Contino v. Leonelli-Contino

2003 30327 (ON CA), 67 O.R. (3d) 703

2003 30327 (ON CA), [2003] O.J. No. 4128

2003 30327

Docket No. C39928

Court of Appeal for Ontario

O'Connor A.C.J.O., Weiler and Rosenberg JJ.A.

October 28, 2003

*Application for leave to appeal granted with costs to the applicant in any event of the cause April 1, 2004 (Bastarache, LeBel and Deschamps JJ.).

Family law -- Support -- Child support -- Federal Child Support Guidelines -- Court is obliged to apply s. 9 of Guidelines once applicant parent shows that shared custody threshold set out in s. 9 has been reached -- Divisional Court erring in holding that parent who applies to reduce child support pursuant to s. 9 must adduce clear and convincing evidence to rebut presumption that Table amount is in best interests of child -- Table amount for both parents must be taken into account under s. 9(a) in addition to factors in s. 9(b) and (c) -- Court should adopt discretionary rather than formulaic approach to assessment of support under s. 9 -- Federal Child Support Guidelines, SOR/97-175, s. 9.

The father brought an application to reduce the child support that he paid for his son pursuant to s. 9 of the Federal Child Support Guidelines because the amount of time that the son was in his physical custody had increased to 50 per cent of the time. The motion was granted. The motions judge applied a mathematical formula similar to the formula found in s. 8 of the Guidelines for split custody and essentially set-off the father's and mother's Table amounts and required the father to pay the difference, with a very minor adjustment. The Divisional Court allowed the mother's appeal. The court held that there is a presumption that the Table amount is in the best interests of the child, and that, unless the father could adduce clear and convincing evidence to rebut the presumption, he would be obliged to pay the Table amount as required by s. 3 of the Guidelines. The court found that the father had not done so and ordered him to pay the Table amount. The father appealed.

Held, the appeal should be allowed. [page704]

The Divisional Court erred in its interpretation of s. 9 of the Guidelines. Once the applicant parent has shown that the shared custody threshold set out in s. 9 has been reached because the parent exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time, the court is obliged to apply that section. The presumption that the Table amount under s. 3 should be paid by one spouse to another for the support of the child no longer applies because s. 9 provides otherwise. The Table amount for both spouses is to be taken into account under s. 9(a) in addition to the factors in s. 9(b) and (c). While s. 9(a) is not the dominant factor, a simple formula setting-off the amounts that each parent would be required to pay the other will often be a convenient starting point. The motions judge erred in applying a strict formulaic approach to s. 9. Rather, the court should adopt a discretionary approach.

Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250, 44 O.R. (3d) 736n, 177 D.L.R. (4th) 1, 246 N.R. 45, 50 R.F.L. (4th) 228; Green v. Green (2000), 2000 BCCA 310, 187 D.L.R. (4th) 37, [2000] 6 W.W.R. 130, 6 R.F.L. (5th) 197, 75 B.C.L.R. (3d) 306, [2000] B.C.J. No. 1001 (QL), 2000 B.C.C.A. 310, 138 B.C.A.C. 121 (C.A.); Harrison v. Harrison (2001), 2001 60967 (ON SC), 14 R.F.L. (5th) 321 (Ont. S.C.J.); Metzner v. Metzner (2000), 2000 BCCA 474, 80 B.C.L.R. (3d) 133, 190 D.L.R. (4th) 366, [2000] 9 W.W.R. 379, 9 R.F.L. (5th) 162 (C.A.), rehearing of (1997), 1997 3611 (BC SC), 46 B.C.L.R. (3d) 149 (S.C.) [leave to appeal to S.C.C. remanded [1999] S.C.C.A. No. 481], (1999), 1999 BCCA 434, 69 B.C.L.R. (3d) 39, 175 D.L.R. (4th) 587 (C.A.); Moran v. Cook (2000), 2000 22542 (ON SC), 9 R.F.L. (5th) 352, [2000] O.J. No. 2583 (QL), [2000] O.T.C. 507 (S.C.J.); Paras v. Paras, 1970 370 (ON CA), [1971] 1 O.R. 130, 14 D.L.R. (3d) 546, 2 R.F.L. 328 (C.A.); Wylie v. Leclair (2003), 2003 49737 (ON CA), 64 O.R. (3d) 782, 226 D.L.R. (4th) 439, 38 R.F.L. (5th) 227, [2003] O.J. No. 1938 (QL) (C.A.), consd

Other cases referred to

Barry v. Rogers (2002), 2002 54144 (NL SC), 213 Nfld. & P.E.I.R. 239, 640 A.P.R. 239 (T.D.); Caselli v. Caselli, [2001] O.J. No. 5176 (QL), [2001] O.T.C. 960 (S.C.J.); Dean v. Brown (2002), 33 R.F.L. (5th) 65, 2002 NSCA 124, [2002] N.S.J. No. 439 (QL), 209 N.S.R. (2d) 70 (C.A.); Fisher v. Fisher, [2001] O.J. No. 5477 (QL), [2001] O.T.C. 976 (S.C.J.); Hanmore v. Hanmore (2000), 2000 ABCA 57, 4 R.F.L. (5th) 348, 255 A.R. 163 (C.A.), revg (1999), 1999 ABQB 301, 47 R.F.L. (4th) 157 (Alta. Q.B.) [Leave to appeal to S.C.C. refused [2000] S.C.C.A. No. 182]; Hunter v. Hunter (1998), 1998 14872 (ON SC), 37 R.F.L. (4th) 260 (Ont. Gen. Div.); Lee v. Lee (1998), 1998 18000 (NL CA), 167 Nfld. & P.E.I.R. 176, 165 D.L.R. (4th) 619, 513 A.P.R. 176, 43 R.F.L. (4th) 339 (Nfld. C.A.); MacNaught v. MacNaught (1998), 1998 29671 (PE SCTD), 169 Nfld. & P.E.I.R. 153, 521 A.P.R. 153, 37 R.F.L. (4th) 79 (P.E.I.S.C.); Middleton v. MacPherson (1997), 1997 11517 (AB KB), 51 Alta. L.R. (3d) 152, 150 D.L.R. (4th) 519, [1997] 7 W.W.R. 601, 29 R.F.L. (4th) 334, 204 A.R. 37, [1997] A.J. No. 614 (QL) (Q.B.); Rosati v. Dellapenta (1997), 1997 12391 (ON SC), 35 R.F.L. (4th) 102 (Ont. Gen. Div.); S. (L.) v. P. (E.) (1999), 1999 BCCA 393, 67 B.C.L.R. (3d) 254, 175 D.L.R. (4th) 423, 50 R.F.L. (4th) 302 (C.A.) [Leave to appeal to S.C.C. refused (1999), 252 N.R. 194n]; Slade v. Slade (2001), 2001 NFCA 2, 197 Nfld. & P.E.I.R. 4, 195 D.L.R. (4th) 108, 591 A.P.R. 4, 13 R.F.L. (5th) 187 (Nfld. C.A.); Ward v. Ward (2000), 2000 22510 (ON SC), 7 R.F.L. (5th) 197 (Ont. S.C.J.)

Statutes referred to

Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 15.1(3), 17(6.2), 26.1

Rules and regulations referred to

Federal Child Support Guidelines, SOR/97-175, ss. 1, 3, 4, 5, 7, 8, 9, 10, 13, 21

Family Law Rules, O. Reg. 114/99, rules 15(7)(i), (13), 24 [page705]

Authorities referred to

McLeod, J.G., "Green v. Green", Annotation (2000), 2000 BCCA 310, 6 R.F.L. (5th) 197, 2000 CarswellBC 1048

Rogerson, C., "Child Support Under the Guidelines in Cases of Split and Shared Custody" (1998) 15 Can. J. Fam. L. No. 2 11

APPEAL from a judgment of the Divisional Court (Carnwath, Macdonald and Czutrin JJ.) (2002), 2002 2774 (ON SCDC), 62 O.R. (3d) 295, 30 R.F.L. (5th) 266 allowing an appeal from an order dismissing an application to vary child support.

Thomas G. Bastedo and Samantha Chousky, for appellant. D. Smith, for respondent.

The judgment of the court was delivered by

[1] WEILER and ROSENBERG JJ.A.: -- This appeal concerns the interpretation of the shared custody provision in s. 9 of the Federal Child Support Guidelines, SOR/97-175, as am. ("Guidelines"). The appellant father applied to reduce the child support that he must pay for the support of his son because the amount of time that the son was in his physical custody had increased to 50 per cent of the time. The motion judge, Rogers J., granted the motion and reduced the amount of monthly child support that the father had been paying, based on the Guidelines' Table amount, of over $550 to $100, retroactive to September 2000. She applied a mathematical formula similar to the formula found in s. 8 of the Guidelines for split custody and essentially set-off the father's and mother's Table amounts. She then required the father to pay the difference, with a very minor adjustment.

