursuant to s. 15.2(4) are the condition, means, needs and other circumstances of each spouse, including (a) the length of cohabitation; (b) the functions performed by each spouse during cohabitation; and (c) any order, agreement or arrangement relating to support of either spouse. The objectives of the Act, as stated in s. 15.2(6), require recognition of any economic advantage or disadvantage to the spouses arising from the marriage or its breakdown; the apportionment of the financial consequences of childcare; the relief of economic hardship arising from the breakdown of the marriage; and the promotion of self-sufficiency of each spouse.

45Here, cohabitation lasted approximately ten years. The application judge found that the marriage was a traditional one with the "wife as homemaker while the husband forged a career with Nova Chemicals" and at the same time furthered his education at night. He found that Mr. Horner's "upward progress clearly started well back in the 1980s and cannot be separated from the marriage and arrangements made with his wife as to how their marriage would be structured". He also found that there had been a material change in circumstances occasioned by the dramatic increase in Mr. Horner's salary from 1995 onwards.

46The application judge then awarded Ms. Horner spousal support of $1,750 monthly, "taking into account her financial needs and his ability to pay, as well as the incidence of tax" from [page576] May 1, 2001, the date of her request, but subject to the strictures of the separation agreement. He declined to set aside the time-limited provisions of the agreement commenting that that was part of the fundamental bargain struck between the parties when Ms. Horner received more than an equal share of the family assets.

47Ms. Horner submits that the application judge erred in the amount of support he awarded, the extent to which he made the award retroactive and in not setting aside the time-limited aspect of the award.

i. The amount of support

48A combination of factors leads me to conclude that the trial judge's award of support is "clearly wrong".

49First, the amount of spousal support awarded by the application judge is predicated on Mr. Horner's income being US$35,000 less than his acknowledged income for 2001. The application judge awarded support based on Mr. Horner's income totalling US$149,000 or CDN$225,000. However, his tax return for that same year indicated that his income was US$184,119, or approximately CDN$272,000, not including the value of stock options. Further, the trial judge found, and I agree, that Mr. Horner was not forthright in his disclosure.

50Second, Ms. Horner's proposed budget of $2,445.70 was reasonable. Yet the trial judge rejected the amount of support she requested without in any way commenting on it.

51Third, one of the factors the application judge was required to determine in fixing the quantum of support was the economic consequences arising from Ms. Horner undertaking the bulk of work within the home. In Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, 99 D.L.R. (4th) 456, L'Heureux-Dubé J. articulated the object of the provisions of the Act relating to spousal support as being that of compensation. As she indicates at p. 848 S.C.R., "the focus of inquiry when assessing spousal support after the marriage has ended must be the effect of the marriage on either impairing or improving each party's economic prospects." Mr. Horner clearly garnered an economic advantage by having his wife take on the bulk of domestic responsibilities, allowing him the time to raise his level of education, and eventually establish himself in the position he occupies today. Ms. Horner, on the other hand, in remaining within the home, was not able to benefit in the same manner when she went to find work in the labour market. T his factor appears not to have been reflected in the amount of support awarded by the application judge. [page577]

52In light of the fact that it is not always possible to determine the extent of the economic loss due to a spouse being out of the paid workforce, the court will consider need and standard of living as the primary criteria, together with the ability of the other party to pay: see Ross v. Ross (1995), 1995 6228 (NB CA), 168 N.B.R. (2d) 147, 16 R.F.L. (4th) 1 (C.A.), at p. 156 N.B.R., cited with approval in Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420, 169 D.L.R. (4th) 577, at para. 36. The application judge's reasons do not indicate how or to what extent he took into consideration Ms. Horner's need and Mr. Horner's standard of living in assessing economic loss.

