Wright v. Zaver

[Indexed as: Wright v. Zaver]

59 O.R. (3d) 26

[2002] O.J. No. 1098

Docket No. C34650

Court of Appeal for Ontario

Carthy, Charron, Feldman, Sharpe and Simmons JJ.A.

March 26, 2002

Family law -- Support -- Child support -- Variation -- Ontario Child Support Guidelines -- Enactment of Ontario Child Support Guidelines creating right to variation of pre- existing child support orders -- Court's discretion not to apply Guidelines limited to s. 37(2.3) and (2.5) of Family Law Act -- "Special provisions" under s. 37(2.3) constituting provisions that are out of ordinary or unusual -- Parties' goals and expectations in entering into prior arrangement not relevant in determining whether that arrangement qualifying under "special provisions" exception -- Family Law Act, R.S.O. 1990, c. F.3, s. 37(2.3), (2.5) -- Child Support Guidelines, O. Reg. 391/97.

In 1985, a court order incorporating Minutes of Settlement awarded custody of the parties' child to the respondent mother, denied access to the appellant father and ordered the appellant to pay lump sum child support of $4,000. The respondent and W were married in 1990 and separated in 1999. W was ordered to pay child support. Following her separation from W, the respondent also applied for child support from the appellant. The applications judge found two material changes in circumstances warranting a variation of the 1985 order: first, that the lump sum of $4,000 was inadequate to meet the child's continuing needs, and second, the coming into force of the Ontario Child Support Guidelines. He ordered the appellant to pay child support in the amount of $509 per month in accordance with the Ontario Guidelines. The applications judge found that it was immaterial whether the application was treated as an application to vary or as a fresh application for support. He also found that a court is not bound by the child support provisions of an agreement, even where incorporated in a court order, where such provisions are inadequate. Finally, he found that the appellant was not eligible to apply for an apportionment of child support under s. 5 of the Ontario Guidelines. The appellant appealed.

Held, the appeal should be dismissed.

Per Simmons J.A. (Feldman J.A. concurring): The applications judge erred by failing to treat this application as an application to vary and by failing to treat the 1985 order as being correct.

The applications judge did not err by failing to apportion child support in accordance with s. 5 of the Ontario Guidelines. By its express wording, s. 5 applies only to a spouse who stands in the place of a parent or to a parent who is not a natural or adoptive parent of a child. The enactment of the Ontario Guidelines created a right to a variation of pre-existing orders for child support, and the court does not retain a residual discretion not to vary once the precondition to variation has been satisfied. It was therefore unnecessary for the applications judge to consider the material change in circumstances test in determining whether the respondent was entitled to a variation of the 1985 order. The court's discretion not to apply the Ontario Guidelines is limited to the circumstances set out in s. 37(2.3) and (2.5) of the Family Law Act.

Section 37(2.3) of the Act sets out a three-part test for departing from the application of the Ontario Guidelines. First, the court must find "special provisions". Second, the court must determine that the special provisions benefit the child in the specified way. Third, the court must find that applying the Ontario Guidelines would result in an amount of support that is inequitable given the special provisions. Only if each part of this test is satisfied can a court depart from the application of the Ontario Guidelines under s. 37(2.3). Section 37(2.3)(a) contemplates three types of special provisions: special provisions in an order or agreement respecting the financial obligations of the parents that directly or indirectly benefit a child; special provisions in an order or agreement respecting the division or transfer of the parents' property that directly or indirectly benefit a child; and special provisions otherwise made for the benefit of a child. A "special provision" must be one that replaces, in whole or in part, the need for support in accordance with the Ontario Guidelines. There is no reason to limit special provisions to provisions that are out of the ordinary or unusual.

The agreement entered into by the parties in this case, the resulting court order, and the fact that W accepted responsibility for supporting the child, were capable of constituting "special provisions" within the meaning of s. 37(2.3) of the Act. The support being paid by W also qualified as part of the arrangements capable of constituting "special provisions". There is nothing in the requirements relating to the third type of "special provisions" that requires that they flow entirely from the parties to the litigation or that they be entirely financial in character. The 1985 agreement was clearly made for the child's benefit. "Inequitable" as used in s. 37(2.3) of the Act includes a connotation that the equities between the interested parties are out of balance. The most important factor in this case affecting the determination of whether application of the Ontario Guidelines would be inequitable was the fact that the respondent was no longer able to meet all of the child's financial needs independently of the appellant, even with the benefit of the additional resources provided by W. As the respondent was no longer able to meet all of the child's financial needs, it was not appropriate to assess them on a minimalist basis. The appellant was the child's biological father. The 1985 agreement did not relieve him of the continuing obligation to ensure that the child's needs were properly met. The Ontario Guidelines table amounts are designed to achieve that result based on the income of the payor(s). While the appellant had not had the opportunity of a personal relationship with the child, he had had a holiday from support for many years. There was no indication that it would be an undue financial burden for him to pay support in accordance with the Ontario Guidelines. The equities between the parties would not be out of balance, and it would not be otherwise inequitable, if the appellant were required to pay the full Ontario Guidelines amount for the child.

Per Sharpe J.A. (Carthy and Charron JJ.A. concurring): The enactment of the Ontario Child Support Guidelines creates a right to a variation of pre-existing orders for child support.

Simmons J.A.'s conclusion that "special provisions" in s. 37(2.3) of the Family Law Act need not be out of the ordinary or unusual is inconsistent with the wording of the statute. The use of the word "special" suggests that the provisions in question must be out of the ordinary or unusual. Interpreting "special provisions" to include provisions that are not out of the ordinary or unusual would undermine the general rule that the Child Support Guidelines provide the amount of a child support order. The "special provisions" qualification in s. 37(2.3) is an exception to the presumptive rule. Its status as an exception suggests that its scope must be carefully delineated.

The parties' goals and expectations when entering into the prior arrangement are irrelevant in determining whether that arrangement qualifies under the "special provisions" exception. Examining the goals and expectations of the parties would import into s. 37(2.3) an uncertainty that is both unnecessary and inappropriate. The goals and expectations of the parties are equally irrelevant in determining whether special provisions benefit the child. The question is not whether the parties subjectively intended to benefit the child but whether the special provisions actually objectively benefit the child.

The "special provisions" exception did not apply in the circumstances of this case. As the goals and expectations of the parties in entering into the 1985 agreement were not relevant in determining whether there were special provisions, it was irrelevant whether or not the respondent's goal in entering the agreement was to remarry and effect a de facto adoption for the child and whether or not the respondent expected to be able to provide for the child's needs. What was relevant was whether, viewed objectively, the arrangement between the parties amounted to a special provision for the financial benefit of the child. The mere existence of an agreement or court order cannot constitute a "special circumstance". The appellant's lump sum child support payment of $4,000 did not constitute a "special provision" since it did not replace the child's ongoing need for support. A lump sum payment may replace a child's ongoing need for support if the payment is sufficiently large. In the circumstances of this case, the payment could not have met the child's needs for more than a few years. W's ongoing child support arguably constituted a "special provision" by partially replacing the child's ongoing need for child support. The support also benefited the child directly, thereby meeting the second part of the test under s. 37(2.3). However, W's ongoing child support failed to meet the third part of the test in s. 37(2.3), since applying the child support guidelines in this case would not be inequitable.

APPEAL from a judgment of Taliano J. (2000), 2000 22395 (ON SC), 49 O.R. (3d) 629, 7 R.F.L. (5th) 212 (S.C.J.) allowing an application for child support.

