Accounting for Law

Departure from guidelines OK in certain circumstances

An Ontario court has dismissed an appeal from a father of three who argued material changes in circumstances justified relief from his child support obligations under a special agreement, says Toronto family lawyer Herschel Fogelman.

In Stevenson v. Smit, 2014 ONCA 521 (CanLII), a separated couple addressed the parameters of a separation agreement that said neither party would pay child support in accordance with the Federal Child Support Guidelines, but instead would “share equally all major expenses concerning the children of the marriage, including private school tuition, activity fees, camp fees, and post-secondary education expenses.”

When the agreement was signed, says the decision, the father was forming a new company and had minimal income, which continued to decline in the following years.

“He met his share of the children’s special expenses by drawing down on or liquidating some of his then considerable capital assets,” says the ruling.

His obligations were satisfied until 2008, when he defaulted and informed the mother that he could no longer fulfill the agreement.

The mother – represented by Fogelman, principal with Fogelman Law – applied to the Ontario Court of Justice for an assessment of the father’s arrears; the father countered with an application to terminate his child support obligations under the agreement and replace them with a requirement that he pay child support in accordance with the guidelines.  

“The father claimed that he had ‘(lost) the ability to liquidate capital to support his children’, that he had insufficient income to pay the agreed child support, and that these allegedly unforeseen and unanticipated factors constituted material changes in circumstances justifying relief from his child support obligations under the agreement,” says the ruling.

The application judge disagreed and dismissed his application to change the child support obligations. The father appealed to the Superior Court of Justice, which denied the appeal, and then to the Ontario Court of Appeal, which also dismissed the request.

The father failed to establish a material change in circumstances, says the decision, noting the fact that he was in an “income-earning slump” was known to the parties at the time of entering into the agreement.

The decision also highlighted the fact that in certain cases, special child support arrangements outside of the guidelines can be appropriate “as long as the children’s needs for and entitlement to support were not bartered away.”

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