A History of the Parties
The parties divorced in 2008, after approximately 21 years of marriage. They had two children (adults at the time of the hearing in this dispute).
The Director of the Family Responsibility Office (FRO) was seeking enforcement of arrears stemming from six court orders including outstanding child support payments dating back to when the children were still minors, accrued and outstanding spousal support, and costs of more than $30,000. The total amount of arrears the FRO was seeking to enforce was $307,372.74 (consisting of arrears of support of $271,224.18, unpaid court costs of $33,732.72, interest of $15.84 and administrative fees of $2,400.
The ex-husband claimed that he did not have the ability to comply with any of the orders to pay, nor did he have the ability to pay the outstanding arrears.
A default hearing was scheduled after many months of back and forth between the parties and delays or non-appearances on the part of the ex-husband.
A default hearing occurs in family court in front of a judge. The purpose is for a payor spouse to explain why they are behind on their payments. The amount of arrears owing and the ability to pay are central issues to be decided at the hearing.
Default hearings are governed by s. 41 of the Family Responsibility and Support Arrears Enforcement Act (FRSAEA) and subrule 30 of the Family Law Rules (FLR). The Director of the FRO can initiate the default proceeding.
Where this occurs, the Director will prepare a statement of arrears and the payor will file a financial statement. The court may elect to hear oral testimony, direct the production of other relevant documentation, and add parties to the default proceedings.
Section 41(9) of the FRSAEA puts the onus (i.e. responsibility) on the payor to establish that he or she cannot pay the amounts owing:
(9) At the default hearing, unless the contrary is shown, the payor shall be presumed to have the ability to pay the arrears and to make subsequent payments under the order, and the statement of arrears prepared and served by the Director shall be presumed to be correct as to arrears accruing while the order is filed in the Director’s office.
Establishing Inability to Pay
The onus on a payor at a default hearing is as follows:
- The payor must show an inability to pay due to valid reasons. “A valid reason is an event over which the payor has no control which renders the payor totally without assets or income with which to meet his or her obligations, such as disability, illness or involuntary unemployment.
- The payor must prove that he or she has accepted responsibility to pay child support and has placed the child’s interests over his or her own; and
- The payor must provide “frank disclosure” to the court.
A “valid reason” was defined by the court in an earlier decision, as follows:
Valid reasons, within the meaning of s. 41(10) of the Act, imply reasons for which the payor cannot be faulted or for which the payor does not bear responsibility in the culpable sense. The court would expect some evidence of circumstances where, despite reasonable, diligent and legitimate efforts by the support payor to comply with the support order, the support payor has been unable to do so for reasons that are not connected with an unwillingness to pay, a lack of effort, a failure to prioritize the support obligation or a deliberate neglect, failure or avoidance on the part of the payor. Evidence relating to the past and present circumstances of the payor, including his financial circumstances since the time of the first default under the order, the manner in which he has applied his available income and assets, and his efforts to secure employment or income during the time that the arrears have arisen will have some bearing upon the determination of the legitimacy of the reasons the payor puts forward for his default under the support order. Circumstances that are beyond the control of the payor, resulting in the payor’s inability to pay, would be valid reasons. An illness on the part of the payor, including a mental disorder, rendering the payor completely unable to work on either a full or part-time basis, as in the case before the court, would amount to a valid reason for the payor’s failure to pay.
Implications of Non-Payment
Where the court finds that the payor has failed to pay support without a valid reason, a broad range of remedies are available, including:
- pay all or part of the arrears by such periodic or lump sum payments as the court considers just, but an order for partial payment does not rescind any unpaid arrears;
- discharge the arrears in full by a specified date;
- comply with the order to the extent of the payor’s ability to pay;
- make a motion to change the support order;
- provide security in such form as the court directs for the arrears and subsequent payment;
- report periodically to the court, the Director or a person specified in the order;
- provide to the court, the Director or a person specified in the order particulars of any future change of address or employment as soon as they occur;
- be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the arrears are paid, whichever is sooner; and
- on default in any payment ordered under this subsection, be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the payment is made, whichever is sooner.
