Wetsch v Kuski, 2017 SKCA 77

Court of Appeal for Saskatchewan Docket: CACV2766 Citation: Wetsch v Kuski , 2017 SKCA 77 Date: 2017-09-14 Between: Travis John Wetsch Appellant (Respondent) And Holli Anne Kuski Respondent (Petitioner) Before: Lane, Ottenbreit and Caldwell JJ.A. Disposition: Appeal allowed in part Written reasons by: The Honourable Mr. Justice Caldwell In concurrence: The Honourable Mr. Justice Lane The Honourable Mr. Justice Ottenbreit On Appeal From: DIV 236 of 2005, Regina Appeal Heard: March 17, 2017 Counsel: W. Timothy Stodalka for the Appellant Cara L. Haaf for the Respondent Caldwell J.A. I.

Introduction [ 1 ] Travis John Wetsch appeals from a judgment issued after a special hearing of the parties’ cross-applications to vary child support. The Court of Queen’s Bench held a special hearing chiefly due to the procedural history of this matter. Although most of the issues at the special hearing involved retroactive variation of child support obligations, they particularly related to: (

a) the effect of a capital gain on income determination for child support purposes; (

b) allegations of material non-disclosure of financial information; (

c) child support for an adopted, disabled adult child of the marriage; (

d) parenting arrangements, which had changed from primary to shared-parenting, giving rise to a so-called hybrid parenting arrangement where one child is in the primary care of one parent and two children are in shared care; (

e) calculation of child support obligations under s. 9 of the Federal Child Support Guidelines , SOR/97-175 [ Guidelines ]; (

f) recalculation of child support obligations, including support based on the Saskatchewan table in

Schedule 1 to the Guidelines [ Table ] and under s. 7 of the Guidelines [ s. 7 expenses], where the payor’s annual income exceeds $150,000; and (

g) calculation of ongoing child support. Mr. Wetsch appealed the whole of the judgment, but later narrowed his grounds of appeal. [ 2 ] For the reasons that follow, I would allow the appeal in part. I find the Chambers judge erred when she proceeded to calculate child support for the parties’ daughter, BK, under s. 3(2)(

a) of the Guidelines and I would adjust accordingly the measure of Mr. Wetsch’s legal obligation in that regard. I also find the Chambers judge erred in principle in her approach under s. 9 of the Guidelines to determining the measure of Mr. Wetsch’s legal obligation to support the two children in shared custody. I would set aside her findings in that regard.

However, as this Court is not in a better position to make the assessment than was the Chambers judge, I would, albeit reluctantly, remit the issue of child support under s. 9 of the Guidelines to the Court of Queen’s Bench for a rehearing, subject to interim orders set out in these reasons. In all other respects, I would dismiss the appeal, with no order as to costs. II. BACKGROUND [ 3 ] Mr. Wetsch and Holli Anne Kuski were married on August 19, 1995. They separated in March 2004 and were divorced by judgment on May 8, 2006, with the certificate of divorce being issued on June 8, 2006. They have three children.

In her unreported judgment, the Chambers judge set out the issues and the factual and procedural background: [2] Litigation over parenting and child support has consumed the parties for the past six years, with no discernable end in sight. Their son’s looming post-secondary education will undoubtedly be the next bone of contention. [3] Both parties have remarried. The father married his present wife, [BW], in 2009. They have two children, a daughter, born in

2011 and a son, born in 2014. The mother re-married in 2013. [ 4 ] The core issue centers on retroactive variation of child support in circumstances where challenging questions arise regarding (1) determination of income for the father where material non-disclosure on his

part is alleged; (2) whether capital gains should be included in the father’s income regarding a disposition of shares in the company that employs him; (3) whether a disabled child is entitled to continued child support after the age of 18, and on what basis; and (4) calculation of child support in a shared parenting arrangement, and in a hybrid shared parenting arrangement, resorting to a Contino analysis ( Contino v Leonelli-Contino , 2005 SCC 63 , [2005] 3 SCR 217 [ Contino ]). BACKGROUND [ 5 ] The eldest child, [BK] was adopted by the respondent during the course of the marriage.

She is the mother’s child from a prior relationship. [BK] suffers permanent disabilities resulting from malignant brain cancer diagnosed when she was six years old. The two younger children are the father’s biological children. [ 6 ] Following marital breakdown, the three children remained in the primary care of the mother after separation. The mother commenced her petition in May 2005, just over a year after separation. The parties reached a formal settlement on all their family issues in August 2005 and obtained judgment for divorce.

It was agreed the mother could relocate to Saskatoon for the purpose of completing a law degree. The parenting arrangement was to be revisited on her return to Regina [ 7 ] On May 8, 2006 Smith J. made a custody and child support order based on the terms of the settlement agreement. Under that order, the three children remained in the primary care of the mother. The mother then fulfilled her objective of obtaining a law degree.

She relocated with the children to Saskatoon, and attended law school at the University of Saskatchewan. [ 8 ] In May 2008, upon return of the mother and children to Regina, the father sought shared parenting of the two younger children. The mother opposed the application and applied for increased child support. [ 9 ] In January 2009, the father arbitrarily reduced his child support payments, believing he was entitled to a set-off of child support under s. 9 of the Federal Child Support Guidelines [ Divorce Act Regulations , SOR/97-175] [ Guidelines ].

By his somewhat self-serving calculations, the two younger children were with him more than 40% of the time. [ 10 ] Two settlement pre-trial conferences were conducted. No resolution was achieved. The matter was scheduled for trial. [ 11 ] The trial commenced in September 2009 before Herauf J. (as he then was). The issues were shared parenting and child support. The father’s position was that a shared parenting arrangement had been in place for some time and that this provided justification for his unilateral reduction in court-ordered child support payments. He was unsuccessful in his bid for shared parenting.

The trial judge decided the children should remain in the primary care of the mother and fixed child support accordingly. The father appealed the decision, but abandoned his appeal in 2011. [ 12 ] A highly contentious issue before trial, and in the six years since, has been the question of the father’s financial disclosure or lack thereof. In particular, this relates to a rather significant capital gain arising from the father’s disposition of some of his shares in Greystone in the months before the 2009 trial. That share sale was not freely or voluntarily disclosed by the father.

It was uncovered in the course of the father’s cross-examination during the 2009 trial. In the intervening years since, there have been repeated efforts made to obtain information from the father relating to this transaction in order to determine whether the 2009 capital gain constitutes income for child support purposes. These will be addressed in more detail later. [ 13 ] [BK] turned 18 years of age in December 2010. The father unilaterally ceased paying child support for [BK] in January 2011 while she was still in grade 12.

She remained in the mother’s care until 2014, although she variously worked at her maternal grandfather’s law firm, engaged in vocational and life-skills training, and eventually succeeded in gaining admission to a post-secondary program at SIAST. [ 14 ] [BK] was hired by the law firm in 2010 and performed duties of a clerical nature, although not without some difficulties. After repeated attempts, she was finally able to secure admission to SIAST for the academic year 2012/2013 to train as an educational assistant.

She gained entry as a student with permanent disabilities and received additional funding and governmental assistance in consequence. [ 15 ] [BK] successfully completed her SIAST course, graduating in June 2013. Thereafter, she secured a job with the school board at an annual salary of just over $8,000. She remained employed in that capacity for a year, from the fall of 2013 to the end of the school year in 2014.

In June 2014, [BK] moved to Moose Jaw and began cohabiting with her fiancé. [ 16 ] Whether, or when, [BK]’s status as a child of the marriage ceased as a result of the foregoing circumstances is the subject of considerable dispute. [ 17 ] The issue of shared parenting for the two youngest children was resurrected by the father in 2011 after abandoning his appeal. By subsequent agreement, a shared parenting regime was formally implemented on April 22, 2012. [ 18 ] According to the father, shared parenting had been the norm for the two youngest children since April 2011.

