THE ADVISORY GUIDELINES SEVEN MONTHS LATER:
CASES, CRITICISMS AND RESPONSES, REVISIONS
Rollie Thompson and Carol Rogerson
A. SOME CASES
1. Appellate Decisions
Yemchuk v. Yemchuk, [2005] B.C.J. No. 1748, 2005 BCCA 406 (B.C.C.A.)(Prowse J.A.)
Married 35 years, one grown child, husband 63 at trial, wife 61.
Family assets divided equally, trial judge found no entitlement to spousal support
Entitlement found on appeal, both compensatory and non-compensatory grounds
Engineer husband retired early in 1997, as wife transferred to Manitoba in federal government
No issue as to duration, as husband only claiming support until wife retired at 65
Husband ‘s income $37,600, wife makes $75,000
Guidelines range under without child support formula: $1,190 to $1,580
Guidelines “a useful tool to assist judges”, “intended to reflect the current law” citing W. v. W.
Extensive discussion of Guidelines issues, not evidence but part of counsels’ submissions
Support fixed at $1,100, to reflect wife’s “expenses relating to employment (including clothing, transportation expenses and significant compulsory employee deductions)”
2. The Without Child Support Formula
Leading Decisions
Carr v. Carr, [2005] A.J. No. 391, 2005 ABQB 265 (Alta.Q.B.)(Veit J.)
Interim spousal support, 28 year marriage, 3 adult children, wife 51
Husband makes at least $150,000, wife $9,300 disability
Without child support formula explicitly used
Range $4,397-$5,863. $5,000 ordered.
General reference to use of guidelines as “cross-check”
Modry v. Modry, [2005] A.J. No. 442, 2005 ABQB 262 (Alta.Q.B.)(Germain J.)
Guidelines argued by wife’s lawyer, husband’s income $1,266,000
29 year marriage, 4 grown children, income imputed to wife
Discussion of guidelines, but this above $350,000 ceiling, $9,900 ordered
Maitland v. Maitland, [2005] O.J. No. 2252 (Ont.S.C.J.)(Pardu J.)
Married 29 years, 4 adult children, wife 45 at separation
Wife has health problems, can’t work, no income
Husband works as truck driver, $28,439
Interim support $1,344, husband also pays $135/mo. for wife’s health insurance
Range $889-$1185 (or $754-$1050 deducting health ins.)
Exception for payor income $20-$30,000 noted, concerns re ability to pay
Support of $700 ordered
Other Trial Decisions
Bishop v. Bishop, [2005] N.S.J. No. 324, 2005 NSSC 220 (N.S.S.C.)(LeBlanc J.)
Together 13 years, 12 married, no children, wife 47 at separation
Wife health problems, irritable bowel syndrome, depression, etc., unable to work
Husband corporal in Armed Forces, earns $57,300, cohabiting with partner and her 2 children
Range reported as $1,188-$1,584 (but actually $931-$1,241)
$1,000 per month, for 10 years (11 in total), ordered
Pearce v. Pearce, [2005] B.C.J. No. 1757, 2005 BCSC 1153 (B.C.S.C.)(Dohm J.)
Married 30 years, 4 grown children, wife homemaker, 50 at separation
Husband makes $101,000, wife earns $25,000 from own business
Variation, $500 ordered previously, on assumption husband paying $405,000 debt
Range $2,375-$3,166, used as “cross-check”
$2,000 ordered monthly, plus $65,000 retroactive lump sum
Proctor v. Proctor, [2005] B.C.J. No. 1585, 2005 BCSC 1063 (B.C.S.C.)(Wilson J.)
Married over 20 years (?), 1 child not “of marriage” in 4 mos., wife 49 at separation
Equal division of family assets, husband doctor makes $247,000
Wife no income, and no efforts
Range $6,175-$8,233 (stated to be $7,103-$9,470, higher than existing awards)
Much discussion of “income equalization”
$5,000 ordered, indefinite, review in 3 years
Crosman v. Crosman, [2005] N.B.J. No. 272, 2005 NBQB 245 (N.B.Q.B.)(Clendening J.)
Married 25 years, 2 adult children, wife 42 at separation
Husband lieutenant colonel in Armed Forces, makes $100,000
Wife working on contract $46,764
Interim support $1,850
Range $1,625-$2,208, wife requested $2,800
$1,625 ordered, for 5 years
Garland v. Garland, [2005] N.J. No. 139, 2005 NLUFC 13 (Nfld.U.F.C.)(Cook J.)
