COURT FILE NO.: FS-20-195 DATE: 2022-04-20

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

LIXIN ZHAO.

M. Stangarone, for the Appellant

Appellant

- and -

TIAN XIAO

T. Matthews, for the Respondent

Respondent

HEARD: February 14, 2022, via Zoom

REASONS ON APPEAL

Justice J. Fregeau

Introduction

[1] The Appellant, Lixin Zhao (the “mother”), appeals from the September 30, 2020 Final Order of the Honourable Justice D. MacKinnon of the Ontario Court of Justice (the “OCJ Order”). A copy of the OCJ Order is attached as Schedule A to these Reasons.

[2] The mother submits that the trial judge erred in her Reasons for Judgment as follows:

1. By limiting retroactive child support to the date of effective notice, namely July 1, 2013;
2. By ordering the termination of child support upon the children turning 25 years old;
3. By imposing conditions on the father’s ongoing child support obligation;
4. By improperly calculating the father’s income for child support purposes; and
5. By adding the income of the mother’s current spouse to the mother’s income when calculating the parties’ proportionate obligations for the children’s ongoing s. 7 expenses.

Background

[3] The mother and father were married on February 26, 1995, separated on March 3, 2002, and were divorced August 31, 2003. The parties have two children, namely Victor, born August 28, 1996, and Daisy, born June 17, 2002.

[4] The Application before the trial judge, commenced in November 2016, is the only application for child support brought by the mother.

[5] When applying for a Divorce Judgment in 2003, the mother and father executed a joint affidavit for divorce. This joint affidavit set out the terms of a settlement the parties had reached in regard to custody, child support and the matrimonial home. The trial judge found that the mother and father agreed that each would be bound by the terms of the agreement set out in the joint affidavit. The relevant terms of that agreement, as found by the trial judge (and set out verbatim below), are:

Child Support

10. The husband would like to pay CAD 950 for every child to the wife as support…monthly until their 18 years’ old birth date.
11. We have agreed that the support arrangements for the children should be as set out above based on the husband’s annual income is approximate $65,000.
12. We agree that every child cost approximately CAD 800 per month and based on our earnings, we agree that the husband should pay CAD 950 for every child monthly to the wife for the support of the said child according to the child support guideline. (a) Both the wife and the husband agree that child support amount can be changed based on the husband’s income change in the future if both of them agree that change, then the husband should pay 17% of his gross income for every child to the wife monthly until their 18 years’ birthdate. (b) If or when the wife is subsequently married again, the husband’s child support payment to the wife for every child will be reduced from 17% to 12.5% of the husband’s taxable income during any period of time when section (a) is effective.

Property

(a) The matrimonial home will be transferred to the wife and since then the wife shall pay any cost of this home. In return, the wife will pay back $79,000 (which includes the husband’s share of the net value of the home plus his pre-marriage assets) to the husband, in monthly instalment equivalent to the monthly child support payment, starting from May 1, 2006. (b) If or when [the mother] is subsequently married again, she should return the $79,000 owing to [the father] immediately upon remarrying.

[6] On January 21, 2004, the parties agreed in writing that the $79,000 owing from the wife to the husband pursuant to (a) or (b) above would be reduced to $74,600.

The Findings of the Trial Judge

Retroactivity

[7] The trial judge found that “at the time of the entering into of the agreement and later, the parties agreed that the property payment and the child support were interrelated” and that “the agreement was that the monthly [child] support owing by the husband would be deducted from the amount owing by the wife”, the latter figure being $74,600 as of May 1, 2006 pursuant to their agreement.

[8] In determining the period for which retroactive support was to be paid by the husband, the trial judge found that child support had been paid from the date of separation to May 1, 2006, such that no retroactive child support was owed for that period of time.

[9] For the period May 1, 2006 to June 1, 2013, the trial judge found that “the parties agreed that the [mother] would owe $74,600 to the [father] for his share of the property of the parties, but it would be offset against any [child] support owing by the [father]”.

[10] The trial judge accepted the mother’s submission that the father’s income for child support purposes be deemed to be $65,000 for this period of time. The trial judge then calculated the father’s annual child support obligation, at that income level, for two children pursuant to the Federal Child Support Guidelines [the “Guidelines”].