The appropriate child support obligation in a shared parenting arrangement is in dispute. The father wants a straight set-off of child support obligations under s. 9 of the Guidelines . The mother advocates a Contino analysis. The mother argues there should be no set-off of Table amounts given the disparity in parental incomes and the disproportionate burden she has assumed in terms of meeting the children’s day-to-day needs. [4] As the Chambers judge alluded in paragraph 12 of her decision, there are additional background details that pertain to the issues raised in the notice of appeal and Mr. Wetsch’s factum.

First, the parties had brought several applications before the Court of

Queen’s Bench to resolve ongoing issues with financial disclosure. In the result of which, in a February 27, 2013, fiat [February 2013 Order], a judge ordered Mr. Wetsch to produce unredacted income tax returns, T4s and notices of assessment and reassessment for 2009, 2010 and 2011, and documentation evidencing the 2009 capital gain and his carrying charges. The February 2013 Order also required Mr. Wetsch to file Parts 5 and 6 of the financial statement required in family law proceedings, including information as to the income of Mr. Wetsch’s new spouse.

No appeal was taken from this order. [5] After much back-and-forth but without much further disclosure, in an application to vary child support, Ms. Kuski again sought the court’s assistance to obtain documentary disclosure pertaining to Mr. Wetsch’s capital gain. On July 19, 2013, a different judge ordered Mr. Wetsch to produce loan or bank statements reflecting the withdrawal of funds in 2004 to purchase his original shares in Greystone as well as his loan or bank statements from 2009 reflecting the deposit of share sale proceeds [July 2013 Order]. The judge also ruled that Ms.

Kuski’s bank statements and those of BK were not relevant and need not be produced. She similarly declined to order production of evidence related to Ms. Kuski’s holidays and associated costs. Lastly, the judge declined to order disclosure of the income earned by Ms. Kuski’s new spouse. Mr. Wetsch sought to appeal against the July 2013 Order, but was denied leave to do so in September 2013. [6] On June 26, 2014, Mr. Wetsch asked the Court of Queen’s Bench for an order declaring that he had complied with the July 2013 Order. The judge who heard that application ordered a special hearing of the parties’ issues.

In doing so, the judge granted both parties leave to request that the judge who would preside over the special hearing address certain issues by way of viva voce evidence, if that judge so decided.

While he also granted the parties leave to file further material in respect of the special hearing, the judge noted, with respect to the July 2013 Order, that “no further material is required to be filed at this point in time.” The Chambers judge, in the decision under review, interpreted the order in this way: … As I read the order, the father’s compliance or non-compliance with the [July 2013 Order] remains a live issue to the present date. What was unresolved was simply whether the issue would be addressed by viva voce evidence or by further affidavit material.

That question was left to the “special hearing judge” for determination. [7] In her submissions to the Chambers judge, Ms. Kuski painted Mr. Wetsch’s reluctance to disclose evidence about the 2009 share sale and resulting capital gain as blameworthy conduct that ought to affect the Chambers judge’s retroactive child support analysis. III. CHAMBERS DECISION [8] In addressing the issues before her in the special hearing, the Chambers judge ordered: (

a) The respondent’s recalculated s. 3 support obligation under the Guidelines for the three children for the period March 1, 2010 to December 31, 2014 is $215,686.00. The respondent shall be credited for support payments made pursuant to the existing order in the amount of $169,874.34 for this same time period, leaving a total owing by the respondent to the petitioner of $45,811.66. (

b) The respondent’s recalculated obligation under s. 7(1) (

f) of the Guidelines for extracurricular expenses to December 31, 2014 is $6,653.04. (

c) The respondent’s recalculated obligation for health-related expenses under s. 7(1)(

c) to December 31, 2014 is $4,192.51. (

d) The petitioner’s obligation for expenses for post-secondary education under s. 7(1) (

e) of the Guidelines is $46.69, which may be set-off against obligations of the respondent. (

e) The installment of $5,313.00 ordered payable by the Honourable Mr. Justice Herauf and withheld by the respondent is payable to the petitioner forthwith. (f) [BK], born [redacted] ceased to be a child for support purposes on December 31, 2010, regained the status of a child between September 1, 2012 and June 30, 2014, and ceased to be a child effective July 1, 2014, until further order. [BK] is not precluded from seeking re-institution of dependent status based on disability at a future date. (

g) Commencing January, 2015 and on the 1 st day of each month thereafter until further order, the respondent shall pay to the petitioner support for two shared children in the sum of $2,703.00 per month, based on a setoff of his 2014 income of $339,261.00 and the petitioner’s 2014 income of $120,930.00. For the period January 1, 2015 to August 31, 2015 the respondent owes the petitioner the sum of $21,624.00 yet has paid $24,984.00 through the Maintenance Enforcement Office. The overpayment of $3,360.00 may be set-off against the obligations of the respondent.

The respondent shall also pay to the petitioner his proportionate share (73.68%) of s. 7 expenses, within 30 days from the date the petitioner provides him a receipt for same. (

h) The parties shall exchange income tax returns and notices of assessment by July 1 st of each year. (

i) Costs are reserved. The parties have leave to file written submission within 60 days. IV. ISSUES [9] In broad terms, the matters put at issue by the notice of appeal are fourfold, namely, whether the Chambers judge erred when: (

a) attributing income to Mr. Wetsch in respect of a capital gain; (

b) determining the status of BK as an adult child of the marriage and Mr. Wetsch’s support obligation in that regard;

(

c) calculating Mr. Wetsch’s s. 9 child support obligations; and (

d) calculating s. 7 expenses. [10] That said, in a later judgment on costs alone, the Chambers judge ordered Mr. Wetsch to pay Ms. Kuski lump sum costs of $10,750 in respect of the special hearing. Although Mr. Wetsch challenges that award in his factum, he has not put the separate costs judgment at issue before this Court. The judgment under appeal did not address costs, except to reserve the issue for later judgment, and this was at Mr. Wetsch’s request—he had sought and been granted leave to make cost submissions after the substantive judgment had been rendered (at para 313).

In consequence, the Chambers judge issued her costs judgment after Mr. Wetsch had served and filed his notice of appeal in this matter. Therefore, while the notice of appeal mentions costs, there was in fact no costs order from which Mr. Wetsch could have appealed when he served and filed his notice of appeal. Moreover, Mr.

Wetsch did not seek to amend his notice of appeal to make reference to the costs judgment once it had been issued and he did not file a separate notice appealing against it (see Holmes v Jastek Master Builder 2004 Inc. , 2017 SKCA 50 , per Ottenbreit J.A. in chambers [ Holmes ], and the case law cited therein). [11] Mr. Wetsch was aware of this problem. He addressed it in this way in his factum: 203. In this case, Wilkinson J. reserved her decision on the cost issue and rendered the same on November 24, 2015.

In the interim, Wetsch has already served a Notice of Appeal of the August 3, 2015 [ sic ] Judgment in which he sought costs in the Court of Appeal and in the Court below. Wetsch understands that the Court of Appeal has not made a definitive decision as to whether a separate Notice of Appeal of a reserved cost judgment is required. If it is, Wetsch would seek leave nunc pro tunc to appeal the decision. See on this point Riley v. Riley 2010 SKCA 88 and Stelter v.

Stelter 2012 SKCA 117 . [12] Of course, leave to appeal the costs judgment is not required—except perhaps from the Chambers judge herself (see Riley v Riley , 2010 SKCA 88 , 359 Sask R 128). Further, Mr. Wetsch’s “understanding” of the law is incorrect. As Holmes has subsequently confirmed, Mr. Wetsch was required to file a separate notice of appeal and he has not done so. If there was any uncertainty prior to Holmes , it was as to whether an appellant could simply amend an existing notice of appeal in lieu of serving and filing a fresh notice of appeal against a costs-alone judgment.

Finally, this appeal was heard 16 months after the Chambers judge had issued her costs judgment and 8 months after Mr. Wetsch had filed a factum in which he recognised the obstacle to his appeal against it, but he nonetheless failed to take any steps during that time to address the problem. For these reasons, I find the issue of costs at the Court of Queen’s Bench is not properly before this Court and I do not address the issue further in these reasons. [13] Similarly, I do not address any of the arguments Mr.