[2] On appeal by the mother, the Divisional Court, in reasons reported at (2002), 2002 2774 (ON SCDC), 62 O.R. (3d) 295, overturned the decision of the motion judge and ordered the father to pay the monthly Table amount, which it found to be $688, commencing September 1, 2000 and further ordered that his support obligation be increased or decreased annually in accordance with the Guidelines amount reflected by his annual income. The court relied on the decision of the Supreme Court of Canada in Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250, 50 R.F.L. (4th) 228, 171 D.L.R. (4th) 1 in holding that there is a presumption that the Table amount is in the best interests of the child. Unless the father could adduce clear and convincing evidence to rebut the presumption, he would be obliged to pay the Table amount as required by s. 3 of the Guidelines. The Divisional Court found that the father had not done so and therefore allowed the appeal and ordered the father to pay the Table amount. [page706]

[3] The father now appeals to this court. In our view, the Divisional Court erred in its interpretation of s. 9 of the Guidelines. Once the applicant parent has shown that the shared custody threshold set out in s. 9 has been reached because the parent exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time, the court is obligated to apply that section. The presumption that the Table amount under s. 3 should be paid by one spouse to another for the support of the child no longer applies because s. 9 provides otherwise. The Table amount for both spouses is to be taken into account under s. 9(a) in addition to the factors in ss. 9(b) and (c).

[4] We are also of the view that the motion judge erred in applying a strict formulaic approach to s. 9, which is inconsistent with the wording of this provision.

[5] This appeal thus requires the court to determine the proper approach to awarding child support in custody situations falling within s. 9. Courts have tended to use two different approaches to the assessment of support under s. 9 of the Guidelines. One approach, similar to the approach used by the motion judge, can be described as a "formulaic approach". Under this approach, generally the Table amounts are set-off as if the case were one of split custody and the parent with the greater income is required to pay the difference [See Note 1 at end of document]. Sometimes the judge will pro-rate the amount to account for the amount of time the child spends with each parent. Often, this formula is adjusted by use of a multiplier to take into account the increased costs to both parents of the shared custody arrangement [See Note 2 at end of document]. In our view, this approach, while providing greater predictability, is inconsistent with the wording of s. 9, which requires the court to take into account not only the Table amounts and the increased costs of shared custody but also "the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought". [page707]

[6] The other approach, which may be described as a "discretionary approach", eschews the use of formulae. That approach, while truer to the wording of s. 9, suffers from a lack of predictability and objectivity, two of the key objectives of the Guidelines. An important example of this more discretionary approach is Green v. Green (2000), 2000 BCCA 310, 75 B.C.L.R. (3d) 306, 6 R.F.L. (5th) 197 (C.A.), to which we will make greater reference below [See Note 3 at end of document].

[7] For the reasons that follow, we generally prefer the more discretionary approach. We are, however, of the view that it is possible to structure that discretion to provide some predictability and objectivity and that formulae, when used in appropriate cases, can assist the court in achieving a result that is fair and in the best interests of the child.

[8] We are concerned about the lack of information presented to the motion judge about the increased costs of shared custody and the conditions, means, needs and other circumstances of the parents and children. This is an issue that has plagued the s. 9 cases. In the absence of sufficient evidence on those circumstances, the courts have tended to fall back on a straight set-off formula. The decision in Slade v. Slade (2001), 2001 NFCA 2, 197 Nfld. & P.E.I.R. 4, 13 R.F.L. (5th) 187 (Nfld. C.A.) is an example.

[9] In this case, the evidence presented to the motion judge was not as detailed as it could or should have been. We are nevertheless of the view that it is inappropriate to simply resort to a strict formulaic approach in such cases. We are satisfied that there is sufficient evidence in the record from which this court can determine the appropriate child support amount under s. 9 for 2001. The parties did not present any further or updated information to this court from which we could make a determination of the appropriate amount of child support for 2002 or the current year. We believe that the parties ought to be able to settle on an appropriate amount for those years based on these reasons. If not, we would permit them to make brief written submissions following the release of these reasons.

[10] For reasons that follow, we would allow the appeal and decrease the monthly amount of child support that the Divisional Court ordered the father to pay to $399.61 as of June 2001. [page708]

THE FACTS

[11] The parties were married on October 30, 1982. For convenience, we will refer to the appellant as the father and the respondent as the mother. They have one child, Christopher, born on March 26, 1986, who is now 17 years of age. The parties separated in January 1989 and entered into a separation agreement dated May 25, 1992. They were divorced on January 7, 1993. We were advised at the hearing of the appeal that the father has since remarried. As indicated, however, we have no current information about the financial circumstances of the parties.

[12] The separation agreement provided that the father and mother were to have joint custody of Christopher but that he would reside with the mother on a daily basis. The father was to have free and liberal access to Christopher. If either party was unhappy with the custody and access arrangements, they could require that the terms be reviewed and varied. If the parties could not agree, then "either party may commence court action in the appropriate court for a variation of the terms based upon the facts as if this agreement had not been made and not solely based upon a material change in circumstances". The agreement further provided that commencing on June 1, 1992, the father was to pay the mother $500 child support, subject to annual cost of living increases, to continue until certain events occur, none of which are relevant to this appeal. The parties waived any right to spousal support. The mother also waived any right to an interest in four named companies in exchange for the father saving her harmless from any debts of these companies [See Note 4 at end of document].

[13] No annual cost of living increases were in fact ever paid by the father. In 1998, the mother brought an application to vary the amount of the child support. By minutes of settlement dated July 20, 1998, the father agreed to pay the monthly sum of $563 in accordance with the Guidelines, based on the father having an income of $68,712. The quantum of child support was to be adjusted annually in accordance with the Guidelines. Despite this term of the agreement, child support was not adjusted even [page709] though the father's taxable income for 1999 was $83,527.58. The parties further agreed to share equally in the cost of Christopher's orthodontic expenses, even though the mother's income of $53,292 was less than the father's.

[14] In March 2001, the father brought an application to vary the child support because Christopher was spending more time with him. In his affidavit in support of the application, the father stated that he has no other dependents, that Christopher was spending 50 per cent of the time with him and that he provided Christopher "with his own bedroom on a full-time basis, and all of the costs pertaining to him while he is residing with the applicant". The father stated that in September 2000, he asked the mother to agree to vary the child support but she refused.

[15] The mother did not retain counsel on the application. In her affidavit, she explained that in 2000 she began taking a course on Tuesday nights and asked the father if he would switch days so that Christopher would be with him on Tuesday rather than Thursday. The father instead said he would take Christopher both days for the duration of the course. He made no mention that he would seek any adjustment to the child support. The mother also notes in her affidavit that the child support had not been adjusted annually in accordance with the Guidelines, as they had agreed in the 1998 minutes of settlement.

[16] On the application, the parties filed their respective financial statements and 1998, 1999 and 2000 tax returns. In Part 7 of the financial statements, "Expenses of the Child(ren)", the parties purport to set out the expenses attributable to Christopher. Both parties attribute 50 per cent of their fixed and variable costs such as the mortgage, taxes, utilities, insurance and groceries to Christopher. In addition, the mother states that she spends a total of $275 monthly on things such as clothing and school fees and activities solely for Christopher. The father states that he spends a total of $120 on items solely for Christopher. The mother also invests $153.84 monthly in an RESP for Christopher's benefit.

SECTION 9 OF THE GUIDELINES

[17] We have set out the applicable legislation in greater detail in the Appendix. However, for convenience, we set out s. 9 of the Guidelines, which was the basis for the father's application:

9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support must be determined by taking into account [page710]

(a) the amounts set out in the applicable tables for each of the spouses;

(b) the increased costs of shared custody arrangements; and

(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

THE HEARING BEFORE ROGERS J.

[18] The May 16, 2001 proceedings before the motion judge were transcribed and the appellant has provided the court with a copy of the transcript. This transcript was not available to the Divisional Court. The mother was not represented by counsel at this hearing. Counsel for the father told the motion judge that two weeks earlier, Goodman J. held a pre-hearing conference and endorsed on the record that the mother conceded that the son would live with the father 50 per cent of the time. Thus, the temporary arrangement while the mother was taking the course, which had begun in February 2000, had become permanent. The motion was therefore limited to setting the amount of child support under the Guidelines. The father claimed the amount should be set in accordance with s. 9 of the Guidelines.

[19] The mother's 1999 tax return showed that her income was $73,009.33. Her year 2000 tax return showed her income was $105,199.26; however, over $44,000 of that was from cashing in her RRSP [See Note 5 at end of document], leaving approximately $61,000 in employment and other income. The motion judge assessed the mother's income at $68,000, not $61,000, because she included a bonus paid to her in January 2001.