53In failing to take into consideration these contextual factors, the amount awarded by the application judge can be seen, by a comparative analysis of awards, to be below the median of support awards in comparable cases even if the lesser figure of CDN$225,000 is used. On a yearly basis, the amount of child support of $1,374 per month awarded by the application judge totals $16,488. Spousal support of $1,750 per month awarded by the application judge amounts to $21,000 on an annual basis. The total is $37,488 per year. Using CDN$225,000 as Mr. Horner's gross income, the total amount of child and spousal support awarded to Ms. Horner represents just over 26 per cent of Mr. Horner's gross income. This figure is considerably below the median of awards for spousal support where there is split or shared custody of children, as well as generally when a spouse has the care of a child. See for example, the following cases involving split custody: Bemrose v. Fetter, 2003 CarswellOnt 1725 (S.C.J.), 13 y ears cohabitation, where the support awarded was 43.6 per cent of gross income; McInnis v. McInnis, [2002] O.J. No. 3154 (S.C.J.), 13 years cohabitation, where it was 42.6 per cent; Aguanno v. Aguanno (2002), 2002 78094 (ON SC), 30 R.F.L. (5th) 14, [2002] O.J. No. 1463 (S.C.J.), 19 years split custody, where the support awarded was 35.6 per cent of gross income. See the following case involving shared custody: Brownstein v. Hanson (2003), 2003 64332 (ON SC), 45 R.F.L. (5th) 67, [2003] O.J. No. 3113 (S.C.J.), ten years cohabitation, where it was 40 per cent; and see also the following cases involving sole custody: French v. French, [2002] O.J. No. 259 (S.C.J.), nine years cohabitation where the amount awarded was 30.2 per cent; Hart v. Hart (2003), 2003 2130 (ON SC), 41 R.F.L. (5th) 80, [2003] O.J. No. 2837 (S.C.J.), 5 years cohabitation where the amount awarded was 36.9 per cent; Masztics v. Masztics, 2003 CarswellOnt 1452 (S.C.J.), ten years cohabitation where the amount awarded was 34 per cent; Roysto n v. Royston, [2003] O.J. No. 849 (S.C.J.), ten years cohabitation where the amount awarded was 30 per cent but there was a review after three years; Savidis v. Savidis, 2003 CarswellOnt 4042 (S.C.J.), seven years cohabitation where the [page578] amount awarded was 35.5 per cent; S.E.C. v. G.P. (2003), 2003 2028 (ON SC), 41 R.F.L. (5th) 250, [2003] O.J. No. 2744 (S.C.J.), 12 years cohabitation, where the amount awarded was 33.3 per cent.

54The combination of the above factors has led me to conclude that the application judge's award is clearly wrong. I would therefore set aside the application judge's award of spousal support and order that spousal support for Ms. Horner be fixed at $2,445 per month, as requested by her.

ii. Retroactivity

55Ms. Horner also seeks to have the award of spousal support made retroactive to January 1, 2000.

56In Bracklow, supra, at para. 21, the Supreme Court stated that the presumption of mutual interdependence and mutual support that exists between spouses during marriage, no longer applies on marriage breakdown. The court will not presume that a fiduciary relationship exists between separated spouses, nor, in the absence of evidence, that one spouse is vulnerable to the other: Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, 224 D.L.R. (4th) 193, at para. 82. If one spouse chooses to bargain away his or her right to support and that bargain was not unfair at the time it was made and not unfair at the time a spouse seeks to set it aside, the court will not intervene. See Miglin, supra, at paras. 82-91.

57Two competing theories of spousal support exist: the compensatory theory and the mutual obligation theory. Both are subject to individual variation by contract. In awarding spousal support, the court must strike the balance that best achieves justice in the particular case before the court: Bracklow, supra, at para. 39. This is not an easy task. As stated in Miglin, supra, at para. 56:

Unlike child support, for which relatively clear normative standards have been set, spousal support rests on no similar social consensus. See M. Shaffer and C. Rogerson, "Contracting Spousal Support: Thinking Through Miglin" (2003), 21 C.F.LQ. 49 (paper originally presented to the National Family Law Program, in Kelowna, B.C., July 14-18, 2002), at p. 61. We note too that Parliament's adoption of broad, and at times competing, objectives for spousal support contrasts with its promulgation of uniform Child Support Guidelines. The discretion granted to trial judges respecting spousal support also contrasts with the detailed default provision for equalization of matrimonial property set out in s. 5 of the Family Law Act, R.S.O. 1990, c. F.3, and the obligatory regime of the family patrimony in arts. 414 et seq. of the Civil Code of Québec, S.Q. 1991, c. 64. Therefore, what is "fair" will depend not only on the objective circumstances of the parties, but also on how thes e parties conceive of themselves, their marriage and its dissolution, as well as their expectations and aspirations for the future. [page579]

58The basis for awarding spousal support and the lack of clear normative standards for when it should be awarded have a bearing on whether and to what extent retroactive spousal support should be awarded.

