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Monday, April 26, 1999Child-support guidelines go on trial
Millionaire appeals: Is parent obliged to pay more as income rises?
OTTAWA - Should the teenage daughters from a previous marriage of Thomas Baker, a Toronto millionaire, be entitled to a level of child support that more closely reflects his wealth?
Rene Johnston, National Post / Thomas Baker lives in the affluent Bridle Path neighbourhood of Toronto.
The question comes before the Supreme Court of Canada tomorrow as it considers whether the federal government's new child support guidelines discriminate against the wealthy by fixing payments to income, no matter how high the amount.
It's one of many cases involving support payments that have come before the court in recent months from challengers asking the judges to fine-tune earlier decisions on who owes what to whom when marriages fall apart.
Mr. Baker, a businessman whom court documents show has a net worth of $78-million, is contesting a large increase in his support payments after the federal guidelines came into effect in May, 1997, increasing his support payments to $10,034 a month from $2,500.
The guidelines are designed to ensure that a child moving between divorced parents' homes experiences a consistent living standard.
Courts no longer award an amount that a judge deems to be reasonable, but instead base payments on a set formula tied to the income of the paying parent, effectively allowing children to share in good financial fortunes, rather than receive payments based solely on need.
Mr. Baker, who unsuccessfully argued in lower courts that the increased payments are a "windfall" for his former wife, Monica Francis, wants the Supreme Court to overturn a March, 1998, ruling from the Ontario Court of Appeal.
"The Court of Appeal erred in determining that child support should always increase with parental income, no matter how large the award," Mr. Baker's lawyers say in a submission to the Supreme Court.
His case was rejected by the Court of Appeal in a ruling that strongly supports the federal guidelines.
"Mr. Baker is exceptionally wealthy. No one quarrels with his right to enjoy the lifestyle his accumulated wealth permits," wrote Justice Rosalie Abella.
"But in the enjoyment and distribution of his resources, he is obliged by law to factor in sufficient consideration for his children so that their standard of living suffers as little from the separation as possible."
Mr. Baker and Ms. Francis married in 1979 after several years of living together. During their marriage, Mr. Baker rose steadily to become a senior lawyer at a large Toronto law firm. Ms. Francis taught school until their first child was born in 1983.
Two years later, when Ms. Francis was eight-months pregnant with the couple's second child, Mr. Baker informed her he thought the marriage was in trouble. He left her five days after their youngest daughter was born.
By 1987, when he became president of Seven-Up Canada Inc. and began leading what Judge Abella described as an "exceptionally lavish" lifestyle, he had bought a new home worth $1.35-million, a Porsche for $90,000, and a Mercedes for $85,000.
A decade later, when the new guidelines took effect, he earned almost $1-million a year. He had upgraded to a house worth $5- million in an affluent Toronto neighbourhood, and also owned a Vancouver property, a ski chalet in the resort town of Whistler, B.C., and had several more vehicles, including a Ferrari and two BMWs, according to court documents.
Ms. Francis, on the other hand, had returned to teaching and was earning about $63,000 a year. She lived in a relatively modest home in a rundown neighbourhood.
The Supreme Court found in a decision only two months ago that divorce should affect children as little as possible.
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