[20] At the hearing, the father's counsel produced the father's 2000 income tax return. It showed his income was $87,315.26. This was the first time that the mother had seen the 2000 return. When she attempted to question some of the items in the return, the motion judge said the following:

The Court: Well you may wish to critique it, generally speaking, at some other time but I think you would probably want to use the larger number for today's purposes. Maybe there's something else that you need to talk to Mr. Cooper [the father's counsel] about. So, I think it's on consent I receive that sir. May I have it?

Ms. Contino: Yes.

(Emphasis added) [page711]

[21] Although it appears the father was also eligible for a bonus to be paid in 2001, the motion judge did not include that bonus in assessing his income.

[22] Based on the father's income of $87,315, the motion judge found that the Table amount of support he would pay to the mother was $688 a month. Having found the mother's income to be $68,000, the Table amount was $560 if the mother were paying child support to the father.

[23] Counsel for the father suggested that the motion judge set-off the two amounts ($128), pro-rate the amount to account for the fact that the child spends 50 per cent of the time with each parent ($64) and then add a 50 per cent multiplier ($32) to account for the additional costs of the child living in two homes. Thus, he submitted that his client should pay $96 in child support. He also asked that the adjustment be retroactive and suggested that it be retroactive to February 2000 when the 50 per cent arrangement took effect, or to September 2000 when the father first asked the mother to vary the child support.

[24] The mother told the motion judge that in November she moved to Woodbridge because it was in the child's best interests, even though it caused her great financial hardship and that she had relied on the child support to make these new arrangements [See Note 6 at end of document]. At this point, counsel for the father intervened and submitted that the mother's submissions should be confined to the record. The motion judge accepted this and told the mother to confine her comments to the materials that were already filed:

I can only hear about what's already in the materials. So go from what the evidence is that you've introduced and you may wish to tell me how that relates to this but essentially there's been a finding that there's a fifty per cent regime here. We're just doing math today. Okay?

(Emphasis added)

[25] The mother then told the motion judge that even though she was earning less than the father, she always paid half of the child's extraordinary expenses such as orthodontics in accordance with the separation agreement. The mother also pointed out that s. 9 of the Guidelines requires the court to take into account the assets and means of the parties.

[26] The motion judge gave very brief reasons. She found that there was now a shared custody regime and "there is going to be a reduction from the Guideline amount". She stated that she had "gone through the math" with the father's counsel and this [page712] produced a number of $96. She decided to pick a slightly different number for "ease of the calculation" and because the mother was paying 50 per cent of the special expenses although her income was lower. She therefore set the amount of child support at $100 a month and ordered that this adjustment be retroactive to September 2000. The father was entitled to deduct $50 a month to account for his overpayment until it is retired. The motion judge ordered the mother to pay the father's costs in the amount of $3,800. A portion of the costs award took into account that the father had made an offer to settle that was higher than the judgment.

THE REASONS OF THE DIVISIONAL COURT

[27] The mother appealed the judgment to the Divisional Court. She had by now retained counsel. The Divisional Court identified several errors in the reasons of the motion judge. First, the court found that the judge had erred in not making a finding as to income as required by s. 13 of the Guidelines. Section 13(b) of the Guidelines states that a child support order must contain "the income of any spouse whose income is used to determine the amount of the child support order". However, as noted by the Newfoundland Court of Appeal in Lee v. Lee (1998), 1998 18000 (NL CA), 167 Nfld. & P.E.I.R. 176, 43 R.F.L. (4th) 339 (Nfld. C.A.), an order lacking this information will not necessarily be void: "Where an error or slip occurs in the drawing up of a formal order, the court retains jurisdiction to correct that error." While the Divisional Court was correct in stating that no income finding was contained in the order, the transcript of the proceedings shows that the motion judge made a finding as to the income of both parties. As we have noted, the Divisional Court did not have the benefit of the transcript of the proceedings before the motion judge.

[28] The Divisional Court also found that there was no evidence regarding the factors set out in ss. 9(b) and (c) of the Guidelines and no analysis of those factors. The court expressed the view that the more important issue was the procedure to be followed in applying s. 9. It held that this procedure is set out in Francis v. Baker, supra, a case decided under s. 4 of the Guidelines. The court held as follows, at paras. 16 and 17:

In considering an application for deviation under any statutory exception a court must first:

(a) make a presumption in favour of the Guidelines amount;

(b) impose an onus on the party seeking a deviation to establish on "clear and compelling evidence" that the deviation is in the child's best interest; [page713]

(c) consider all the statutory factors noted in the section establishing a permitted deviation without providing pre-eminence to any factor;

(d) deny any application for a deviation based merely upon invocation of the discretionary provision;

(e) focus on the child's actual circumstances and not perceived parental fairness considerations, such as balancing of parental means.

To hold otherwise would lead to an inconsistent application of discretionary principles to the permitted deviations. As an example, it would result in a presumption in favour of the Guidelines amount when considering s. 4, as in Francis v. Baker, but no such presumption when considering a payor standing in the place of a parent as in s. 5. We find nothing in Francis v. Baker nor in the statutory scheme of the Guidelines that supports such an inconsistent approach.

[29] The court then set out a three-step analysis to be followed where a party seeks to apply "to deviate from the Guidelines amount" (at para. 18):

(a) the Court must first determine whether the applicant exercises a right of access to or has physical custody of a child for no less than 40 per cent of the time over the course of a year. The onus is on the applicant;

(b) if the 40 per cent test is met, the court must then find that the presumption in favour of the Guidelines amount has been rebutted. In order to so find, the court must find the applicant has discharged the onus of establishing on "clear and compelling evidence" that the decision is in the child's interest. There is no right of deviation merely upon invocation of the discretionary provision of s. 9. The court must consider all the statutory factors without providing pre-eminence to any factor. The focus of determination must be the child's actual circumstances, not perceived parental fairness consideration, such as balancing parental means;

(c) if the court finds in accordance with (b) above that the applicant has rebutted the presumption of the Guidelines amount, then and only then does the court consider ss. 9(a), (b) and (c) in the exercise of its discretion to deviate from the Guidelines.

(Emphasis added)

[30] The court held that the motion judge was clearly wrong in not carrying out the second step of this analysis and that given the absence of evidence needed to conduct a proper s. 9 analysis, the judge was wrong to depart from the Guidelines amount. The court held that there was no clear and compelling evidence that the deviation was in the child's interest. The court therefore allowed the appeal, restored the 1998 order and, taking into account the father's increased income, increased the child support to $688 per month retroactive to September 2000. The court ordered the father to retire the resulting arrears at a rate of $350 per month. Costs were awarded to the mother fixed at $5,000. [page714]

ANALYSIS

The Legislative Scheme Generally

[31] The overall scheme of the legislation is important to an appreciation and interpretation of s. 9 of the Guidelines. Section 15.1(3) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) requires that support orders be made in accordance with the Guidelines. The Guidelines are based on the principle contained in s. 26.1 of the Act, ". . . that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation". Section 3 of the Guidelines creates a presumption that the amount of a child support order is the amount set out in the applicable table plus the amount, if any, for special or extraordinary expenses under s. 7, "[u]nless otherwise provided under these Guidelines". The Guidelines identify five circumstances where the court has discretion to award an amount other than the amount determined under s. 3. They are:

(1) where the child is over the age of majority and the court considers the amount determined by applying these Guidelines as if the child were under the age of majority to be inappropriate, the court may award the amount it considers appropriate (s. 3(2));

(2) if the payor's income is over $150,000 per annum and the court considers the amount determined under s. 3 to be inappropriate (s. 4);

(3) if the payor spouse stands in the place of a parent, the court may order such amount as it considers appropriate, having regard to the Guidelines and any other parent's legal duty to support the child (s. 5);

(4) shared custody (s. 9); and

(5) where a child or spouse would otherwise suffer undue hardship from having to pay the amount determined under ss. 3 to 5, 8 or 9, a court may award a different amount of child support (s. 10). The circumstances that may cause undue hardship include, but are not limited to, those set out in s. 10(2), such as unusually high expenses in relation to exercising access to a child.

[32] We disagree with the Divisional Court's conclusion that a consistent approach to all of these discretionary exceptions to the [page715] Guidelines is required. The court concluded that there was a presumption that a payor spouse should continue to pay the Guidelines amount although exercising physical custody of the child for over 40 per cent of the time. It held that to deviate from the Guidelines amount, "clear and compelling evidence" was required that such deviation was in the child's interest. This is the language used by the Supreme Court of Canada in Francis v. Baker in determining whether the Guidelines amount is "inappropriate" under s. 4, which relates to incomes over $150,000.