Bates v. Bates (2000), 2000 14734 (ON CA), 49 O.R. (3d) 1, 188 D.L.R. (4th) 642, 5 R.F.L. (5th) 259 (C.A.), apld Cane v. Newman, [1998] O.J. No. 1776 (Gen. Div.); MacKay v. Bucher, 2001 NSCA 120, 196 N.S.R. (2d) 293, 208 D.L.R. (4th) 472, 613 A.P.R. 293; Wanstall v. Walker, [1998] B.C.J. No. 1808 (S.C.), apld Other cases referred to Burns v. Burns (1998), 1998 14880 (ON SC), 40 R.F.L. (4th) 32 (Ont. Gen. Div.); Danchuk v. Danchuk, 2001 BCCA 291, 88 B.C.L.R. (3d) 116, 198 D.L.R. (4th) 604, [2001] 5 W.W.R. 458, 15 R.F.L. (5th) 328; Dergousoff v. Dergousoff (1999), 1999 12250 (SK CA), 177 Sask. R. 64, 199 W.A.C. 64, [1999] 10 W.W.R. 633, 48 R.F.L. (4th) 1 (C.A.); Hall v. Hall (1997), 1997 3803 (BC SC), 35 B.C.L.R. (3d) 311, 30 R.F.L. (4th) 333 (B.C.S.C.); Julius v. Oxford (Lord Bishop) (1880), 5 App. Cas. 214, [1874-80] All E.R. Rep. 43, 49 L.J.Q.B. 577, 42 L.T. 546, 44 J.P. 600, 28 W.R. 726 (H.L.); Laird v. Laird, 2000 ABCA 9, 76 Alta. L.R. (3d) 1, 182 D.L.R. (4th) 357, [2000] 4 W.W.R. 213, 3 R.F.L. (5th) 241; Nouveau-Brunswick (Ministère de la Santéé et des Services communautaires) v. L. (M.), 1998 800 (SCC), [1998] 2 S.C.R. 534, 204 N.B.R. (2d) 1, 165 D.L.R. (4th) 58, 230 N.R. 201, 520 A.P.R. 1, 41 R.F.L. (4th) 339 (sub nom. New Brunswick (Minister of Health and Community Services) v. L. (M.)); Parent v. Pelletier (1999), 1999 32734 (NB CA), 219 N.B.R. (2d) 102, 561 A.P.R. 102, 1 R.F.L. (5th) 66 (C.A.); Perka v. R., 1984 23 (SCC), [1984] 2 S.C.R. 232, 28 B.C.L.R. (2d) 205, 13 D.L.R. (4th) 1, 55 N.R. 1, [1984] 6 W.W.R. 289, 14 C.C.C. (3d) 385, 42 C.R. (3d) 113; R. v. Southwark Crown Court, Ex parte Customs and Excise Commissioners, [1990] 1 Q.B. 650 (D.C.); Sherman v. Sherman (1999), 1999 4701 (ON CA), 44 O.R. (3d) 411, 45 R.F.L. (4th) 424 (C.A.); Wang v. Wang (1998), 1998 6374 (BC CA), 58 B.C.L.R. (3d) 159, 164 D.L.R. (4th) 146, [1999] 4 W.W.R. 752, 39 R.F.L. (4th) 426 (B.C.C.A.), affg (1997), 1997 1299 (BC SC), 41 B.C.L.R. (3d) 375 (S.C.); Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670, 125 Sask. R. 81, 119 D.L.R. (4th) 405, 173 N.R. 321, 81 W.A.C. 81, 6 R.F.L. (4th) 161 Statutes referred to Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 15.1, 17 Family Law Act, R.S.O. 1990, c. F.3, ss. 31(1), 33, 37 Family Services Act, S.N.B. 1980, c. F-2.2 Rules and regulations referred to Child Support Guidelines, O. Reg. 391/97, ss. 1, 3, 5, 14, 14.1, 14.2, 14.4 Federal Child Support Guidelines, SOR/97-175, ss. 4, 14

Corina Anghel Bachmann, for respondent. Thomas G. Bastedo, Q.C., for appellant.

[1] SIMMONS J.A. (FELDMAN J.A. concurring): -- This appeal raises two important issues concerning child support. First, did the enactment of the Child Support Guidelines, O. Reg. 391/ 97, as amended (the "Ontario Guidelines"), create a right to a variation of pre-existing orders for child support? Second, were "special provisions" made for the benefit of the child in this case such that applying the Ontario Guidelines would be inequitable?

[2] Ms. Wright and Mr. Zaver signed Minutes of Settlement resolving a proceeding regarding custody, access and child support in May 1985. A court order incorporating the Minutes of Settlement awarded custody of their son, Michael, to Ms. Wright, denied Mr. Zaver access to Michael, and required Mr. Zaver to pay lump sum child support of $4,000.

[3] Ms. Wright married Mr. Wright in 1990. They separated in 1999. After their separation, Mr. Wright consented to an order in divorce proceedings requiring him to pay child support for Michael.

[4] Following her separation from Mr. Wright, Ms. Wright applied for child support from Mr. Zaver. In June 2000, the applications judge ordered Mr. Zaver to pay child support for Michael in accordance with the Ontario Guidelines.

[5] Mr. Zaver appeals against the June 2000 order. He claims that the applications judge erred in finding a material change in circumstances warranting a variation of the 1985 order. He has not seen Michael since 1985. In his view, other events unfolded exactly as planned; Ms. Wright married, and Mr. Wright assumed financial responsibility for Michael.

[6] In the alternative, Mr. Zaver says the applications judge erred by failing to exercise his discretion either to refuse to award child support or to apportion it.

[7] For the reasons set out below, I would dismiss this appeal.

Background

[8] Ms. Wright and Mr. Zaver were involved in an intimate relationship for slightly less than three years. Their son, Michael, was born on January 23, 1985.

[9] Because of increasing acrimony in their relations, Ms. Wright denied Mr. Zaver and his family any contact with Michael soon after Michael's birth. In March 1985, Ms. Wright applied to the Provincial Court (Family Division) for custody, child support and spousal support. Mr. Zaver cross-applied for custody.

[10] The parties resolved the application by Minutes of Settlement dated May 29, 1985. The Minutes of Settlement included acknowledgments confirming that the terms would be incorporated into a court order, that the order would be subject to variation, and that Mr. Zaver did not admit paternity.

[11] An order was made the same day incorporating the terms of the Minutes of Settlement. It awarded custody of Michael to Ms. Wright, required Mr. Zaver to pay lump sum child support of $4,000, and provided that Mr. Zaver would have no access to Michael.

[12] By January 1986, Mr. Zaver began having second thoughts about the agreement. He commenced an application for access, admitted paternity, and offered to revisit the issue of child support. Ms. Wright opposed the application vigorously, contending that there had been no material change in circumstances. She also asserted that she hoped to marry and that it would not be in Michael's best interests to have Mr. Zaver involved in his life.

[13] Faced with the prospect of acrimonious litigation, Mr. Zaver withdrew the 1986 application.

[14] In October 1990, Ms. Wright married Mr. Wright. They separated in July 1999. During their marriage they had one child, Amanda Wright, born October 31, 1992. Throughout the marriage, Mr. Wright treated Michael as his own son.

[15] Ms. Wright commenced this application against Mr. Zaver on October 19, 1999, claiming child support for Michael in accordance with the Ontario Guidelines and"if necessary, a declaration that there has been a material change of circumstances". In support of her application, Ms. Wright claimed monthly living expenses of $3,819 and a gross monthly income of $2,820, leaving her with a deficit of $999 per month.

[16] Mr. Zaver requested that Mr. Wright be added as a party to this proceeding. However, his request was made essentially meaningless by a consent order dated November 8, 1999 in divorce proceedings between Ms. Wright and Mr. Wright requiring Mr. Wright to pay child support of $879 per month for two children based on the Federal Child Support Guidelines, SOR/ 97-175, as amended (the "Federal Guidelines").

[17] Taking account of the child support paid by Mr. Wright, Ms. Wright has a deficit of $120 per month.

[18] Mr. Zaver is a Public Health Inspector for the City of Toronto. His gross income from all sources as disclosed on his 1998 tax return was $60,260.90. According to his financial statement, his net worth is $428,248.65.

[19] On June 20, 2000, the applications judge found two material changes in circumstances warranting a variation of the 1985 order, first, that the lump sum payment of $4,000 was inadequate to meet Michael's continuing needs, and, second, the coming into force of the Ontario Guidelines. He accordingly ordered Mr. Zaver to pay the Ontario Guidelines table amount of $509 per month as child support for Michael.

[20] The applications judge made three other findings that are in issue on this appeal. First, he found that it is immaterial whether this application is treated as an application to vary or as a fresh application for support. Second, he found that "a court is not bound by the child support provisions of an agreement, even where incorporated into a court order, where such provisions are inadequate" (p. 634 O.R.). Third, he found that Mr. Zaver is not eligible to apply for an apportionment of child support under s. 5 of the Ontario Guidelines.

