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The child support payor has an obligation to make the required payments, but in some instances, it may be necessary to secure that obligation so that the recipient can protect their ability to collect the amount that is owed. A payor spouse can be ordered to maintain or obtain a life insurance policy designating the other spouse or child as the beneficiary to secure their support obligations. However, this option will not be appropriate in all cases. As an alternative, courts can also secure support payments by registering a charge against the payor’s property. One recent case demonstrated how this can be used to ensure that sufficient equity is available to meet the secured obligations while striking a balance with the payor’s ability to manage their assets.
Courts Can Make Enforcement-Related Orders
In Findlayter v. Pusey, the father was obligated to pay child support. The mother was looking for an order for security for support in the amount of $100,000. She argued that the father had failed to comply with his support obligations, was encumbering one of the rental properties that he owned, was residing in Jamaica and had no intention of returning to Canada. The father confirmed that while his move to Jamaica was intended to be temporary, he no longer planned to return to Canada.
Section 34(1) of the Family Law Act (FLA) provides courts with a range of remedies when making a support order. These include making enforcement-related orders to secure the support that the payor owes. In Kumar v. Kumar, the judge set out a list of non-exhaustive factors that can be considered when deciding whether to order security for support. These included:
- Where a party has a history of dissipation of assets.
- A real danger the payor will leave the jurisdiction.
- The payor’s past avoidance of complying with the support obligation.
- Lack of income, poor employment history, or uncooperative behaviour towards the recipient.
- The existence of assets in Ontario that could form the basis of a security order.
- A declaration by the payor that they will not comply with a support order.
Section 34(1)(i) gives courts the ability to order that “a spouse who has a policy of life insurance as defined under the Insurance Act designate the other spouse or a child as the beneficiary irrevocably”. Importantly, courts cannot make an order for life insurance coverage under this section unless the parties were “spouses”. This includes married spouses, but also unmarried persons who have either cohabited continuously for a period of not less than three years, or who are in a relationship of some permanence if they are the parents of a child.
Consequently, the court cannot order life insurance coverage pursuant to section 34(1)(i) of the FLA unless the parties were spouses. However, section 34(1)(k) enables courts to secure a payment under a support order “by a charge on property or otherwise”. In Katz v. Katz, the Ontario Court of Appeal confirmed that section 34(1)(k) was broad enough to require a support payor to obtain life insurance as a form of security. The court also added a caution that if an insurance policy was not already in place, courts need to be careful about introducing a requirement to maintain insurance. As the judge summarized it in Findlayter, “it is preferable to have evidence of the payor’s insurability and the cost of obtaining coverage so that the order is specific, enforceable, and realistic”.
It is Not Always Appropriate to Secure Support With Life Insurance
In this case, the father was residing in Jamaica, and this was a jurisdiction where Ontario did not have a reciprocal enforcement agreement for child support. Looking to the possible remedies, the judge first considered whether the court could order the father to designate a beneficiary under section 34(1)(i). However, Justice Daudlin determined that the parties were not “spouses” as used in section 29 of the FLA. The parties shared a child, but their relationship was neither continuous nor sufficiently permanent to meet the definition. They only cohabited briefly while the mother was pregnant, and there was “no evidence of a shared domestic or financial life beyond that period”. Accordingly, the court had no jurisdiction to order the father to designate a beneficiary under a life insurance policy under that section of the FLA.
There was also no evidence that the father currently maintained a life insurance policy. No evidence was presented that spoke to his ability to obtain coverage, the cost, or his ability to comply with an order requiring him to maintain a life insurance policy. The judge felt that, without that evidence available, and in light of the limitations in clauses 34(1)(i) and (k), it was not appropriate to make an order that required the father to obtain life insurance.
While it may not have been appropriate to order the father to insurance coverage with a designated beneficiary to secure support, Justice Daudlin recognized that the court still retained the option of securing the payment of child support through “a charge on property or otherwise” pursuant to 34(1)(k). It was relevant that the father owned three rental properties in Ontario, and only one was in the process of being encumbered or disposed of. Also, the judge accepted the mother’s concern that the father’s residence in Jamaica significantly impaired the enforcement of the owed support.
Court Considers Placing a Charge Against Payor’s Properties
The court first had to determine that support was necessary “for the provision of necessities” as set out by the FLA’s section 34(2). The judge recognized that the child was “entitled to be supported by both parents”. In this case, the child was bearing the financial burden of the father’s non-compliance with making support payments. Although the mother was doing her best to provide for the child’s needs, the lack of support from the father meant there were fewer resources available for the child. Easton v. McAvoy recognized that courts must not solely consider avoiding hardship, but that a child has the right to share in both parents’ financial means. Justice Daudlin declined to order the father to obtain life insurance but concluded that a form of security for support was necessary and appropriate. Additionally, the mother’s request fixing the amount at $100,00 was proportionate, considering the duration and quantum of the father’s support obligations. The judge decided to award that amount as a charge against all three of the father’s Ontario properties to “ensure enforceability and to safeguard [the child’s] right to consistent financial support”.
The registered charge against the properties secured the father’s support obligations. Still, his history of non-compliance with court orders, combined with his relocation to Jamaica, a non-reciprocating jurisdiction, led the judge to feel additional restrictions were necessary to protect the enforceability of the security. Accordingly, the father was also ordered not to refinance, encumber, transfer, or sell any of the properties without the mother’s consent or a court order. This restriction remained in effect until all his support obligations had been satisfied and the child ceased to be entitled to support. As the judge explained, this ensured that sufficient equity remained to meet the secured obligations without leaving the mother with the burden of responding to any of the father’s dealings with the properties. However, Justice Daudlin explained that the order did not restrict the father from all transactions with the properties, such as a refinancing or sale, as long as sufficient equity remained to secure the outstanding support obligation fully. In her view, these orders struck a balance between protecting the child’s support and allowing the father reasonable flexibility in managing his assets”.
Knowledgeable Windsor Child Support Lawyers Assisting With Support Obligations and Parenting Plans
When making a support order, courts can make enforcement-related orders to secure support payments. This can extend to registering a charge against the payor’s property to assist in enforcing the support obligation.
Don’t leave your child’s financial future to chance. If you’re concerned about securing child support payments, especially when facing complex enforcement challenges like those involving out-of-province payors or a history of non-compliance, registering a charge against property can be a powerful solution. The experienced family lawyers at Johnson Miller Family Lawyers in Windsor are here to explain your options and help you navigate the legal process to protect your children financially. Contact us today at 519.973.1500 or complete our online questionnaire to arrange a confidential consultation