[33] In our view, a consistent approach to all of the specified exceptions to the application of the Guidelines ignores the differences in wording contained in these sections. Section 4 states that when a payor spouse has income over $150,000 the amount of a child support order is the amount determined under s. 3. It is only if the court considers this amount to be "inappropriate" that the court exercises its discretion to award a different amount of support. In giving content and meaning to the word "inappropriate", the Supreme Court placed an onus on the party seeking a departure from the s. 3 amount to establish on "clear and compelling evidence" that such a departure is warranted.

[34] Section 3(2) pertaining to children over the age of majority uses language similar to s. 4. It prescribes that the amount of support is the amount determined under s. 3(1) unless "the court considers that approach to be inappropriate". By contrast, pursuant to s. 5, a spouse who stands in the place of a parent will simply be ordered to pay "such amount as the court considers appropriate having regard to these Guidelines". The court is to also have regard to any other parent's legal duty to support the child.

[35] The wording of s. 9 does not start with a presumption that the amount determined under s. 3 is to be paid by the person seeking an order under s. 9; it instead states that the amount in the tables is to be taken into account. Nowhere in s. 9 is the word "inappropriate" to be found, such as would signal an onus on a payor spouse to establish that a departure from the amount determined under s. 3 is warranted. The Divisional Court erred in ignoring these significant differences in wording in the various sections. The Divisional Court's analysis of s. 9 introduces a presumption not called for by the language of the section and one that is contrary to the plain wording of the provision and to principles of statutory interpretation.

[36] In seeking to uphold the decision of the Divisional Court, counsel for the mother relied in particular on a portion of para. 42 of the reasons of Bastarache J. in Francis v. Baker: [page716]

For that portion of the paying parent's income over $150,000, the strict Guidelines amount is immediately open to review; under s. 4(b)(ii) any amount attributable to income above the $150,000 threshold can be reduced or increased by a court if it is of the opinion that the amount is inappropriate having regard to the condition, means, needs and other circumstances of the children, and the financial abilities of the spouses. Nevertheless, based on the ordinary meaning of the provision, its context in the overall child support scheme, and the purposes of the Guidelines, I find that in all cases Parliament intended that there be a presumption in favour of the Table amounts. I agree with Abella J.A. that the words "Presumptive Rule" found in the marginal note beside s. 3 of the Guidelines are relevant in this regard. Accordingly, the Guideline figures can only be increased or reduced under s. 4 if the party seeking such a deviation has rebutted the presumption that the applicable Table amount is appropriate.

(Emphasis added)

[37] The passage quoted above cannot be taken out of context. The words "in all cases" refer to all cases to which s. 3 applies. Section 3 itself recognizes that the calculation under that provision will not apply where "otherwise provided under these Guidelines". Section 9 sets out a different regime that falls within this "unless otherwise provided" exception.

[38] Subsection 9(a) requires that in cases of shared custody the court must determine the amount of the child support order by taking into account the incomes of both parents; in the words of the section, "the amounts set out in the applicable tables for each of the spouses". Thus, in our view, the presumption set out in s. 3, which the court in Francis v. Baker found applied to s. 4, has no application to s. 9. Unlike s. 9, s. 4 makes express reference to s. 3 and requires the court to apply that provision unless this would produce an inappropriate order. In the context of s. 4, a presumption in favour of the s. 3 approach is consistent with the wording of the statute. Requiring the s. 4 payor spouse to show that such an amount is inappropriate by clear and convincing evidence is consistent with the overall objectives of the Guidelines, which the Francis v. Baker court described at para. 39 as "to establish fair levels of support for children from both parents upon marriage breakdown, in a predictable and consistent manner" and to ensure "that a divorce will affect the children as little as possible".

[39] Section 9 must be interpreted with those objectives in mind, but regard must also be had to the wording of that section, which is quite different from s. 4. In Francis v. Baker at para. 40, the court held that the proper construction of s. 4 requires that the "objectives of predictability, consistency and efficiency on the one hand, be balanced with those of fairness, flexibility and recognition of the actual 'condition, means, needs and other circumstances of the children' on the other". In considering the [page717] interpretation of s. 9, the goals of predictability, consistency and efficiency must similarly be balanced with those of fairness, flexibility and recognition of the actual "condition, means, needs and other circumstances of each spouse and of any child for whom support is sought" (s. 9(c)). A court must also consider the amounts set out in the tables "for each of the spouses" (s. 9(a)); and "the increased costs of shared custody arrangements" (s. 9(b))

(emphasis added).

[40] It seems to us that the error by the Divisional Court was in treating the s. 3 calculation as the "Guidelines amount". The court [at p. 299 O.R.] made the same error in saying that "[t]here is no right of deviation merely upon invocation of the discretionary provision of s. 9." To the contrary, where the 40 per cent threshold in s. 9 has been met, that provision establishes the manner of calculating the amount of child support, a calculation quite different from that set out in s. 3 or s. 4. As we read s. 9, especially the use of the phrase "must be determined" in the opening paragraph, deviation from the amount determined under s. 3 or s. 4 is required and the court must follow the process set out in s. 9. We appreciate that this results in more uncertainty and introduces more subjectivity in the calculation of child support orders, but that is an inevitable consequence of the wording of s. 9.

[41] In her submissions, counsel for the mother attempted to support the decision of the Divisional Court by reference to the decision of the Supreme Court of Canada in Metzner v. Metzner, [1999] S.C.C.A. No. 481. This was a decision on an application for leave to appeal remanding the case to the British Columbia Court of Appeal. The reasons of the leave panel, L'Heureux-Dubé, Gonthier and Bastarache JJ., are as follows:

The Court of Appeal having rendered its decision on the basis of the impact on custodial arrangements occasioned by the application of the Federal Child Support Guidelines, and under s. 17(6.2) of the Divorce Act, without the benefit of the judgment of this Court in Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250, which provides for support corresponding to the actual living conditions of the children, the matter is remanded to the Court of Appeal to be disposed of in accordance with the decision in Francis v. Baker.

[42] The original decision of the British Columbia Court of Appeal is reported at (1999), 1999 BCCA 434, 69 B.C.L.R. (3d) 39, 175 D.L.R. (4th) 587. The reasons of the majority, Hollinrake J.A. (Southin J.A. concurring), made no mention of s. 9 and turned instead on s. 17(6.2) of the Divorce Act, which explains the reference to that subsection in the remand order. That subsection provides that the court, in making a variation order, may award an amount that is different from the amount that would [page718] be determined in accordance with the Guidelines if special provision has been made in an order, judgment or written agreement respecting financial obligations of the spouses or division of property that benefits the child, and the application of the Guidelines would result in an amount of child support that is inequitable given those arrangements. The reference to Francis v. Baker in the Supreme Court's brief endorsement must be read in that light. It cannot be taken as an indication that the court had determined that Francis v. Baker governs the interpretation of s. 9. The only references to s. 9 in the court's reasons are found in the dissenting reasons of Rowles J.A.

[43] We are reinforced in this view by the subsequent decision of the British Columbia Court of Appeal, reported at (2000), 2000 BCCA 474, 80 B.C.L.R. (3d) 133, 190 D.L.R. (4th) 366, which interprets the remand order of the Supreme Court of Canada. The reasons of the majority, Finch J.A. (Huddart J.A. concurring), turn on the application of s. 4 of the Guidelines (which was the provision in issue in Francis v. Baker) in the context of s. 17(6.2) of the Act. There is no reference at all to s. 9. In fact, it is not entirely clear that this was a s. 9 case. The trial judge had made an unusual custody order giving custody to the father, who was quite wealthy, but providing that the children would have their principal place of residence with the mother. For these reasons, Metzner does not provide support for the result reached by the Divisional Court.

[44] While the Divisional Court erred in interpreting s. 9 as creating a presumption in favour of the Guidelines amount, the motion judge erred in applying what is essentially the set-off approach found in s. 8. The latter section deals with split custody, which occurs where, for example, there are two children of a marriage and each parent has custody of one child. Where there is split custody, the amount of a child support order is the difference between the amount that each spouse would otherwise pay if a child support order were sought from each spouse. This is a formulaic approach. Unlike the other sections referred to above, s. 8 does not grant any discretion to the court.

[45] The formulaic language of set-off in s. 8 is not found in s. 9. The language of s. 9 requires the court to determine child support "by taking into account" the three factors contained therein. This language, and the language of subsection (b) pertaining to increased costs of shared custody and subsection (c), "the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought", suggest an individualized, fact-specific approach to each case. [page719]

[46] The straight set-off approach ignores the fact that shared custody may result in overall costs of caring for a child that are greater than the Guidelines amount that an individual parent would otherwise be obligated to pay. It also ignores the spending patterns of the parties for the child. Had the legislators wished to adopt a set-off approach in s. 9 cases, they would have said so.