Grounds of Appeal

[21] Mr. Zaver submits that the applications judge made the following errors:

1. he concluded that neither the prior agreement for child support nor the resulting court order limited his ability to award child support;

2. he found a material change in circumstances that permitted him to award support in accordance with the Ontario Guidelines;

3. he failed to consider s. 37(2.3) of the Family Law Act, R.S.O. 1990, c. F.3, which allows the court to depart from a strict application of the Ontario Guidelines where they result in an amount of child support that is inequitable having regard to special provisions made for the child; and

4. he failed to exercise the discretion contained in s. 5 of the Ontario Guidelines to apportion child support between Mr. Wright and Mr. Zaver in order to prevent duplicative child support.

Relevant Legislation

[22] In 1997, the federal and provincial governments significantly revised the pre-existing child support regime by amending the legislation governing child support and by enacting regulations setting out child support guidelines. Under the new regime, the quantum of child support is generally determined based solely on the income of the payor and the number of children being supported.

[23] The relevant provisions of the Family Law Act, and of the Ontario Guidelines, as they stood on June 20, 2000, [^1] are set out below.

Family Law Act, R.S.O. 1990, c. F.3

Obligation of parent to support child

31(1) Every parent has an obligation to provide support for his or her unmarried child who is a minor or is enrolled in a full time program of education, to the extent that the parent is capable of doing so.

Order for support

33(1) A court may, on application, order a person to provide support for his or her dependants and determine the amount of support.

Setting aside domestic contract

(4) The court may set aside a provision for support or a waiver of the right to support in a domestic contract . . . and may determine and order support in an application under subsection (1) although the contract or agreement contains an express provision excluding the application of this section,

(a) if the provision for support or the waiver of the right to support results in unconscionable circumstances;

Purposes of order for support of child

(7) An order for the support of a child should,

(a) recognize that each parent has an obligation to provide support for the child;

(b) apportion the obligation according to the child support guidelines.

Application of child support guidelines

(11) A court making an order for the support of a child shall do so in accordance with the child support guidelines.

Exception: special provisions

(12) Despite subsection (11), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines if the court is satisfied,

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

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

Exception: consent orders

(14) Despite subsection (11), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines on the consent of both parents if the court is satisfied that,

(a) reasonable arrangements have been made for the support of the child to whom the order relates; . . .

Application for variation

37(1) An application to the court for variation of an order made . . . under this Part may be made by, . . .

Powers of court: child support

(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(c) make any other order for the support of a child that the court could make on an application under section 33.

Application of child support guidelines

(2.2) A court making an order under subsection (2.1) shall do so in accordance with the child support guidelines.

Exception: special provisions

(2.3) Despite subsection (2.2), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines if the court is satisfied,

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

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

Exception: consent orders

(2.5) Despite subsection (2.2), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines on the consent of both parents if the court is satisfied that,

(a) reasonable arrangements have been made for the support of the child to whom the order relates; and

Reasonable arrangements

(2.6) For the purposes of clause (2.5)(a), in determining whether reasonable arrangements have been made for the support of a child,

(a) the court shall have regard to the child support guidelines; and

(b) the court shall not consider the arrangements to be unreasonable solely because the amount of support agreed to is not the same as the amount that would otherwise have been determined in accordance with the child support guidelines.

Child Support Guidelines, O. Reg. 391/97

Objectives

1. The objectives of these guidelines are,

(a) to establish a fair standard of support for children that ensures that they benefit from the financial means of their parents and, in the case of divorce, from the financial means of both spouses after separation;

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

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

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

Presumptive rule

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

(a) the amount set out in the applicable table . . .

Spouse in place of a parent

5. Where the spouse against whom an order for the support of a child is sought stands in the place of a parent for a child or the parent is not a natural or adoptive parent of the child, the amount of the order is, in respect of that parent or spouse, such amount as the court considers appropriate, having regard to these guidelines and any other parent's legal duty to support the child.

Circumstances for variation

14. For the purposes of subsection 37(2.2) of the Act . . . any one of the following constitutes a change of circumstances . . . :

15. In the case where the amount of child support includes a determination made in accordance with the table, any change in circumstances that would result in a different order for the support of a child or any provision thereof.

16. In the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either parent or spouse or of any child who is entitled to support.

17. In the case of an order made under the Divorce Act (Canada) before May 1, 1997, the coming into force of section 15.1 of that Act, enacted by section 2 of chapter 1 of the Statutes of Canada (1997).

18. In the case of an order made under the Act, the coming into force of subsection 33(11) of the Act.

[24] Many of the cases I will be referring to were decided under similarly worded provisions contained in the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) and in the Federal Guidelines. It will therefore be helpful to bear in mind that ss. 17(1), (4), (6.1), (6.2) and (6.4) of the Divorce Act are the counterparts to ss. 37(2.1), (2.2), (2.3) and (2.5) respectively of the Family Law Act, and that ss. 14(a), (b) and (c) of the Federal Guidelines are the counterparts to ss. 14.1, 14.2 and 14.4 respectively of the Ontario Guidelines.

[25] Although there are variations in language between the federal provisions and the provincial provisions, in my view, those variations are not material to my conclusion.

Analysis

[26] I am satisfied that the enactment of the Ontario Guidelines created a right to a variation of pre-existing orders for child support. Resolution of the first ground of appeal will not therefore affect the outcome of this appeal. I will deal with it briefly, however, because it raises an issue concerning the proper approach to variation applications. The fourth ground of appeal can be disposed of summarily. I will deal with it before turning to the remaining grounds.

(i) Did the applications judge err by concluding that neither the prior agreement for child support nor the resulting court order limited his ability to award child support?

[27] The applications judge concluded that because s. 33(4) of the Family Law Act allows a court to set aside the terms of a child support agreement if it finds unconscionable circumstances, it is immaterial whether this application is treated as a fresh application for child support or as an application to vary. He also said that a prior order not made in the child's best interests "is no obstacle to a fresh determination of a proper level of child support" (p. 635 O.R.).

[28] In Willick v. Willick [^2] Sopinka J. held that although a court is not bound by the terms of a child support agreement, a court dealing with an application to vary an order incorporating its terms must treat the prior order as being correct and may only exercise its powers of variation if satisfied that the pre-condition to variation has been satisfied. I respectfully agree, therefore, that the applications judge erred by failing to treat this application as an application to vary and by failing to treat the 1985 order as being correct.

[29] I am aware that Professor McLeod questions whether s. 33(4) of the Family Law Act even forms a part of the court's powers of variation in an annotation to the applications judge's decision. However, it is unnecessary that I resolve that issue for the purposes of this appeal.

(ii) Did the applications judge err by failing to apportion child support in accordance with s. 5 of the Ontario Guidelines?

[30] The applications judge found that Mr. Zaver is not eligible to apply for apportionment of child support under s. 5 of the Ontario Guidelines because he is Michael's biological father. I agree with this finding. By its express wording, s. 5 applies only to a spouse who stands in the place of a parent or to a parent who is not a natural or adoptive parent of a child. I would not give effect to this ground of appeal.

[31] I will turn now to the two most significant issues raised on this appeal.

(iii) Did the applications judge err in finding a material change in circumstances that permitted him to award support in accordance with the Ontario Guidelines?

[32] For the reasons that follow, I conclude that the enactment of the Ontario Guidelines created a right to a variation of pre-existing orders for child support and that the court does not retain a residual discretion not to vary once the pre-condition to variation has been satisfied. It was therefore unnecessary for the applications judge to consider the material change in circumstances test in determining whether Ms. Wright is entitled to a variation of the 1985 order. He was, however, correct in concluding that the enactment of the Ontario Guidelines created a right to a variation of the 1985 order. I also conclude that the court's discretion not to apply the Ontario Guidelines is limited to the circumstances set out in s. 37(2.3) and (2.5) of the Family Law Act.

[33] The effect of the enactment of Ontario Guidelines on the right to a variation turns on the interpretation of the legislative framework establishing the new child support regime.

[34] Section 37(2.1) of the Family Law Act prescribes one pre-condition to variation, namely"change of circumstances as provided for in the child support guidelines". Section 14 of the Ontario Guidelines establishes three ways of satisfying that condition, each of which applies exclusively to a particular category of order:

14. For the purposes of subsection 37(2.2) of the Act . . . any one of the following constitutes a change of circumstances:

15. In the case where the amount of child support includes a determination made in accordance with the table, any change in circumstances that would result in a different order for the support of a child or any provision thereof.

16. In the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either parent or spouse or of any child who is entitled to support.

17. In the case of an order made under the Divorce Act (Canada) before May 1, 1997, the coming into force of section 15.1 of that Act, enacted by section 2 of chapter 1 of the Statutes of Canada (1997).