Married 27 years, 2 grown children, husband $31,500, wife $12,000
Range $608-$815. $680, indefinite, ordered.
Coolen v. Coolen, [2005] N.S.J. No. 155, 2005 NSSC 78 (N.S.S.C.)(Warner J.)
Married 25 years, review of $900 order made in 2003
Husband makes $42,400, wife $9,800 disability plus imputed employment
Both new partners, wife’s deficit $575 (sharing new home)
Range $1,018-$1,358. Support reduced to $750.
Romaniuk v. Romaniuk, [2005] O.J. No. 1818 (Ont.S.C.J.)(Maranger J.)
Together 9 years (married 3), wife 38 at separation, husband $72,400
Wife in school til June 2006, husband went bankrupt, left with with debt
$2,000 ordered til June 2006, then $400 til debt paid in full
Guidelines “considered”, but no details (range would have been $815-$1,086)
Kletzel v. Kletzel, [2005] S.J. No. 323, 2005 SKQB 174 (Sask.Q.B.)(Sandomirsky J.)
Married 26 years, wife 47 at separation
2002 order of $1,100, application to vary by husband
Husband’s income reduced by early retirement and new job, to $74,900
Wife’s income reduced by health problems, to $19,000
No change in spousal support, amount in range of $1,046 to $1,395
Vanderham v. Vanderham, [2005] A.J. No. 655, 2005 ABQB 351 (Alta.Q.B.)(Verville J.)
Married 30 years, 2 adult children, wife 49 at separation
Interim order by consent for $2,200 per month, then reduced to $1,100
Wife earns $33,500 as clerk
Husband’s income as heavy equipment operator fluctuates, $80,000 estimated
Guidelines “a useful tool”
Range: $1,453-$1,937. $1450 ordered, indefinite, review in 2 years
Crisall v. Crisall, [2005] A.J. No. 675, 2005 ABQB 411 (Alta.Q.B.)(Lee J.)
Married 8 years, no children
Husband union representative, earns $93,000
Wife previously earned $36-$60,000, temporarily unemployed
Order for $1,500 per month, review in 6 months
Range stated to be $795-$1,060, but doubts about “real merit” of guidelines
Correct range $930-$1,240
Denton v. Denton, [2005] N.S.J. No. 245, 2005 NSSC 155 (N.S.S.C.)(Moir J.)
Together 23 years, 19 married, wife 55 at separation
Wife hairdresser, working part-time only $8,000, imputed $30,000 full-time
Husband works overtime, income fixed at $60,000
Range $863-$1,150
Support reduced to $750, as husband larger debt load and equalization payment
3. The With Child Support Formula
Leading Decisions
W. v. W., [2005] B.C.J. No. 1481, 2005 BCSC 1010 (B.C.S.C.)(Martinson J.)
Together 24 years (22 married), both in 40’s, professionals, 2 children with mother
Husband makes $125,000, wife makes $56,728
Child support $1,470
Range $745-$1,585, spousal support of $1,500 ordered, indefinite
Extensive discussion of Guidelines, “consistent with the law in British Columbia”
Kerr v. Kerr, [2005] O.J. No. 1966 (Ont.S.C.J.)(Blishen J.)
Married 16 years, 5 children with mother, husband $95,014, wife no income
Child support $2,085, plus some s. 7 expenses
Formula range stated as $794-$1,189, temporary spousal support of $1,000 ordered.
Other Trial Decisions
Stieda-Everitt v. Everitt, [2005] B.C.J. No. 1556, 2005 BCSC 1034 (B.C.S.C.)(Ehrcke J.)
Married 19 years, 3 children with wife
Proceeds of sale of matrimonial home reapportioned 55/45 to wife
Husband earned $68,590, now working part-time for $37,700 and pursuing pilot’s licence
Wife earns $6,000 as substitute teacher
Full income imputed to husband, child support $1,182
Range: $606-$919, $650 ordered, indefinite, review in 24 months (wife sought lower end)
Hewko v. Hewko, [2005] B.C.J. No. 1416, 2005 BCSC 904 (B.C.S.C.)(Curtis J.)