59This case is not like Marinangeli v. Mirinangeli (2003), 2003 27673 (ON CA), 66 O.R. (3d) 40, 228 D.L.R. (4th) 376 (C.A.), where the original separation agreement contained an implied term of financial disclosure, nor were the circumstances such that Ms. Horner was justified in relying on Mr. Horner for disclosure. In relation to the amending agreement, the husband made no representation that later turned out to be inaccurate as to what his income was or would be at the time it was signed. The amending agreement of July 1999, dealt only with child support and did not deal with spousal support. More importantly, Ms. Horner did not submit that, had Mr. Horner made proper financial disclosure at the time the amending agreement was signed, she would have brought an earlier application for spousal support.

60I see no error in principle in the application judge's decision and, as a result, would not interfere with it. I would dismiss the request to order retroactive support beyond May 1, 2001.

iii. Time-limited support

61The application judge found that under the separation agreement Ms. Horner received her husband's interest in the matrimonial home "and some other credits" and that she ended up with a greater share of the net worth of the parties than her husband. He further found that in return she gave up the right to support for an indeterminate period, agreeing instead to time-limited spousal support of approximately ten years. As well, she gave up any interest she had in her husband's pension. The application judge held that the agreement should not be overridden on the time-limited aspect for support.

62Ms. Horner submits the application judge failed to consider and give effect to the plain wording of the separation agreement. The agreement provides that para. 5, which deals with spousal support, may be varied if there is a material change of circumstances. The variation provision does not distinguish between the quantum of support and the time limit for support. Ms. Horner submits that, as a result, this case is different from the decision of the Supreme Court in Miglin and the application judge erred in not distinguishing it.

63Mr. Horner's position is that while the increase in his income would arguably have a bearing on the future quantum of spousal support, it should not have a bearing on the duration of support. [page580]

64Miglin and the more recent decision of Hartshorne v. Hartshorne, 2004 SCC 22, [2004] 1 S.C.R. 550, 236 D.L.R. (4th) 193, both dealt with domestic agreements that did not contain a variation clause and whose terms were intended to be final. I agree that this is not the situation here. However, the application judge's reasons do not refer to Miglin, and I would not say that he erred as to the law. His conclusion is based on his understanding of the parties' agreement in this case.

65A material change in circumstances means a change that, if known at the time, would likely have resulted in different terms: see Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670, 119 D.L.R. (4th) 405, at p. 688 S.C.R.

66There has clearly been a material change in Mr. Horner's circumstances. The question is whether the material change should affect only the quantum of support or the duration of support as well, bearing in mind the objectives of the Act, and such factors as the length of cohabitation, the applicant's contribution to the marriage and the agreement made by the parties.

67The application judge concluded that the duration of support should not be affected. In his reasons, the application judge referred to time-limited support as being part of the "fundamental bargain" between the parties, that should not be varied absent "unusual circumstances". I take the application judge's comments to be a reference to his earlier conclusion that the separation agreement gave Ms. Horner a greater share of the net worth of the parties at the time she and her husband separated, in part, because she agreed to time-limited support. Read as a whole, the application judge's reasons indicate he considered, as well, the length of the marriage and Ms. Horner's contribution to Mr. Horner's career advancement during the marriage. I would defer to the motion judge's balancing of these factors. I cannot say that he erred in principle or that his decision is clearly wrong.

68Although Ms. Horner submits that the application judge's reference to "unusual circumstances" is an error of law, I do not read the reasons as applying the decision in Miglin, where support was meant to be final, to these reasons. Instead, I take the comment to mean that the parties knew that Mr. Horner's income was likely to increase at the time they entered into their separation agreement, but that Ms. Horner nevertheless agreed to time-limited support. Thus, they intended that Mr. Horner's increase in income might affect the quantum of support, but they did not intend that his increased income would, by itself, necessarily affect the duration of support. The application judge decided that effect should still be given to their original intention. As I have indicated, I am not prepared to interfere with his [page581] conclusion in that regard. Because I do not read the application judge's reasons as interpreting the provision in the separation agreement respecting the duration of support a s indicating that this provision could never be varied, Ms. Horner would not be precluded from bringing a further application to extend the duration of support based on a different change of circumstances, such as ill health, for example, at a future date.