Any of these remedies can be ordered by the court unless the payor can satisfy the court that he or she is unable to pay for valid reasons. Arrears continue to accrue even after any of the above remedies are ordered. Imprisonment does not discharge arrears.
Imprisonment for Non-Payment of Arrears
In another earlier decision, the Court of Appeal considered the imposition of a term of imprison for non-payment of arrears, and observed as follows:
- Clause 41 (10) (i) of FRSAEA contemplates an order of imprisonment for failure to pay an amount owing at the time the order is made or a failure to make future payments required under the order.
- Enforcement legislation should be viewed as remedial rather than punitive.
- Imprisonment is a last resort. Something more than non-payment is required. The payor’s conduct must demonstrate a willful and deliberate disregard for the obligation to comply with court orders. It is meant as a mechanism to enforce support and not as a means of punishing the payor.
The Court of Appeal went on to note:
Further, the case law and the Act recognize that imprisonment for non-payment is meant as a means of enforcing the support order and not as a means of punishing the payor. The payor must be released upon payment of the amount owed: see s. 41(10) (i). A committal order, imposed as a term of either a temporary or final order in a default hearing, is intended to induce compliance with the payment terms of the order. The prospect of imprisonment hopefully focuses the payor’s mind on the importance of making the required payments. The enforcement rationale for imprisonment upon non-payment makes sense only if the payor has the ability to make the payments required by the order…
In general, the maximum jail term should be reserved for only the most severe cases.
Did the Ex-Husband Meet the Onus to Prove an Inability to Pay?
The ex-husband argued that he has no income and no ability to pay the outstanding amounts. He also argued that his ability to obtain employment has been restricted after the FRO confiscated his driver’s license and passport. He submitted financial statements in support of his position. His only major listed asset was a cottage valued at $30,000.
During his testimony he made what the court called an “emotional outburst” shouting that there was no justice, that he had emerged from the divorce with “nothing” and wondered how he could give “the last thing he owned (a cottage) to the FRO to give to his ex-wife who had received over a million dollars.
The court noted that the ex-husband:
- Had not provided the court with full and frank disclosure;
- Had not fully complied with the disclosure orders made throughout the proceedigngs;
- Had a “pattern of non-disclosure and being evasive”
- Willfully and deliberately impede the sale of the cottage property (which was determined to be an asset that could be sold to satisfy some of the arrears)
The court found that the ex-husband was capable of earning income and therefore had the ability to pay ongoing support. Moreover, he had at least one known asset, and may have more (which cannot be accurately determined based on his failure to provide the required disclosure).
The court concluded that the ex-husband had failed to rebut the presumption of his ability to pay the ongoing spousal support order, failed to prove that he had a valid reason for his default, and failed to provide required disclosure.
What Was the Appropriate Remedy?
In analyzing what the appropriate remedy might be in this case, the court noted, among other things that the ex-husband:
- Had not acted in good faith;
- Has a history of diverting funds, not fully disclosing his assets, and failing to provide full and complete financial disclosure;
- Has a history of prolonging court proceeding to avoid payment of support.
The court also noted that it was clear that other methods of available enforcement had already failed: the ex-husband’s driver’s license had been suspended and his passport had been revoked. The court additionally observed that the ex-husband was a sophisticated payor who is aware of the fact that he faces imprisonment if he continues to be non-compliant.
The court concluded:
Given the Respondent’s payment history and the amount of arrears owing, this is a case where a significant committal term for non-payment is appropriate. Counsel for FRO seeks payment of the ongoing support and arrears totalling $3,000 per month with a committal term of 5 days for default of each periodic payment, a lump sum of $90,000 to be paid by September 3, 2018 and in default 60 days and the balance owing by June 1, 2019 and in default 100 days. I find these orders are appropriate.
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