Married 21 years, children 21 and 15, with wife, wife 43 at separation
1999 settlement: child support $1,300, spousal $3,000 and $24,000 lump sum
Husband health problems, working part-time, earns $58,164 ($108,000 before)
Wife many health problems, university and teacher’s degree not reasonable plan, no income
Child support reduced to $795
Guidelines “in the range of $1,400/month” (Range by Divorcemate: $1,049-$1,287)
Spousal support of $2,000 ordered, reviewed in 18 months and $25,000 then imputed to wife
M.S. v. W.S., [2005] B.C.J. No. 1447, 2005 BCSC 939 (B.C.S.C.)(Romilly J.)
Together 15 years (married 12), wife 36 at separation
2 children, 12 and 8, younger with learning disability and in private school
Equal division of family assets
Child support $2,286 plus 80/20 split of s. 7 expenses ($25,694/year)
Husband makes $207,432 in family business
Wife returned to film school, paid by husband, could earn $30-$40,000 as animator
Guidelines “not law”, spousal support of $2,500 ordered
(Range by Divorcemate: $3,941-$4,897 if wife no income, $3,432-$4,539 if $30,000)
Pelletier v. Pelletier, [2005] N.S.J. No. 273, 2005 NSSC 178 (N.S.S.C.)(Nathanson J.)
Together 21years (married 19), wife 41 at separation
Split custody: 19 year old with wife, 17 year old with husband
Husband in Armed Forces, makes $56,000, cohabiting with partner and her 4 children
Wife personal care worker, makes $22,200
Child support: $455 - $160 = $295, plus $2000/year for university expenses
Spousal support $300/mo., for 5 years, “generally in accord with Advisory Guidelines”
(Range by Divorcemate: $488-$834)
Dench v. Dench, [2005] O.J. No. 2646 (Ont.S.C.J.)(Heeney J.)
Married 16 years, 4 children, 1 still dependent, with wife, wife 47 at separation
Husband owns car dealership, makes $150,000
Child support $1,108
Wife’s income $51,000 ($36,000 on investments, plus $15,000 imputed minimum wage)
Range $1,597-$2,680, spousal support of $2,000 ordered
Roughly equal standards of living, wife’s lower housing costs
Anderson v. Anderson, [2005] M.J. No. 243, 2005 MBQB 133 (Man.Q.B.)(MacInnes J.)
Together 5 years (married 4), 1 child 5 years old with cerebral palsy
Husband earns $153,000 Cdn equivalent, in U.S. computer business
Child support $1,122, plus $843/year for s. 7 expenses
Range $3,732-$4,507, “simply not realistic”, uses budget analysis
Spousal support of $2,000/mo. plus taxes ordered (approx. $2,416)
Bielanski v. Bielanski, [2005] O.J. No. 2171 (Ont.S.C.J.)(Gauthier J.)
Married 14 years, 2 children, 16 and 14, with mother
Interim order: child support $1,049; spousal support $850
Husband’s income $90,900 at Inco, wife $34,500 in retail
Order for child support $1,146 and spousal support $1,000
Range $611-$1,237
Large v. Large, [2005] P.E.I.J. No. 43, 2005 PESCTD 34 (S.C.T.D.)(Mitchell C.J.P.E.I.)
Long traditional marriage, wife 55, one child in university and living at home
Income imputed to lawyer husband in Saskatchewan, $80,000
Child support $609, no s. 7 expenses, as student earned $15,000
Formula calculated by arithmetic, 43% INDI as $1,685, indefinite
Restructured to lump sum, 10 years support, discount rate, tax, to $102,100
(Range by Divorcemate: $1,891-$2,290, hybrid university formula: $1,650-$2,200)
Friess v. Friess, [2005] S.J. No. 360, 2005 SKQB 248 (Sask.Q.B.)(Sandomirsky J.)
Married 22 years, 2 children with wife 17 and 16
Husband earns $49,239 as farmer, wife earns $15,300
Child support $650
Formula calculated by arithmetic, range zero to $228, $350 ordered
(Range by Divorcemate: zero to $295)
Simmonds v. Simmonds, [2005] N.J. No. 144, 2005 NLUFC 10 (Nfld.U.F.C.)(Handrigan J.)