C. Child Support:

i. Whether the trial judge failed to give effect to the amending agreement in deciding on the respondent's counter-application for child support

69In a split custody situation, support is calculated in accordance with s. 8 of the Guidelines, by deducting the support payable by the support payor with the lesser income, from the support payable by the support payor with the greater income. The difference is paid by the support payor with the greater income. The court may, however, award an amount that is different than the amount under s. 8 where a spouse makes a request and the court finds that the spouse would otherwise suffer undue hardship.

70Where a court finds special provisions in a written agreement with regard to the financial obligations of the parties that directly or indirectly benefit a child and the application of the Guidelines would result in an amount of child support that is inequitable given those special provisions, the court has a discretion to depart from the Child Support Guideline Table amount of support: s. 15.1(5) of the Act.

71Ms. Horner submits that pursuant to the amending agreement of July 1999, Mr. Horner agreed not to seek support for the child that moved to his residence. Clause 6 of the agreement stated, "I waive any right to claim financial support from you for Sean's living expenses provided all of the above conditions are accepted as is."

72Ms. Horner's argument was not raised before the trial judge or in the notice of appeal. In any event, the wording of the clause in the amending agreement suggests that the waiver of financial support for Sean only applied provided Ms. Horner accepted the support Mr. Horner was paying for Samantha as stipulated in the agreement. Once Ms. Horner did not accept the amount for Samantha as provided in the agreement and sought support in accordance with the Guidelines, I see no reason why Mr. Horner's waiver would apply. As I have indicated, the Guideline amount is to be paid unless a spouse makes a request on the [page582] basis of undue hardship and no such request appears to have been made in this case. I would dismiss this ground of appeal.

ii. Appellant's claim for retroactivity of child support

73The application judge gave no reason for not awarding increased child support prior to May 1, 2001, the month after Ms. Horner had requested support and financial disclosure. Typically, any increase in support takes effect from the date of the application or from the date of demand for financial information. The application judge's lack of reasons for not awarding retroactive support beyond this date may be taken as an indication that he did not consider whether to exercise his discretion to award retroactive support on the particular facts of this case.

74Ms. Horner submits that child support should be made retroactive to January 1, 2000, for the following reasons: (1) at the time she agreed to child support for Samantha in the amending agreement Mr. Horner did not make full and complete financial disclosure as he was obligated to do when the amending agreement was signed; (2) Mr. Horner knew that his son would benefit from his lifestyle and that, comparatively, Samantha would suffer; (3) Mr. Horner has the ability to pay and a retroactive order for support would not be a hardship to him.

75Mr. Horner acknowledges that a court may award retroactive support to a date earlier than the date on which financial information is requested, or an application is begun. Mr. Horner's position is, however, that it was always open to Ms. Horner to seek further financial information from him and to apply to the court in a timely way for an increase in spousal and child support and she chose not to do so. He relies on this court's decision in Walsh v. Walsh (2004), 2004 36110 (ON CA), 69 O.R. (3d) 577, 46 R.F.L. (5th) 455 (C.A.).

76It is important to note that this court's decision in Walsh was concerned with an appeal from an interim order that in effect granted a final order by ordering retroactive child support to four years before Mrs. Walsh began her application. The judge who heard the application did not find a "change of circumstances" and did not find that the needs of the children required a retroactive increase. However, she ordered child support retroactive to four years before Mrs. Walsh began her application to vary and did so on the basis that the Guidelines gave her an inherent discretion to do so. Walsh was a very different case from the present one.

77In this case we are not concerned with an interim order. There is no dispute that Mr. Horner's increase in income has [page583] resulted in a material change of circumstances pursuant to the parties' separation agreement. Moreover, in this case the amending agreement is a domestic contract pursuant to s. 56(4) of the Family Law Act, R.S.O. 1990, c. F.3. Under the Family Law Act, if a party fails to disclose to the other party significant assets when the contract is made, the court may set aside the contract or a provision thereof. There was thus a statutory duty to make financial disclosure at the time the amendment to the separation agreement was signed. Mr. Horner did not comply with this duty. The right to an income stream is an asset and ought to be disclosed: Underwood v. Underwood (1994), 1994 7576 (ON SC), 3 R.F.L. (4th) 457, 113 D.L.R. (4th) 571 (Ont. Gen. Div.), at para. 25. Not only did Mr. Horner not disclose his full compensation, he did not disclose that he was in receipt of a $100,000 loan that would be forgiven provided that he maintained his employment. This is a significant contingent asset. Mr. Horner engaged in and, as the application judge found, continues to engage in, incomplete financial disclosure. None of this was present in Walsh.