[11] The trial judge determined this to be either $11,664 or $12,750 annually, depending on which of the two alternative methods of calculating his obligation, as set out in the agreement, was used. Using these figures as the father’s child support obligation for the period May 1, 2006 to June 1, 2013 and offsetting them against the $74,600 owing from the mother to the father, the trial judge found that the $74,600 owing from the mother was fully offset either in and around September 2012 or sometime in 2013.

[12] The trial judge then applied section 37(2.3) of the Family Law Act, (R.S.O. 1990, c. F.3, as am.) (the “FLA”) and concluded that the agreement between the parties provided reasonable arrangements for the support of the children and that the child support obligations of the father for this period of time “were met by the application of the lump sum funds”.

[13] The trial judge further concluded that “the lump sum payment and the property settlement benefitted the children during this period and that special provisions were made for the support of the children in that way. Ordering [retroactive] child support for the period [May 1, 2006 to June 1, 2013] would be unfair and inequitable”.

[14] The trial judge went on to order that the father pay child support to the mother retroactive to July 1, 2013, based on the mother having requested income disclosure from the father on June 3, 2013.

Termination of Child Support at Age 25

[15] The trial judge noted that the separation agreement stipulated that child support terminated when the children turned 18 years old.

[16] As of the date of the hearing of the Application, Victor was 23 years old, had completed a five-year undergraduate degree and had been accepted into medical school. Daisy was 17 years old and was registered to attend university the following autumn.

[17] The trial judge summarily rejected the provision in the separation agreement which stated that child support was to terminate upon each child’s 18th birthday and stated that she “intend[ed] to set out a maximum period of support for both children”. The trial judge ordered that child support would terminate at age 25 for each child. Her reasons for doing so are set out at paragraphs 34 and 36 of the Reasons for Judgment:

There must be certainty in regard to the duration of the support. Each of these dependents are highly intelligent and can accomplish a tremendous amount through education. Yet, the court must balance this with other considerations in this case including fairness to the father and his other two children, and the need for these young adults to learn to become independent and to care for themselves in a difficult world.

While the determination of a date for support to end is somewhat arbitrary, there is a need for certainty for the parties and the young adults in this case. The age of twenty-five years would allow for a reasonable degree to be obtained and for the child to slowly move into the adult world and independence. Of course, there would be requirements for the dependent to be in school and achieving. It is not expected that this would be a problem for these young adults.

Conditions Imposed on the Father’s Ongoing Child Support Obligation

[18] The trial judge set out the terms of her Order in Appendix “A” to her Reasons for Judgment. In paragraph 2 of the Order, the trial judge made the father’s ongoing child support obligation contingent on several conditions. Paragraph 2 of the Order provides as follows:

The support for Victor or Daisy shall be paid only if:

a) He or she is in full time attendance at post-secondary education and applying himself or herself; b) A consent is provided to the educational institution for disclosure of the academic progress and financial records and accounts of the dependent to their father; c) The educational plan of the child has been approved by their father in writing; such approval not to be unreasonably withheld; d) The relationship between the student and the father has been maintained by monthly discussions or conversations in private of at least 15 minutes in duration by electronic means and at least two face to face visits each year, subject to variation by the student and his or her father; e) The costs of one of the annual in-person access visits shall be paid by the mother, not to exceed $1000 CDN. The other visit shall be paid by the father. The location shall be agreed by the dependent and the father; f) The dependent and his or her father may forego in-person visits by agreement during Covid 19 or for any other reason; g) The requirements may be varied or truncated for the 2020-2021 year by agreement of the parties.

Calculation of the Father’s Income for Child Support Purposes

[19] The father resides and is employed in Washington State. He is paid in U.S. dollars and files U.S. tax returns. The trial judge ordered the father to pay ongoing child support for the two children based on annual income of $202,053 (CDN) commencing October 15, 2020. The trial judge further required the father to provide annual income disclosure and mandated a variation of child support pursuant to the annual income disclosure of the father.

[20] In determining the father’s income, the trial judge rejected the mother’s submission that the father’s annual income “should include benefits”. The trial judge concluded that:

The gross income of the [father], converted to Canadian funds, should be used just as with any other payor under the [guidelines]. There is insufficient information for a calculation of the benefits in the context of the cost of living in the State of Washington or in-depth comparatives, particularly in relation to health care costs.

