The Lawyers Weekly

December 17, 1999


By Cristin Schmitz

Ottawa - The Ontario Court of Appeal has sent a clear message that high-income earners will generally have to pay the hefty child support amounts specified in the federal child support guidelines.

The court’s unanimous decision in Simon v. Simon - which deals with child support payable by people with annual incomes over $150,000 - takes a narrow view of judges’ discretion to depart from the formula amounts under s. 4 of the guidelines, and a broad view of “reasonable” expenses for scions of the wealthy.

The court emphasizes several key points in its first major interpretation of the guidelines since Francis v. Baker, last September’s Supreme Court of Canada ruling.

The Ontario Court of Appeal stressed that:

Courts should not use their discretion, under s. 4 of the guidelines, to award less than the guideline formula amount simply because the award exceeds the custodial parent’s projected budget for the child.

In deciding whether the guideline amount is “inappropriate” (i.e. too high), trial judges should not be “selectively critical” of individual items in custodial parents’ proposed child-care budgets.

In the absence of “strong evidence” that the custodial parent is misusing child support, courts should not impose trusts on high child support payments.

The Court of Appeal ordered NHL player Christopher Simon, 27, who earned $1.4 million in 1997 (he now earns close to $1.7 million) to pay monthly support of $9,215 for his five-year-old son, Mitchell, retroactive to May 1997 when the federal guidelines came into force.

The appeal court overruled Justice Roydon Kealey of Ottawa, who had awarded only $5,000 per month in 1997 for the then-three-year-old boy. The trial judge concluded that the $9,215 guideline formula amount exceeded the child’s needs and was thus “inappropriate” within the meaning of s. 4 of the guidelines.

But Ontario Court of Appeal Justices James MacPherson, Allan Austin and David Doherty disagreed, observing that the Washington Capitals forward and enforcer is in “wonderful financial shape” and has no other dependants.

“Viewed from Mr. Simon’s perspective, supporting his son to the tune of less than 10 per cent of his income does not seem unreasonable,” Justice MacPherson wrote.

The appeal court held that Justice Kealey erred by being “selectively critical” of certain items proposed by Lauri Simon in her budget for Mitchell.

These items included $6,000 per year for clothes and $10,000 per year for the boy’s “activities”, including summer camp, skating lessons, golf lessons, music lessons, Scouts and hockey camp. “Her budget is, in my view, a reasonable one,” Justice Mac-Pherson said. He noted that the mother and child had been forced to rely on welfare before Mr. Simon began paying $2,200-per-month in child support.

Ms. Simon’s counsel, Burke Doran of Doran & Mills in Toronto, said the Appeal Court’s decision suggests that “it is not going to be that easy” - at least in cases where the custodial parent does not have a high income - for high-income payers to distinguish their cases from Francis v. Baker, which recognized a presumption in favour of the strict table amounts in the guidelines.

“The message is that courts still obviously have a discretion [to depart from the guideline amounts] but there is a heavy onus on the person seeking to displace the guidelines,” Doran said.

“I think there is a further significance to Simon in that this is, I think, one of the first appellate decisions after Baker, and it does not place huge significance on budgets. The significance is an appellate court refused to have the amount diminished just because of a budget.”

Doran said lawyers who were hoping that the appeal court would take a restrictive approach to Francis v. Baker will be disappointed. “At some point courts are going to say that [a payer’s] income is so high that the guidelines should not be applied, but as I said to the Court of Appeal: ‘this ain’t that case.’”

Doran noted that there are cases coming before the appeal court that involve payers with extremely high annual incomes, up to $5 million.

Mr. Simon’s counsel, Robert Houston of Burke-Robertson in Ottawa, said his client is seeking leave to appeal to the Supreme Court of Canada.

“Essentially what the Court of Appeal has said in this case is that child care budgets are meaningless,” Houston said.

“Notwithstanding the fact that Parliament has specifically stated that there is discretion [to depart from the formula amount] for incomes over $150,000, I don’t know where the discretion starts to click in.

“You have, in this instance, a hockey player who makes the equivalent of $1.5 million Canadian a year-but that’s not a sufficiently high income to trigger the point that there is indeed some discretion on the part of the trial judge. So if we are going to exclude [from the court’s discretion to depart from the table amounts] incomes below $1.5 million, there is not much left.”

Like Francis v. Baker (1999), 177 D.L.R. (4th) 1, Simon interprets s. 4 of the guidelines, which covers child support paid by parents with annual incomes of more than $150,000.

The guideline tables specify amounts of child support up to a parental income of $150,000 and give a formula for calculating an additional amount where the income exceeds $150,000.

Section 4(b) allows a court to simply use the formula for calculating the additional support or, if the court considers the resulting amount of support to be “inappropriate”, to award the additional amount “having regard to the condition, means, needs and other circumstances of the children” and “the financial ability of each spouse to contribute to the support of the children.”

The Supreme Court ruled in Baker that a child’s need is just one factor to take into account in exercising the court’s discretion. The top court also held that courts have discretion to remedy situations where the table amounts so exceed children’s reasonable needs as to no longer qualify as child support. On the other hand, sheer size doesn’t render an award prima facie inappropriate, the high court said. There must be “clear and compelling evidence” to depart from the formula amount, and a court must examine all the circumstances of the case, including the factors expressly listed in s. 4(b).

In Simon, the parents were married for less than two years when they split up in 1994. Ms. Simon was three-months pregnant at the time. She is not employed outside the home.

Based on Mr. Simon’s $1 million U.S. income in 1997, the formula amount for the support of one child is $9,215 per month.

Mr. Simon argued the table amount should not be applied given his high income, the child’s reasonable needs, and the uncertainty and risk of his career as a professional hockey player. The appeal also raised the issue whether the trial judge erred by imposing a trust in the child’s favour on some of the child support because of the uncertainty of Simon’s ability to maintain his high income.

In light of Francis v. Baker, which was decided after the trial decision, the trial judge erred by imposing a heavy burden on Ms. Simon to justify her budget, Mr. Justice MacPherson held.

The trial judge also “got sidetracked” into considering “irrelevant” factors, such as the precariousness of Simon’s hockey career. If Simon’s income changes in the future, he can apply to vary the child support order, Justice MacPherson said. “It should not be effectively varied in advance by a judge speculating about his future income.”

Simon’s own modest lifestyle was also “irrelevant”.

“It does not diminish his obligation to his son. The son’s needs, and Mr. Simon’s income and ability to pay, are the only factors relevant in an analysis under s. 4 of the guidelines,” the appeal court held.

Justice MacPherson also stated that while a court-imposed trust to secure funds for a child’s future care and education may be appropriate in “some cases”, “absent a good reason for imposing a trust, the court should not do so.”

The appeal court did not follow American authorities that have imposed trust accounts in cases involving children of highly paid professional athletes. Instead Justice MacPherson endorsed the “excellent analysis” of the Saskatchewan Court of Appeal’s in Bachorick v. Verdejo (1999), 175 D.L.R. (4th) 633.

“I do not think that the discretion of the custodial parent with respect to the expenditure of child support monies should be fettered unless the non-custodial parent can establish a valid reason for doing so,” Justice MacPherson wrote.

“The presumption should be that a custodial parent will do his or her best to provide for both the child’s immediate needs and his or her future care and education.

“Unless there is strong evidence establishing the need for a trust (e.g. the misuse of support payments by the custodial parent), I see no reason to interfere.”

(Reasons in Simon v. Simon, 1932-010, 13 pp. are available from FULL TEXT.)

© 1999 The Lawyers Weekly