A man in British Columbia who provided “misleading information about his income” when he separated from his wife has been ordered to pay more than $500,000 in retroactive child support.
The parties were married in 1994 and separated in 2001. They had two children together.
The wife signed the Separation Agreement in August 2003, after obtaining independent legal advice. The child support provision in the Agreement provided that the parties agreed that the husband’s income was just over $90,000 and that he would pay the wife $1,128 in monthly child support, plus an additional almost $500 for transportation costs. The wife is a teacher’s aide making approximately $28,000 annually.
The Agreement did not provide for any future exchange of financial information or for variation of child support. There had been no financial disclosure between the parties either before, during, or after the signing of the Agreement. The wife claims that she was never advised by her counsel that the Agreement should have included a term requiring the husband to disclose his income annually. It had been her misunderstanding that the amount of child support was settled and could not be changed.
The wife continued to receive the same amount of child support until February 2015, at which point the older of the two children turned 19 and the husband arbitrarily reduced the amount of child support to $800. The wife made numerous requests to return to the original amount of support, but the husband did not respond.
The wife claims that she retained new counsel in 2015 and learned, for the first time, that the husband had an obligation to disclose his financial circumstances annually, and to adjust the child support accordingly. She claims that she sent the husband emails and text messages explaining this, but received no response.
The wife sought a variation of child support in 2016. She learned that the husband had sold a business for $4 million in 2010, which netted him $1.25 million that year, followed by payments of $250,000 annually between 2011 and 2020. That same year, his reported income on his tax return was more than $770,000.
Retroactive Child Support
Under the Federal Child Support Guidelines, the payor parent has an ongoing obligation to provide financial disclosure. Any increase in income that would affect the amount payable by the payor parent is considered a material change in circumstances and must be reported.
The leading case on retroactive child support is the Supreme Court’s decision in D.B.S. v. S.R.G. In that case, the Supreme Court emphasized the crucial obligation that children are owed by their parents, the legal responsibility of parents to support their children in a way that is commensurate to their income, and the right of children to increased child support payments where parental income increases. The Supreme Court further noted that a parent will not have fulfilled their obligation to their children where they did not increase child support when their income increased significantly.
The test for determining whether awarding retroactive child support is appropriate takes into consideration:
- whether there was a reasonable excuse for the recipient parent failing to make an earlier request for support;
- the conduct of the payor parent;
- the circumstances of the children; and
- any hardship stemming from a retroactive award.
In this case, Justice Young found that there was a reasonable excuse for the wife failing to make an earlier request for additional support as she was under the mistaken impression that the amount of child support was fixed and could not be varied. She had not been aware of the husband’s obligation to provide ongoing disclosure.
Furthermore, Justice Young found that the husband was:
…guilty of blameworthy conduct in the extreme. He provided misleading information about what his income was at the time the Separation Agreement was entered into in 2003 and he never corrected that misinformation. His income has always been dramatically higher than that which he disclosed in the Separation Agreement.
In addition, the children in this case had gone without support from the husband for many years, and the wife struggled to support them, even going into debt to do so. The family had to move in 2015 after the husband’s unilateral decrease in the support that was already too low.
Lastly, Justice Young found that the husband had been very successful financially and would not suffer financial hardship if he were ordered to pay retroactive child support dating back to 2002.
Justice Young found that the husband owed child support arrears from 2002 to 2017 totalling $522,408.24, and ordered him to pay that amount immediately. He further ordered ongoing payments of $1,041 per month for as long as the children continued to be in post-secondary education.
If you have questions about child support in Ontario, including retroactive child support, contact the offices of Jason P. Howie at 519.973.1500 or online. Many of our clients are referred to us by former and current clients, and also by lawyers, counsellors, and other professionals.