78In Walsh, Laskin J.A. noted at paras. 20, 21, and 23, that neither the Act nor the Guidelines standing alone contain any provision giving the court jurisdiction to recalculate child support retroactively because of non-disclosure of the payor's increases in income. That said, the court does have a broad power to order retroactive support under the Act ³ and, at common law, the court is always free to intervene and to determine the appropriate level of support for a child: see Richardson v. Richardson, 1987 58 (SCC), [1987] 1 S.C.R. 857, 38 D.L.R. (4th) 699, at p. 869 S.C.R.; Malcovitch v. Malcovitch (1978), 1978 1270 (ON SC), 21 O.R. (2d) 449, 91 D.L.R. (3d) 594 (H.C.J.); Hansford v. Hansford, 1972 410 (ON SC), [1973] 1 O.R. 116, 30 D.L.R. (3d) 392 (H.C.J.), at pp. 117-18 O.R.; Dal Santo v. Dal Santo (1975), 21 R.F.L. 117 (B.C.S.C.); Mercer v. Mercer (1978), 1978 3055 (ON SC), 5 R.F.L. (2d) 224, [1978] O.J. No. 128 (H.C.J.); Collins v. Collins (1978), 1978 652 (AB SCTD), 2 R.F.L. (2d) 385, 10 A.R. 214 (S.C.), at p. 391 R.F. L.; Krueger v. Taubner (1974), 1974 2193 (MB QB), 17 R.F.L. 86 (Man. Q.B.).

79The reason a court can always intervene in determining the appropriate level of support for a child is, as I have indicated, [page584] that child support has a different foundation than spousal support. A parent's statutory obligation to provide child support is based on the nature of the parent-child relationship. Unlike a spousal relationship, the parent-child relationship is one of presumed dependency in which the obligation of support arises at birth. The dependency of the child requires the parent to put the interests of the child first. The Supreme Court of Canada recognized that the overall purpose of the Guidelines is to implement a parent's obligation to put the interests of the child first in Baker v. Francis, supra, at paras. 38-39. Thus, in relation to child support the term "retroactive support" is somewhat of a misnomer. Both the Alberta Court of Appeal in MacMinn v. MacMinn (1995), 1995 6247 (AB CA), 17 R.F.L. (4th) 88, 174 A.R. 261 (C.A.), at paras. 15-17 R.F.L. and the Bri tish Columbia Court of Appeal in S. (L.) v. P. (E.) (1999), 1999 BCCA 393, 50 R.F.L. (4th) 302, 175 D.L.R. (4th) 423 (B.C.C.A.), at para. 55 R.F.L., as well as this court in Marinangelli v. Marinangelli, supra, at para. 72 have recognized that the term is a misnomer. Perhaps, the court in MacMinn v. MacMinn, supra, expressed it best when it said at paras. 15-16:

There is another point we wish to emphasize. By questioning the rationale for a trial judge to order "retroactive" maintenance, the father implies that he is being asked, after the fact to assume a liability for child support which he did not have in the first instance. This is simply wrong in law. Both parents of a child have financial obligations to that child. The obligation arises out of the common law, equity and statute; it is an obligation which exists from the time a child is born. When parents separate, the obligation continues. Thus, it exists irrespective of whether an action has been started by the custodial parent against the non- custodial parent to enforce the obligation: Paras v. Paras (1970), 1970 370 (ON CA), 2 R.F.L. 328 (Ont. C.A.); Mannett v. Mannett (1992), 1992 4668 (NS SC), 111 N.S.R. (2d) 327 (T.D.).