18. In the case of an order made under the Act, the coming into force of subsection 33(11) of the Act. [^3]

[35] Several provincial appellate courts have considered whether the enactment of the Guidelines created a right to a variation of a pre-existing order for child support. The Courts of Appeal of British Columbia, New Brunswick and Alberta all determined that the court retains a residual discretion not to vary and that there is, accordingly, no right to a variation: Wang v. Wang, [^4] Parent v. Pelletier [^5] and Laird v. Laird. [^6] By contrast, the Courts of Appeal of Saskatchewan and Nova Scotia each determined that there is no such residual discretion and that the enactment of the Guidelines did therefore create a right to a variation: Dergousoff v. Dergousoff [^7] and MacKay v. Bucher. [^8]

[36] This court has considered the issue on two occasions. In Sherman v. Sherman, [^9] this court held that the enactment of the Guidelines does not create a right to a variation. Rather, the material change in circumstances test remains applicable on applications to vary child support. In Bates v. Bates, [^10] this court stated in obiter that the enactment of the Guidelines creates a right to vary a prior order and that Sherman was wrongly decided.

[37] It will be helpful to briefly review Wang, Dergousoff, Sherman and Bates because they illustrate the differing views concerning the effect of the enactment of the Guidelines.

[38] In Wang, the British Columbia Court of Appeal focused on the language of s. 17(1) of the Divorce Act: "[a] Court . . . may make an order varying . . . a support order" (p. 164 B.C.LR.) (emphasis added), in considering the effect of the enactment of the Guidelines. It found that "may" is used permissively, and provides a residual discretion not to vary.

[39] In Dergousoff, the Saskatchewan Court of Appeal expressly disagreed with the reasoning in Wang, and found that s. 17(1) of the Divorce Act does not include a residual discretion not to vary once the pre-condition to variation has been met.

[40] Cameron J.A. found that s. 17(1) of the Divorce Act is an empowering provision, enabling a court to do that which it could not otherwise do. He observed that use of the word "may" in such a context "is customarily taken to confer neither discretionary nor non-discretionary power" (p. 649 W.W.R.) and that "the nature, object, and conditions of the powers conferred by these subsections, together with the makeup of the class of persons for whose benefit they were conferred" may be seen to impose a duty on the court to act "once the conditions of fact and law requisite to the exercise of that power are met" (p. 650 W.W.R.). By analyzing s. 17 of the Divorce Act in conjunction with s. 15.1, he reasoned that, just as a judge must be required to make an award of child support in the first instance, once the conditions for doing so have been met, so must a judge be required to vary under s. 17(1), once the pre- condition to variation set out in s. 17(4) is met.

[41] In Sherman, this court adopted portions of the reasoning in Wang concerning the existence of a residual discretion not to vary, but without specific reference to s. 17(1) of the Divorce Act. Unlike Wang, Sherman analyzed the coming into force of the Federal Guidelines as "a triggering mechanism to permit a review of the circumstances" (p. 413 O.R.) to see whether the threshold test for variation of "material change in circumstances" established in Willick has been met. Implicitly, this court preserved the Willick test as part of the pre- condition to variation.

[42] In Bates Laskin J.A. expressed the view that the enactment of the Guidelines creates a right to a variation of a pre-existing order for child support. He opined that Wang and Sherman were incorrectly decided and recommended that a five- person panel of this court reconsider Sherman. In the circumstances, however, he found that fairness and institutional considerations dictated that Sherman be applied, and remitted the case to the trial court for a determination of whether there had been a material change in circumstances apart from the enactment of the Guidelines.

[43] In my view, Laskin J.A.'s reasoning is compelling, and applies equally to the enactment of the Ontario Guidelines. I will accordingly review his reasons in some detail.

[44] Laskin J.A. found, first of all, that a plain reading of the provisions dealing with variation in the Divorce Act and the Federal Guidelines supports his conclusion. The Divorce Act provides that a court "may" vary a child support order where there has been a change in circumstances within the meaning of the Guidelines; the Guidelines stipulate that their enactment constitutes a change in circumstances; the Divorce Act requires a court that varies a prior order for child support to apply the Guidelines unless one of the legislated exceptions to their application applies. Read in combination, these provisions indicate that a payee can apply to vary a prior child support order based on nothing more than the enactment of the Guidelines.

[45] Second, Laskin J.A. adopted the reasoning in Dergousoff that the meaning of "may" can vary depending on context. He found that, in the context of the new child support regime, the duty to act is clear once the condition for variation has been met (p. 12 O.R.):

Because the mere coming into force of the Guidelines is a change in circumstances, on application, a court must vary a previous child support order to comply with the Guidelines. Apart from ss. 17(6.2) to 17(6.5) of the Divorce Act [ss. 37(2.3) and 37(2.5) of the Family Law Act] it has no discretion to refuse to do so.

[46] Third, Laskin J.A. found that interpreting the legislative and regulatory framework as creating an entitlement to a variation promotes all of the stated objectives of the Guidelines whereas the contrary interpretation promotes none. In Laskin J.A.'s words (p. 14 O.R.):

Assuming the Guidelines reflect what Parliament considers "fair" support, adopting an interpretation of s. 17 of the Divorce Act [s. 37 of the Family Law Act] that gives judges an open-ended discretion to refuse to apply the Guidelines does not promote fair support. Expanding the scope of judicial discretion to permit judges to refuse to apply the only objective standard of child support available, the Guidelines, will increase, not reduce, conflict and tension between spouses. Permitting judges to ignore the Guidelines will make the resolution of family disputes less efficient, not more efficient. And giving judges broad discretion to refuse to vary previous child support orders to comply with the Guidelines regime will not ensure that spouses and children in similar circumstances are treated consistently, because their treatment will differ depending on the wholly arbitrary factor of when separation or divorce took place.

[47] Fourth, Laskin J.A. found that Parliament has expressly provided the circumstances under which a court can maintain the prior quantum of child support instead of awarding the guideline amount. The court may do so where special provisions have been made for the benefit of the child and applying the child support guidelines would be inequitable. The court may also do so where the parties consent and reasonable arrangements have been made for the support of the child. Since Parliament expressly provided for departure from the guideline amount in these circumstances, it is reasonable to infer that Parliament did not intend courts to have discretion in other circumstances.

[48] Fifth, Laskin J.A. found that s. 14(c) of the Federal Guidelines, which corresponds to s. 14.4 of the Ontario Guidelines, is meaningless if courts retain a residual discretion not to vary a prior child support order. Under this section, the very coming into force of the child support guidelines constitutes a change in circumstances, and no additional criteria must be met. Giving courts discretion not to vary a prior child support order imports an additional criterion into this section.

[49] Sixth, Laskin J.A. found that the legislative history of the Guidelines demonstrates an intention to allow spouses to bring prior orders within the new child support regime. Parliament was aware of the issue of varying prior child support orders to comply with the new regime, and intended to remove the broad judicial discretion characteristic of the prior regime.

[50] Faced with the reasoning in Bates, Mr. Zaver nevertheless submits that this court should reaffirm its decision in Sherman based on four submissions.

[51] First, he challenges the empowering interpretation of "may" adopted in Dergousoff and Bates. He points out that "may" and "shall" appear throughout the support provisions of the Divorce Act (and the Family Law Act). He contends that it should be presumed that Parliament rationally and deliberately chose which word to use. The choice, in each instance, emphasizes the mandatory nature of the word "shall" and the permissive use of the word "may". Further, Mr. Zaver submits that the plain and obvious permissive meaning of may, should, in any event, be preferred. He also challenges the interpretation given to various authorities in both Bates and Dergousoff to derive an empowering interpretation of "may".

[52] I adopt the views expressed by Laskin J.A. in Bates and by Cameron J.A. in Dergousoff that "may" as it appears in s. 17(1) of the Divorce Act and in s. 37(2.1) of the Family Law Act means "must", once the pre-condition requisite to variation is met. I specifically agree with Cameron J.A.'s analysis in Dergousoff that "the nature, object, and conditions of the powers conferred by [each section], together with the makeup of the class of persons for whose benefit they were conferred [make clear the duty to act]" (p. 650 W.W.R.). In the case of s. 17(4) of the Divorce Act and s. 37(2.1) of the Family Law Act, the three methods of satisfying the pre-condition to variation are prescribed by s. 14 of the respective Guidelines. Once the requirements of one of those methods have been satisfied, the duty to act is clear.

