2.0 Child Support Guideline Material
 
 
THE "EXTRAORDINARY" INTERPRETATIONS OF s.7 OF THE GUIDELINES(1)
By Melanie Kraft and Philip M. Epstein, Q.C.(2)

A paper delivered at the Law Society of Upper Canada's Seminar:
Child Support Guidelines: Recent and Important Caselaw
(December 16th, 1998)
 
 
 
Notes:  

... be followed in Ontario and will likely be the leading authority on s. 7 "extraordinary" expenses.

All of these cases are also discussed in the Case Comment "What's Extraordinary and What's Not?
- 5 Courts of Appeal Have Spoken - The Score is 3 to 2 in Favour of "Subjective" Reasoning"
found in Cases and Comments .

2. This paper has an extremely extensive national lisiting of cases dealing with s. 7, along with Digests of each case. That will take some time to code for Internet viewing and should be posted shortly but I didn't want to delay putting up the paper until that was done. There will also be a Table of Contents so you'll be able to jump directly to the section you are interested in. Please check back shortly to see the cases and the Digests.

3. This paper refers to s. 7 of the Child Support Guidelines which you may access by clicking on the highlighted phrase.

Thanks, Joel Miller.

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Introduction  

After eighteen months of Guidelines litigation the interpretation of various controversial sections of the Guidelines is becoming clearer. In interpreting the Guidelines the courts have undoubtedly strayed in some respects from the original intent of the drafters of the legislation to make child support easily determinable. The Child Support Team of the Federal Government continues to work on proposals to clarify the Guidelines and return to their original intent. Thus it is to be expected that in the not too distant future some sections of the Guidelines will be amended. Section 7 is one of the fundamental areas that needs clarification and amendment. This section has produced the most litigation and continues to be a source of controversy and dispute amongst lawyers and their clients. In particular, appellate courts and trial courts in different provinces have given different interpretations to the section.

The Government and the provinces in adopting the Guidelines, did not intend for there to be different results in different provinces under precisely the same wording. It is not likely that the Federal Government will wait until a section 7 case gets before the Supreme Court of Canada before clarifying the Guidelines since s.7 expenses, by their very nature, will usually not be substantial enough to enable the issue to get before our final court. Until the Guidelines are either amended by the Government or interpreted by the Supreme Court of Canada, we must do our best to ascertain what s.7 means from an Ontario perspective.

This paper is written, as an aid, to practitioners in Ontario and unlike our previous paper does not extensively canvass cases that are in conflict with Ontario trends. If the reader is interested in a cross-Canada view of section 7, then reference should be had to the earlier paper and, in particular, the digest of cases that accompanies this paper.

Ontario has taken a different approach than Manitoba(3) and Nova Scotia(4) and is more in line with the approach taken in Saskatchewan(5).

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To Qualify As An S.7 Expense Top of the Page

For an expense to be allowed as "special" or "extraordinary" it must fall within one of the enumerated categories in section 7(1), which are as follows:

(a) child-care expenses;
(b) medical and dental insurance premiums;
(c) uninsured health and dental expenses;
(d) extraordinary school expenses;
(e) expenses for post-secondary education; and
(f) extraordinary extracurricular expenses

Of the six categories listed above, three are child care expenses (s.7(1)(a)), a portion of medical and insurance premiums attributable to the children (s.7(1)(b)), and expenses for post-secondary education (s.7(1)(e)). One of the categories, namely, health-related expenses, (s.7(1)(c)) is for expenses that exceed insurance reimbursement by at least $100 annually. Two of the categories are described as "extraordinary" expenses, namely for primary and secondary school education (s.7(1)(d)) and for extracurricular activities (s.7(1)(f)). It is obvious, from the language alone, that the "extraordinary" expenses for school or extracurricular expenses are not "ordinary" or "usual" expenses, such as those for child care, medical and insurance premiums and post-secondary education, nor are they expenses which exceed a particular dollar amount, such as those for health-related expenses. Further, it appears that since the applicable Table amounts provided for in s.3(1) of the Guidelines are based on an average of what parents at various income levels spend on their children(6) and since the Guidelines employ the adjective "extraordinary" to describe expenses covered by s.7(1)(d) and s.7(1)(f), it is reasonable to infer that the applicable Table amounts are intended to include a component for "ordinary" expenses for extracurricular activities and primary and secondary school education. There is, however, no indication as to the amount of that component. In light of these factors, the decisions which have interpreted which expenses qualify as "extraordinary" in these two subparagraphs, more particularly s.7(1)(f) the early cases were divergent and inconclusive. A clear trend, however, is emerging for the later cases.