Wetsch made in his factum alleging reversible error on the part of the judges who issued the February 2013 Order and the July 2013 Order. No appeal was taken against the February 2013 Order and a judge of this Court denied Mr. Wetsch’s application for leave to appeal against the July 2013 Order. The appeal of the Chambers judge’s decision may not be used to collaterally attack those earlier orders. [14] Lastly, Mr.

Wetsch has abandoned his appeal against the Chambers judge’s handling of the s. 7 expense issue in his factum “in view of the amount of money involved.” As he has acknowledged he owes $10,798 in s. 7 expenses to Ms. Kuski, I do not address that ground of appeal in these reasons. V. ANALYSIS [15] To set the framework for the appeal in respect of the parties’ child support obligations, in the 2009 trial decision, the trial judge had directed the parties to exchange income tax returns and notices of assessment by July 1st of each year, beginning in 2010.

On this basis, the parties’ ongoing child support obligations are calculated on their respective previous year’s income with adjustments taking place after the annual exchange of income tax information. The Chambers judge confirmed this basic framework in her decision, applying the annual adjustments retroactively to January of the year in question. In addition, it is important to understand that the trial judge had held that the dividend income Mr. Wetsch received from his shares in Greystone was properly income for child support purposes.

The Chambers judge proceeded from this basic framework to address the issues raised before her. [16] In this appeal, Mr. Wetsch challenges the Chambers judge’s conclusions with respect to the inclusion of a capital gain in his income for 2009, the status of BK as an adult child of the marriage and his child support obligations in respect of BK and under s. 9 of the Guidelines . A. Capital gain [17]

Section 16 of the Guidelines directs a court to determine annual income using a parent’s T1 General form adjusted in accordance with

Schedule III to the Guidelines .

Section 17 addresses income that fluctuates annually or is non-recurring income, such as a capital gain.

Section 19 empowers the courts to impute income to a parent in situations where a capital gain has arisen and constitutes a significant source of income: Vincent v Vincent , 2012 BCCA 186 at paras 35–40 , [2012] 9 WWR 1. Sections 16, 17 and 19 provide: Calculation of annual income 16 Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with

Schedule III. Pattern of income 17(1) If the court is of the opinion that the determination of a spouse’s annual income under

section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

… Imputing income 19(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; (

b) the spouse is exempt from paying federal or provincial income tax; (

c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada; (

d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines ; (

e) the spouse’s property is not reasonably utilized to generate income; (

f) the spouse has failed to provide income information when under a legal obligation to do so; (

g) the spouse unreasonably deducts expenses from income; (

h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and (

i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. [18] In Ewing v Ewing , 2009 ABCA 227 , [2009] 11 WWR 627 [ Ewing ], Conrad J.A. set out a list of factors for a court to consider when faced with the question of whether a capital gain resulting from the sale of shares ought to be included in income for support purposes: [35] While the courts have the discretion to determine whether the

section 16 income calculation is fair, having regard to non- recurring gains and patterns of income, the following, although not an exhaustive list, outlines some of the matters a court might consider: Is the non-recurring gain or fluctuation actually in the nature of a bonus or other incentive payment akin to income for work done for that year? Is the non-recurring gain a sale of assets that formed the basis of the payor’s income? Will the capital generated from a sale provide a source of income for the future?

Are the non-recurring gains received at an age when they constitute the payer’s retirement fund, or partial retirement fund, such that it may not be fair to consider the whole amount, or any of it, as income for child support purposes? Is the payor in the business of buying and selling capital assets year after year such that those amounts, while the sale of capital, are in actuality more in the nature of income? Is inclusion of the amount necessary to provide proper child support in all the circumstances?

Is the increase in income due to the sale of assets which have already been divided between the spouses, so that including them as income might be akin to redistributing what has already been shared? Did the non-recurring gain even generate cash, or was it merely the result of a restructuring of capital for tax or other legitimate business reasons? Does the inclusion of the amount result in wealth distribution as opposed to proper support for the children? [ 19 ] Mr. Wetsch raises issues in respect of the Chambers judge’s analysis under the Guidelines and the factors identified in Ewing .

However, when first addressing the capital gain issue in his factum, Mr. Wetsch focused on financial disclosure or, more precisely, his years-long recalcitrance in disclosing the financial information that is relevant and material to his capital gain and his ongoing child support obligations. At root, he says the Chambers judge’s erred in her characterisation of the disclosure issues that arose in this case and that that erroneous characterisation influenced her reasoning on the capital gain.

I find the whole of this ground of the appeal turns on that issue. [ 20 ] To be clear, under ss. 21(2) and 25(1) of the Guidelines by reference to s. 21(1), Mr. Wetsch has always been required to disclose the information that related to his 2009 capital gain: Obligation of applicant 21(1) A spouse who is applying for a child support order and whose income information is necessary to determine the amount of the order must include the following with the application: (

a) a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years;

(

b) a copy of every notice of assessment and reassessment issued to the spouse for each of the three most recent taxation years; (

c) where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse’s employer setting out that information including the spouse’s rate of annual salary or remuneration; (

d) where the spouse is self-employed, for the three most recent taxation years (

i) the financial statements of the spouse’s business or professional practice, other than a partnership, and (ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm’s length; (

e) where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years; (

f) where the spouse controls a corporation, for its three most recent taxation years (

i) the financial statements of the corporation and its subsidiaries, and (ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length; (

g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements; and (

h) in addition to any income information that must be included under paragraphs (

c) to (g), where the spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year, or if such a statement is not provided, a letter from the appropriate authority stating the required information. Obligation of respondent

(2) A spouse who is served with an application for a child support order and whose income information is necessary to determine the amount of the order, must, within 30 days after the application is served if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court, as well as the other spouse or the order assignee, as the case may be, with the documents referred to in subsection (1). … Continuing obligation to provide income information 25(1) Every spouse against whom a child support order has been made must, on the written request of the other spouse or the order assignee, not more than once a year after the making of the order and as long as the child is a child within the meaning of these Guidelines , provide that other spouse or the order assignee with (

a) the documents referred to in subsection 21(1) for any of the three most recent taxation years for which the spouse has not previously provided the documents; (

b) as applicable, any current information, in writing, about the status of any expenses included in the order pursuant to subsection 7(1); and (

c) as applicable, any current information, in writing, about the circumstances relied on by the court in a determination of undue hardship. [ 21 ] As the Chambers judge observed, the fundamental principle underpinning the Guidelines is that children of the marriage have a presumptive right to support based on their parents’ incomes.

Section 16 of the Guidelines provides that a parent’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by Canada Revenue Agency. Under that heading, Line 127 of a T1 General form addresses “Taxable capital gains (attach

Schedule 3)”. Line 199 of

Schedule 3 to the T1 General form provides that the total capital gains (or losses) of a taxpayer is to be multiplied by 50% to arrive at the “taxable capital gains” of the taxpayer, which amount is then entered on Line 127 of the T1 General form.

Section 16 of the Guidelines also provides for adjustments to income in accordance with

Schedule III to the Guidelines . In relevant part,

Schedule III reads: Capital gains and capital losses 6 Replace the taxable capital gains realized in a year by the spouse by the actual amount of capital gains realized by the spouse in excess of the spouse’s actual capital losses in that year. [ 22 ] This means the actual amount of capital gains realised by a parent in a year is clearly a basis of income for child support purposes and, therefore, the information pertaining to the capital gains must be disclosed under s. 21(2) of the Guidelines . In this case, on Line 127 of his T1 General form, Mr.

Wetsch entered the sum of $122,280 as his taxable capital gain for 2009. Therefore, the capital gain at issue in this case is $244,560, as the Chambers judge determined. [ 23 ] Although he claimed he had received no actual increase in his disposable income from the capital gain, it is plain from the record that Mr. Wetsch took an obstinate approach to the statutorily-mandated and the court-ordered financial disclosure that could have

supported his claim. Indeed, when she adjourned the special hearing to be continued at a later date, the Chambers judge granted Mr. Wetsch “one last opportunity to disgorge information about the capital gains” (at para 58). In response, Mr. Wetsch tendered a lengthy affidavit that “[shed] some additional light on the 2009 transactions, albeit almost six years after the fact” (at para 59). Notwithstanding this late affidavit, the Chambers judge concluded some of the required documentation had never been produced.