The court's initial focus must be on the children's needs, that is the costs of raising the children. By recognizing that parents of children have a joint financial obligation to meet their children's needs, Parliament has indicated that the children's needs come first. Parliament has also recognized that the existence of the parent-child relationship imposes on the parents an obligation to support their children. Parliament's acceptance of this principle -- that parents are responsible for supporting their children -- also happens to be consistent with both provincial statute law [See, Parentage and Maintenance Act, R.S.A. 1990, c. P- 0.7] and equity since, in our view, financial responsibility for one's children is a necessary consequence of the fiduciary relationship which exists between parent and child: M.(K.) v. M.(H.), 1992 31 (SCC), [1992] 3 S.C.R. 6.

80In M.(K.) v. M.(H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, 96 D.L.R. (4th) 289, La Forest J., with whose comments respecting the fiduciary duty of parents the other members of the court unanimously agreed, stated at pp. 61-62 S.C.R.: [page585]

It is intuitively apparent that as the relationship between parent and child is fiduciary in nature . . . . society has imposed upon the parents the obligation to care for, protect and rear their children.

Further at p. 63 S.C.R., he stated:

. . . being a parent comprises a unilateral undertaking that is fiduciary in nature. Equity then imposes a range of obligations coordinate with that undertaking.

81At p. 66 S.C.R., La Forest J. noted that Canadian cases and academic authors have recognized the parent-child relationship as a traditional head of fiduciary obligation. Earlier, at p. 65 S.C.R. he observed that there is a strong, albeit not irrebuttable, presumption that the parent-child relationship is fiduciary in nature, and that one obligation arising from this class of relationship

. . . will most often include the avoidance of a conflict of duty and interest and a duty not to profit at the expense of the beneficiary.

82My comments about the fiduciary nature of the parent-child relationship are not intended to suggest that a child has a separate right of action for support against the parent based on a breach of fiduciary duty. I recognize that the decision of the majority of the Supreme Court of Canada in Frame v. Smith, 1987 74 (SCC), [1987] 2 S.C.R. 99, 42 D.L.R. (4th) 81, and the decision of this court in Louie v. Lastman (No. 1) (2002), 2002 45060 (ON CA), 61 O.R. (3d) 449, 217 D.L.R. (4th) 257 (C.A.), at para. 20, stand for the proposition that the legislature intended to devise a comprehensive statutory scheme in relation to custody, access and the on-going needs of support for children. This does not mean, however, that an understanding of the fiduciary nature of the parent-child relationship is unimportant. 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": Rizzo & Ri zzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, 154 D.L.R. (4th) 193, at para. 21. This general approach to statutory interpretation is the proper approach to family law related legislation: Chartier v. Chartier, 1999 707 (SCC), [1999] 1 S.C.R. 242, 168 D.L.R. (4th) 540. Thus, recognition of the fiduciary component of the relationship between a parent and child is instructive in understanding and giving meaning to the overall purpose of the Guidelines that the interests of the child are to be put first, as well as in shaping the exercise of the court's discretion to enforce the parent's support obligation "retroactively".

83Against the background of her understanding of the parent-child relationship, Rowles J.A. articulated and reviewed a number of considerations in S.(L.), supra, that this court applied [page586] in Marinangeli, supra, at para. 72 in deciding to order support for a period of time prior to when the application for support was made. I am of the opinion that those considerations are met in this case and that there is a valid basis for awarding retroactive support for the period requested.

84The first consideration is need on the part of the child and ability to pay of the payor parent. The child's needs are determined with the objective of giving the children the same standard of living as that which they would have enjoyed had the family break-up not occurred: see Willick, supra, at p. 691 S.C.R. per Sopinka J. on behalf of the majority; Francis v. Baker, supra; Paras v. Paras, supra. If the ability of a parent to provide support increases, it is reasonable to expect that the level of support for the child will increase: see Willick, supra, at p. 689 S.C.R. The Guidelines are based on economic studies of average spending on children in families by a spouse with a particular number of children and level of income: see s. 5 of Schedule I of the Guidelines. Thus, a rebuttable presumption exists that the Guideline amount of support is the appropriate amount of support required to meet a child's needs: s ee Francis v. Baker, supra, at para. 42. A parent whose income increases is presumed to know the law and to know that as his or her income increases, the child's needs, taking into account standard of living, will also increase. In addition, in Willick, at pp. 739-40 S.C.R., and later affirmed in Hickey, supra, at para. 18, the Supreme Court has stated that in relation to child support, inflation and the increased needs of a child as he or she grows older constitute a material change that justifies an upward variation of the amount of support based on need. The Supreme Court appears to have taken judicial notice of these factors. Concomitant with the objective of s. 1(d) of the Guidelines, to ensure consistent treatment of children who are in similar circumstances, children are entitled to be treated equally, irrespective of whether they reside with their mother or their father. Mr. Horner well knew at the time that the lifestyle he was providing for his son was not similar to the payment he was making for his daughter's support. Samantha's needs were not met by the support paid by Mr. Horner after the amending agreement in June 1999 was signed although he clearly had the ability to pay.