Despite the fact that the decisions interpreting s.7 have been inconsistent, a common, but not universally accepted approach is to ask the following four questions:

1. Are the expenses in question covered under s.7(1) (a) - (f)?;
2. Are the expenses necessary in relation to the best interests of the child(ren)?;
3. Are the expenses reasonable, having regard to the means of the spouses and those of the child, and the family's established spending pattern prior to the separation?; and
4. If the expense in question falls under s.7(1)(d) or s.7(1)(f), are the extra-curricular or school expenses "extraordinary" that is, are the costs unusual in the circumstances?."(7)

A review of the cases in the attached digest will however lead the reader to discover many decisions where the court has ordered payment of extracurricular activities where they were clearly not unusual, ie; piano and swimming lessons(8). There is some doubt that these cases would now be decided similarly in Ontario.

Disputes relating to s.7 are common because the section itself is ambiguous. The restrictive language of s.7 in its references to "special" or "extraordinary" expenses suggests that the situations in which "add-ons" are allowed was intended by the legislature to be limited. Notwithstanding note 5 to the Guidelines, some of the case law seems to indicate that expenses pertaining to child care and health care are divisible whenever they are incurred (provided the judge considers them to be reasonable and in the child's best interests), regardless of the fact that these expenses are included already in the "average spending" of Canadian families on children and thus reflected in the table amounts(9).

We must always remember that the Tables are based on economic studies of average spending on children in families at different income levels in Canada.(10) Accordingly, when a non-custodial parent pays the Table amount, it is supposed to cover the payor's appropriate contribution to all of the ordinary expenses of child rearing. Since it was determined that there will, on occasion, be special or extraordinary expenses for the child not contemplated in the Tables, there needed to be some way of adding these "special" or "extraordinary" amounts to the Table amounts and, hence, section 7(1). That is the first and fundamental principle. Accordingly, if the expense is not "special" or "extraordinary" as defined in section 7(1) it is not to be ordered. This raises the fundamental questions of when is an expense "special" and when is an expense "extraordinary"?

The determination of special expenses is relatively easy. They are those expenses set out in s.7(1),(a), (b), (c) and (e). Those expenses are to be apportioned in accordance with the parties' respective incomes(11), after deducting from the expense the contribution, if any, from the child. Accordingly, where a spouse pays spousal support to the other spouse, the respective incomes will be calculated by looking at the incomes of the parties after spousal support has been paid or received(12). For example, if the husband earns $100,000.00 per annum and the wife receives spousal support of $30,000.00 as her only source of income (other than child support), then the ratio of the s.7 expenses is 7:3.

It is to be always kept in mind that the threshold in s.7, requires the court to take into account the necessity of the expense in relation to the child's best interests and the reasonableness of the expense having regard to the means of both spouses and those of the children and to the family's spending pattern prior to the separation. This is an area where judicial discretion plays a major role and it seems obvious that what may be reasonable to one judge may not be reasonable to another. The court will consider in determining a s.7 expense whether the parties can still afford it, that is, the court will have to determine whether the expense is reasonable in relation to the overall income of the parties. In Nadeau v. Mitchell(13), the court found that horseback riding is a luxury that could no longer be afforded and therefore refused to order the cost of same. Given the fact that the parties' combined income was $160,000 per year, what will be a luxury for one judge, may well be a reasonable necessity for another.

