The Court of Appeal for Ontario rendered its decision in R. v. R. on March 25, 2002. Justice John Laskin, speaking for a unanimous panel, overturned the trial judge’s decision and doubled the base amount of child support. Appeal was heard on November 8, 2001.
The court accepted the wife’s argument that the husband’s income of $4.1 million per year warranted a monthly child support award that was greater than the $20,000 ordered by the trial judge. Having considered the position put forward by Lorne Wolfson and Andrea Himel of Torkin Manes Cohen Arbus LLP (on behalf of Mrs. R.), and by Tom Bastedo, Q.C., and Samantha Chousky of Bastedo Stewart Smith (on behalf of Mr. R.), the panel awarded $36,000 per month in after-tax dollars. Justice Laskin’s decision will have significant implications for all payors who earn over $150,000.
The court panel chose not to interfere with the trial judge’s discretion in determining that the $65,000 amount was inappropriate. However, Justice Laskin advised that the trial judge committed two material and reviewable errors:
“He based his order entirely on the parties’ lifestyle and pattern of expenditure while they were together. By doing so, the trial judge failed to adequately take into account the large increase in Mr. R.’s income after he and his wife separated. Second, the trial judge erred in failing to consider whether the options proposed by Mrs. R. in her April 2000 budget were reasonable in light of the increase in Mr. R.’s income.”
The wife’s counsel argued that the trial judge had erred in applying a “ceiling” to the husband’s payment of child support based on the family’s modest lifestyle during the marriage. Justice Laskin stated that the children were entitled to benefit from the increase in income: “it is one thing for the family to live modestly and save money while together; it is quite another, and seemingly unfair, for the paying parent to hold his children to the family’s pre-separation lifestyle while saving the increase in his post-separation income but now for his benefit alone.”
Justice Laskin then reviewed the wife’s proposed 2000 budget and concluded that the following monthly expenses were reasonable in the circumstances of this high-income family: $2,200 for vacation expenses; $6,000 for the purchase and maintenance of a Muskoka cottage; $3,000 for ski club and golf club fees; $8,000 for future savings for the children; and $2,000 for miscellaneous expenses for the children including recreational and other activities.
The R. v. R. decision confirms that high-income payors should expect to be treated the same as low- and middle-income payors with respect to post-separation date increases in their income. Where the payor earns less than $150,000 per year, the table amount provides for an increase in support to a specified level. High-income payors will be expected to increase their child support payments when their incomes increase.