Married 4 years, 2 children 10 and 3, with wife
Husband makes $83,945, wife $10,210 part-time
Child support $1,013 plus $163 for day care
Formula calculated by arithmetic, range reported as $650-$925
Spousal of $400 ordered, as requested by wife, review in October 2007
(Range by Divorcemate: $839-$1,416)
Skipton v. Skipton, [2005] N.S.J. No. 83, 2005 NSSC 43 (N.S.S.C.)(Warner J.)
Together 9 years (married 7), one child age 8, wife 32 at separation
Husband $57,000 in military, wife $5,700 employment insurance
Both formulas applied, with and without child support, as “check”
Formula calculated by arithmetic, low end of range reported as $616. $616 ordered.
(Range by Divorcemate: $793-$1,133)
Anderson v. Anderson, [2005] N.S.J. No. 176, 2005 NSSC 94 (N.S.S.C.)(Warner J.)
Together 12 years (married 11), custody in dispute, 2 children placed in husband’s custody
Husband makes $50,000, wife now cohabiting and no income
Wife seeks $500 per month for 14 months as spousal support
Wife’s request less than guidelines, so support ordered as requested.
(Hybrid formula: $554-$738, for 6-12 years)
Zelko v. Zelko, [2005] O.J. No. 653 (Ont.S.C.J.)(Cusinato J.)
Married 15 years, 2 children 14 and 12, wife 36 at separation
2001 order: $1,031 child support, $1,500 spousal support
2 children now with father
Wife makes $14,000, i.e. child support of $211
Wife still to receive $1,500 spousal, indefinite
Discussion of guidelines, but unable to do calculations without software
(Hybrid formula: $894-$1,193 for 7.5 to 15 years)
Araya v. Gaete, [2005] O.J. No. 704 (Ont.S.C.J.)(Young J.)
Married 23-plus years, 3 children, 1 left with wife
Husband makes $50,000, wife laid off, $10,000 imputed
No child support, shared custody agreement
Guidelines cited in discussion on entitlement
$800 interim spousal support ordered
(Range by Divorcemate: $1,150-$1,533 indefinite)
McPhee v. McPhee, 2005 CarswellOnt 683 (Ont.S.C.J.)(Gordon J.)
Application to vary, husband’s income reduced, wife’s increased
Child support adjusted, but spousal left unchanged at $1,500 per mo.
Support still within range computed using guidelines (no details given)
B. SOME CRITICISMS AND SOME RESPONSES
The release of the Draft Proposal has already achieved one of its goals: the rekindling of a serious debate about the law of spousal support. In general, the guidelines have had a very warm reception from lawyers and judges, as people appreciate the benefit of greater consistency and predictability. Again and again, we hear that it is helpful to have a range to know that one’s claim, offer, settlement or decision is “in the ballpark”.
Some criticisms are very specific, more in the nature of feedback about particular parts of the guidelines. These comments are very helpful, as we look to revisions and improvements to the guidelines over the coming year. Others criticize the very idea of guidelines, any guidelines, not just these guidelines, as they prefer pure case-by-case discretion. Often these criticisms assume a rigid scheme of guidelines, not the advisory guidelines we have actually published. We do not focus here upon either of these critiques.
In between are those who suggest that these particular guidelines are flawed. One of the major sources of these criticisms is Professor Jay McLeod, in his weekly newsletter. Some of the “flaws” identified by these critics flow from a misreading of the Draft Proposal. Many of the criticisms are not fleshed out, little more than “bullets”. Below we have identified the most common “bullets”.
(1) “Unprincipled”
Many of the critics simply don’t like the current state of spousal support law. They prefer a stricter compensatory approach, a more “principled” approach, as if Bracklow never happened. The advisory guidelines are then criticized for not restoring this “principled” approach.
But the advisory guidelines are not a “law reform” project. It is not our task to change the broad principles of Moge and Bracklow. The law remains clear that spousal support can be found on compensatory and non-compensatory grounds. In turn, that law is reflected in the advisory guidelines on amount and duration. If the Supreme Court were to change the law, e.g. to narrow the scope of Bracklow, then the advisory guidelines would have to adjust too.
A related criticism has been that the advisory guidelines don’t provide “principled” answers to the “hard questions” in spousal support law. Again, this is not a reform exercise. The “hard questions” are often entitlement issues. The guidelines identify these hard issues and often provide some assistance in their resolution, but there is no consensus in the current law and these hard issues are to be decided by the courts.