These section 7 cases are clearly and heavily fact driven since what is reasonable and necessary in one family may be the opposite in another. For example, a child has an opportunity to attend a prestigious American University. It would be a strain for the family, but they could afford it. If the parties themselves were educated at an American University and the Judge was not, would this make a difference in determining both necessity and reasonableness?

Obviously the most difficult question facing the Courts since the passage of the Guidelines with respect to s.7 has been the issue of "extraordinary expenses for extracurricular activities", (s.7(1)(f)).

With fear of some contradiction, we suggest that s.7(1)(f) was intended to cover the situation in which the average Canadian child in each particular income level did not have the relevant extracurricular expense. That is to say, "extraordinary" was to be measured against the average Canadian child for that particular income level. There can be no doubt that notwithstanding that well intentioned approach to extracurricular expenses, it was bound to lead to difficulties. For example, a child in a family of limited means on the average would not go to an expensive overnight summer camp and, accordingly, that summer camp experience, if it met the other two tests (reasonableness and necessity), would be extraordinary. However, a child from a wealthy family would, on the average, go to an expensive overnight summer camp and, thus, for that child the expense would not be extraordinary. Of course, on that theory the wealthier the family, the less likely there would be any extraordinary expenses and there is growing support for that approach(14). One could argue that if prior to separation the child attended daily riding lessons and had her own horse and the concommitant grooming expenses, that would not be an extraordinary expense, and, it might well follow that if the non-custodial parent earns sufficient monies, the Table amount might well produce a number that, in fact, permitted the riding and grooming costs and still met all of the child's other needs. In sum, the section may have been well intended but its interpretation was bound to be fraught with difficulty.

Two appellate decisions from other provinces, which concur with each other, have interpreted s.7 with respect to extracurricular activities in a very restricted fashion.. It is largely the result of these two cases that requires the Government to rethink and revise the section, particularly, since these two appellate decisions conflict with the appellate decision in the Saskatchewan Court of Appeal(15). Because Ontario does not yet have an appellate decision under s.7 it may be useful to review the three Court of Appeal decisions in our sister provinces.

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Nova Scotia Court Of Appeal: Raftus V. Raftus Top of the Page

The Raftus decision of the Nova Scotia Court of Appeal found that the determination as to whether an expense is "extraordinary" is to be interpreted on an objective basis, without regard to parental income. Bateman, J.A., while concurring in the result, would interpret "extra-ordinary" subjectively, in relation to joint parental income. In Raftus, the wife was appealing the decision of a trial judge who refused to find any of the extracurricular expenses submitted by the wife as "extraordinary" s.7 expenses for the children. The trial judgment was upheld. The expenses submitted totalled $2,259 annually, and were made up of swimming, soccer and Tae Kwan Do lessons, school activities, birthdays, Christmas and special events being claimed as extraordinary extracurricular expenses, under s.7(1)(f) of the guidelines. The trial judge held that by using the word "extraordinary" to describe the expenses in s.7(1)(f), Parliament has excluded expenses that might usually be associated with such activities. While the trial judge acknowledged the liberal approach taken with respect to the term "extraordinary" found in Middleton v. MacPherson(16), he found that given the financial circumstances of the applicant, after taking into account the basic level of child support, the expenses claimed were not extraordinary. Essentially, the trial judge held that the term "extraordinary expense for extracurricular activity" means not the basic expense of the extracurricular activity, but the extraordinary expenses associated with that activity". It was stated:

"I determine that by using the word "extraordinary" to describe the expenses relevant rather than simply having stated expenses for extracurricular activities, Parliament has excluded expenses that might be usually associated with such activities."

The Raftus decision canvasses three approaches taken by most opposing spouses when claiming or defending s.7(1)(f) expenses. The wife's approach is that the cost of any non-school organized activity, irrespective of the financial resources of the parents, qualifies as an extraordinary expense under s.7(1)(f), provided the expense is considered reasonable and necessary in the context of the parents' financial means and that an appropriate amount ought to be "added on" to the basic table sum. This approach adopts the liberal approach found in the Middleton v. MacPherson decision. The husband's approach is that the applicant must demonstrate that the expense is truly unusual in nature or amount, objectively, without regard to parental income. The third alternative is to look at the expense of the activity, subjectively, in relation to the parents' incomes to determine whether it is an "extraordinary" expense.