The Calculation of the Mother’s Income for s. 7 Purposes

[21] In determining the parties’ proportionate contributions to the ongoing s. 7 expenses of the children, the trial judge concluded as follows:

The household of the [mother] and the household of the [father] each have two children and two adults. Mr. Linhananta, the husband of the [mother], earns $138,251 per year and in addition there is $35,900 ($30,000 imputed, $5,900 earned) for the [mother] resulting in a total for their household of $174,151. The [father] earns $202,053 CDN for his household.

I determine that the household of the [mother] shall pay 46% of any special or extraordinary costs and the [father] shall pay 54% of the costs. This will change when Victor is no longer a dependent. The structure is set out in the attached order.

The Position of the Appellant

[22] The mother submits that the principles governing the determination of retroactive child support have emphasized the importance of ongoing disclosure of the payor’s income. The mother contends that courts have consistently recognized that a parent will not have fulfilled their obligations to their children if they do not disclose increases in their income and adjust their child support payments accordingly.

[23] The mother acknowledges that child support will generally be retroactively adjusted as of the date the recipient gave the payor effective notice of their intention to seek increased support, up to a maximum of three years before the date of formal notice (being the date upon which an application for increased support was commenced). However, the mother contends that courts can and should order retroactive child support for a period of time in excess of three years prior to the date of formal notice where the payor has engaged in “blameworthy conduct”.

[24] The mother suggests that “blameworthy conduct” includes any conduct that prioritizes the payor’s own interests over the children’s right to an appropriate amount of support. An objective approach is used to determine if a payor has engaged in blameworthy conduct. A failure on the part of the support payor to disclose increases in income is blameworthy conduct, according to the mother. The mother submits that where blameworthy conduct is found, the date of effective notice is rendered irrelevant and retroactive child support should be ordered beyond the date of effective notice.

[25] The mother submits that the trial judge erred by not properly apply the foregoing principles in determining the retroactive support issues. The mother submits that the trial judge found as a fact that the father did not keep the mother apprised of his income. However, the trial judge excused this blameworthy conduct of the father because of the agreement between the parties in relation to property issues, which the trial judge found amounted to “special arrangements” that otherwise benefitted the children.

[26] In doing so, the trial judge treated the debt owed by the mother to the father as equivalent to the retroactive child support owed by the father to the mother. This was an error in law, according to the mother.

[27] The mother submits that the trial judge erred in law in arbitrarily terminating child support upon the children’s 25th birthdays. The mother contends that the law in Ontario does not provide for an arbitrary termination point for child support based on either age or the level of scholastic achievement of a child. The mother suggests that a parent is generally responsible for the support of their dependent child until the child has reached a level of education commensurate with the child’s ability and which has prepared the child for entry-level employment in their chosen field.

[28] The mother submits that simply imposing an arbitrary termination date in a situation where it is not possible to determine when the above has taken place prioritizes the support payor’s interest in certainty and predictability over the child’s right to adequate financial support.

[29] The mother submits that the trial judge erred in law when she made the father’s ongoing child support obligation contingent on certain conditions, which the mother summarizes as follows:

1. The children must be enrolled in a full time post-secondary educational program approved by the father and the children must consent to the father obtaining their academic and financial records from their respective educational institutions; and
2. The relationship between the children and the father must be maintained by monthly discussions or conversations in private of at least 15 minutes in duration by electronic means and at least two in-person visits each year, the cost of one such visit to be borne by the mother.

[30] The mother submits that these conditions were ordered without jurisdiction and without reasons and that the trial judge erred in law in imposing them.

[31] The mother submits that the father did not advance any parenting claims in his Answer and that he did not request that the conditions set out above be applied to his ongoing child support obligation. The mother submits that the trial judge exceeded her jurisdiction by ordering relief that went beyond the scope of claims contained in the pleadings.

[32] The mother contends that the trial judge’s failure to provide any reasons to support the imposition of conditions on the father’s ongoing child support obligation demonstrates an implicit misapprehension of her jurisdiction and of the claims before her such that the Reasons for Judgment in this regard are unreasonable.

[33] The mother submits that the trial judge erred when, in determining the father’s income for support purposes, she simply converted his gross income from U.S. dollars to Canadian dollars without adjustment to account for lower taxes paid by the father in Washington State. As a result, the Order understates the child support payable by the father.

