- collect late support payments from a current or former spouse;

- obtain a spousal or a child support order from a current or former spouse; or,

- seek an increase in spousal or child support payments from a current or former spouse,

you can deduct those legal fees from your taxable income.  These deductions should be set out in line 221 of your Income Tax Return, and are discussed further in a tax guide issued by the Canada Revenue Agency.  Henderson Heinrichs can help review and identify which client expenses are deductible to make the process as simple as possible.

Please contact our offices to find out if your support obligation needs to be adjusted to reflect the new table amounts.

Special or extraordinary expenses

7. (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

The question this raises in my mind is why separated or divorced parents are subject to this potential obligation when children of parents still together are subject to the vagaries of their parents’ decision.  Would a child of parents who are still together be able to secure similar funding if the courts were asked to intervene?

But what happens if one of the parties was pursuing an application to cancel or reduce arrears of maintenance?  The court found (at para. 16) that an application to vary or cancel arrears, “… must be made by a spouse or former spouse and those terms do not extend to a corpse, an estate, or a personal representative.”  Because of this, any application to change maintenance owing also abates upon the death of either party.  Which means that if you intend on applying to varying or cancel arrears, it’s best to do it while you’re alive.

Previously, the parties have been separated since 1994. The initial child and spousal support order was made in 1996, and varied in 2004. The 2004 Order specified that, anytime after a year had passed, either party could seek a review hearing on the issue of spousal maintenance. The husband sought that review in 2005, and then again in 2009 when it was alleged the youngest child of the parties was no longer a child of the marriage. The husband sought to terminate spousal support at that point.

At the 2009 application the judge indicated she was relying on Section 17 of the Divorce Act, which relates to the variation of support orders. She concluded the husband ought to keep paying indefinite support to the wife in the amount of $1250.00 per month.

On appeal, the Court of Appeal noted that Section 17 of the Divorce Act is irrelevant in the context of review hearings and should not have been relied on by the judge. Instead, at a review hearing, the judge should have conducted a “reconsideration” of entitlement and quantum of support having an eye to the Spousal Support Advisory Guidelines, which the Court of Appeal concluded would have assisted the husband in terms of the duration of support.

This decision clarifies the test that a party must satisfy when bringing an application for a review of support as opposed to the test that must be met on an application to vary support. Procedurally, this distinction is important to note as the legal test is markedly different.

After the parties’ separation July 2000, they entered into an agreement in August 2000 providing for joint custody and for Mr. Trignani to pay maintenance. The parties filed against each other in spring 2001, each claiming sole custody and child maintenance. The Ontario Superior Court of Justice pronounced a consent order in April 2001 that the parties have equal time with the child (the mother’s access to be supervised) and Mr. Trignani was to pay child support. Notwithstanding this order, for the next five years, Mr. Trignani had the child in his care for the majority of the time.

The court order was was varied in 2006 by Minutes of Settlement which provided for joint custody and for Mr. Trignani to pay child maintenance which appears to have been a set off between his and the appellant’s guideline income obligations.

The tax court held that, despite interim agreements reached by the parties between 2001 and 2006, Mr. Trignani at all material times had a live claim for child support and sole custody. The fact that he agreed to a settlement in 2006 which provided that he pay net maintenance to the respondent did not detract from the viability of his claim prior to that point and did not extinguish his right to claim the monies expended on pursuing his child support claim as a tax deduction.

In cases where joint custody is sought or where sole custody is a reasonable consideration, the tax considerations raised in Trignani v. Canada should be considered when deciding whether to claim child maintenance. This case could have far reaching implications. It remains to be seen whether the decision will be appealed and how the decision will be woven by lower courts into the fabric of Canadian family law.

The same cannot be said for the expense section of the Form 89, which is rife with assumptions.  It is not clear on the face of the document what, exactly, is called for.  Is one being asked to say what one’s expenses have been for the past year?  What one expects them to be in the coming year?  What they will be if one gets what one is proposing that the court order, or what one will be paying if the other party is successful?  Does one calculate expenses on the most one believes one should be spending or the least?   The answer to all of these questions is, unfortunately, yes.

Because there is so much grey in the Financial Statement, it is important that one clarifies for the court any assumptions and decisions that you make.  If one is filling out the document based upon what one expects to pay if one receives what one is seeking, that assumption should be set out in affidavit material and brought to the attention of any judge hearing a related matter.  Clarifying affidavits are very helpful for the court and helps them to see exactly what logic lies behind the income and expense calculations you or your counsel may be promoting.

“Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably-based suspicion that justice was not done. Non-disclosure also has a tendency to deprive children of proper support.

It is not enough to respond to non-disclosure by an award of costs. Nor is it enough, in a case like this one, to deal only with what is known. Either of these approaches, or both together, may still reward the non-disclosing litigant for his conduct, depending whether his concealment has been successful.”

What then is to be done?  Luckily, the courts provide some resources to the party seeking information.  They include:

Presumptions Against the Non Disclosing Party: If someone does not disclose assets in accordance with the Rules, the court may presume that there is continuing non-disclosure and the onus will be on the non-disclosing party to satisfy the court that he or she has complied.

Penalties Against the Non-Disclosing Party: If a proper demand has been made for disclosure and it has not been complied with, the court is able to assess up to $5000.00 against the non-disclosing party, to be paid for the benefit of the spouse, child or parent on whose behalf the request for financial information was made.

Dismissal of the Non-Disclosing Party’s Action: If a party does not provide a financial statement, the court under Rule 60D of the rules of court, under Rule 2(5) is able dismiss the offending party’s proceedings or order that the proceeding go ahead as if no appearance had been entered or no defense had been filed.

Contempt: The court can, in certain circumstances, make findings of contempt of court against someone hiding income or assets.  This could result in fines against the offending party or even jail time.

Mr. Justice Fraser’s words still ring very true, and it is vital that each party provide full disclosure so that each has full knowledge of the other’s finances.