(2) Not Consistent with the Legislation, or Its Language
We have summarized each formula in a phrase, one that captures the current law on amount and duration in the relevant cases: “merger over time” for the without child support formula and “parental partnership” for the with child support formula. These phrases do not represent new theories of spousal support, just shorthand labels for the existing law which is set out in more detail in Chapters 5 and 6 of the Draft Proposal. The without child support formula reflects the mix of compensatory and non-compensatory thinking found in Moge and Bracklow, which interpreted the objectives of s. 15.2(6) of the Divorce Act. The with child support formula is profoundly compensatory, reflecting the analysis of Moge, which in turn emphasized paragraphs (a) and (b) of s. 15.2(6).
(3) Consistency for Consistency’s Sake
Professor McLeod refers to “the appeal to unprincipled consistency”. What comes to mind is Ralph Waldo Emerson’s famous quote: “a foolish consistency is the hobgoblin of small minds”. In the law of spousal support, a little consistency would not be “foolish”. But this is not consistency for its own sake. It’s about a fundamental principle of law: equal treatment, the similar treatment of similar cases. These formulas generate outcomes across a wide range of cases in a consistent, principled fashion, serving as a healthy check upon one’s “gut feeling” or budget-based result.
(4) Just “Averages”
The formula ranges are not just “averages” of all the spousal support cases decided out there. Given the wild scatter of outcomes, that would not be helpful or instructive.
Judgment had to be exercised by us to identify the dominant ranges of support outcomes, those clusters you can find in the cases. Negotiated settlements don’t always track the decided cases and here we had the benefit of the expert advice of the Advisory Working Group on Family Law. Some cases contain exceptional facts, that would take them out of any formula. We had to classify categories of cases, starting with the big divide in the case law between cases with and without dependent children. In some sub-sets of cases, we had to identify emerging trends in the law, e.g., short marriages with young children. The formulas are the product of a comprehensive process of review and testing before the release of the Draft Proposal by the federal Department of Justice.
And the formulas are not the guidelines, a point which also takes us to the next bulleted criticism.
(5) Too Rigid
Those that worry about the advisory guidelines being “too rigid” reach this conclusion by one of three routes. Some assume a more rigid scheme than the one we proposed, without reading the full Draft Proposal. Others focus upon the formulas to the exclusion of the rest of the guidelines. And a third group predicts that the advisory guidelines will be applied in a rigid and inflexible fashion, whatever the intentions of the authors.
There are critical steps before the formulas: application, entitlement, determination of income, ceilings and floors. And there are critical steps after: location within the ranges, restructuring, exceptions, variation and review. By these steps, there remains room for the exercise of judgment on the facts of an individual case, facts other than those built into the formulas.
Nothing in the case law or experience so far suggests that judges are applying the advisory guidelines in a rigid fashion.
(6) “Too Low” or “Too High”
The Divorce Act is a national statute and these advisory guidelines generate ranges that must operate across the country. In some “high support” areas, like the 416 and 905 area codes of Ontario, the ranges are criticized as “too low”. In other “low support” areas, like much of Atlantic Canada, we hear the ranges are “too high”. These statements tend to be impressionistic in nature.
First, both formulas already adjust for income levels. The formulas will generate lower support numbers in lower-income areas and higher ones in higher-income areas. The without child support formula also adjusts for length of marriage. The with child support formula also adjusts for taxes, number of children, child benefits and child support obligations. To the extent that a region or locality has lower incomes or more traditional marriages or longer marriages or more children, the formulas make adjustments.
Second, as we travel across the country, we continue to update the research and apply these formulas to the cases decided in the past two or three years – those cases where entitlement has been found – with interesting results. In general, about 50 to 65 per cent of cases fall within these ranges, or very close to the ranges. In areas where spousal support tends to be lower, like New Brunswick, trial decisions tend to cluster at the lower end of the ranges, but still within the ranges. In Alberta, cases were well-distributed across the ranges, with some higher and some lower. (There was a particular cluster of cases below the without child support range in Alberta, cases of long traditional marriages where the wife had little or no income.) The British Columbia decisions fit the formulas particularly well.
