Child Support: Appeal Due To Material Change In Circumstance
Stevenson v Smit, 2014 ONCA 521
This case addresses the issue of child support under federal and provincial guidelines.
The parties married in 1989, separated in 2003 and divorced in 2004. There are three children of the 15 year marriage, ages 14, 18 and 19. In 2005 the parties entered into a Separation Agreement, whereby the parties agreed that neither would pay child support in accordance with the Child Support Guidelines. Instead, the parties agreed that they would share equally all major expenses concerning the children of the marriage.
When the above-mentioned Separation Agreement was executed the Father, Peter Smit, was in the process of forming a new company and had minimal income. He met his share of the special expenses by "drawing down on or liquidating some of his then considerable capital assets" (paragraph 3).
The Father brought an Application to terminate his child support obligations under the Agreement and to pay child support in accordance with the Guidelines. He claimed that he had lost the "ability to liquidate capital to support his children" and that he had insufficient income to pay the agreed child support (paragraph 5). As such, he submitted that these allegedly unforeseen and unanticipated factors constituted material changes in circumstances.
At trial, the Application was dismissed the Father's application to change his child support obligations under the Agreement. The Father appealed and the Superior Court of Justice dismissed that appeal. As such, the Father appealed to the Court of Appeal.
The Court of Appeal held that the trial judge found that the "father's need to resort to capital to meet his child support obligations, the fact that he was in 'an income-earning slump', and the fact that his income was in decline were factors plainly known to the parties at the time they entered into the Agreement" (paragraph 11).
As such, the Court of Appeal held that the father "failed to establish a material change in circumstances within the meaning of that term under the applicable authorities" (paragraph 13). Further, the Court of Appeal held that "the appeal judge did not err in deferring to this central finding by the application judge" (paragraph 13).
The Court of Appeal further found that the test for the variation of special contractual child support obligations on the basis of a material change in circumstances was definitely set out in Willick v Willick,  3 SCR 670 (paragraph 14). Further, the Court held that the concept of foreseeability lies at the heart of this test, and, "if the matter relied upon as constituting a material change in circumstances was known at the time of contract formation, it cannot ground a variation request" (paragraph 14).
As such, the Court of Appeal dismissed the Father's appeal regarding his claim to vary child support due to a material change in circumstance.