[47] In this case, after applying a straight set-off approach, the motion judge grossed up the net amount after set- off, such as is done in some United States jurisdictions, by the use of a multiplier. We do not fault the motion judge for using a multiplier for the reasons we give later.

[48] The motion judge's use of a multiplier cannot, however, compensate for her failure to undertake a full analysis under s. 9 of the Guidelines. Her comment, "We're just doing the math today" is indicative of a mechanical approach. Further, as set out above, when the mother, who only received the father's 2000 tax return on the day of the hearing on May 18, 2001, indicated that she wished to question some of the father's deductions, the motion judge told her she could do so, "some other time". There was no other time offered to the mother. When the mother, who was self-represented, attempted to explain that a reduction in child support would result in "great financial hardship" to herself, she was interrupted by the husband's counsel who indicated that this was not in the materials and ". . . otherwise it's a matter of giving evidence which we are not doing today". The motion judge did not at that point inquire whether the mother wished to give evidence respecting undue hardship pursuant to s. 10 of the Guidelines, consider whether the mother should be allowed to amend her material to reflect this and adjourn the proceedings or order a trial of this issue. Although the motion judge briefly averted to the subsections of s. 9, her reasoning was conclusory and she did not provide a pathway to her conclusion.

The Application of Section 9

[49] Section 9 requires a two-part determination: first, establishing that the 40 per cent threshold has been met; and second, where it has been met, determining the appropriate amount of support. In this case, as noted above, the mother conceded that this was a regime of shared custody, as the father has the child 50 per cent of the time.

[50] With respect to the second part of the determination, as we said in the introduction, courts across the country have struggled to develop an interpretation of s. 9 of the Guidelines that promotes the Guideline objectives of ensuring consistent treatment of spouses and children and reducing conflict by making [page720] calculation of child support orders more objective. To that end, most courts have utilized various formulae as a means of bringing some objectivity and consistency to the exercise. The various formulae are reviewed in the case law and the literature. See in particular Carol Rogerson, "Child Support under the Guidelines in Cases of Split and Shared Custody" (1998), 15 Can. J. Fam. L. No. 2, 11. A few courts have rejected any kind of formula in favour of a broad discretionary approach.

[51] The Guideline objectives of establishing a fair standard of support for children and ensuring that children benefit from the financial means of both parents are also essential, and should, along with the other enumerated objectives, guide the exercise of discretion under s. 9. This requires that in making the s. 9 determination, the overall context and well-being of the child or children be considered.

Section 9(a): The Table Amounts

[52] Section 9(a) provides that in determining the amount of the child support order, the court must take into account "the amounts set out in the applicable tables for each of the spouses". As courts and commentators have noted, this provision is different from the split custody regime under s. 8. In split custody cases, where each parent has one or more of the children, the child support is determined by a rigid formula, subject of course to s. 4 ("incomes over $150,00"), s. 7 ("special expenses") and s. 10 ("undue hardship"). Under s. 8, the amount of child support is the difference between the amount that each spouse would otherwise pay if a child support order were made against each of the spouses.

[53] Section 9 only requires the court to take the Table amounts "into account". Nevertheless, most courts have used a formula that in some way resembles the set-off approach in s. 8. As Prowse J.A. recognized in Green v. Green at para. 34, formulae can be of assistance:

It is apparent from a review of the decided cases that the courts have not succeeded in finding a s. 9 formula or formulas which can be applied in an equitable way in all cases. Section 9 is one of the provisions of the Guidelines which appears to recognize, particularly in ss. 9(b) and (c), that the myriad of fact patterns which come before the courts require some room for the exercise of judicial discretion. Discretion is built into the section. This is not to say that formulas cannot be of assistance in applying s. 9, or in testing the result, but only that a particular formula should not be regarded as definitive.

[54] We agree that no formula can be definitive, but a formula that resembles the set-off approach in s. 8 can be useful as a starting point because it brings some consistency and objectivity [page721] to the determination. However, the court retains the discretion not to use a formula where it would lead to a result that is inconsistent with the objectives of the Guidelines and contrary to the best interests of the child. As James G. McLeod said in his annotation to Green, "a court should not adopt a simplistic approach to save time if the effect is to provide inadequate support so that a payee parent has insufficient funds to meet a child's needs": see (2000), 2000 BCCA 310, 6 R.F.L. (5th) 197, 2000 CarswellBC 1048, at p. 200 R.F.L.

[55] The amount produced by a formula that takes into account the Table amounts of both parents as required by s. 9(a) must then be modified to take into account the factors set out in ss. 9(b) and (c). As Eberhard J. stated at para. 5 in Rosati v. Dellapenta, supra, cited with approval by Prowse J.A. in Green, supra, at para. 24, "Time tells me little about who arranges for the children's material needs." In order to ensure that the best interests of the children prevail, the section needs to be read as a whole and effect must be given to each of the subsections of s. 9. The objectivity of a formulaic approach is of little value if the best interests of the child in receiving adequate support are not met.

[56] We would also not foreclose the possibility that in a particular case, such as where the expenses of caring for a child are greater than the Table amount for either parent, the only solution is to revert, as suggested by McLeod, to the pre- Guideline approach in Paras v. Paras, 1970 370 (ON CA), [1971] 1 O.R. 130, 14 D.L.R. (3d) 546 (C.A.). Under the Paras formula, a court calculates the appropriate quantum of child support by, firstly, arriving at a sum that reflects the total needs of the child. This sum is then divided in proportion to the respective incomes and resources of the parents. At this stage the court could decide what further adjustment is necessary having regard to the costs already assumed by a parent and the increased costs of exercising access. The court could then compare the result with the Table amounts under s. 9(a) for each parent and assess whether the result is a reasonable reflection of what that parent could pay. The resulting amount is derived after taking into account the three factors in s. 9 as a whole as opposed to considering them as separate watertight compartments.

[57] However, in most cases and particularly in a case such as this where there is limited information and the incomes of the parties are not widely divergent, we think a formula based on the Table amounts is the most appropriate starting point. In adopting this approach, we are conscious of the important policy concerns raised by Rogerson, supra, at pp. 20-22 and others. In particular, we are aware that any formula that has the effect of [page722] dramatically reducing support can create financial incentives on the part of a custodial parent to limit access, and on the part of the access parent to seek increased time with the child or children solely to reduce the quantum of the child support obligation. The application of any formula should strive to minimize these incentives, which go directly against the best interests of the child and in effect create a phenomenon of trading "dollars for days". This case is an excellent example of the danger: the mother would have had a strong financial incentive to hire a caregiver once a week for the duration of her evening course rather than seek the assistance of the father, which led to a reduction in the child support from $688 to $100.

[58] An interpretation of s. 9(a) that would aggravate these concerns would be inconsistent with the objectives in s. 1 of the Guidelines. The formulae most susceptible to that criticism are those that produce the so-called "cliff effect" where a modest increase in access results in a dramatic reduction in the amount of support. Examples of such formulae are those that use a pro-rated approach, whereby in addition to applying some form of set-off, the quantum is further reduced to reflect time actually spent in each parent's care. In our view, this is in effect a double penalty and such formulae fail to reflect the reality that many costs associated with having the child in one's care are constant, irrespective of the percentage of time spent with the child. The set-off approach used by the motions judge in this case suffers from this defect.

[59] We can illustrate the problem with examples taken from this case. The Table amount that the mother would receive from the father if the father had access to Christopher 39 per cent of the time is $688. Using a pro-rated formula produces the following result based on the incomes as determined by the motion judge:

Father's Table amount $688

Pro-rated at 50 [per cent] as father has custody/access for

50 [per cent] of the time $344

Mother's Table amount $560

Pro-rated at 50 [per cent] as mother has custody/access for

50 [per cent] of the time $280

Set-off the two amounts ($344 - $280) $ 64

[60] Thus, because the father now has Christopher for one night more, his child support obligation to the mother has fallen from $688 to $64. As Prowse J.A. points out in Green v. Green, at para. 32, the loss of income produced by the cliff effect has a [page723] disproportionate impact on the lower income parent. This result is more readily justified where both parents have similar incomes, but even so, there is in our view no sound conceptual reason for the pro-rated approach where the Table amounts have already been set-off.

[61] One solution to reducing the cliff effect was suggested by Speigel J. in Moran v. Cook (2000), 2000 22542 (ON SC), 9 R.F.L. (5th) 352, [2000] O.J. No. 2583 (QL) (S.C.J.). She based the set-off on the greater amount of time that the access parent had the child over and above the 39 per cent cut-off. In that case, because the father had access to the child for 46 per cent of the time, she reduced his child support obligation by 17.5 per cent to take into account that he had the children for 17.5 per cent more than he would have them if he only had them for 39 per cent of the time ((46-39)/(40) = 17.5 per cent).