85A second consideration is whether the payor parent engaged in "blameworthy" conduct. I take blameworthy conduct to include conduct that seeks to put the payor parent's own self-interest, as opposed to the child's interests, first. The overall purpose of the Guidelines, putting the child's interests first, must be considered in combination with the clear direction in the Guidelines that parents have a duty to pay financial support for their [page587] children in accordance with their ability. The effect of the payor parent's failure to pay support in accordance with his or her ability is to penalize the children. It also has the effect of placing a disproportionate burden of support on the parent with the day-to-day care of the children. The decision to order retroactive support in such circumstances is consistent with the requirements of S. (L.), supra: see Tedham v. Tedham (2003), 2003 BCCA 600, 44 R.F.L. (5th) 204, 20 B.C.L.R. (4th) 56 (C.A.).

86In this case, Mr. Horner has acted in his own self-interest beginning with the amending agreement that he drafted. At that time, in addition to not making financial disclosure as required when a domestic agreement is amended, he did not suggest, or pay for, independent legal advice to protect the interests of Samantha. As I have indicated, a parent cannot bargain away a child's right to support. The amending agreement benefited Mr. Horner's son at the expense of his daughter and was thus unfair to her. Mr. Horner did not even pay the amount of child support provided for in the agreement. He failed to pay the annual cost of living increase in child support he undertook to pay in the original separation agreement, an undertaking that was not affected by the amending agreement.

87Once Ms. Horner sought financial disclosure, Mr. Horner did not provide it in a timely or complete fashion. Mr. Horner's cross-examination demonstrates that he continued to be evasive as to his income. In addition, although Mr. Horner acknowledged that he receives stock options as part of his compensation in his cross-examination, his financial statement does not disclose the value of the options and the terms of their exercise. Ms. Horner thus had no means of obtaining information as to whether or when Mr. Horner had exercised these options, although they are part of his income: see Marinangeli, supra, at paras. 27-34. The financial statement Mr. Horner filed in court is also incomplete because he has listed all his household expenses without indicating what portion of the expenses his present wife pays. Mr. Horner has put his own self-interest first instead of his child's interests. In addition, when disclosure of his income was sought in order to assist in enforcing his obligatio n to pay the appropriate amount of support, less than full disclosure was provided.

88Further, although blameworthy conduct is a consideration favouring an award of child support, the absence of blameworthy conduct does not preclude an order being made: see Tedham, supra, at para. 68. In this case as in Tedham, it is impossible to ascertain with any degree of certainty what the payor parent's income will be as his income is heavily dependent on profit-sharing management incentives and bonuses received after the company's [page588] fiscal year ends; one cannot simply multiply his monthly paycheque by 12. Thus, in order for Mr. Horner to pay his fair share of child support, it is necessary to award retroactive support.

89A third consideration is that Mr. Horner's counsel does not suggest that an order for increased support for Samantha that is retroactive for a further 16 months, as requested, would cause an unreasonable or unfair burden on Mr. Horner, interfere with his ongoing support obligations, or fail to benefit his daughter. Courts are cautious about enforcing the payor parent's support obligation when enforcement will impose an unreasonable or unfair burden on the other parent, perhaps to the extent of interfering with ongoing support obligations. Depending on the time that has elapsed, the child's ongoing needs may already have been met and support would, instead, amount to a redistribution of capital to a spouse as in Brett v. Brett (1999), 1999 3711 (ON CA), 44 O.R. (3d) 61, 173 D.L.R. (4th) 684 (C.A.), or to a child who is no longer a dependant. The amount involved here is not so great that it can be said to be an attempt to redistribute capital in favour of a spouse. Ms. Horner has borne a disproportionate share of the childcare expenses. Ms. Horner's actual budget, which was not criticized by the application judge in any way, indicates that she was running a deficit of just over $900 per month. Moreover, the mortgage on Ms. Horner's home has increased since separation instead of decreasing. Because support is the child's right, the fact that child support will indirectly benefit the spouse with whom the child resides cannot decrease the quantum awarded to the child: see Richardson, supra, at p. 869 S.C.R.