All told, the Chambers judge devoted 31 paragraphs of her reasons to the sorry history, and 39 paragraphs to the repercussions, of Mr. Wetsch’s years-long failure to disclose relevant financial information. [ 24 ] These circumstances were entirely of his own making, but I have some sympathy for Mr. Wetsch given the result. I say this only because the imputation of the full $244,560 of the capital gain as income is not—absent the adverse inferences drawn by the Chambers judge—consistent with s. 16 of the Guidelines , the case law or the overall economics of the financial restructuring transactions Mr.

Wetsch claims he undertook in 2009. [ 25 ] As Mr. Wetsch explains it, the 2009 sale and the subsequent purchase of Greystone shares had the net effect of increasing the balance of his share purchase debt from $1,450,000 to $2,400,000. Mr. Wetsch acknowledges he received a personal benefit because he used some of the share sale proceeds to pay his outstanding legal bills from the 2009 trial.

He also used the proceeds to convert his residential mortgage loan into a tax-deductible investment loan (see: Singleton v Canada , 2001 SCC 61 , [2001] 2 SCR 1046 [ Singleton ]; Lipson v Canada , 2009 SCC 1 , [2009] 1 SCR 3 [ Lipson ]). That is, Mr. Wetsch says the ongoing, bottom-line personal benefit of these transactions is $5,900 annually in tax-deductible interest on his mortgage, which he submits (assuming a 46% marginal tax rate) results in an annual personal tax savings of only $2,700, approximately. Also, on the income side of things, Mr.

Wetsch asserts his 2009 purchase of additional Greystone shares actually resulted in ongoing, increased income for child support purposes. This is because the annual dividends paid on the shares he acquired in 2009 exceed his ongoing costs of borrowing to buy them. Lastly, Mr. Wetsch asserts the Chambers judge overlooked the fact his capital gain was a one-time thing, not a recurring amount. [ 26 ] Frankly, I find Mr. Wetsch’s resistance to disclosure inconsistent with his explanation of the 2009 restructuring.

In my assessment, there is nothing untoward on the face of what he claims he did in restructuring his financial position in 2009. In general terms, transactions of the nature that Mr. Wetsch says he carried out, of which the 2009 share sale was a part, could certainly have placed Mr. Wetsch in a superior position with respect to taxation, debt, investment and income, as the Chambers judge observed (at paras 68– 75). If carried out legitimately (and there is nothing but his obfuscation to suggest otherwise), there was no reason for Mr.

Wetsch to be reluctant to provide full and frank disclosure of all of the circumstances surrounding his 2009 financial restructuring. It is not as if he was seeking to avoid an increase in the quantum of his child support obligations; in fact, he argued his income had increased as a result of the restructuring, undoubtedly knowing that fact is directly related to the quantum of his child support obligations. [ 27 ] Nonetheless, s. 19(1)(

f) of the Guidelines clearly states that the question of whether Mr. Wetsch “has failed to provide income information when under a legal obligation to do so” is relevant and material to whether it is appropriate in the circumstances to impute the capital gain to Mr. Wetsch as income.

Indeed, where a parent is the subject of an order under s. 22(1) of the Guidelines to enforce financial disclosure, the court may, under either s. 23 or s. 24 (c), “draw an adverse inference against the spouse who failed to comply and impute income to that spouse in such amount as it considers appropriate.” All of which is to say, it ought to have been readily apparent to Mr. Wetsch at the outset that full and frank disclosure was not only required but was also in his best interest.

Unfortunately for him, the result of his wrong-headed approach to financial disclosure was the undermining of his arguments and his credibility in the eyes of the Chambers judge. Moreover, his approach to disclosure opened the door to the adverse inferences and attribution of income that he now seeks to set aside. [ 28 ] At root, the Chambers judge’s decision to impute the capital gain income to Mr. Wetsch was a discretionary decision based on her determination that that result was appropriate in the circumstances. In doing so, the Chambers judge properly had regard for the fact that Mr.

Wetsch’s parsimonious disclosure had left the court with scant evidence in support of his position on the matter and gave her reason to question reliability of what evidence there was. Indeed, the Chambers judge found Mr. Wetsch’s evidence was insufficient to persuade her to his position or to corroborate any of the various motives or rationales he had advanced over the years for the transactions in question. In this regard, she wrote: [76] The father’s loan transactions were never clarified, despite two court orders made for that very purpose. He was pursued on the subject on any number of occasions.

Adverse inferences are justified in the circumstances. The transactions were indeed complicated, as the father himself once declared, but the father has had a long and profitable career in the investment field. He is a chartered financial analyst. I find it hard to believe he could not have explained his transactions, and their ultimate consequences, in a more comprehensible fashion and in a more timely way. … [82] The father has zealously guarded his loan information in the face of two court orders from the Court of Queen’s Bench and a terse reminder from the Court of Appeal.

The explanations he did deign to provide were often in “baffle-speak”. As an example (in para. 8 of his November 2014 affidavit) he speaks of the September 2009 share acquisition and corresponding increase in debt level as only amounting to “an approximate annual cost of $7,500”. In his May 4, 2015 affidavit, he suggests his loans to acquire shares only increased by $185,560 as a result of the September 2009 acquisition. I refer to para. 22 of his May 4, 2015 affidavit which employs some enigmatic calculus using “average cost base” as a measure of the debt incurred.

I found these explanations somewhat “sleight of hand”. … [87] The father has persistently tried to deflect attention away from his early acquisition costs and his loan transactions. He discouraged attempts to examine the 2009 transaction in isolation. Indeed, that was the gist of his response to his brother-in-law in the email of October 2013. … [96] In terms of financial disclosure, the father’s staccato performance left the mother unable to obtain a professional opinion that would have been of considerable assistance to the Court in its assessment. Instead, I have been left to grope through unsatisfying

explanations and forced to draw negative inferences from the delay and obfuscation that accompanied financial disclosure: See Friedt vFraser, 2002 SKQB 79 at para 23, 216 Sask R 300. [29] In his factum, Mr. Wetsch directed much criticism at the ability of others to understand his “relatively straightforward”investment in Greystone or the implications of s. 47 of The Income Tax Act, RSS 1978, c I-2, which deals with the sale of identicalproperties. He invited the inference that the failings of Ms. Kuski’s accountant to grasp Mr. Wetsch’s financial circumstances had led theChambers judge into error.

The alleged error being that the Chambers judge had ignored the net effect of the 2009 restructuringtransactions and the fact the capital gain was a one-time occurrence. What his submissions themselves ignore is the fact that theChambers judge determined she could not place any faith in Mr.

Wetsch’s explanation of the transactions by reason of his mulish refusalto produce the financial documentation that underpinned the transactions and, presumably, supported his explanation of them. [30] Notwithstanding his protestations to the contrary, it is clear to me the Chambers judge well understood the general nature andpurpose as well as the overall effect of such restructuring transactions (see paras 67–89 of her reasons). But, the plain fact is theChambers judge rejected Mr.

Wetsch’s explanation of the overall effect of financial restructuring in assessing his income for childsupport purposes because he had obfuscated and had failed to produce the evidence necessary to make his case. Her reasons make itclear that the Chambers judge knew these types of transactions could be relevant. She observed: [66] The particular nature of the capital gain under consideration should always be examined and understood. This is essential todetermining whether it can fairly constitute income for support purposes.

It is necessary to scrutinize in some detail what the father setout to accomplish in terms of the transactions underlying the capital gain. The fact that a capital gain is a non-recurring event does not,on that ground alone, eliminate it from consideration: Schick v Schick, 2008 ABCA 196, 433 AR 242 [Schick]; leave to appeal to SCCrefused, (2008 SCCA No. 336). … [90] A child support obligation does not preclude tax stratagems or sensible structuring for tax purposes.