[62] The increased amount of time that a child spends with the other parent is a factor to consider under s. 9(c) as part of the condition of the child. Used as the dominant factor, however, this approach does not take into account the mother's Table amount as required by s. 9(a): see Harrison v. Harrison (2001), 2001 60967 (ON SC), 14 R.F.L. (5th) 321 (Ont. S.C.J.). Taking the mother's Table amount into account in the way that was done in Harrison, since each party has custody of Christopher for 50 per cent of the time, there has been a 28 per cent increase from 39 per cent for the father and a corresponding reduction for the mother. This produces the following:

Father's obligation: $688 less 28 [per cent] (i.e. $192.64) $495.36

Mother's obligation: $560 less 28 [per cent] (i.e. $156.80) $403.20

[63] The Moran v. Cook approach, modified as was done in Harrison to take into account the Table amounts of both parents, would result in the following calculation: $495.36 - $403.20 = $92.16.

[64] Another approach is simply to set-off the two table amounts as under s. 8 for split custody. In this case, that results in $688 - $560 = $128.

[65] To summarize, the four different formulae produce the following results (rounding off for simplicity) in this case:

Pro-rated set off $ 64

Moran v. Cook approach $495

Modified Moran v. Cook approach as was done

in Harrison v. Harrison $ 92

Simple set-off (as in s. 8) $128 [page724]

[66] None of these formulae produce entirely satisfactory results. We have already discussed why we consider the pro- rated set-off to be unsatisfactory. While the Moran v. Cook approach is the most effective at reducing the cliff effect, it does not take into consideration the Table amount for both parents as required by s. 9(a). The modified Moran approach adopted in Harrison is in reality simply a more nuanced method of pro-rating and suffers from the same flaws discussed above in that it also does not reflect the wording of the statute and it gives undue emphasis to s. 9(a). This leaves simple set-off as the basic starting point for the s. 9 analysis.

[67] If a formula is used as a starting point, we consider the simple set-off approach to be the starting point that is most faithful to the wording of s. 9. This approach takes into account the Table amounts for both parents, and recognizes the importance of the 40 per cent threshold. The simple set-off approach, however, has certain underlying assumptions including the following:

(1) The Table amount is the maximum that a parent with that income can afford to pay for support (apart from extraordinary expenses);

(2) The ordinary needs of the child equal the Table amount;

(3) The parents each spend an equal amount for the care of the child; and

(4) The child's needs are reduced by virtue of a shared custody arrangement on a dollar for dollar basis.

[68] Parliament has recognized that these assumptions will not accord with the reality of the situation. The set-off is therefore nothing more than a starting point and has to be revised in accordance with subsections (b) and (c). Put another way, the analysis under s. 9 is incomplete without a full consideration of subsections (b) and (c), and the cliff effect remains unaddressed until they are applied.

Section 9(b): Increased Cost of Shared Custody

General considerations

[69] Subsection 9(b) provides that the court must take into account "the increased costs of shared custody arrangements". Read in context and in view of the opening words of s. 9, which refer to "a spouse who exercises a right of access to, or has [page725] physical custody of" a child, the term "shared custody" must refer not only to the case of actual shared custody, but to cases of increased access that have reached the 40 per cent threshold.

[70] In our view, the provision recognizes that the parent sharing custody or exercising access 40 per cent or more of the time incurs certain expenses for the child. The aim of the subsection is not, however, to compensate that parent for all shared custody or access costs but to recognize that there are increased costs associated with having the child for 40 per cent or more of the time. In addition, the subsection recognizes that greater access is not reflected in a dollar for dollar decrease in the spending of the custodial parent. See Rogerson, supra, at pp. 20-22, Green v. Green, supra, at para. 27, and Slade v. Slade, supra. As Cameron J.A. said in the latter case at para. 17, "In short, as s. 9(b) recognizes, the total cost of raising children in shared custody situations is greater than where there is sole custody." Each parent must bear some of this burden according to his or her ability.

The use of a multiplier

[71] As we have said, s. 9 recognizes that the custodial parent's costs are not reduced by virtue of a shared custody arrangement on a dollar-for-dollar basis. Some of a custodial parent's costs are constant irrespective of the residential arrangement. Accommodation is one such constant and constitutes a major component of the parent's costs. As well, of course, the child's needs will not have been reduced by the shared custody arrangement and to the contrary may well have increased. In an attempt to recognize the impact on the custodial parent, some courts have adopted a "multiplier approach" to augment the figure arrived at after a simple set- off.

[72] In the United States, jurisdictions that use a multiplier incorporate it into the relevant legislated child support guidelines and it replaces the need to introduce evidence of the actual increased costs of a shared custody arrangement. See Carol Rogerson, supra, in which Professor Rogerson describes the various multipliers at pp. 75-79. Prowse J.A. in Green v. Green, supra, at para. 35, while recognizing the advantage of a multiplier approach from the point of view of simplicity, was sceptical that our Guidelines justify such an approach. She stated, "I do not interpret our Guidelines, as currently drafted, as justifying such an approach."

[73] In our opinion, the use of a multiplier recognizes the concerns raised by the commentators and the courts that dollars spent on increased access or shared custody do not necessarily [page726] lead to a reduction in expenditure for the custodial parent. The use of a multiplier also furthers two of the objectives of the Guidelines, predictability and consistency, in calculating support. Used with discretion, a multiplier can provide a mechanism for recognizing the relative inflexibility of some of the custodial parent's costs. In the absence of evidence concerning fixed costs of the responding parent, the most common multiplier is 50 per cent, which is applied to the set-off amount. The amount of the multiplier ought, however, to be adjusted depending on the circumstances.

[74] The manner in which s. 9(a) is dealt with has a bearing on the approach used under s. 9(b). The appropriate method of accounting for the increased costs of shared custody arrangements under s. 9(b) is a fact-specific one. After considering the evidence, the increased costs of shared custody may become more apparent. Where they do not, and in the absence of evidence concerning those costs, the Guidelines as currently drafted, while not providing for a multiplier, at least do not prohibit its use and may be a useful tool to recognize the responding parent's fixed costs.

Increased costs of the applicant parent

[75] A particular problem in interpreting s. 9(b) is the extent to which the court may take judicial notice of increased costs. In our view, the provision is worded to permit the court to make the common sense assumption that a parent exercising shared custody or access for 40 per cent or more of the time will have additional costs for such variable items as food, entertainment and transportation. If, however, that parent wants to show that the increased cost of shared custody has resulted in some extra fixed cost expense such as larger living quarters, he or she must adduce evidence to that effect. The judge will then take that into account under subsection (b). Depending on the nature of the additional cost, the applicant parent will be entitled to a reasonable reduction in the support payment equal to some portion of the amount expended.

[76] Further, because the wording of s. 9(b) refers to the "increased" costs of shared custody, it seems to envisage that the applicant parent must show what his or her costs are for time spent with the child in excess of 40 per cent. Thus, if the applicant already provided the child with his or her own bedroom before the child began spending more than 40 per cent of the time with that parent, this would not be an increased cost. [page727]

Section 9(c): Conditions, Means, Needs and Other Circumstances

[77] The final consideration under s. 9 involves the "conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought". In applying this subsection the court should take into account the goal that the child should, so far as possible, enjoy a comparable standard of living in both households. Further, where a wide disparity of income is evident, the court will need to recognize that the lower income parent spends a greater percentage of his or her income on the child's expenses, both fixed and variable. Where a parent who has been paying support brings an application under s. 9, the court should make the common sense assumption that the responding parent's fixed costs have remained unchanged and that his or her variable costs have been reduced only modestly by the increased access, in the absence of evidence to the contrary. If the applicant claims that the respondent's costs have been substantially reduced because of the new custody arrangement, for example that baby-sitting costs are drastically reduced, then he or she must adduce evidence to that effect.

[78] Subsection (c) also allows the court to take into account the actual spending patterns of the parents. One parent often absorbs more of the variable costs for a child than the other. These may include expenses such as clothing, school supplies and activities, birthday presents for friends, spending allowances, dental checkups, camp fees and entertainment expenses. In this regard child expense budgets are particularly important. Under subsection (c), the court will also consider, where relevant, any other circumstances such as whether the parent has income in excess of $150,000, the income of other members of the household and the incomes of other persons who are contributing to the support of the child.

The importance of evidence

[79] Before turning to the application of the factors relating to s. 9 in this case, we wish to express our concern, as have the appellate courts in Green v. Green and Slade v. Slade, about lack of evidence concerning the subsection (b) and (c) factors. In Green, at para. 35, Prowse J.A. stated, "In order to apply s. 9 however, it is important that the parties lead evidence relating to ss. (b) and (c); that is, of the 'increased costs of shared custody arrangements' and 'the conditions, means, needs and other circumstances of each spouse [parent] and of any child for whom support is sought.'" Prowse J.A. suggests, at para. 35, that the [page728] court has two options: either to make assumptions as to the increased costs or to dismiss the application for lack of evidence.