[53] I disagree with Mr. Zaver's contention that Julius v. Oxford (Lord Bishop) (1880), 5 App. Cas. 214, [1874-80] All E.R. Rep. 43 (H.L.), relied on by Cameron J.A. in Dergousoff, restricts the availability of an empowering interpretation of "may" to situations involving "private rights". Lord Blackburn did not in fact restrict the mandatory interpretation of "may" in that way. However, even if Mr. Zaver were correct, I would not, in any event, categorize child support as other than a "private right" based on the examples Lord Blackburn gave.

[54] In my view, the nature of the authority conferred here is indistinguishable from that conferred in New Brunswick (Minister of Health and Community Services) v. L. (M.), 1998 800 (SCC), [1998] 2 S.C.R. 534, 165 D.L.R. (4th) 58 relied on by Laskin J.A. in Bates. There, the Family Services Act, S.N.B. 1980, c. F-2.2 provided that where a child is in his care the Minister "may return the child to the former parent periodically, as the Minister considers appropriate" (p. 542 S.C.R.). Gonthier J. expressed the view at para. 18 (p. 550 S.C.R.) that "the expression 'may' means 'must' where that is in the best interests of the child."

[55] I agree with Mr. Zaver's contention that R. v. Southwark Crown Court, Ex parte Customs and Excise Commissioners, [1990] 1 Q.B. 650 (D.C.) demonstrates that courts sometimes have a residual discretion not to exercise a conditional statutory power even after the conditions requisite to exercising the power are fulfilled. However, that decision also demonstrates that where the language of a statute is empowering, the court must examine its context to discern its true meaning. In this instance, I adopt the conclusions of Cameron J.A. and Laskin J.A., that, taken in context"may", as it appears in s. 37(2.1) of the Family Law Act and s. 17(1) of the Divorce Act, means "must" once the statutory pre-condition to variation has been fulfilled, and that there is no residual discretion in the court not to vary. In my view, the empowering nature of s. 37(2.1) of the Family Law Act and s. 17(1) of the Divorce Act explains the use of "may" versus "shall" in both of those sections.

[56] Second, Mr. Zaver submits that certain additional reasoning contained in para. 36 of Wang is persuasive. With respect, I disagree.

[57] Paragraph 36 (p. 172 B.C.L.R.) provides, in part, as follows:

The retention of a threshold discretion not to vary flows from the language of the Divorce Act. In enacting the amendments Parliament left untouched the words in section 17(1) giving discretion to the court to vary child support . . . Had Parliament intended the Guidelines to be mandatory on all applications to vary, it would have said so explicitly in s. 17(1); Guideline 14(b) would not have been required; and s. 17(6.4) and (6.5) would not have been included.

(Emphasis added)

[58] Mr. Zaver points out that Laskin J.A. referred to s. 14(c) of the Federal Guidelines but not to s. 14(b), when he concluded that a plain reading of the legislation supports his interpretation of the effect of the enactment of the Guidelines. Mr. Zaver submits that Wang neutralizes Laskin J.A.'s conclusion because it holds that s. 14(b) supports the existence of a residual discretion not to vary.

[59] With respect, the issue at hand is not whether Parliament intended application of the Guidelines to be mandatory on all applications to vary, but rather whether Parliament intended variation to be mandatory once the pre- condition to variation is satisfied.

[60] The statement in Wang that s. 14(b) would not have been required "[h]ad Parliament intended the Guidelines to be mandatory on all applications to vary" (p. 172 B.C.L.R.) incorrectly equates variation in accordance with the Guidelines with variation. Variation in accordance with the Guidelines is not the only variation contemplated by the legislation.

[61] In my view, the presence of s. 14(b) actually supports Laskin J.A.'s analysis. In this regard, it is important to note that each method of satisfying the pre-condition to variation set out in s. 14 of the Federal Guidelines applies exclusively to one specific category of orders.

[62] Section 14(a) applies exclusively to applications to vary post-Guidelines orders where the amount of child support in the existing order was determined based on Guidelines table amounts. Section 14(b) applies exclusively to applications to vary post-Guidelines orders where the amount of child support in the existing order was not determined based on Guidelines table amounts. Section 14(c) applies exclusively to applications to vary pre-Guidelines orders.

[63] Section 14(b) is the only subsection of s. 14 that requires the exercise of any discretion to determine whether the method of satisfying the pre-condition to variation has been met. It retains the language of s. 17(4) of the Divorce Act as it existed prior to the enactment of the Guidelines and accordingly preserves the pre-existing judicially interpreted test of "material change in circumstances" in relation to this one specific category of orders.

[64] Rather than signalling a legislative intent that there be an undefined residual discretion not to vary, in my view, s. 14(b) of the Federal Guidelines limits judicial discretion not to vary to a single category of orders, and defines the scope of that discretion.

[65] Third, although Mr. Zaver relies heavily on Wang, he also contends that the applications judge erred in finding a material change in circumstances. This submission presupposes that Sherman is correct, and that the coming into force of the Guidelines triggers application of the material change in circumstances test. I cannot agree with this conclusion. In my view, the material change in circumstances test no longer forms part of the pre-condition to variation.

[66] It is helpful to remember that the material change in circumstances test for variation was formulated in Willick in relation to s. 17(4) of the Divorce Act as it existed prior to the enactment of the Guidelines:

17(4) Before the court makes a variation order in respect of a support order, the court shall satisfy itself that there has been a change in the condition, means, needs, or other circumstances of either former spouse or of any child of the marriage . . .

(Emphasis added)

[67] The language of s. 17(4) required further definition to be effective as a condition for variation. Willick accordingly stipulated that in order to trigger a right to a variation any change in circumstances had to be "material".

[68] The language from which the Willick test was derived is no longer contained in s. 17(4). Rather, amended s. 17(4) requires simply that the court satisfy itself that "a change of circumstances as provided for in the applicable guidelines" has occurred. The language from which the Willick test was derived now appears only in s. 14(b) of the Federal Guidelines, and applies only to one discrete category of orders. Sections 14(a) and (c) of the Federal Guidelines require neither definition, nor the exercise of discretion, to be effective as methods of satisfying the pre-condition to variation.

[69] In my view, it is clear that the Willick test no longer forms a part of the pre-condition to variation contained in s. 17(4) of the Divorce Act. With respect, I accordingly conclude that Sherman was incorrectly decided.

[70] Finally, Mr. Zaver argues that even if s. 14.4 of the Ontario Guidelines (the counterpart to s. 14(c) of the Federal Guidelines) indicates a legislative intention that the coming into force of the Guidelines creates an entitlement to a variation, regulations should not be permitted to override their enabling legislation and should be interpreted narrowly where they conflict with that legislation. In my view, s. 14.4 neither overrides nor conflicts with the child support regime established by the Family Law Act. Rather, it simply implements the legislative provisions.

[71] In addition to the factors noted by Laskin J.A., there are two additional factors that support the interpretation that the enactment of the Guidelines created a right to a variation of pre-existing orders for child support: first, the obvious purpose of s. 14.4 of the Ontario Guidelines; and second, various amendments to the preamble of s. 14 of the Guidelines.

[72] In my view, the obvious purpose of s. 14.4 of the Ontario Guidelines is to bring pre-existing orders for child support into the new child support regime, whether or not the Guidelines are applied in determining the amount of support.

[73] On an application to vary a pre-Guidelines order the court is required to determine child support based on the identical criteria that exist for determining child support on an original application for support. However, because s. 37(2.3) and 37(2.5) respectively contemplate the existence of "special provisions" and "reasonable arrangements" for the benefit or support of a child that permit the court to award an amount different than the amount that would be determined under the Ontario Guidelines, the resulting variation order need not actually change the amount of the original order.

[74] The court is accordingly required to reconsider the case under the parameters of the new child support regime and determine the appropriate amount of support using the parameters of the new regime. The power to vary is exercised by determining the amount of support in accordance with the criteria established by the new regime.

[75] Even if no change is made to the amount of the original order, subsequent variation orders will be triggered, not by s. 14.4 of the Ontario Guidelines, but by satisfying the requirements of either s. 14.1 or s. 14.2 of the Ontario Guidelines, depending on whether the Guidelines are used in awarding support.