But what may be consideredappropriate from an accounting or a taxation perspective does not necessarily carry the day when the objective is to determine whetherthe father benefited from a source of income that should impact on his support obligations. The economic realities of a transaction maynot be the guiding principle for certain discrete tax analyses, but they are very much a concern in support matters. [31] What Mr. Wetsch fails to see is that he bore the onus of proof and the concomitant burden of persuasion on how to calculatethe capital gain and whether or how it ought to be imputed into income.

Critically, for the purposes of this appeal, the Chambers judgeconcluded there was insufficient reliable evidence before her to carry the day on Mr. Wetsch’s position on the capital gain. She gave aclear reason for this and it was, as I have explained, grounded solidly on the facts and the applicable law. Had Mr. Wetsch approachedfinancial disclosure differently, the result might well have been very different given the Ewing factors and cases like Singleton andLipson. However, on the evidence the Chambers judge accepted as reliable, Mr.

Wetsch had used the capital gain to pay off hismortgage and some personal debts and to acquire a Guaranteed Investment Certificate. In these isolated and stark terms, the evidenceindicated the capital gain had resulted in a significant increase in Mr. Wetsch’s disposable income for 2009. In clichéd terms, this alsoshows that Mr.

Wetsch was his own worst enemy in these proceedings. [32] Given the court record, the evidence pertaining to disclosure, and standard of review applicable to discretionary decisions, Isimply see no basis upon which to interfere with the Chambers judge’s exercise of her discretion in these circumstances. Put in terms ofthe standard, I find the Chambers judge did not err in principle or misapprehend the evidence and the result is not clearly wrong: Hickeyv Hickey, (SCC), [1999] 2 SCR 518 at paras 10–11. I would dismiss this ground of appeal. B.

Adult child of the marriage [33] As background, at the age of six, BK was diagnosed with an aggressive form of brain cancer. Through surgical intervention,radiation treatment and chemotherapy, BK survived but she is cognitively and intellectually impaired as a result. BK is Ms. Kuski’sbiological daughter. Mr. Wetsch adopted BK with knowledge of these circumstances. There is no doubt BK was a child of the marriageat the time of the 2009 trial decision. In it, Mr. Wetsch was ordered to pay child support in respect of BK and she enjoyed access to him. [34] However, in June 2010, Mr.

Wetsch unilaterally terminated BK’s overnight access. In December 2010, BK turned 18 years ofage. On January 1, 2011, Mr. Wetsch unilaterally ceased paying child support in respect of BK. He did not bring an application to varyaccess or his child support obligations in respect of BK until May 2012. [35] Between September 2012 and June 2013, BK was a full-time student at SIAST. While there, she received government fundingof $10,497 for her tuition and special equipment costs. She graduated in June 2013 with an Education Assistant Diploma.

Between Juneand September 2013, BK was intermittently employed at a day care, realising nominal income. In September 2013, she obtained casualemployment as a substitute teacher’s assistant and earned $8,268 to June 2014. She lived with Ms. Kuski during this time. In June 2014,BK moved to Moose Jaw to live with her fiancé.

On this basis, the Chambers judge found: (f) [BK], born [redacted] ceased to be a child for support purposes on December 31, 2010, regained the status of a child betweenSeptember 1, 2012 and June 30, 2014, and ceased to be a child effective July 1, 2014, until further order. [BK] is not precluded fromseeking re-institution of dependent status based on disability at a future date. [36] The Chambers judge found $16,000 annually was required for BK’s necessaries of life between September 2013 and June2014. She apportioned the shortfall in 2013–2014 ($16,000 less $8,268 = $7,732) as between Mr. Wetsch and Ms.

Kuski on the basis oftheir incomes. [37] Mr. Wetsch now appeals against the Chambers judge’s findings as to BK’s status as a child of the marriage and as to thequantum of child support payable in consequence of that finding.

1. Status [38] In respect of the finding on status, Mr. Wetsch first says the Chambers judge erred when she concluded BK had regained thestatus of a child of the marriage while BK attended SIAST, but he does not say how the Chambers judge erred in fact or in law whenreaching this conclusion. In a nutshell, his submission is simply that the Chambers judge was wrong. This ground is completely withoutmerit. [39] Mr. Wetsch next says the Chambers judge erred in her determination that BK was a child of the marriage because Ms.

Kuskicould have applied for Saskatchewan Assured Income for Disability Plan [SAID] benefits for BK. The availability of SAID benefits iscertainly relevant to the question of whether an adult child is unable to obtain the necessaries of life by reason of disability: Bradley vZaba (1996), (SK CA), 18 RFL (4th) 1 (Sask CA) at para 10. However, the fact is that BK was not receiving SAIDbenefits at the relevant time. The failure of Ms.

Kuski or BK to apply for SAID benefits may be one reason why BK was unable to obtainthe necessaries of life, but there was no evidence that she would have qualified for benefits or, if she had, what amount she would havereceived. This ground has no merit. [40] In a related way, Mr. Wetsch also submits the combination of $10,497 in government tuition funding, her student loans andthe financial assistance BK received from her biological father and Ms. Kuski’s parents ought to have extinguished any obligation that hehad to pay child support in respect of BK while she attended SIAST.

These factors are relevant to the question of whether BK was a childof the marriage, but the Chambers judge was well-aware of them. These considerations speak equally to the analysis required unders. 3(2)(

b) of the Guidelines into “the condition, means, needs and other circumstances” of an adult child who has been found to be a“child of the marriage” within the meaning given to that term in s. 2(1) of the Divorce Act, RSC 1985, c 3 (2d Supp), and, in thecircumstances of this case, they are more properly dealt with under that rubric. For this reason, I would give no effect to this ground ofappeal as it relates to BK’s status as a “child of the marriage.” I address it later, in respect of quantum. [41] Lastly, Mr. Wetsch says the Chambers judge erred by “leaving the door open”.

That is, she is alleged to have erred becauseshe remarked that BK, although no longer a child of the marriage at the date of her decision, might again realise that status at some pointin the future. In one sense, Mr. Wetsch is correct. Once a child attains 18 years of age, there is no continuing presumption of childsupport entitlement in the absence of evidence that such support remains statutorily required under the Divorce Act (or analogousprovincial legislation): Ethier v Skrudland, 2011 SKCA 17 at para 18, 366 Sask R 203; Geran v Geran, 2011 SKCA 55 at para 8, 371Sask R 233.

Rather, the parent who seeks a support order in respect of an adult child bears the onus of proof and burden of persuasion inestablishing that, at the material time, the adult child is by reason of illness, disability or some other cause unable to withdraw from hisor her parents’ charge or to obtain the necessaries of life: Ethier v Skrudland at paras 18–19; Geran v Geran at paras 11–13; Smith vSmith, 2008 SKCA 141, 314 Sask R 187.

However, where that onus and burden have been discharged to the satisfaction of a judge, anadult child of divorced parents may again become a child of the marriage for support purposes under the Divorce Act. In short, theChambers judge’s remark reveals no error. [42] In sum, I find no reversible error in the Chambers judge’s analysis or in her conclusion that BK remained a child of themarriage while she attended SIAST and for a period of time thereafter. The appeal against that determination is dismissed. 2. Quantum [43] Although invoking some of the same arguments, Mr.