[80] We would add a third option. The court can adjourn the motion and require the parties to provide additional evidence or direct a trial. Rule 15(13) of the Family Law Rules, which apply to this proceeding, provides that on a motion to change a final order, "If the court is of the opinion that a motion . . . cannot be properly dealt with because of the material filed, because of the matters in dispute or for any other reason, the court may give directions, including directions for a trial" (emphasis added).

[81] We also note that in Francis v. Baker, supra, at para. 48, the Supreme Court observed in reference to s. 4 of the Guidelines that, "there is nothing objectionable per se about recognizing that trial judges have the discretion to require custodial parents to produce child expense budgets." As the court pointed out, "Along with other factors, these budgets speak to the reasonable needs of the children." The needs of the children is a factor expressly included in s. 4(b) and is also referred to in s. 9(c). The Supreme Court's comments have particular application in cases of shared custody where there is no presumption in favour of the Table amounts. What the Supreme Court found objectionable was that the custodial parent, under pre-Guideline jurisprudence, had the burden of proving the reasonableness of each budgeted expense on a balance of probabilities (at paras. 48 and 49). The court held that such an approach ran contrary to the presumption that the Table amount in the Guidelines was the appropriate amount of support that should be paid for the child. The court cautioned that there is some inherent imprecision in child expense budgets and that the pre-Guideline approach failed to recognize the unique situation of high income earners. Thus, it was held that the trial court should not be too quick to condemn expenses as unreasonable for children of high income earners. Taking into account the different contexts of ss. 4 and 9, we nevertheless think those comments are helpful in applying s. 9.

[82] As pointed out in Francis v. Baker, at para. 39, the actual circumstances of the child are the central consideration. In dealing with an application under s. 9 by a payor spouse, it will be particularly important for the responding parent to present a child care budget if he or she wishes to contend that the existing expenses of caring for the child exceed the Table amount in the Guidelines that the applicant has been paying and that the respondent is presently contributing to the child's support. In such situations, it may be that the overall support required to meet the needs of the child will exceed the Table amount of one parent. [page729]

Undue Hardship

[83] We recognize that because of this approach to s. 9, in some cases there will be considerably less money available to the payee spouse than was the case when access by the payor spouse did not exceed 39 per cent. In some cases this could result in undue hardship to the payee spouse. In such cases, the court will need to consider the provisions of s. 10(1) of the Guidelines, which allow a court to award a different amount than the amount determined under, inter alia, s. 9, where "the spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship." Section 10(2) lists some circumstances that may cause undue hardship, but it is not exhaustive. At the same time, s. 10 must not be given an overly broad interpretation so as not to defeat the objectives of the Guidelines. See Hanmore v. Hanmore (2000), 2000 ABCA 57, 255 A.R. 163, 4 R.F.L. (5th) 348 (C.A.), at para. 10 (leave to appeal refused [2000] S.C.C.A. No. 182):

The objectives of the Guidelines are set out in s. 1. The primary objectives are "to establish a fair standard of support for children that will ensure that they continue to benefit from the financial means of both spouses after separation", and "to ensure consistent treatment of spouses and children who are in similar circumstances". Such objectives will be defeated if the Courts adopt a broad definition of "undue hardship" or if such applications become the norm rather than applying to exceptional circumstances. That has been the consistent message of the Courts since the Guidelines came into force.

[84] In our view, this policy is of less importance in the case of s. 9 because of the greater subjectivity that is implicit in the application of that section.

Summary

[85] To summarize, the Guidelines are based on the principle that spouses have a joint obligation towards their children in accordance with their financial means. The objectives of the Guidelines are to achieve a fair, objective, consistent measure of support. To reach these objectives, judicial discretion is limited to five specific situations. In those five situations the court is granted a discretion that is structured by the specific wording of the particular section.

[86] On application by the payor parent, s. 9 requires the court to make a determination, "by taking into account" the three factors that follow. Subsection (a), which refers to the Table amounts, is not the dominant factor. However, a simple formula setting-off the amounts that each parent would be required to pay the other will often be a convenient starting point. [page730]

[87] Subsection (b) recognizes that shared custody does not necessarily result in a dollar for dollar decrease in the amount of support required by the responding parent. Shared custody arrangements may actually require an increased amount of overall child support. In the absence of evidence, a formula, such as a multiplier, can assist in quantifying the increased costs of shared custody arrangements to the respondent. While a 50 per cent multiplier may be appropriate in many cases, the court should have regard to the respondent's actual fixed costs, especially costs of accommodation, in determining an appropriate multiplier. The court can also take notice of the common sense proposition that increased access over 39 per cent will result in increased variable costs to the applicant. However, it is not all access costs, only the increased costs of access, that are taken into account under subsection (b). Where the applicant claims to have incurred extra fixed costs, he or she will have to adduce evidence of those expenses to have some portion of that expenditure taken into account.

[88] The factors in subsection (c) give the court a broad discretion to take into account the actual situation of the parents and children in ordering support. This is not novel, as prior to the enactment of the Guidelines, support orders for children under both the Divorce Act and the Children's Law Reform Act took into account the condition, needs, means and circumstances of the parties and the children. Further, the exercise of the court's discretion under s. 9 must recognize that in apportioning support, the court must, insofar as the overall level of family resources allows, ensure that at the end of the day there is an adequate amount of resources to meet the child's needs in both households.

[89] Finally, the court will consider any application by either parent based on undue hardship under s. 10.

Application of the S. 9 Factors to this Case

[90] We would adopt the following approach in this case. First, we see no reason not to start with the simple set-off. We would then adopt an appropriate multiplier to reflect the mother's fixed costs. As we have said, in many cases the 50 per cent multiplier will be appropriate. In other cases, having regard to the responding parent's actual fixed costs, some different multiplier might be appropriate to reflect these fixed costs. We think this is one of those cases. The mother's costs for accommodation are higher than 50 per cent of her variable costs for the child. Her monthly expenditures, not including the RESP, are approximately $1,260 of which accommodation is $845 or 67.6 per cent of her fixed [page731] costs. We would therefore multiply the set-off sum by the 67.6 per cent multiplier and obtain the product. It is then necessary to adjust the result to reflect the actual spending pattern of the parents on the child.

[91] Accordingly, we begin in this case with the simple set- off amount of $128.9 To that we would add $86.62, reflecting the use of a 67.6 per cent multiplier. This produces a figure of $215 (rounding off).

[92] The material filed by the father provided very little evidence of his increased costs of shared custody. For example, in his affidavit, he stated, "I provided [Christopher] with his own bedroom on a full-time basis and all of the costs pertaining to him while he is residing with me." However, he did not indicate when he provided the child with his own bedroom and what if any additional costs this entailed. Further, the father did not provide any information about the increased costs pertaining to Christopher that were occasioned by the increased access. Accordingly, we propose to make the common sense assumption that the father has incurred additional variable costs for such items as food and entertainment. These increased costs are part of the overall variable costs that we will take into account under s. 9(c) as part of the condition, means, needs and circumstances of the spouses and the child.

[93] It is then necessary to consider the factors in subsection (c) by looking at the actual spending patterns of the parents. While the parties did not adduce evidence expressly directed to the factors in subsection (c), it is possible to take these factors into consideration, to a certain extent, by having regard to the parties' financial statements. Each parent incurs the expense of transporting the child to and from school and we assume that this expense will continue to be borne by that parent. We note that we do not have actual information on other normal variable expenses such as haircuts, birthday gifts and gifts for family occasions, dental bills, etc. Not including her contribution to an RESP, the mother's variable monthly expenses for the child are: clothing $100; food $137.50; school fees $25; school lunches $40; school activities $15; entertainment $60, and summer camp $35 for a total of $403.41. The father's variable expenses for groceries, clothing, school lunches and children's summer camp are $270 on a monthly basis. The difference between the mother's variable expenses of $403.41 and the father's of $270 is $133.41. [page732] The total variable expenses should be shared by the parties in proportion to their incomes. Adding the two figures of $403.41 and $270 together equals $673.41. The ratio of the father's income to the mother's income is 55:45. The result is that the father should pay 55 per cent of $673.41 or $370 rounded off and the mother's share is $303. Inasmuch as the father is only expending $270, he should pay to the mother an additional $100. When $100 is added to the $215 figure, it produces a total of approximately $315 regular support to be paid. Factoring in the expense for the mother's contribution to an RESP of $153.84 as a special expense in the same proportion, we would add $84.61 to the $315 for a total of $399.61 in support to be paid by the father to the mother based on the 2001 financial information.