The “too low” or “too high” criticisms would suggest that most cases in those provinces will fall outside the ranges, something that has not proven to be the case in any research so far, despite first impressions.
(7) Couldn’t the With Child Support Formula Be Simpler? Why Software?
There are two criticisms here: one a wish for greater simplicity, and another about the need for computer software. At first glance, some like Prof. McLeod say, “there had to be a simpler ‘unit pricing’ scheme”. The without child support formula can be calculated on the back of an envelope. Why not the second formula too? Short answer here. Simple gross income formulas just didn’t work.
Section 15.3 of the Divorce Act requires that priority be given to child support and that spousal support be paid out of what’s left over. Determining “what’s left over” is what we call “individual net disposable income”. It requires close consideration of taxes and deductions, government benefits and credits, and the tax effects of some section 7 expenses. Spousal support is not simple in these cases and any useful formula has to make a wide range of automatic adjustments. In short, the real world is complicated and so too must be the formula.
Both DIVORCEmate and ChildView can now do these calculations. Some lawyers object to the use of software, based upon expense or other concerns. Without software, it is very difficult to provide reliable net income figures or section 7 expenses or other critical numbers, even if we did not have spousal support guidelines.
There is a live concern for unrepresented and self-represented litigants. Here the software issue is part of a much larger problem of access to legal information and advice, not unique to spousal support guidelines. And the glib answer here is that it’s not as if the current law of spousal support is so readily accessible to unrepresented spouses. It is a serious issue in family law generally and we are working on ways to make the numbers more widely available.
(8) What’s the Courtroom Status of the Guidelines?
The advisory guidelines are not “law” and will not be legislated. But neither are they “evidence” or “expert evidence” and there is no need to “prove” the document. The Draft Proposal is really part of legal argument and reasoning. The Draft Proposal can be cited like any other article, text or government document. This approach has been adopted by the B.C. Court of Appeal in the Yemchuk case and by Justice Martinson in W. v. W., both found in the list of cases above.
For the advocate, the guidelines build upon the existing use of software calculations of net income and support scenarios, already presented by lawyers and accepted by judges. The guidelines ranges can best be presented as part of the brief or argument: first you argue the statute and broad principles, then a few similar cases, then the usual budget, expense and ability to pay arguments, capped off by a presentation of these ranges. The ranges can be argued to reflect the dominant ranges of the existing case law on amount and duration, as explained above.
For the judge, the advisory guidelines are part of legal reasoning and the Draft Proposal can be used as one more piece of useful information in the determination of the amount and duration of spousal support. The advisory guidelines have been variously described in the cases as a “cross-check”, a “check”, a “litmus test”, a “bench mark”, a “useful tool”, a “starting point”.
C. SOME MISUNDERSTANDINGS
As you can see from the above criticisms, a number of them are based upon misunderstandings or misreadings of the Draft Proposal. In this section, we want to highlight and correct a few other common misunderstandings we have identified in our travels across Canada.
(1) “Indefinite” Doesn’t Mean “Permanent”
For some reason, the release of the advisory guidelines has caused some people to think that the concept of “indefinite” support has changed. “Indefinite” under the guidelines still means what it has always meant: an order without specific time limit at the time it is made, subject to the usual processes of variation and review. Under the guidelines, “indefinite” support is not “permanent” support. Some lawyers seem to think that “indefinite” orders under either formula mean that the recipients will receive the amount initially determined until they die. The normal process of variation and review means that the amount will usually be modified, reduced or even terminated when entitlement ceases.
(2) The Formulas Don’t Work Above the Ceiling
The “ceiling” is set at a gross annual income for the payor of $350,000. As we have said, we are looking for feedback on whether this ceiling itself is too high. When the payor’s income exceeds that ceiling, the formulas no longer operate and you are into the wild blue yonder of individual decision-making. Some lawyers for recipients incorrectly attempt to use the formula ranges to push for very high amounts in these “above-ceiling” cases. This is a misuse of the formulas, as the Draft Proposal makes clear. The use of the formulas in such cases only serves to discredit them, even though they work reasonably well in typical cases.