Wetsch’s appeal against the calculation of the measure of his legalobligation to support BK during her attendance at SIAST has some merit. [44] By way of additional background, having found BK was a child of the marriage during her time at SIAST, the Chambersjudge ordered Mr. Wetsch to pay, under s. 3(2)(

a) of the Guidelines, full Table support from September 2012 to June 2013. [45] Mr. Wetsch argues that the Chambers judge erred by proceeding to calculate the quantum of child support under s. 3(2)(

a) ofthe Guidelines, rather than s. 3(2)(b), and by deciding not to take into account funds BK received from her maternal grandparents andnatural father. a. Guidelines–section 3(2)(

a) or 3(2)(b)? [46] Section 3(2) of the Guidelines provides:

(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over,the amount of the child support order is (

a) the amount determined by applying these Guidelines as if the child were under the age of majority; or (

b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition,means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child. As can be seen, there is a threshold question under s. 3(2), namely, whether the Table amounts would be inappropriate in thecircumstances. If the court considers the Table amounts to be inappropriate, the court will approach its assessment of the measure of thepayor’s legal obligation to support adult children of the marriage under s. 3(2)(b). Otherwise, the approach under s. 3(2)(

a) will prevail asit is the presumed approach. [47] In Geran v Geran, Cameron J.A. said the following about the threshold question: [52] The tables, which form part of the Guidelines, incorporate amounts intended to reflect the average percentage of incomeCanadian families spend in raising children. The amounts vary depending upon the number of children and the income of the parentrequired to pay the amount. Only the income of this parent is considered. The reason for this lies in the two-fold assumption, first, that

the other parent contributes to the support of the children by providing directly for their care and, second, that if the other is also earningan income he or she will spend proportionately the same amount on the children as the paying parent. The amounts specified by thetables are based on the further assumption—particularly relevant to this case—that the children, being under the age of majority, have noincomes of their own. … [55] As contemplated by subsection 3(2)(a), the court may settle on the amount called for by the presumptive rule of subsection 3(1),“as if the child were under the age of majority.” Doing so entails resort to the amount specified in the applicable table (and to

section 7should there exist special or extraordinary expenses). This is commonly referred to as the usual Guideline approach. But, as subsection3(2)(

b) recognizes, this approach may be “inappropriate”. In that event, an “appropriate” amount is to be determined in accordance withsubsection 3(2)(b). The provisions of subsection 3(2)(

b) posit quite a different approach, one that envisions determining the amountbased on the actual, rather than presumed, needs and means and circumstances of the child, and the actual rather than the presumedfinancial ability of each of the parents. [56] Obviously, the key to employing one or the other of these approaches lies in whether the first is “inappropriate”, in which eventan “appropriate” amount is to be determined in keeping with the second. These terms, which appear in both subsections 3(2) and 4(

b) ofthe Guidelines, were taken by this Court in Hagen v. Rankin to have the same meaning in relation to both. Their meaning was explained by the Court in the case of Dergousoff v. Dergousoff (1999), (SK CA), 48 R.F.L. (4th) 1: [67] The word “inappropriate” is the opposite of “appropriate,” both relative terms having to do with something which is eitherunsuited or suited to the occasion or purpose at hand.

Since, in this instance, the term “inappropriate” modifies the word “amount,” usedin the sense of a specified sum of money, the term speaks to an unsuitable amount: to a sum of money which, while specified for thepurpose, is in fact unsuited to that purpose. Hence, to speak of an inappropriate amount of money is to speak of a sum which eitherexceeds or falls short of the purpose. If it exceeds the purpose it is inappropriate to the extent of the excess; if it falls short of its purpose,it is inappropriate to the extent of the shortfall.

If it does neither, the amount is appropriate. … [63] Unfortunately, it appears that Hagen v. Rankin was not drawn to Justice McIntyre’s attention. It seems to have been overlookedby counsel and therefore overlooked by him. This is unfortunate because that case stands for the proposition that, where a healthy andable-bodied adult child is living at home with one of the parents, is attending university, and is earning a substantial income, the amountof child support the other parent is obliged to pay should generally be determined on application of subsection 3(2)(

b) of the Guidelinesrather than 3(2)(a). There are good reasons for this. [64] As we have seen, subsection 3(2)(

a) falls to be applied “as if the child were under the age of majority”. Why, it might be asked,should a child who is 19 to 21 years old, let us say, and earning a substantial income, be treated as though he or she were 16 or 17 yearsold and earning no income? To ask the question is not to answer it, but to ask it serves to put the matter into perspective. [65] And it serves to remind us of something of considerable significance, namely the fact the child is earning a substantial incomeoperates to displace one of the basic assumptions on which the table amounts prescribed by subsection 3(1)(

a) are based: that childrenunder the age of majority have no incomes of their own. This operates in turn to throw the appropriateness of the table amount into doubt,which suggests in general that the amount is more appropriately determined pursuant to subsection 3(2)(

b) rather than 3(2)(a). [66] Viewed from a related perspective, the fact a child over the age of majority is earning a substantial income serves to move thecircumstances of the child away from those of a child under the age of majority, making it more likely that the usual Guideline approachwill be inappropriate. This, of course, is the reverse of the idea that the closer the circumstances of a child over the age of majority are tothose of a child under the age of majority the less likely it is that the usual Guideline approach will be inappropriate.

In this sense, thefact a child over the age of majority is earning a substantial income is not unlike the fact a child over the age of majority is living wayfrom home. Both serve to displace a basic assumption upon which the table amounts are based. And in the latter circumstance, subsection 3(2)(b), rather than 3(2)(a), generally applies, as in W.P.N. v. B.J.N., 2005 BCCA 7; 10 R.F.L (6th) 440 and as suggested in Park v. Thompson (2005), (ON CA), 13 R.F.L. (6th) 415 (Ont.

C.A.). [67] Moreover, subsection 3(2)(b), unlike subsection 3(2)(a), calls for an approach that entails determining the amount with referenceto the actual rather than the presumed needs and means and circumstances of the child, and the actual financial ability of each parent tocontribute to those needs.

This is the natural and logical approach to determining the amount of support that might reasonably beexpected of the parents of a healthy, able-bodied adult child pursuing a post-secondary education. [68] And taking this approach, rather than the usual Guideline approach, is more apt to result in a suitable amount when the child isearning a substantial income.

Suitable, that is, to the occasion or purpose at hand, namely to provide a level of parental assistancecommensurate with the actual needs of the child and the financial ability of the parents, and consistent with the object of the childsupport provisions of the Divorce Act as they apply to such a child. [69] To digress for a moment, I should like to emphasize that we are not here concerned with an adult child who is unable towithdraw from the charge of the parents by reason of “illness” or “disability”. That is quite a different matter.

Rather we are concernedwith a healthy and able-bodied adult who, while earning a substantial income, is unable to withdraw from the charge of the parents byreason of “other cause”, namely the pursuit of further education. [Emphasis in original, footnote omitted] See also Hagen v Rankin, 2002 SKCA 13, 24 RFL (5th) 38; Bradley v Zaba (1996), (SK CA), 18 RFL (4th) 1 (SaskCA).

[48] The Court in Senos v Karcz, 2014 ONCA 459, 120 OR (3d) 321, echoed Cameron J.A.’s comments in Geran v Geran but tookthem further in application in the context of a disabled adult child of the marriage: [65] It is useful to analogize to the cases involving adult children attending university, living away from home and earning an income,thereby contributing to their own education and support.

There are numerous cases in which courts have concluded that thesecircumstances make the usual Guidelines approach “inappropriate” because the assumptions underlying the approach are not present.The Saskatchewan Court of Appeal noted in Geran v. Geran, 2011 SKCA 55, 371 Sask. R. 233 that the fact that the child is earning asubstantial income serves to displace one of the basic assumptions on which the Table amounts are based: namely, that children under theage of majority have no incomes of their own.

This operates in turn to throw the appropriateness of the table amount into doubt, whichsuggests in general that the amount is more appropriately determined pursuant to subsection 3(2)(b): Geran v. Geran, at para. 65. Seealso Rebenchuk v. Rebenchuk, 2007 MBCA 22, at paras. 29-32; W.P.N. v. B.J.N., 2005 BCCA 7, at para. 42. [66] There have as well been a number of cases at the trial level in which ODSP [the Ontario equivalent to SAID] and other forms ofsocial assistance received by the child have been taken into account in determining the appropriate support: Magne v.

Magne (1990), (MB KB), 26 R.F.L. (3d) 364 (Man Q.B.); Cossette v. Cossette, (ON SC), [2003] O.J. No. 4928(S.C.); Liscio v. Abram, (ON SC), [2009] O.J. No. 3406 (S.C.); Welsh v. Welsh (1998), 79 O.T.C. 81 (Gen. Div.);Blonski v. Blonski, 2010 ONSC 2552. In Henry v. Henry, 2010 ONSC 6990, the court found that the receipt of ODSP income by one ofthe children made the Guidelines approach “not appropriate”. See also Vivian v. Courtney, 2012 ONSC 6585. [67] The Table amount is predicated on the parents alone sharing responsibility for the financial support of their child.