[34] Finally, the mother submits that the trial judge erred when, in determining the parties’ incomes for the purposes of calculating the parties’ proportionate shares of the children’s s. 7 expenses, she simply added the income of the mother’s new spouse to the mother’s income. The mother submits that the trial judge erred in law in doing so absent a finding that the mother’s new spouse stood in loco parentis to the children.

The Position of the Respondent

[35] The father submits that the trial judge declined to order that the father pay retroactive child support from the date of separation to May 1, 2006 because she concluded that what the father had paid in support during this period of time met or exceeded his guideline child support obligation. The father submits that this conclusion of the trial judge is entitled to deference.

[36] The father contends that the trial judge further concluded that, for the period May 1, 2006 to June 1, 2013, the terms of the parties’ agreement in regard to the matrimonial home and their property settlement constituted “special provisions” that indirectly benefitted the children such that ordering retroactive child support for this period of time would be inequitable.

[37] The father submits that the trial judge acted within her jurisdiction in finding that the parties had made “special provisions” for the benefit of the children and that the trial judge properly and reasonably exercised her discretion in finding that the payment of retroactive child support would be inequitable given those special provisions.

[38] The father submits that the mother’s submission that he engaged in blameworthy conduct by failing to provide income disclosure must be scrutinized in the context of the trial judge’s factual findings. First, the mother remarried in 2006 which, pursuant to the parties’ agreement, triggered her obligation to immediately pay the father $74,600. However, the mother failed to advise the father of her remarriage. The father submits that the mother’s evidence at trial clearly established that she never had any intention of honouring her obligation to the father even when he learned of her remarriage.

[39] The father submits that the trial judge properly considered all relevant evidence and the law with respect to retroactive child support. The father contends that the trial judge properly found that special provisions existed which had benefitted the children and properly exercised her discretion in concluding that the payment of retroactive child support for the period during which the special provisions applied would be inequitable.

[40] The father submits that the trial judge’s decision to terminate the father’s obligation to pay child support upon the children’s 25th birthday was consistent with Ontario caselaw, both in the Ontario Court of Justice and in the Superior Court of Justice. The father further submits that the trial judge recognized that doing so was “somewhat arbitrary” and that she did so only after carefully considering the specific facts in the case before her, together with the “need for certainty for the parties and the young adults” involved.

[41] The father does not oppose the mother’s request that paragraph 2(e) of the Final Order, which required each of the parties to be responsible for the cost of one in-person visit per year, be set aside.

[42] The father submits that the balance of the conditions that the trial judge placed on the father’s obligation to pay ongoing child support are reasonable and typical ancillary terms directly relating to maintaining the children’s ongoing entitlement to child support.

[43] Full time attendance at a post-secondary institution, disclosure of academic and financial records and the father’s approval of the children’s academic plans are all directly related to the ongoing entitlement to child support for children over the age of 18, according to the father.

[44] The father submits that paragraph 2(d) of the Final Order, which makes the payment of ongoing child support conditional on the maintenance of a minimal father/child relationship, is not contrary to the FLA or the Guidelines. The father submits that the trial judge had the jurisdiction to impose such a condition on the facts of this case.

[45] The father acknowledges that s. 19(1)(c) of the Guidelines allows a court to impute income to a support payor if the support payor lives in a country that has effective rates of income tax that are significantly lower than those in Canada.

[46] The father submits that the trial judge considered the mother’s request to impute income to the father on the basis that he resided in Washington State and properly exercised her discretion when she declined to do so. The father submits that the trial judge reasonably concluded that she had “insufficient information for a calculation of the benefits in the context of the cost of living in the State of Washington or in-depth comparatives, particularly in relation to health care costs”.

[47] The father submits that the mother failed to call expert evidence at trial with respect to the rates of income tax in Ontario and Washington or the services provided in exchange for taxes paid in each jurisdiction. The father suggests that decisions to impute or not to impute income are discretionary and involve the weighing of evidence by a trial judge. The father submits that the trial judge’s conclusion that she had insufficient evidence to allow her to impute income in these circumstances was reasonable and is entitled to deference.