(3) The Exceptions Are Not Exhaustive
In listing “exceptions”, we have identified five commonly-recurring fact situations that justify a departure from the formula results. Other “exceptions” are identified in various parts of the Draft Proposal. The list of exceptions is plainly not exhaustive. Going back to basics, these guidelines are “advisory” only, so that the guidelines outcomes need not be applied where they don’t make sense. The whole idea of advisory guidelines is to leave sufficient flexibility to make case-by-case adjustments or “exceptions” as necessary, unlike the rule-like Child Support Guidelines.
(4) High Assets and Unequal Division of Property Can Be an “Exception”
A good example of this flexible approach would be our approach to the issue of an “exception” for high asset cases or cases where there is an unequal division of property. We say that there should not be an “automatic” exception for such cases, as the current case law is not clear whether spousal support should be reduced or refused just because of the property division (apart from any income issues). But it is clear that the property division may lead to a departure from the formula outcomes in any particular case. If both parties have high assets, a court may find no entitlement, as both parties are seen as self-sufficient. Or, if there is an unequal division of property based upon compensatory considerations, as occurs in B.C., again there may be a reduction or even elimination of spousal support in some cases. Most often, adjustments for property division can occur in locating the amount or duration within the ranges.
(5) The With Child Support Formula Requires Iteration, Not “Arithmetic”
As mentioned above, the calculations under the with support formula require software. In those provinces where DIVORCEmate or ChildView are commonly used, this misunderstanding has not arisen. But in those where software is rarely used, both lawyers and judges have used “arithmetic” to do the calculations. By “arithmetic”, we mean that the individual net disposable incomes of the spouses are calculated, the two combined and then the percentages of 40 and 46 per cent of INDI applied to this total and then support determined. We appreciate that the formula in the box might leave this impression, even if the text of Chapter 6 or the more detailed Appendix C clarifies the point.
But it’s not a matter of subtraction, addition and division. It’s a matter of “iteration”, which requires software. What the software does is, by increments, to increase the amount of spousal support and, for each iteration, to work out the tax and benefit implications for each increment, until the formula percentages are obtained. Complicated, yes, but necessary. Each transfer of a dollar from the higher-income payor to the lower-income recipient increases the size of the INDI pool, because of the tax advantages of deductible-includible spousal support. Further, the payment of spousal support will reduce the recipient’s child tax benefit and GST credit. In effect, determining 40 to 46 per cent of INDI requires you to hit a moving target.
The use of “arithmetic” to determine the range under the with child support formula will generally underestimate both ends of the range, as can be seen from the cases noted above. Only with software can the formula ranges be correctly calculated.
(6) Duration under the With Child Support Formula in Shorter Marriages
Under the with child support formula, all orders are “indefinite in form”. Again, “indefinite” has its usual meaning, as we explained above, including the processes of variation and review. We have also set out in Chapter 6 of the Draft Proposal what we call “outside time limits”, i.e., a generally-understood outside limit on the eventual duration of these “indefinite” orders. We posit two tests for these “outside time limits”: a longer-marriage test based upon length of marriage and a shorter-marriage test based upon the age of the last or youngest child. There has been some misunderstanding of this second, shorter-marriage test, similar to that with “indefinite” orders generally. A recipient in a shorter marriage under the with child support formula does not simply receive the amount of spousal support initially determined until the youngest child finishes high school. The amount of support will be varied or reviewed over time, especially in response to the recipient’s employment and income situation. Where the recipient remarries or repartners, the support will reduce or even terminate. Other entitlement issues will arise. Very few recipients will actually receive spousal support until this “outside time limit” and those who do will be receiving reduced amounts.
D. SOME POSSIBLE REVISIONS
While we have this opportunity, we want to highlight three possible revisions to the advisory guidelines, ones that we can already predict.
(1) Contino and Shared Custody
The Supreme Court of Canada heard argument in the Contino case on January 14, 2005 and we are awaiting a decision on the tough question of determining child support under s. 9 of the Child Support Guidelines in shared custody cases.
Once that decision comes out, we will undoubtedly have to make some adjustments to the with child support formula as it applies to shared custody situations. One point should be noted already. In cases of shared (and split) custody, lawyers should look closely at the family net disposable income results (including both child and spousal support in the recipient’s income), to ensure a reasonable over-all allocation of net income.
(2) Adult Children, Section 3(2)(b) and the Choice of Formula
The with child support formula works best where there is a table amount plus section 7 expenses. But there are a number of these cases that do not use table amounts, that fall within s. 3(2)(b) of the Chil |