[94] In her submissions to the motion judge, the mother stated that she had moved to Woodbridge because it was in Christopher's best interest, but that she did so "with great financial hardship to myself". Counsel for the father objected to this submission because it was not supported by any material. The motion judge upheld the objection and in that context made the comment that "we're just doing math today". In the result, there is no information about the hardship resulting from the mother's move and whether this would constitute undue hardship under s. 10 of the Guidelines. The mother did not seek to adduce any such evidence before us to supplement the record. We are therefore not prepared to increase the support amount arrived at under s. 9.

Wylie v. Leclair

[95] Before concluding this part of our reasons, we wish to very briefly deal with the effect of this court's decision in May of this year in Wylie v. Leclair (2003), 2003 49737 (ON CA), 64 O.R. (3d) 782, 226 D.L.R. (4th) 439. This case concerned two issues including the quantum of child support for two children. The parties had been in a long-term, committed relationship but had not married. When they separated they agreed on a joint custody regime with the children residing with their parents on alternate weeks. At trial, apparently with the agreement of the parties, the trial judge held that the proper approach in interpreting s. 9(a) was to use a simple set-off approach. This produced a monthly payment by the father to the mother of $272. The trial judge then increased that amount to $400, taking into account subsections (b) and (c) because of the parties' "lifestyle" and the father's assets. MacPherson J.A. speaking for the court held that the trial judge's comments about lifestyle and assets were entirely speculative [page733] and inconsistent with other findings of fact made by the trial judge. Counsel also conceded that there was no evidence of increased costs of shared custody arrangements. MacPherson J.A. therefore held that the trial judge's analysis and application of the factors in subsections (b) and (c) were not supportable and that "there was no basis for departing from the set-off amount which the parties acknowledged was the sum of $272 per month" (at p. 786 O.R., p. 443 D.L.R.).

[96] Neither counsel in their submissions before us suggested that the Wylie decision represented a binding precedent on the interpretation of s. 9. Counsel for the father informed us that the interpretation of s. 9 was not fully argued in this court. It is also apparent that the case was argued on the basis of concessions made at trial concerning the use of the simple set- off approach. In those circumstances, we do not consider that the Wylie case stands in the way of the analysis set out above. Unlike in Wylie, this court has had the benefit of full argument on the interpretation of s. 9 of the Guidelines and we have been referred to most of the reported cases and the leading articles on the issue.

Retroactive Child Support

[97] The motion judge ordered that the adjusted child support order be retroactive to September 2000 when the father first contacted the mother and asked for a reduction in child support because of the shared custody. Many of the factors to be considered in deciding whether to make an order for support retroactive have been summarized by Rowles J.A. in S.(L.) v. P. (E.) (1999), 1999 BCCA 393, 67 B.C.L.R. (3d) 254, 50 R.F.L. (4th) 302 (C.A.), at paras. 66 and 67. A detailed application of those factors is not required. In our view, the motion judge erred in principle in making the order retroactive in this case. The overwhelming factor against making the new order retroactive in the circumstances of this case is that the father had failed to pay increased child support as his income increased, as required by the 1998 minutes of settlement. In fairness, it does not appear that the mother specifically drew this to the attention of the motion judge, although it was mentioned in her affidavit.

Costs

[98] The question of costs is a difficult one in this case. We have found that both the motion judge and the Divisional Court erred in their interpretation and application of s. 9. The motion judge erred in failing to take into account all of the factors in s. 9 and in simply using a pro-rated set-off approach. These errors favoured [page734] the father. She also erred in making the new order retroactive to September 2000. The Divisional Court erred in its application of Francis v. Baker and in holding that there was a presumption in favour of the Table amount that had not been rebutted by the father. These errors favoured the mother. The result of the appeal in this court is mixed. While the father has succeeded in overturning the decision of the Divisional Court, the amount of child support that we have arrived at is substantially more than the motion judge ordered.

[99] Having regard to all of these circumstances and that this is the first occasion on which this court has been called upon to consider in detail the interpretation and application of s. 9 of the Guidelines, we believe that this is a proper case for each party to bear their own costs at all stages of the proceedings. We consider this order to be consistent with Rule 24 of the Family Law Rules, and in particular, subrule (6), which speaks to divided success.

DISPOSITION

[100] Accordingly, we would allow the appeal, set aside the order of the Divisional Court, and order that the father pay child support to the mother in the monthly amount of $399.61 as of June 2001. Because the father was paying a lesser amount until the date of the order of the Divisional Court and then a greater amount thereafter, there may have been some overpayment or underpayment. We assume that the parties will be able to agree on the amount of this overpayment or underpayment and how it can be dealt with. If not, they may serve and file brief written submissions within 30 days of the release of this judgment.

[101] As indicated, the parties did not present any further or updated information to this court from which we could make a determination of the appropriate amount of child support for 2002 or the current year. We believe that the parties ought to be able to settle on an appropriate amount for those years based on these reasons. If not, we would permit the parties to serve and file brief written submissions within 30 days of the release of this judgment.

[102] We would order that each party bear their costs of the proceedings in this court, in the Divisional Court and before the motion judge.

Appeal allowed. [page735]

APPENDIX

Federal Child Support Guidelines

1. The objectives of these Guidelines are

(a) to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation;

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

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

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

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

(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought; and

(b) the amount, if any, determined under section 7.

(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is

(a) the amount determined by applying these Guidelines as if the child were under the age of majority; or

(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.

4. Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order is

(a) the amount determined under section 3; or

(b) if the court considers that amount to be inappropriate,

(i) in respect of the first $150,000 of the spouse's income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;

(ii) in respect of the balance of the spouse's income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and [page736]

(iii) the amount, if any, determined under section 7.

8. Where each spouse has custody of one or more children, the amount of a child support order is the difference between the amount that each spouse would otherwise pay if a child support order were sought against each of the spouses.

9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account

(a) the amounts set out in the applicable tables for each of the spouses;

(b) the increased costs of shared custody arrangements; and

(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

10(1) On either spouse's application, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.

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

15.1(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to pay for the support of any or all children of the marriage.

(3) A court making an order under subsection (1) . . . shall do so in accordance with the applicable guidelines.

26.1(1) The Governor in Council may establish guidelines respecting the making of orders for child support, including, but without limiting the generality of the foregoing, guidelines

(a) respecting the way in which the amount of an order for child support is to be determined;

(b) respecting the circumstances in which discretion may be exercised in the making of an order for child support;

(h) respecting the production of income information and providing for sanctions when that information is not provided.

(2) The guidelines shall be based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation. [page737]

Notes

Note 1: For examples of this approach see: Dean v. Brown (2002), 2002 NSCA 124, 209 N.S.R. (2d) 70, 33 R.F.L. (5th) 65 (C.A.); Middleton v. MacPherson (1997), 1997 11517 (AB KB), 204 A.R. 37, 29 R.F.L. (4th) 334 (Q.B.); Barry v. Rogers (2002), 2002 54144 (NL SC), 213 Nfld. & P.E.I.R. 239 (S.C.T.D.). There are other formulae. In some cases, the courts have taken the percentage of time the child spends with the payee parent and multiplied that by the Guideline amount the payor parent would be obligated to pay. See e.g. Moran v. Cook (2000), 2000 22542 (ON SC), 9 R.F.L. (5th) 352, [2000] O.J. No. 2583 (QL)(S.C.J.); Harrison v. Harrison (2001), 2001 60967 (ON SC), 14 R.F.L. (5th) 321 (Ont. S.C.J.).

Note 2: See: Hunter v. Hunter (1998), 1998 14872 (ON SC), 37 R.F.L. (4th) 260 (Ont. Gen. Div.).

Note 3: For other examples of this approach see: Casselli v. Casselli, [2001] O.J. No. 5176 (QL), [2001] O.T.C. 960 (S.C.J.); Fisher v. Fisher, [2001] O.J. No. 5477 (QL), [2001] O.T.C. 976 (S.C.J.); Ward v. Ward (2000), 2000 22510 (ON SC), 7 R.F.L. (5th) 197 (Ont. S.C.J.); Rosati v. Dellapenta (1997), 1997 12391 (ON SC), 35 R.F.L. (4th) 102 (Gen. Div.); MacNaught v. MacNaught (1998), 1998 29671 (PE SCTD), 169 Nfld. & P.E.I.R. 153, 37 R.F.L. (4th) 79 (P.E.I.S.C.).

Note 4: On a motion to change an order for support, the affidavit in support of the motion must contain the financial statements of any corporation that a spouse controls for the three most recent taxation years and income from any other source: Rule 15(7)(i) of the Family Law Rules, O. Reg. 114/99 and s. 21 of the Guidelines. No information pertaining to these companies is contained in the materials filed. No issue of disclosure has been raised in relation to them.

Note 5: The proceeds of this RRSP may have been used to buy the house in Woodbridge to which reference is later made.

Note 6: This may explain the withdrawal of the RRSP funds by the mother.