[48] The father submits that the trial judge did not err in including the mother’s current spouse’s income when calculating the parties’ respective proportionate contributions to the children’s s. 7 expenses. The father contends that a court has jurisdiction, pursuant to s. 7(1) of the Guidelines, to consider “the reasonableness of the [s. 7] expenses in relation to the means of the parents…”. The father submits that a court may look beyond the respective income of the parties and consider their overall means, including total household income, when addressing s. 7 expenses.

[49] The father further submits that, contrary to the submission of the mother, there is no legislation or binding authority that requires a finding of in loco parentis before the income of a parent’s spouse can be considered for support purposes. In any event, the trial judge did find that the mother’s spouse both acted as a parent to the children and financially supported them when the mother left the workforce, according to the father.

[50] The father submits that the mother’s appeal should be dismissed but for the request to set aside paragraph 2(e) of the Final Order.

Discussion

The Date of Retroactivity of Child Support

[51] It is not in dispute that the trial judge was correct in concluding that the parties accepted the terms of settlement contained in their joint affidavit for divorce as evidencing the settlement agreement between them as of the date of separation.

[52] The trial judge further found as a fact that “the parties agreed that the property payment [due to the father] and the child support [due to the mother] were interrelated”. This finding was supported, in part, by the mother’s June 3, 2013 e-mail to the father wherein she requested confirmation of his annual income in order to calculate the offset of the property debt against the child support arrears. This finding of fact was not challenged by the mother on appeal.

[53] The trial judge further found as a fact that “proper support was paid from the date of separation to May 1, 2006” such that retroactive child support was not owing for this period. This finding of fact was not challenged by the mother on the appeal.

[54] The trial judge then considered the period of time between May 1, 2006 and June 1, 2013. She found the father’s failure to keep the mother apprised of his income during this period was “wrong”. It appears, from the context of this discussion in the Reasons for Judgment, that this was a conclusion that the father had thus engaged in “blameworthy conduct”.

[55] However, the trial judge went on to find the father’s conduct “understandable” in the context of the agreement, pursuant to which child support ordinarily payable by the father would be offset against the significant property debt ($74,600.00) owed in full by the mother as of the date of her remarriage. The mother remarried in 2006 and failed to advise the father of this fact.

[56] Child support payments are legally enforceable debts, owed to the children. In D.B.S. v. S.R.G., 2006 SCC 37, the Supreme Court established four factors to help determine when an award of retroactive child support is appropriate: the recipient’s reason(s) for any delay in applying for child support, the conduct of the payor parent, the circumstances of the child, and the hardship the award creates for the payor. In subsequent cases, Michel v. Graydon, 2020 SCC 24, and Colucci v. Colucci, 2021 SCC 24 the Supreme Court refined the analysis of retroactive child support and clarified that when the applicant can meet the threshold by showing a material change in circumstances, a presumptive three-year rule applies such that the Court will only vary an order back to the date of effective notice, up to three years before the application. After threshold validity is established, the sole question left to answer is: whether the court should depart from the presumptive date of retroactivity in order to be fair in the result? To answer this question, the court refers to the four factors in D.B.S, mentioned above.

[57] The Supreme Court in Michel offered helpful guidance about the relationship between delay and blameworthy conduct of the payor. The Court found that the Respondent’s failure to disclose his income amounted to blameworthy conduct which justified an award of retroactive child support and nullified his interest in the certainty of his child support obligations.

[58] In line with the decision in Michel, the mother argues that, where there is blameworthy conduct, “the date of effective notice is rendered irrelevant, as there is no need to protect a blameworthy parent’s interest in certainty beyond the date when they knew their circumstances had changed.”

[59] However, Michel also clarified that the D.B.S factors and the framework in Colucci does not mean that the Divorce Act embraces all other statutory schemes. Rather, when provinces establish “an application-based regime such as the FLA, and where an application for retroactive child support is brought thereunder, it is that legislation which governs a court’s authority to grant retroactive child support.” [1]

[60] The Supreme Court, at paragraph 96 of Colucci, determined that courts “retain discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair in the circumstances of a particular case.” It also confirmed at the same paragraph that “[t]here is no fixed formula; none of the [D.B.S.] factors is determinative and they must be viewed holistically”.

