Friday, May 17, 2002
Child support set at $12,000 a month
Any more would have been excessive, judge decidesNeal Hall
A Surrey real estate developer with more than $42 million in assets has been ordered to pay his ex-wife $12,000 a month in child support for two children.
The couple are referred to only by initials in a written judgment by B.C. Supreme Court Justice Marion Allan.
The judge noted that Mr. A "can afford to pay virtually any child support order made by this court," but she decided any amount over $12,000 would be excessive, since both parents are very wealthy.
The Surrey woman, identified as S.H.A., received after-tax cash payments of $7.5 million as part of the divorce property settlement. She will receive a final payment of $2.5 million in December.
She also has clear title to the matrimonial home in Surrey, which is valued at more than $750,000. The judge noted that the woman spent $250,000 on the garden.
The judge made the child support order retroactive to Jan. 1, 2000, but refused the ex-wife's request to make it retroactive to May 1, 1997, when new federal child support guidelines were introduced.
"To do so would be to redistribute further capital to Mrs. A in the guise of child support," the judge concluded.
Mrs. A was asking for up to $54,067 a month, similar to the child support order of $59,500 for three children initially obtained by Susan MacDonald of North Vancouver against her ex-husband, Ian MacDonald, a vice-president of RBC Dominion Securities.
But in the MacDonald case, B.C. Supreme Court Justice Linda Loo found that $59,500 a month was excessive and amounted to de facto spousal support for the former wife, who had substantial income of her own.
Loo reduced the child support payments to $20,000 a month, which was later upheld by the B.C. Court of Appeal.
Another case heavily relied on by Mrs. A was an Ontario court decision known as R vs. R, where the father's income was $4.1 million a year. He was ordered to pay child support of $20,000 a month, later increased to $36,000 on appeal.
In this week's decision, Allan described the ex-husband, W.D.A., as working for his family's property management and real estate development company. He also inherited significant assets from his father, who died in 1992.
The former spouses had agreed that W.D.A.'s business assets totalled $42 million in 1997, when new federal child support guidelines were introduced.
The couple married in 1978 and had three children, now 22, 20 and 18. They moved to the Lower Mainland in 1990 and separated in 1994.
They were divorced last year, but the court still had to determine child support payments for the two youngest children. The oldest is no longer considered a child of the marriage because she is not attending university and needs no support.
Mrs. A, who declared income of $40,000 last year, submitted an annual budget of $182,128 for herself, which was broken down as:
- $13,340 for housing costs.
- $37,224 for utilities, gardening and pool expenses.
- $34,600 for household expenses, including food, meals outside the home and cleaning.
- $30,000 for housekeeper fees.
- $11,508 for transportation costs, including $696 for driving lessons for the 18-year-old.
- $4,532 for health expenses.
- $19,700 for personal expenses.
- $12,000 for vacations.
- $22,624 for children's clothing, entertainment, activities, lessons and allowances.
Alison MacLennan, the lawyer for Mrs. A, asked the court to declare Mr. A's income as $5.2 million in the year 2000, $3.9 million in 1999, $1.3 million in 1998 and $3.2 million in 1997.
The judge noted that "Mr. A's financial affairs are extraordinarily complex" and he declares relatively little income in his annual tax returns because of careful tax planning.
Mr. A's primary source of funds is from a shareholder loan account. His lawyer, Rosemary Basham, submitted that her client's income was a little more than $1 million a year.
The trial heard that Mr. A has an expensive collection of cars, guns and coins. He gave his wife $10,000 a month for expenses while married and the payments continued after separation. He also continued to pay the nanny's salary of $27,600 a year.
After they separated, Mr. A purchased a home a few blocks away in Surrey. At first, the children saw their father frequently and often spent weekends with him at the couple's Whistler duplex.
But Mrs. A testified that the visits decreased when Mr. A's girlfriend moved into his home. The children's visits now are almost non-existent, she said.
Mr. A testified he paid the taxes on the income generated by the trust funds inherited by each of the children from Mr. A's father.
He also bought them clothing and gifts, including a $16,000 Jeep Cherokee when his daughter turned 18 (subsequently traded in for a new Toyota 4Runner, which cost an additional $30,000) and a $26,000 Ford Explorer for his son, who will graduate from high school this year.
The oldest daughter, who attended university in Hawaii last year, got a used 1991 BMW when she was 17.
The judge decided Mrs. A should pay 19.4 per cent of the children's future extraordinary expenses, such as university tuition, and Mr. A will pay the remaining 80.6 per cent.
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