90A fourth consideration is the delay in seeking increased child support and any explanation for the delay. Ms. Horner's delay in seeking increased child support on behalf of Samantha is explained by Mr. Horner's non-disclosure of his financial circumstances at the time the amending agreement was signed. The delay can also be explained by the fact that Ms. Horner only appreciated the extent of the different lifestyle between her son and daughter as a result of her son's visits; as well, she was concerned that the children's relationship with their father not be affected by any dispute with respect to their support.

91Even if Ms. Horner did not have a reasonable explanation for her delay in bringing this application, I would hold that the child should be in no worse position than when his or her parent has bartered away the child's right to support. A court is not precluded from making a support order because of the parent's action in bartering away child support. Similarly, a parent's inaction in requesting disclosure and in bringing an application for increased child support should not of itself be [page589] allowed to trump the making of an order predating the application that would be in the interests of a child that would otherwise be fair and reasonable. To hold otherwise would be to allow the payor parent to benefit at the expense of the child and would not put the interests of the child first. (See by analogy the comments in M. (K.) v. M. (H.), supra, pertaining to discoverability at p. 68 S.C.R. and the discussion of laches or delay at pp. 76-77 S.C.R.) While the decision whether or no t to grant retroactive spousal support is to be exercised sparingly, in relation to child support the real question in each case is whether the circumstances justify the making of a "retroactive" order for support: Whitton v. Shippelt (2001), 2001 ABCA 307, 23 R.F.L. (5th) 437, 293 A.R. 317 (C.A.) and M. (M.K.) v. D. (L.), (2002), 2002 BCCA 216, 166 B.C.A.C. 220, [2002] B.C.J. No. 655 (in Chambers).

92The application judge did not have regard to the criteria for awarding retroactive support in considering when the variation order should start. Having regard to the overall purpose of the Guidelines that the interests of the child are to be put first, and applying the criteria for awarding retroactive support, I would hold that the application judge erred in principle in not making child support retroactive to January 1, 2000. I would order that support be retroactive to January 1, 2000 and would order that the amount to be paid be in accordance with the Guidelines.

V. Disposition

93For the reasons I have given, I would allow the appeal in part. I would allow the appeal with respect to the quantum of spousal support, and would order that spousal support be fixed at $2,445 per month instead of the $1,750 ordered by the application judge. I would dismiss the appeal relating to the making of spousal support retroactive beyond May 1, 2001, and the appeal from the application judge's decision not to award support for an indeterminate period of time. In relation to child support, I would allow the appeal, in part, and order that child support should be retroactive to January 1, 2000. I would dismiss the appeal in relation to the cross-application.

V. Costs

94Having regard to the divided success on this appeal, I would order that each party bear their own costs of the appeal.

Appeal allowed in part.

[page590]

Notes

Footnotes

Section 2(1) of the Divorce Act defines a "child of the marriage" as "a child of two spouses or former spouses who, at the material time, (a) is under the age of majority and who has not withdrawn from their charge, or (b) is the age of majority or over and unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life".
Mr. Horner's 1994 T4 slip shows his income was $81,000. The tax return filed shows that his income was $111,000. There was no evidence as to why there is a discrepancy between the T4 slip and the tax return.
Julien D. Payne, in Child Support in Canada, 4th ed., (Kingston: Quicklaw, 2003) states at Part 11-11, "while s. 15.1 of the Divorce Act is silent on the question, the prevalent opinion in the case law is that permanent child support may be ordered to commence from a stipulated date prior to the divorce judgment but that the court will not ordinarily make an order retroactive to a date prior to the commencement of the divorce proceedings". Section 17(1) of the Act expressly empowers a court to retroactively vary an order for child support.

I. Overview