Bateman, J.A., concurring in the result but differing in reasoning, stated that at lower income levels there is less discretionary income to accommodate a child's extracurricular activities and the increase in the Table amounts as the payor's income rises, must be intended to address greater participation in extracurricular activities, in addition to increased clothing, food and shelter costs. Bateman, JA. noted that "the cost of a child's activity which may not qualify as extraordinary for parents with high incomes, may well be extraordinary in the context of parents with relatively low incomes." In so doing, Bateman, JA. likely reflected the original intent of the Guidelines. She noted:

"It is thus, in my view, appropriate and necessary when determining whether the expense fits within the "extraordinary" requirement of s.7(1)(f) to assess it, subjectively, in accordance with the parents' incomes using "income" as defined in the Guidelines. The definition of "extraordinary" invites a comparison to what is usual. A relatively modest expense for a child's extracurricular activity may be "extraordinary" for parents who are living at a very low income level, but trivial for those with generous income. In this regard, there is no "usual" that cuts across income levels. There must be some attempt by the court to measure "extraordinary" in accordance with a norm...It is most consistent with the structure of the Guidelines, in my view, to assess the "extraordinary" nature of the expense, subjectively. For this purpose I would use the parent's joint incomes."

Bateman, JA. classifies this approach as being akin to the conventional "ability to pay" approach since for the "add-on" expenses the Guidelines do not presume an ability to pay. Flinn, JA., on behalf of the majority, agreed with Bateman, JA. that the wife's appeal should be dismissed but decided that parental income, while relevant to certain provisions of the Guidelines, has no relevance to a determination as to what constitutes "extraordinary expenses for extracurricular activities" within the meaning of s.7(1)(f) of the Guidelines. Rather, such a determination involves an objective assessment, giving the words "extraordinary expenses for extracurricular activities" their plain meaning in the context of the Guidelines as a whole (emphasis added). The rationale for the majority deciding an "objective" test vs. a "subjective" test in determining which expenses qualify as "extraordinary" begins with the explanatory notes in the Guidelines which dictates that the tables are based on an average of what parents at various income levels spend on their children. The majority outlines that the following issues may arise in any application of s.7(1)(f):

1. Any order for payment of all, or a portion, of such expenses is discretionary. An applicant is not, on establishing certain criteria, entitled to an order. As in all cases of the exercise of discretion, circumstances will dictate whether it is exercised one way or the other.

2. The court must decide if the expenses which are the subject of the application are "extraordinary expenses for extracurricular activities". If they are not, the inquiry ends. There is no definition of "extraordinary expenses for extracurricular activities" in the Guidelines.

3. If the expenses are extraordinary expenses for extracurricular activities, then, pursuant to s.7(1), the court may provide an amount to cover those expenses, after taking into account:

(a) The necessity of the expense, in relation to the child's interest, and
(b) the reasonableness of the expense, having regard to the means of the spouses, and those of the child, and to the family's spending pattern prior to the separation.

4. If the expenses are extraordinary expenses for extracurricular activities, and if those expenses are necessary and reasonable, then in determining an amount which is required to be contributed, the guiding principle is that the expense is shared by the spouses in proportion to their respectable incomes. In coming to this conclusion, the court considers the contribution, if any, from the child and the court takes into account any subsidies, benefits or income tax deductions or credits relating to the expense.

The majority in Raftus concluded that parental income is not relevant to the initial determination of whether expenses are "extraordinary expenses for extracurricular activities" within the meaning of s.7(1)(f) of the Guidelines. Flinn, JA. rejects Bateman, JA.'s approach to look at parental income to determine whether an expense is "extraordinary". This narrow approach will for the time being, at least, make it easier for counsel in Nova Scotia to determine what is "extraordinary" but it will clearly lead to problematic results particularly, in low income families, where the Table amounts are inadequate to meet virtually any extracurricular expenses.

