The decision of Justice Sherr, released on June 23, 2010, discusses the obligation of a step-parent with respect to child support when the biological parent is also fulfilling their support obligation.
In this case, the applicant mother (Hilliard) and respondent father (Popal) resided together from approximately March of 2001 until 20 July 2005. Mr. Popal, who was not the biological father of Ms. Hilliard’s first child, Leyla, was nevertheless present at her birth and was admittedly very involved in the child’s life, acting as “the only father whom Leyla had ever known.” Ms. Hilliard and Mr. Popal also had a biological child together, Aliya, born in October 2005. The couple separated in 2005.
At the outset of the appearance, Ms. Hilliard reached a final settlement with Mr. Dixon, Leyla’s biological father, regarding his child support obligations. It was agreed that Mr. Dixon would not have access to Leyla and would pay child support in the amount of $260/month, based on an income of $29,000 per year.
The main issue before Justice Sherr was Mr. Popal’s liability for the table amount of child support in light of Mr. Dixon’s support obligation.
Mr. Popal conceded that he was Leyla’s “parent” for support purposes as defined in subsection 1(1) of the Family Law Act(FLA). According to the couple’s separation agreement of September 26, 2006, it was agreed that Mr. Popal would pay Ms. Hilliard the full table amount for child support for both children together with his proportionate share of special expenses.
Unfortunately, the separation agreement was never filed with the court, and Ms. Hilliard commenced an application for child support based on Mr. Popal’s actual income (instead of the amount of $50,000 agreed upon in the separation agreement). Accordingly, Mr. Popal sought to reduce his support obligation for Leyla by the amount that Mr. Dixon was required to pay for her.
Mr. Popal’s Income
After separating, Mr. Popal commenced a second career as a real estate agent. In the years 2006-7, while he was establishing himself, he continued to work as a collection agent and sought to deduct real estate expenses from his income. In 2008, he was terminated as a collection agent, and in 2009, he worked primarily as a real estate agent and secondarily as a collection agent. Ms. Hilliard asked the court to impute additional income to Mr. Popal pursuant to clause 19(1)(g) of the Child Support Guidelines (CSG) which states that the court may impute income to a parent where the parent unreasonably deducts expenses from his income.
Justice Sherr agreed that it was unreasonable for Mr. Popal to deduct his real estate expenses as there was no need for Mr. Popal to incur such expenses in 2006. Justice Sherr contended that the respondent already had a well-paying job and that there was no reason the children should have to bear the cost of his new career, which was speculative at the time.
Although Justice Sherr refused to allow Mr. Popal to deduct his losses from his income, he also refused to “gross-up” Mr. Popal’s income for the years in question, something he would ordinarily have done where there was no merit to a new career path. For the years 2009-10, Justice Sherr accepted Mr. Popal’s real estate expenses, as there was evidence to support the fact that such expenses were attributable to business and not personal use. Mr. Popal’s income for 2010 was fixed at approximately $92,000 subject to adjustment following financial disclosure.
The Step-Parent Support Obligation
According to subsection 33(7) of the FLA, an order for child support should (a) recognize that each parent has an obligation to provide support for the child; and (b) apportion the obligation according to the CSG. However, s. 5 of the CSG states that:
Where the spouse against whom an order for the support of a child is sought stands in the place of a parent for a child or the parent is not a natural or adoptive parent of the child, the amount of the order is, in respect of that parent or spouse, such amount as the court considers appropriate, having regard to these guidelines and any other parent’s legal duty to support the child.
Thus, s. 5 of the guidelines provides the court with discretion to determine what amount of child support Mr. Popal should pay.
In determining the appropriate amount of child support, a court should consider the guideline amount as well as the condition, means, needs and circumstances of the parties and of the children. A court may also consider the relationship between the person who stands in the place of a parent (Mr. Popal, in this instance) and the children, including the length of that relationship, whether it continues and the extent to which the children have come to rely on that person for support.
While some courts have approached this problem by simply deducting the biological parent’s support from the step-parent’s obligation, others have ordered that the step-parent be responsible for the full guideline amount. In Kobe v Kobe, it was established that the court should order the table amount for a step-parent unless he or she can provide clear and compelling evidence that the table amount is inappropriate.
The case law suggests that a court is more likely to order a step-parent to pay closer to the guideline amount in the following circumstances:
(a) If the step-parent and child had a close relationship.
(b) If the step-parent and the child continue to have a close relationship.
(c) If the child enjoyed a high standard of living when the step-parent lived with the child.
(d) If the step-parent has the means to pay the table amount.
(e) If the biological parent has a remote relationship with the child.
(f) If the biological parent does not have a reliable payment history.
(g) If the parties have agreed to pay a higher amount in a separation agreement.
(h) If it is a long-standing relationship between the step-parent and the child.
Following the Supreme Court of Canada in Chartier v Chartier, Justice Sherr rejected the argument that a court’s failure to order a straight mathematical set-off (reduce Mr. Popal’s support obligation by the amount Mr. Dixon is paying in support) would discourage step-parents from assuming a parental role. Justice Sherr also rejected the argument that individuals may be reluctant to be generous towards children for fear that the generosity will give rise to parental obligations.
Ultimately, Justice Sherr adopted the approach taken in Mancuso v Weinrath and reduced Mr. Popal’s support obligation for Leyla by 50% of Mr. Dixon’s support obligation ($130/month) commencing in October 2009. However, Justice Sherr refused to reduce the amount prior to that date as Mr. Popal had agreed in the separation agreement to pay the full table amount. Justice Sherr also noted that he would not tie future set-offs in child support to 50% of Mr. Dixon’s support obligation as there were too many variables that could affect future support obligations.
In making this decision, Justice Sherr considered a number of factors including but not limited to the fact that: Mr. Popal had agreed to pay his proportionate share of special expenses without requiring Ms. Hilliard to seek contribution from Mr. Dixon; if a deduction was not made in Mr. Popal’s support obligation, Ms. Hilliard would receive more support than recipients in cases where there is only one parent liable; Mr. Popal assumed the role of father to Leyla and had always assumed full financial responsibility for the child; and Mr. Popal had the financial means to pay child support at the table level.