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Child support and spousal support obligations are serious, and failing to pay them could leave a parent in arrears, and a large debt to repay. Only in certain situations will courts retroactively discharge or rescind support arrears. A recent case from the Ontario Superior Court of Justice serves as a good summary of which types of situations may qualify for such relief.
The settlement agreement
The mother and father entered into a Settlement Agreement (the “Agreement”) on November 22, 2010. An outcome of the Agreement was that the father was ordered to pay $450 per month in spousal support and $1,457 in child support each month. These figures were arrived at due to the father’s annual income of $104,424.93 and the mother’s annual income of $40,457.
The Agreement also stipulated that the parties would review their children’s special and extraordinary expenses on an annual basis and that these expenses would be shared in proportion to their incomes.
Finally, the father was required to take out a life insurance policy in the amount of $250,000 in order to cover any outstanding support obligations in the event of his death.
By the time the issue came to trial, the husband had fallen behind in both spousal and child support, owing $47,264 and $24,911 respectively.
The positions of the parents
The mother testified that she should receive the arrears from the father. She also stated that the life insurance policy had not been taken out. Furthermore, one of their children was completing university, and the total costs of the education were $40,000. She sought to have the father’s portion of those expenses added to the amount owing.
Meanwhile, the father asked the court to set aside the arrears, and asked that his ongoing support obligations be set aside due to his financial situation.
The father lost his job in 2015 and was not able to find similar work. His annual income in 2017 was $46,195, having dropped off considerably since earlier in the decade. In addition to this, he also taken on a new family.
The court’s analysis
The court began its analysis by explaining that it does have the power to retroactively discharge or rescind arrears. Section 37(2.1) of the province’s Family Law Act states,
(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,
(a) discharge, vary or suspend a term of the order, prospectively or retroactively;
(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and
(c) make any other order for the support of a child that the court could make on an application under section 33.
The court explained that a change in income that would result in a change in support obligations according to the Child Support Guidelines qualifies as a situation where ongoing support could be adjusted. However, the court added, “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.”
There is no fixed formula for the courts to follow when determining whether to grant retroactive relief. However, there are established that can be considered. They are:
- The nature of the obligation to support, whether contractual, statutory or judicial;
- The ongoing needs of the support recipient and the child;
- Whether there is a reasonable excuse for the payor’s delay in applying for relief;
- The ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears;
- 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”;
- 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
- 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.
In applying these factors to the case at hand, the court ruled it would not vary the child support arrears, but decided to make them inclusive of the university costs the father owed. The court also deducted spousal support arrears for the time the father was earning less than the mother.
If you have experienced a change in circumstances, or have found that an existing child or spousal support agreement is no longer working in your best interests, the team at Gelman & Associates can review your situation and determine what types of changes should be sought. Our offices can be reached Monday to Friday from 8 AM to 8 PM. To schedule a brief consultation, call us at (844) 769-0737 or 1-844-769-0737, or contact us online.