[61] In the case at bar, the trial judge, properly referred to the FLA, which circumscribes the Court’s powers with respect to child support in Ontario, to assess retroactive child support. The trial judge found that the mother and children benefitted from both the transfer of the matrimonial home into her name (which she subsequently sold for $260,000.00 net proceeds) and the mother’s retention of the $74,600.00 she owed to the father. Notwithstanding the blameworthy conduct alleged by the mother, the trial judge was satisfied that this arrangement constituted “special provisions…in a written agreement respecting the financial obligations of the parents” that directly benefitted the children such that ordering retroactive child support for this period of time would be inequitable, within the meaning of s. 37(2.3) of the FLA.

[62] In my view, there are no errors of fact underlying this conclusion. I am also of the view that the trial judge was correct in her legal conclusion when she limited retroactive child support to the date of effective notice as a result of the application of s. 37(2.3) of the FLA. I would not give effect to this ground of appeal.

Termination of Child Support at age 25

[63] The trial judge ordered that child support was to terminate for each of the children when they turned 25 years old. In doing so, the trial judge acknowledged that this was “somewhat arbitrary”.

[64] However, in ordering a definite termination date for child support, the trial judge also carefully considered the evidence relating to each of the children. Daisy was turning 18 years old in June 2020, was found to be “an accomplished student” and was scheduled to begin university in the fall of 2020. At the time of the hearing, Victor was 23 years old, had completed a five-year undergraduate program and been accepted into medical school.

[65] The trial judge, in consideration of these facts, found that “the age of twenty-five years would allow for a reasonable degree to be obtained and for [each]child to slowly move into the adult world and independence”. In terminating child support at age 25, the trial judge also emphasized the “need for certainty” for both the parties and the children.

[66] I reject the mother’s submission that the trial judge ordered that child support would terminate at age 25 based on “speculation regarding when the children could be expected to be financially independent”. The trial judge concluded that each of the children would have, by the age of 25, completed approximately seven years of university education.

[67] In coming to this conclusion, the trial judge considered and followed a line of Ontario cases which recognized that parents are not legally obligated to provide for adult children indefinitely and which held that it was reasonable to terminate child support when a child had completed a first post-secondary degree or at the age of twenty-five years, whichever occurs first. The trial judge, however, chose the age of twenty-five as the termination date for child support. In doing so, the trial judge ordered ongoing child support for approximately seven years following the children’s high school graduation and beyond the completion of the children’s undergraduate degrees. On the facts of this case this is a fair and reasonable conclusion.

[68] In my opinion, the trial judge did not err in ordering the termination of child support upon the children’s 25th birthdays.

Conditions on Father’s Ongoing Child Support Obligation

[69] The trial judge ordered that the father’s child support obligation was contingent on several conditions, summarized as follows:

The children must be enrolled in a full time post-secondary program, approved by the father and the children must have consented to the father obtaining their academic and financial records from their respective institutions; and

The relationship between the children and the father must be maintained by monthly discussions or conversations in private of at least 15 minutes duration by electronic means and at least two face to face visits each year, with the cost of one such visit to be paid by the mother.

[70] These conditions were not requested by the father in his Answer. The father did not request that he be relieved of his child support obligation based on estrangement from the children. The trial judge did not provide any reasons explaining why she imposed these conditions.

[71] However, the children’s entitlement to child support in this case is legally premised on each child being enrolled in a full-time program of education. I accept that academic records are required to enable the father to confirm this fact. I also accept that the disclosure of the children’s financial records and accounts directly from their educational institutions is necessary on the facts of this case, given the trial judge’s finding that the mother attempted to deceive the court in regard to the payment of the older child’s university expenses.

[72] Pursuant to s. 33(11) of the FLA, the Court shall make orders for child support in accordance with the child support guidelines. However, a court may award a different amount according to s. 33(12), if special provisions benefitting the child have been made or that the application of the child support guidelines would result in an inequitable amount of child support. That said, where the Court departs from the guideline amount of child support under s. 33(12), it must record the reasons for the departure according to s. 33(13).

[73] The imposition of the conditions set out at paragraphs 2(c), (d), (e), (f) and (g) of the Final Order dated September 30, 2020 was beyond the jurisdiction of the trial judge and was not supported by reasons. I find that they are therefore unreasonable. The mother’s appeal of these specific provisions is granted. I order that paragraphs 2(c), (d), (e), (f) and (g) be removed from the Final Order.