[76] Viewed in this context, it is clear that the purpose of s. 14.4 is to bring pre-existing orders into the new child support regime whether or not child support is determined in accordance with the Ontario Guidelines, and that the enactment of the Guidelines mandates exercising the power to vary.

[77] Second, s. 14 of the Ontario Guidelines essentially mirrors s. 14 of the Federal Guidelines. The preamble to s. 14 of the Federal Guidelines originally provided as follows:

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

[78] It has subsequently been amended on two occasions:

(i) by SOR/97-563, effective December 9, 1997, to read:

For the purposes of subsection 17(4) of the Act, any one of the following constitutes a change of circumstances . . .

(ii) by SOR/2000-337, effective August 23, 2000, to read:

For the purposes of subsection 17(4) of the Act, any one of the following constitutes a change of circumstances that gives rise to the making of a variation order in respect of a child support order . . .

[79] The Ontario Guidelines came into force on December 1, 1997. O. Reg. 446/01, effective January 1, 2002, amends the preamble to s. 14 to read:

For the purposes of subsection 37(2.2) of the Act and subsection 17(4) of the Divorce Act (Canada), any one of the following constitutes a change of circumstances that gives rise to the making of a variation order . . .

[80] In my view, the amendments to the preamble to s. 14 of the Guidelines indicate a clear legislative intent that the enactment of the Guidelines creates a right to a variation.

[81] I am aware that one of two appellate decisions delivered subsequent to the effective date of the most recent amendment to the preamble of s. 14 of the Federal Guidelines tentatively held that the amendment did not affect the reasoning in Wang [^11] because no change had been made to the wording of s. 17 of the Divorce Act. As I have rejected the reasoning in Wang, this decision does not affect my conclusion.

[82] Accordingly, I would reject the submission that this court should affirm Sherman. Rather, I would adopt the reasoning of Laskin J.A. in Bates, and hold that the enactment of the Guidelines creates a right to a variation of a prior child support order, and that the applications judge was correct in finding that the pre-condition to variation was satisfied in this case.

(iv) Did the applications judge err by failing to give effect to s. 37(2.3) of the Family Law Act and by failing to find that special provisions were made for the child in this case such that application of the Ontario Guidelines would be inequitable?

[83] In fairness to the applications judge, it should be noted that Mr. Zaver did not raise s. 37(2.3) of the Family Law Act at the original hearing. As a general rule, courts of appeal will not allow issues to be raised for the first time on appeal: see Perka v. The Queen, 1984 23 (SCC), [1984] 2 S.C.R. 232, 13 D.L.R. (4th) 1. In this case, however, the parties were content that the matter be dealt with on the basis of the existing record. This court allowed this issue to be argued for the first time on appeal in the interest of providing some finality to this proceeding.

[84] I accept Mr. Zaver's submission that arrangements capable of constituting special provisions were made for Michael's benefit. I am not however satisfied that application of the Ontario Guidelines would result in an amount of support that is inequitable given those provisions. I would not, accordingly, give effect to this ground of appeal.

[85] Section 37(2.3) of the Family Law Act is one of two sections that permit the court to depart from the requirement of applying the Ontario Guidelines in making an order for child support. It provides as follows:

(2.3) Despite subsection (2.2), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines if the court is satisfied,

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

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

[86] Section 37(2.3) sets out a three-part test for departing from the application of the Ontario Guidelines. First, the court must find "special provisions". Second, the court must determine that the special provisions benefit the child in the specified way. Third, the court must find that applying the Ontario Guidelines would result in an amount of support that is "inequitable" given the special provisions. Only if each part of this test is satisfied can a court depart from the application of the Ontario Guidelines under s. 37(2.3).

(a) Special provisions

[87] Section 37(2.3)(a) contemplates three types of "special provisions":

-- special provisions in an order or agreement respecting the financial obligations of the parents that directly or indirectly benefit a child;

-- special provisions in an order or agreement respecting the division or transfer of the parents' property that directly or indirectly benefit a child; and

-- special provisions otherwise made for the benefit of a child.

[88] Mr. Zaver asserts that the 1985 agreement and order, coupled with Mr. Wright's assumption of responsibility for Michael, fall within the third type of "special provisions".

[89] Bateman J.A. dealt with a closely analogous situation involving a prior lump sum payment in MacKay v. Bucher, supra. In considering the nature of special provisions, she noted that many courts have adopted a definition of special provisions that require that they be "out of the ordinary or unusual". However, she agreed, generally, with the comments in Hall v. Hall (1997), 1997 3803 (BC SC), 30 R.F.L. (4th) 333, 35 B.C.L.R. (3d) 311 (B.C.S.C.) concerning the nature of "special provisions":

In the first place, I am of the opinion that a "special provision" must be one which, in whole or in part, replaces the need for the ongoing support for the children. . . .

[90] Like Bateman J.A., I too agree generally with this approach. In my view, however, a more precise focus would be whether the provisions replace, in whole or in part, the need for support in accordance with the Ontario Guidelines. This approach is consistent with the exercise of determining whether the Ontario Guidelines should be applied.

[91] Moreover, I see no requirement to read s. 37(2.3) restrictively and limit its application to provisions that are "out of the ordinary or unusual", so long as the provisions replace, in whole or in part, the need for support in accordance with the Ontario Guidelines and satisfy the other requirements of s. 37(2.3).

[92] In this respect, it is helpful to juxtapose s. 37(2.5) of the Family Law Act with s. 37(2.3). Section 37(2.5) provides the court with relatively broad discretion to recognize, where appropriate, reasonable arrangements for child support that differ from the Ontario Guidelines amount where an application is made on consent of the parents. [^12] It is clear that there is no restriction on the categories of consensual arrangements that can qualify for exemption under s. 37(2.5).

[93] I see no reason to read such a restriction into s. 37(2.3). The enactment of the Ontario Guidelines exposed all pre-existing consent orders to variation. Although the Ontario Guidelines clearly change the ground rules for awarding child support, the simplest of domestic contracts may have involved extended negotiations and concessions that militate against their application in a particular case. Moreover, surrounding circumstances, or the terms of the agreement themselves, may make it obvious that the existence of the Guidelines would have made no difference to the agreement that was ultimately reached.

[94] In my view, no principled reason emerges from the language or purpose of s. 37(2.3) to limit special provisions to provisions that are "out of the ordinary or unusual". Rather, they refer simply to provisions that replace, in whole or in part, the need for support in accordance with the Ontario Guidelines.

[95] In this case, the applications judge noted (p. 632 O.R.) that Ms. Wright "alleged [in her 1986 affidavit] that access would be upsetting for her and her son as it was her intention to move on with her life, marry, and have her future spouse take on the responsibility of fathering Michael and providing for his support. . . . It was her view that the father had 'sold away' his rights to parent her son for $4,000 and that he should not be permitted to resile from that agreement."

[96] It is significant, in my view, that at least part of Ms. Wright's goal in entering the 1985 agreement with Mr. Zaver was to put herself in a position where she could remarry and effect for Michael what was essentially a "de facto adoption". Ms. Wright entered into the 1985 agreement expecting to be able to provide for Michael's needs either through her own resources, or with the assistance of a new partner. That expectation on her part formed part of the arrangement she and Mr. Zaver made, as did Mr. Zaver's release of any claim to access. For a significant period these arrangements completely replaced the need for any support from Mr. Zaver.

[97] I find that the agreement entered into by the parties, the resulting court order, and the fact that Mr. Wright accepted responsibility for supporting Michael, are capable of constituting "special provisions" within the meaning of s. 37(2.3) of the Family Law Act. In my view, the support now being paid by Mr. Wright also qualifies as part of the arrangements capable of constituting "special provisions". I see nothing in the requirements relating to the third type of "special provisions" that requires that they flow entirely from the parties to the litigation or that they be entirely financial in character.

[98] Given that it is the totality of these arrangements that are advanced as special provisions, I think it appropriate that they be assessed cumulatively, to see whether they satisfy the other two prongs of the three-part test set out in s. 37(2.3).

(b) Benefit to the child

[99] On the issue of benefit to Michael, Mr. Wright's child support payments are a direct benefit to Michael now. Such a benefit was clearly anticipated by Ms. Wright, and, in fact, motivated the 1985 agreement between the parties, at least in part. The court endorsed the 1985 agreement at the time it was made, including the term denying Mr. Zaver access to Michael. I conclude that the 1985 agreement was clearly made for Michael's benefit.