In the case ofadult children with disabilities, the [Ontario Disability Support Plan Act] commits society to sharing some responsibility for support. Inmy view, this makes the s. 3(2)(

a) approach inappropriate, and s. 3(2)(

b) should be applied to achieve an equitable balancing ofresponsibility between [the adult child], his parents and society. [49] Although the Chambers judge acknowledged this Court’s clear direction in Geran v Geran, she distinguished that casebecause its circumstances “are very dissimilar to the case at bar” (at para 164).

Respectfully, while the circumstances may be dissimilar,the cases are not unalike from the perspective of the application of the principle espoused in Geran v Geran. [50] At the root of that principle is Cameron J.A.’s recognition that, where an adult child of the marriage earns a substantialincome or receives funds from other sources, one of the basic assumptions upon which the Table amounts are based, namely, childrenunder the age of majority have no incomes or resources of their own, is displaced. This fact throws the appropriateness of the Tableamounts into doubt.

The more income earned or received from other sources, the more doubt that is cast on the appropriateness of theTable amounts. This is so because the fact an adult child of the marriage earns income or has access other funds unquestionably shiftsthe baseline circumstances of the adult child of the marriage away from those of a minor child of the marriage. [51] While the reasons in Geran v Geran speak to employment income only, they reveal that the principle is of broaderapplication.

On a principled basis, any factor or combination of factors that shifts the circumstances away from the assumptions uponwhich the Table amounts are predicated serves to cast doubt upon the appropriateness of approaching child support under s. 3(2)(

a) ofthe Guidelines. This principle is also found in Francis v Baker, (SCC), [1999] 3 SCR 250, with respect to theinappropriateness threshold and the calculation called for under s. 4 of the Guidelines where the payor parent earns in excess of $150,000per year. In that case, Bastarache J. wrote: [44] While there must be an “articulable reason” for displacing the Guideline figures (see, for example, Plester v. Plester (1998), (BC SC), 56 B.C.L.R. (3d) 352 (S.C.), at para. 153), relevant factors will, of course, differ from case to case.

I note,however, my agreement with MacKenzie J. in Plester, supra, as well as Cameron J.A. in Dergousoff, supra, that the factors relevant todetermining appropriateness which Parliament expressly listed in s. 4(b)(ii), that is, the condition, means, needs and other circumstancesof the children, and the financial abilities of both spouses, are likewise relevant to the initial determination of inappropriateness.

Onlyafter examining all of the circumstances of the case, including the factors expressly listed in s. 4(b)(ii), should courts find Table amountsto be inappropriate and craft more suitable child support awards. [52] The relevant factors are the same under s. 3(2) and s. 4 of the Guidelines but, as Bastarache J. observed, they will be differentfor each child of a marriage. There will be cases where non-income factors will shift the analysis.

Without limitation, the relevant factorsunder s. 3(2) may include whether the adult child of the marriage lives away from the parents, whether the adult child is living with hisor her own partner (at a parent’s home or otherwise), whether the support payment will be made directly to the adult child, whether theadult child receives funds from other sources, the nature of those sources of support or assistance and the quantum of funds received,whether the adult child has his or her own health or other insurance, whether the adult child has children of his or her own, the relativeage of the adult child, the adult child’s level of education or training, the employability of the adult child, whether the adult child hasexhibited an unwillingness to become employed or self-sufficient, etc. [53] The relevant factors may also include the nature of the illness, disability or other cause that is proffered as preventing theadult child from withdrawing from parental care or obtaining the necessaries of life as well as its effect on the condition, means, needsand other circumstances of the adult child.

For example, the ordinary but additional expenses of an educational program that meets anadult child’s “particular needs” by reason of his or her illness or disability may not be caught under s. 7(1)(

d) of the Guidelines, whichspeaks only to extraordinary expenses, nor are such expenses factored into the assumptions that underpin the Table amounts. [54] As to “the financial ability of each spouse to contribute to the support of the child”, the Table amounts assume that the payoris the sole member of his or her household and that the payee is also single but living with all the children of the marriage, seeDepartment of Justice Canada, Formula for the Table Amounts Contained in the Federal Child Support Guidelines: A Technical Report,Child Support Team, Research Report (CSR-1997-1E) (Department of Justice Canada, December 1997) [Technical Report] at 3.0.

Bothparents are presumed to earn income and pay taxes. No allowances are made for discretionary actions on the part of a taxpayer, i.e.,RRSP or RESP contributions, charitable donations, etc. (Technical Report at 5.0). Similarly, no allowance is made for non-discretionaryexpenses like union dues and the like. In addition, the Table amounts do not recognise tax allowances for disabilities, dependent relativesor other special circumstances (Technical Report at 5.0). In figurative terms, the Table amounts were determined on this simple model

(Technical Report at 3.0): Although, for low income earners, the formula is modified by a “marginal capping rate” so that the Table amounts do not “constitute adisincentive to working for a higher income which would simply increase tax and child support obligations, leaving little or noimprovement in the payer’s financial state” (Technical Report at 7.0). [55] The greater the shift away from these baseline assumptions, the more likely it is that s. 3(2)(

a) of the Guidelines will beinappropriate. Importantly, Bastarache J. held in Francis v Baker that the payor has the onus of rebutting the presumption of Tablesupport but could do so by simply “raising a concern” that such support is inappropriate. In Tauber v Tauber (2000), (ON CA), 187 DLR (4th) 1 (Ont CA) at 39, Rosenberg J.A. found this threshold could be met with a prima facie case.

In Gould v Gould,2013 SKCA 34 at para 31, 414 Sask R 30, Ottenbreit J.A. noted that, once the issue is raised, “the ‘evidence of inappropriateness’ in itsentirety must be sufficient to raise a concern and it must be clear and compelling.” On this basis, I conclude that, while there is anelement of discretion in ascertaining the inappropriateness of Table support, once a prima facie case has been made out to the effect thatbasic assumptions underpinning the Table amounts have been displaced, the calculation of child support under s. 3(2)(

a) will beinappropriate. [56] The assessment of inappropriateness under s. 3(2) of the Guidelines is mirrored under s. 4 of the Guidelines in respect of payorwho earn in excess of $150,000. For this reason, the principles applicable to an inappropriateness assessment under s. 4 are readilyadaptable to the assessment under s. 3(2) (Hagen v Rankin at paras 10–14). With that footing, applying Bastarache J.’s reasoning inFrancis v Baker to s. 3(2) of the Guidelines, the following guiding principles may be enumerated: (

a) The Table amounts are presumed to apply to adult children of the marriage and a parent seeking to deviate from the Tableamounts bears the onus of rebutting the presumption (paras 41 and 43). This presumption, which is found in s. 3(1) for children of themarriage under the age of majority, is not displaced under s. 3(2) of the Guidelines. (

b) Where the presumption has been rebutted, the Table amount may be increased or decreased (para 42). (

c) To rebut the presumption, and to deviate from the Table amount, the evidence adduced must clearly and compellingly raise aconcern that the Table amount is inappropriate; however, the parent seeking to deviate from the Table amount is not required to testify orto adduce evidence and no unfavourable conclusion may be drawn from a failure to do so because the parent may not possess therequired relevant evidence (para 43). (

d) In the court’s assessment of inappropriateness, no element is to be given more weight than the actual circumstances of theadult child of the marriage (para 39). The condition, means, needs and other circumstances of the adult child must be considered in theassessment of the threshold determination of inappropriateness and in the determination of appropriate support under s. 3(2)(b) (para 44). (

e) The proper construction of s. 3(2) of the Guidelines requires the court to balance the objectives of predictability, consistencyand efficiency, on the one hand, against those of fairness, flexibility and recognition of the actual condition, means, needs and othercircumstances of the adult child of the marriage and the financial ability of each parent to contribute to the support of the adult child, onthe other (para 40). (

f) To assess inappropriateness and an appropriate amount of support, the court must be provided with sufficient evidence of thecondition, means, needs and other circumstances of the adult child of the marriage and the financial ability of each parent to contribute tothe support of the adult child. This may require the production of expense budgets, which the court may order the parents to produce(para 45). (

g) The legislative objective of s. 3(2) is maintenance for the adult child of the marriage, not household equalisation or spousalsupport (para 41). (

h) The reasonableness of the needs of an adult child of the marriage is rebutted where the budgeted expenses exceed “thegenerous ambit within which reasonable disagreement is possible” (para 49). [57] As an aside, Francis v Baker stands directly for the proposition that if the payor’s income exceeds $150,000, the Tableamount on the first $150,000 is presumed along with a fair additional amount corresponding to the payor parent’s income in excess of$150,000, but that the closer the payor parent’s income is to $150,000, the more likely it is that the Table amount will be awarded(para 41). While Mr.