The Determination of the Father’s Income

[74] Section 19(1) of the Guidelines provides courts in Ontario with fairly wide discretion to impute income to a support payor “as it considers appropriate in the circumstances”. Pursuant to s. 9(1)(c) of the Guidelines, such circumstances include the support payor living in a country that has “effective rates of income tax that are significantly lower than those in Canada”.

[75] The trial judge rejected the mother’s submission that the court should exercise its discretion and impute income to the father because he resided in the state of Washington. Her reasons for doing so are found at para. 43 of the Reasons for Judgment:

I do not accept the [mother’s] suggestion that the annual income of the [father] should include benefits…there is insufficient evidence for a calculation of the benefits in the context of the cost of living in the State of Washington or in-depth comparatives, particularly in relation to the health care costs.

[76] As can be seen, the trial judge declined to exercise her discretion to impute income to the father because she concluded that she did not have sufficient evidence to enable her to do so, specifically in regard the cost of living and health care costs in Washington.

[77] The trial judge’s refusal to impute income to the father involved a consideration of the evidence available to her. In my view, her exercise of discretion in this regard is entitled to deference and I would not give effect to this ground of appeal.

The Addition of Mother’s Spouse’s Income to the Mother’s Income

[78] At para. 105 of her Reasons for Judgment, the trial judge simply added the income of the mother’s current spouse to the mother’s income to arrive at a “household income” of the mother for the purpose of calculating the parties’ proportionate shares of s. 7 expenses. The trial judge did not provide any reasons for doing so.

[79] Paragraphs 7(1) and (2) of the Child Support Guidelines state as follows:

Special or extraordinary expenses

7. (1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation: (a) child care expenses incurred as a result of the employment, illness, disability or education or training for employment of the parent or spouse who has the majority of parenting time; (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, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy, prescription drugs, hearing aids, glasses and contact lenses; (d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs; (e) expenses for post-secondary education; and (f) extraordinary expenses for extracurricular activities.

Sharing of expense

(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the parents or spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child. O. Reg. 391/97, s. 7 (2).

[80] I accept the submission of the father that there is no specific requirement that there be a finding of in loco parentis before the income of a parent’s spouse can be considered for the purposes of a s. 7 calculation.

[81] The trial judge’s exercise of discretion in regard to this issue must be considered in context. According to s. 7(2), the extraordinary expenses should be shared by the spouses in proportion to their respective incomes. These expenses should be reasonable and necessary in order to justify their division between the former spouses. The mother was requesting that the father be ordered to contribute 97% of the cost of the older child’s medical school expenses, estimated at $40,000.00/year, plus 97% of the younger child’s university expenses. The reasonableness of the claimed s. 7 expenses was obviously in issue.

[82] As well, the mother married her second spouse in 2006 and both children had resided exclusively with the mother and her spouse since that date. At para. 61 of the Reasons for Judgment, the trial judge found as a fact that the mother’s “second husband participated by acting as a parent…”.

[83] It is apparent to me that the trial judge exercised her discretion and included the mother’s spouse’s income in determining the “means” of the mother for the purposes of s. 7 because the mother’s spouse had acted as a parent to the children for 14 years at the time of trial and because of the very significant s. 7 expenses that were being claimed by the mother. The trial judge’s conclusion in this regard is entitled to deference. I reject this ground of appeal.

Costs

[84] The father has been largely successful on this appeal. As a result, I decline to vary the costs award made by the trial judge. If the parties cannot agree on the costs of this appeal, they shall make written submissions as to costs, not to exceed five pages, exclusive of their respective Bills of Costs. The Respondent’s Costs Submissions shall be filed within 14 days of the release of this decision; the Appellant’s within 7 days thereafter.

The Hon. Justice J. Fregeau

Released: April 20, 2022

COURT FILE NO.: FS-20-195 DATE: 2022-04-20

BETWEEN:

LIXIN ZHAO

Appellant

- and -

TIAN XIAO

Respondent

REASONS ON APPEAL

Fregeau J.

Released: April 20, 2022

/sf

[1] Michel, at para 16 (emphasis in original; “FLA” refers to the British Columbia Act.)