(c) Inequitability

[100] I turn then to the question of whether the "application of the child support guidelines would result in an amount of child support that is inequitable given [these] . . . provisions."

[101] Bateman J.A. made a number of helpful findings concerning "inequitability" at paras. 41, 42, 43, 45, 48, and 49 of MacKay:

-- the test is not one of general inequity, but a result that would produce an amount of child support that is "inequitable" -- the section is so worded to avoid exposing a payor to duplicative amounts of child support, resulting in excessive awards;

-- the measure by which inequitability is gauged is the Guideline amount of support, as it may be increased due to special expenses or reduced on account of undue hardship, based on the payor's income at the time of the application;

-- in determining whether the amount of support is inequitable, it is helpful to consider the objectives of the Guidelines;

-- considerations similar to those involved in determining whether the table amount is inappropriate under s. 4 of the Federal Guidelines may be relevant in determining whether an amount of child support is inequitable: the condition, means, needs and other circumstances of the child, and the financial abilities of both spouses;

-- there must be clear and compelling evidence, and an "articulable" reason for departing from the Guidelines amount;

-- the assessment of inequitability is a child-centred one;

-- circumstances of the parents are to be taken into account but only insofar as they are relevant to the ability of the parent to contribute to the support of the child. Examples of circumstances that may be considered include:

-- where a custodial parent has structured his or her affairs in reliance on terms exceeding the Guideline amount and application of the Guidelines would impair that parent's ability to otherwise provide for the child;

-- an agreed higher level of support may constitute an acknowledgment of a child's needs in excess of the Guideline amount;

-- a "special provision" may reduce a child's need for support below the Guideline amount; and

-- application of the Guideline amount in combination with "special provisions" may result in the payor overpaying the Guideline amount.

[102] I agree substantially with her findings. I also adopt the comments of Vogelsang J. in Burns v. Burns (1998), 1998 14880 (ON SC), 40 R.F.L. (4th) 32 (Ont. Gen. Div.) at para. 9 (p. 36 R.F.L.) quoting from Wang v. Wang (1997), 1997 1299 (BC SC), 41 B.C.L.R. (3d) 375 (S.C.) at para. 18 (pp. 380-81 B.C.L.R.):

. . . the term "inequitable" . . . relates to the parties and requires a consideration of both the circumstances of the parties giving rise to the order or written agreement and their circumstances at the time of the application. Such an interpretation recognizes the give and take of settlement discussions and the interrelationship of terms which will be reflected in a settlement agreement and order.

[103] Finally, in my view, in addition to its dictionary definition of "unfair" [^13] "inequitable" as it is used in s. 37(2.3) of the Family Law Act includes a connotation that the equities between the interested parties are "out of balance". I reach this conclusion because there is no statement in the subsection of to whom "inequitable" applies. Had the legislature intended to be specific concerning to whom the concept was to apply, it could easily have said so. The interested parties include the child as well as the parties to the application.

[104] I note the following matters relevant to Michael's needs, Ms. Wright's present ability to satisfy them, and Mr. Zaver's ability to pay:

-- Ms. Wright's stated monthly shortfall, taking account of the child support she is receiving, is $120;

-- on its face, Ms. Wright's budget appears not only reasonable, but "bare bones"; as an example she has no expenses for children's activities;

-- given that Michael is part of a family unit which includes two children, notionally Mr. Wright pays less child support for Michael than he would if Michael was an only child, i.e. Mr. Wright is paying $879 per month, if Michael were an only child he would pay $543 per month;

-- need is a relative concept, determined in part by disposable income, and in the case of a child, in part by the lifestyle of the family unit of which he is a part;

-- in the case of a family unit including separated parents, the family unit includes all parents;

-- assuming Michael was the only child of a payor with an income equal to the total income of Mr. Zaver and Mr. Wright, the Ontario Guidelines table amount of monthly child support would be approximately $942, a figure that is approximately equal to half of the amount paid by Mr. Wright plus the Ontario Guidelines figure for Mr. Zaver; and

-- Mr. Zaver's budget includes a number of discretionary expenditures; e.g. his annual expenses for entertainment, recreation, vacation, gifts, alcohol/tobacco, charities/ lotteries and R.R.S.P.'s (he has an OMERS pension) approximate $8,000.

[105] In my view, the most important factor affecting the determination of whether application of the Ontario Guidelines would be inequitable is the fact that Ms. Wright is no longer able to meet all of Michael's financial needs independently of Mr. Zaver, even with the benefit of the additional resources provided by Mr. Wright. Having determined that Ms. Wright is no longer able to meet all of Michael's financial needs, I do not think it appropriate to assess them on a minimalist basis. Mr. Zaver is Michael's biological father. The 1985 agreement did not relieve him of the continuing obligation to ensure that Michael's needs are properly met. The Ontario Guidelines table amounts are designed to achieve that result based on the income of the payor(s).

[106] While it is true that neither Michael nor Mr. Zaver has had the opportunity of a personal relationship with the other, Mr. Zaver has had a holiday from support for many years. There is no indication that it will be an undue financial burden for him to pay support in accordance with the Ontario Guidelines. As the amount in issue is relatively modest, it is unlikely there will be a surplus available to somehow unfairly increase Ms. Wright's standard of living.

[107] Taking account of all of these circumstances, I cannot conclude that the equities between the parties would be out of balance, or that it would be inequitable otherwise, if Mr. Zaver is required to pay full Ontario Guidelines support for Michael.

Disposition

[108] For the reasons given, I would dismiss this appeal with costs on a partial indemnity scale, and permit counsel to make written submissions as to costs within 21 days and 28 days respectively following receipt of this judgment if they are unable to agree as to quantum.

[109] SHARPE J.A. (CARTHY and CHARRON JJ.A. concurring): -- I have had the benefit of reading the reasons of Simmons J.A. and I too would dismiss this appeal. I agree, for the reasons given by my colleague, that the enactment of the Child Support Guidelines creates a right to a variation of pre- existing orders for child support. While I agree with the result she reaches, I respectfully disagree with Simmons J.A.'s analysis and interpretation of the "special provisions" exception contained in s. 37(2.3) of the Family Law Act.

[110] I agree with the structure of the three-part test with respect to the "special provisions" exception set out at para. 86 of Simmons J.A.'s reasons. However, I disagree with the proposition that "special provisions" need not be out of the ordinary or unusual. Nor do I accept the contention that the subjective goals and expectations of the parties are relevant in determining whether a pre-Guidelines arrangement qualifies as a special provision within the meaning of s. 37(2.3).

[111] For the reasons that follow, I conclude that the "special provisions" exception does not apply to the circumstances of this case. While Mr. Wright's ongoing child support arguably does qualify as a special provision, that arrangement fails to meet the test in s. 37(2.3), since applying the child support guidelines would not be inequitable.

[112] Courts have held that "special provisions" must be out of the ordinary or unusual. In MacKay v. Bucher [supra] at para. 38, Bateman J.A. held that an arrangement must be out of the ordinary or unusual to constitute a special provision. In this regard, Bateman J.A. cited Wanstall v. Walker, [1998] B.C.J. No. 1808 (S.C.), in which the court held that "special provisions" are those that are "exceptional" or that exceed or excel the "usual or common". Bateman J.A. also noted that courts generally have not found that routine orders for periodic child support constitute "special provisions". For example, in Cane v. Newman, [1998] O.J. No. 1776 (Gen. Div.), Wein J. found that the provisions in question were not "special provisions" because they were the kind of provisions routinely ordered under the Divorce Act and Guidelines.

[113] I agree with the approach in these cases. Under s. 37(2.3), a court may only depart from the amount under the child support guidelines if there are "special provisions". In my view, the very use of the word "special" suggests that the provisions in question must be out of the ordinary or unusual. If provisions that were not out of the ordinary or unusual could qualify as "special provisions", the word "special" in s. 37(2.3) would have no meaning.

[114] In my view, interpreting "special provisions" to include provisions that are not out of the ordinary or unusual would undermine the general rule that the child support guidelines provide the amount of a child support order. Under s. 3(1) of the Ontario Guidelines, the presumptive rule is the guideline amount of child support. Under s. 37(2.2) of the Family Law Act, a court that varies a child support order shall do so in accordance with the child support guidelines. The "special provisions" qualification in s. 37(2.3) is an exception to the presumptive rule. Its status as an exception suggests to me that its scope must be carefully delineated. If "special provisions" were not restricted to provisions that are out of the ordinary or unusual, the exception would, in my view, effectively displace the rule.

