Agreements and orders outlining responsibilities for divorced or separated parties are important to follow through with. A failure to do so can land someone in hot water. Those who find themselves unable to meet the requirements of an order, such as child or spousal support payments should take action quickly so as not to find themselves in a situation similar to a father in a case recently heard before the Ontario Superior Court of Justice.
The mother and father signed a Settlement Agreement (the “Agreement”) on November 22, 2010. The Agreement required the father to pay spousal support in the amount of $450 per month and child support in the amount of $1,457 per month (the “Order”). Both payments were based on the father’s annual income of $103,424.93 and the mother’s income of $40,457. In addition, the parents were required to review the payment of any special and extraordinary expenses on an annual basis. These expenses were to be shared between the parties in a way that was proportional to their income. Finally, the Agreement required the father to take out a life insurance policy of $250,000 in order to cover his support obligations in the event of his death.
Arrears pile up
By the time the case went to trial the father was in arrears on his support payments. He owed $47,264 in spousal support and $24,911 in child support. The mother also told the court the father had still not contributed to the $40,000 that had been spent on their daughter’s university education. The mother sought payment of what was in arrears as well as the father’s share of their daughter’s university costs.
The father’s position is that the arrears should be set aside and he should not be required to pay any additional support on the basis of his financial situation. He lost his job in 2015, and found a new one, but at a much reduced salary. In 2017 he made $46,195.
The general principles for recession or reduction of arrears
The court began its analysis by stating that the Family Law Act does allow courts to retroactively discharge or rescind child support arrears. However, such power should only be exercised if there has been a change in circumstances within the meaning of the Child Support Guidelines.
The court noted that while the father clearly went through a change in circumstances, it was his ability to make such a change known to the courts at the time. The court wrote, “The accumulation of arrears without evidence of a past inability to pay is not a change in circumstances. As well, the present inability to pay does not by itself justify a change order. Such an order should only be granted if the payor can also prove a future inability to pay.” That said, the Ontario Court of Appeal did state in a 2016 decision that,
“Where, however, the payor demonstrates that a change in circumstances took place during the time that arrears were accumulating which rendered the payor unable to make child support payments for a substantial period of time, the court may provide relief by varying the child support order or rescinding arrears. … [the court] may determine that it is appropriate to retroactively suspend enforcement of the support order during the time when the payor was unable to pay, or decrease the amount of child support owed during that time and reduce or rescind the arrears owing accordingly. [emphasis added]”
The Court of Appeal also outlined the principles required to be assessed:
“1. The nature of the obligation to support, whether contractual, statutory or judicial;
2. The ongoing needs of the support recipient and the child;
3. Whether there is a reasonable excuse for the payor’s delay in applying for relief;
4. The ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears;
5. The conduct of the payor, including whether the payor has made any voluntary payments on account of arrears, whether he has cooperated with the support enforcement authorities, and whether he has complied with obligations and requests for financial disclosure from the support recipient. As stated by Chappel J.: “Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission or reduction of arrears”;
6. Delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears; and
7. Any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears. As put by Chappel J.: “[I]f a retroactive order reducing child support would result in the child support recipient having to repay money to the child support payor, this may militate against making the order, particularly if the payor has not given the recipient notice of the change in their circumstances, has not provided appropriate disclosure to support their claim for an adjustment to the child support, or has delayed initiating court proceedings to change the order.” [emphasis added]”
In the present case, the court determined it would not vary the child support arrears, since they were “proper given (the father’s) ongoing obligation to assist with financing his eldest daughter’s expenses while in University.” The court slightly reduced the father’s spousal support owing, setting it at $32,800. This left the father with total arrears of $57,711, to be paid at a rate of $250 per month.
Issues related to child support, such as who will pay it and for how long can be difficult to work through and must be addressed on an individual basis. It is important to speak with an experienced lawyer, such as Jason P. Howie about child and spousal support, especially if you find yourself unable to pay or if financial circumstances in your life change. Please call us at 519.973.1500 or reach us online to talk today.