Wetsch’s income exceeded $150,000 at all relevant times, I do not need to address that nuance in these reasons ashe only raised it tangentially in his factum. It is sufficient to simply note that the financial ability of the parents in this case to contributeto BK’s support also puts the Table amounts in question under s. 4 of the Guidelines because Mr. Wetsch’s income exceeded $150,000 atall times. Under s. 4, his income alone triggers an identical inquiry into the inappropriateness of the Table amounts for all children of themarriage, whether minors or adults.

[58] In short, approaching child support under s. 3(2)(

a) will be inappropriate where a payor parent has established—on the basisof a prima facie case grounded in clear and compelling evidence of the condition, means, needs and other circumstances of the adultchild of the marriage or the financial ability of each parent to contribute to the support of the child—that a basic assumptionunderpinning the Table amounts has been displaced. In which case, it would be an error in principle not to approach the matter unders. 3(2)(

b) of the Guidelines. b. Application in this case [59] Where the approach under s. 3(2)(

a) is inappropriate, s. 3(2)(

b) calls for the court to approach the payor’s child supportobligations having regard for the actual condition, means, needs and other circumstances of the adult child of the marriage and theactual financial ability of each parent to contribute to the support of the adult child. This reinforces the principle espoused in Geran vGeran because the approach under s. 3(2)(

b) of the Guidelines is more likely to result in an appropriate amount of financial supportwhere the condition, means, needs and other circumstances of an adult child of the marriage differ from those of a minor child of themarriage or the financial ability of a parent to contribute to the support of the child differs from the assumptions that underpin the Tableamounts. [60] As was observed in Geran v Geran, in that s. 3(2)(

b) allows a court to arrive at a level of parental assistance commensuratewith the actual condition, means, needs and other circumstances of an adult child of the marriage and the actual financial ability of theparents to contribute to the support of the adult child, it is consistent with the principles and objects of the child support provisions of theDivorce Act and the Guidelines.

They are, chiefly, “that spouses have a joint financial obligation to maintain the children of the marriagein accordance with their relative abilities to contribute to the performance of that obligation” (Divorce Act, s. 26.1(2)), “to establish a fairstandard of support for children that ensures that they continue to benefit from the financial means of both parents after separation”(Guidelines, s. 1(a)) and “to ensure consistent treatment of spouses and children who are in similar circumstances” (Guidelines, s. 1(d)). [61] Finally, given that s. 3(2)(

b) deals with child support for adult children of the marriage, in Hagen v Rankin, with reference toBradley v Zaba, Cameron J.A. made the following remarks: [9] In Zaba, this Court held that in determining whether a child, who has reached the age of majority and is attending university,continues to be a “child of the marriage” and, if so, the extent of the legal obligation of each of the parents to contribute to the support ofthe child, the court should have regard, among other considerations, for the ability of the child to contribute to his or her own supportthrough part-time employment.

As this clearly implies, and as the Court of Queen’s Bench has occasionally held, such children areexpected to contribute to their own support to the extent reasonably possible before looking to their parents and their parents’ exceptionallegal obligation to continue to provide support while adult children attend university and are, for that reason alone, unable to get by ontheir own. (See, for example, Simpson v. Palma (1998), (SK KB), 171 Sask. R. 89 (Sask Q.B., per Zarzeczny J.) andMeyers v. Meyers [1998] S.J. No. 265 (QL) (Sask Q.B., per Dovell J.)).

See also Fleming v Boyachek, 2011 SKCA 11, 366 Sask R 163, in the context of an adult child’s obligation to contribute to his or herown educational expenses. [62] In this case, Mr. Wetsch challenges the Chambers judge’s resort to s. 3(2)(

a) with respect to the period when BK attendedSIAST. Turning to those facts, although BK has an ongoing disability, she had been gainfully employed as an adult for the two yearsprior to her attendance at SIAST, but did not work while attending school. Of note, BK received $8,497 in federal government grants forstudents with permanent disabilities, $2,000 under a Canada Study Grant, had access to a $5,076 student loan, received unquantifiedfinancial assistance from her maternal grandparents and unknown amounts from her biological father during this time. Lastly, neither BKnor Ms.

Kuski had applied for SAID assistance, which may have been available during this time. [63] On the needs and other circumstances side of things, BK requires prosthetics and has other lasting complications resultingfrom her cancer and its treatment when she was a child.

These factors also serve to shift her basic needs away from the baselineassumptions for a minor child of the marriage under the Tables. [64] On the whole of it, although I agree that BK’s circumstances are dissimilar to those of the adult child in Geran v Geran, heractual condition, means, needs and other circumstances are very clearly not analogous to those that are assumed for a minor child of themarriage under the Tables. In my assessment, the evidence is clear and compelling and leads to the conclusion that the Chambers judge’sresort to s. 3(2)(

a) was inappropriate in these circumstances. An analysis under s. 3(2)(

b) into BK’s actual condition, means, needs andother circumstances and her parents’ actual financial ability to contribute to the support of BK was required. [65] The evidence in that respect establishes that BK was largely able to support herself and to meet many of the needs in respectof which she would otherwise have had to look to her parents for financial support.

In my opinion, the facts of this case called for adetermination of child support obligations having regard for BK’s actual condition, means, needs and other circumstances, rather thansimply her presumed needs under the Table, and having regard for Mr. Wetch’s and Ms. Kuski’s respectively significant financial abilityto meet her actual needs. In undertaking that assessment, I find the inappropriateness of approaching child support for BK under s.3(2)(

a) of the Guidelines is illustrated by the result of that approach. [66] In that regard, the Chambers judge ordered Table support for the 38 weeks BK attended SIAST and the two months thereafter,after which she had obtained employment with the Regina School Board, i.e., for the 12 months between September 1, 2012, and August31, 2013. The Chambers judge found BK reasonably required $16,000 per year to cover the necessaries of life—excluding BK’shealthcare costs (at para 169), which were addressed separately and assessed in addition to Table support.

The cost of BK’s education isnot factored into this sum because BK received $10,497 in government funding that covered her tuition and equipment needs. Relying onFleming v Boyachek, the Chambers judge found this amount of government funding met or exceeded BK’s expected one-third to one-halfcontribution to the costs of her education. This led the Chambers judge to conclude Table support alone would suffice, meaning no orderwas necessary under s. 7 of the Guidelines because “the bulk of s. 7 expenses were covered by the federal funding” (at para 167).

On thisbasis, BK’s necessaries of life ($16,000) were all that remained unaddressed.

[ 67 ] In that respect, while at SIAST, BK had received $5,076 in student loans, which she had put to “clothing, shoes, meals, transportation costs, and entertainment” (at para 148). She had earned $105 in income during July and August 2013 (at para 149). Ms. Kuski had covered the remainder of BK’s “living costs and necessities” and had paid BK’s cell phone bills while she attended SIAST (at para 148), but that is irrelevant for the purposes of this analysis.

It is, however, relevant that BK’s student loan funding and employment income left $10,819 of her necessaries of life unaddressed. [ 68 ] On the other side of things, Mr. Wetsch’s income in 2011 and 2012, which was $213,040 and $368,723 respectively, is relevant to his 2012 and 2013 child support obligations under s. 3(2) (

a) of the Guidelines . In terms of the Tables , rounded to the nearest dollar, Mr. Wetsch’s 2011 income equates to $3,542 of child support per month for three children and $2,772

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