[115] The juxtaposition of sections 37(2.3) and 37(2.5) does not, in my view, undermine the conclusion that "special provisions" must be out of the ordinary or unusual. Whether or not s. 37(2.5) is limited to certain kinds of arrangements has no bearing on the question whether or not s. 37(2.3) is so limited. Section 37(2.3) is differently worded and contains different requirements than s. 37(2.5). While the parties must consent under s. 37(2.5), the parties need not consent under s. 37(2.3). While the arrangements under s. 37(2.5) need only be "reasonable", the provisions under s. 37(2.3) must be "special". Hence, even if it is unnecessary for arrangements to be out of the ordinary or unusual under s. 37(2.5), it does not follow that it is similarly unnecessary for provisions to be out of the ordinary or unusual under s. 37(2.3).

[116] I do not accept the submission that the parties' goals and expectations when entering into the prior arrangement are relevant in determining whether that arrangement qualifies under the "special provisions" exception. Examining the goals and expectations of the parties would import into s. 37(2.3) an uncertainty that is, in my view, both unnecessary and inappropriate. The uncertainty is unnecessary because the question under s. 37(2.3) is not whether the parties subjectively intended to make special provisions in favour of the child. Rather, the question is whether the parties actually objectively made those provisions, which objectively replace the child's ongoing need for support. The uncertainty is inappropriate, because the objectives of the Ontario Guidelines are to enhance fairness, objectivity, efficiency and consistency. Far from enhancing these objectives, the examination of subjective goals and expectations would undermine them by re-importing the uncertainty that characterized the former child support regime.

[117] For the same reasons, I would hold that the goals and expectations of the parties in entering into an agreement are equally irrelevant in determining whether special provisions benefit the child. The question is not whether the parties subjectively intended to benefit the child, but whether the special provisions actually objectively benefit the child.

[118] I turn to the application of s. 37(2.3) to the circumstances of the present case. Mr. Zaver advanced several arrangements as being capable of constituting "special provisions" under s. 37(2.3): the goals and expectations of Ms. Wright and Mr. Zaver in entering into the 1985 agreement; the agreement itself, including Mr. Zaver's $4,000 lump sum child support payment; the court order resulting from the agreement; and Mr. Wright's ongoing child support of $879 per month.

[119] For the reasons stated above, I do not accept the argument that the goals and expectations of Ms. Wright and Mr. Zaver in entering into the 1985 agreement are relevant in determining whether there are "special provisions". It is therefore irrelevant whether or not Ms. Wright's goal in entering the agreement was to remarry and effect a de facto adoption for Michael and whether or not Ms. Wright expected to be able to provide for Michael's needs. What is relevant is whether, viewed objectively, the arrangement between Ms. Wright and Mr. Zaver amounted to a special provision for the financial benefit of their child.

[120] The mere existence of an agreement or a court order cannot constitute a "special provision". As I have already stated, the presumptive rule under s. 37(2.2) is that a court that varies a child support order shall do so in accordance with the child support guidelines. To read "special provisions" as embracing all agreements or orders providing for child support, or even all those agreements or orders that provide for adequate child support, would be to nullify the presumption and make the exception the rule. In and of itself, it is irrelevant whether there was an agreement or whether the agreement was incorporated into a court order. What are relevant are the actual provisions for the child's benefit contained in the agreement or court order, since it is those provisions that must qualify as "special provisions" under s. 37(2.3).

[121] It follows that the only arrangements advanced by Mr. Zaver that are capable of falling within the "special provisions" exception are Mr. Zaver's $4,000 lump sum child support payment and Mr. Wright's ongoing child support of $879 per month.

[122] In my view, Mr. Zaver's $4,000 lump sum child support payment does not constitute a "special provision" since it does not replace Michael's ongoing need for support. A lump sum payment may replace a child's ongoing need for support if the lump sum payment is sufficiently large. It cannot be said that Mr. Zaver's one-time $4,000 lump sum payment was sufficiently large to replace Michael's ongoing need for support. On the contrary, as the applications judge found, this payment could not have met Michael's needs for more than a few years.

[123] With respect to Mr. Wright's ongoing child support, this arguably constitutes a "special provision" by partially replacing Michael's ongoing need for child support. The support also benefits Michael directly, thereby meeting the second part of the test under s. 37(2.3). However, I do not find it necessary to make a definitive determination of these issues, since, in any event, Mr. Wright's ongoing child support fails to meet the third part of the test in s. 37(2.3). Applying the child support guidelines in this case would not be inequitable. At first glance, it might seem inequitable for both Mr. Zaver and Mr. Wright to pay child support for Michael, since this support may increase Ms. Wright's personal standard of living along with that of her son. But further examination indicates that this is not actually inequitable for two reasons.

[124] First, any increase in Ms. Wright's personal standard of living from Mr. Wright's ongoing child support for Michael is insignificant. Based on the guideline amount of child support for two children, Mr. Wright is currently paying $879 per month. If Mr. Wright were not paying child support for Michael, his monthly payment would be $543. This means that Mr. Wright's child support for Michael amounts to only an additional $336 per month, or only $4,032 per year.

[125] Second, any increase in Ms. Wright's personal standard of living from Mr. Wright's ongoing child support for Michael is irrelevant. Child support is awarded for the child and not for the custodial parent; it is therefore the child's interests that must govern. Further, Mr. Zaver could not have relied on s. 37(2.3) to relieve him of the obligation to pay the guideline amount of child support if Mr. Wright and Ms. Wright had remained together. The result should be no different simply because Mr. Wright and Ms. Wright are separated and Mr. Wright is making direct monthly payments of child support.

[126] In conclusion, I agree with Simmons J.A. that the applications judge did not err in failing to apply s. 37(2.3), but I would dismiss this ground of appeal for the reasons I have expressed above. Like Simmons J.A., I would dismiss the appeal and order Mr. Zaver to pay the Ontario Guidelines table amount of child support of $509 per month. I agree with Simmons J.A.'s proposed disposition as to costs.

Appeal dismissed.

Notes

[^1]: A subsequent amendment to the preamble to s. 14 of the Ontario Guidelines will be discussed below.

[^2]: 1994 28 (SCC), [1994] 3 S.C.R. 670 at pp. 685-89, 6 R.F.L. (4th) 161 at pp. 178-80.

[^3]: Sections 14.3 and 14.4 are minor variations on the same method of satisfying the pre-condition to variation.

[^4]: (1998), 1998 6374 (BC CA), 58 B.C.L.R. (3d) 159, 164 D.L.R. (4th) 146 (C.A.).

[^5]: (1999), 1999 32734 (NB CA), 219 N.B.R. (2d) 102, 1 R.F.L. (5th) 66 (C.A.).

[^6]: (2000), 2000 ABCA 9, 182 D.L.R. (4th) 357, 3 R.F.L. (5th) 241 (Alta. C.A.).

[^7]: 1999 12250 (SK CA), [1999] 10 W.W.R. 633, 48 R.F.L. (4th) 1 (Sask. C.A.).

[^8]: (2001), 2001 NSCA 120, 196 N.S.R. (2d) 293, 208 D.L.R. (4th) 472 (C.A.).

[^9]: (1999), 1999 4701 (ON CA), 44 O.R. (3d) 411, 45 R.F.L. (4th) 424 (C.A.).

[^10]: (2000), 2000 14734 (ON CA), 49 O.R. (3d) 1, 188 D.L.R. (4th) 642 (C.A.).

[^11]: Danchuk v. Danchuk (2001), 2001 BCCA 291, 88 B.C.L.R. (3d) 116, 198 D.L.R. (4th) 604 (C.A.).

[^12]: Sections 37(2.5) and (2.6) provide as follows:

(2.5) Despite subsection (2.2), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines on the consent of both parents if the court is satisfied that

(a) reasonable arrangements have been made for the support of the child to whom the order relates; and

(2.6) For the purposes of clause (2.5)(a), in determining whether reasonable arrangements have been made for the support of a child,

(a) the court shall have regard to the child support guidelines, and

(b) the court shall not consider the arrangements to be unreasonable solely because the amount of support agreed to is not the same as the amount that would otherwise have been determined in accordance with the child support guidelines.

[^13]: Shorter Oxford English Dictionary, 8th ed., s.v. "inequitable".