In light of the above, this case directs us to approach the defining whether an extracurricular expense is "extraordinary" by determining whether the expense is not usual, or exceptional or additional to what is usual, not in light of parental income, but, rather in considering the nature of the activity and the nature of the expense. The income of the parents will only be considered after the expense has been found to be extraordinary and after the expense has been found to be necessary in the child's best interests. It is only at that point when the incomes of the parents come into play to assist the court - otherwise the objectives of the guidelines will not be met.

The approach in Raftus is consistent with Justice Abella's comments in Francis v. Baker(17) where it is stated that the solution proposed via these Guidelines was to "replace the haphazard with the predictable, through the presumptive application of fixed amounts designed to reflect a more equitable distribution of the post-separation economic realities of the parents".

Nova Scotia Court Of Appeal: Raftus V. Raftus Top of the Page

1. This is a revised edition of a paper with a similar title delivered at the National Family Law Program of the Federation of Law Societies in Whistler, B.C., June, 1998.

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2. Both of Epstein, Cole, Toronto, Ontario. The authors are greatly indebted to Caroline Clark and Kori Levitt for their further research assistance and to Sandy Peters for her technical assistance and support.

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3. Andries v. Andries, 36 R.F.L. (4th) 175 (Manitoba Court of Appeal, per Twaddle, Lyon and Monnin, JJ.A.) April 9, 1998 [hereinafter Andries].

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4. Raftus v. Raftus, 37 R.F.L. (4th) 59 (Nova Scotia Court of Appeal, per Jones and Flinn JJ.A. for the majority; Bateman J.A. concurring), March 25, 1998 [hereinafter Raftus].

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5. Kofoed v. Fichter, [1998] S.J. No. 338 (Saskatchewan Court of Appeal, per Wakeling, Gerwing & Sherstobitoff, JJ.A.), May 8, 1998 [hereinafter Kofoed]

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6. Note 5, Schedule I to the Guidelines.

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7. Omah-Maharaj v. Howard, [1998] A.J. No. 173 (Q.B., per, Johnstone, J.) February 18, 1998, at paragraph 74.

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8. See for example, Burton v. Burton, [1997] N.S.J. No. 560 (S.C., per Hood, J.) February 10, 1998; Bureau v. Bureau, [1997] N.S.J. No. 422 (S.C., per Glube, J.) October 22, 1997; Ellis v. Ellis, [1997] P.E.I.J. No. 119 (S.C., per Webber, J.) December 22, 1997; Payntor v. Sackville, [1998] S.J. No. 56 (Q.B.F.L.D., per Dickson, J.) February 10, 1998; Bially v. Bially [1997] S.J. No. 352 (Q.B.F.L.D., per Gunn, J.) May 28, 1997; and Yaremcuk v. Yaremcuk, unreported (Q.B., per Clarke, J.) March 11, 1998.

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9. Middleton v. MacPherson, [1997] A.J. No. 614 (Q.B., per Moreau J.) June 12, 1997; (1997), 29 R.F.L. (4th) 334; 150 D.L.R. (4th) 519.

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10. Supra, note 6.

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11. Although a court does not have power to apportion differently - see Ebrahim v. Ebrahim, [1997] B.C.J. No. 2039 (S.C.,, per Macaulay J.) September 15, 1997 , and the comments on this case on page 23 below.

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12. See, however, Whittle v. Clements, [1998] N.J. No. 140 (U.F.C., per L.D. Barry, J.) June 23, 1998, where the court added the child support paid by the husband to the wife's income to determine her proportionate responsibility. With respect, we believe this case to be wrongly decided.

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13. Nadeau v. Mitchell, [1997] O.J. No. 2833 (Gen. Div., per Jarvis J.) July 11, 1997.

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14. See Francis v. Baker [1998] O.J. No. 924 (Ont. C.A.) March 10, 1998 and see Interplay between s.4 and s.7 on page 26 below.

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15. Supra, note 5.

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16. Supra, note 9.

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17. Supra, note 14, at paras 34 and 35.

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