Claims for Retroactive Child Support and Spousal Support

Speaking of the recently concluded National Family Law Program (see the post below), I was fortunate enough to be asked to present a paper at the conference reviewing the case law on retroactive child support and spousal support. Since my paper is too dull to hold any reasonable person's attention for more than twenty seconds, I'll just give you the Coles Notes version.

The two really important cases on this subject are D.B.S. v. S.R.G., a 2006 decision of the Supreme Court of Canada on retroactive child support, and Kerr v. Baranow, a 2011 decision of the court which addresses retroactive spousal support. A "retroactive" order is an order that has a start date before the date the order is made, like an order made in July for child support payments beginning in March.

The key points of the court's analysis in D.B.S. are these:

• An obligation to pay child support exists independent of any order or agreement on child support.
• The amount of child support is determined by the Child Support Guidelines. The Guidelines base the amount of support owing on the income of the payor. 
• The payor's child support obligation is the amount payable based on the payor's income and the Guidelines, but changes as the payor's income fluctuates.
• An order or agreement may correctly state the amount of child support payable when the order or agreement is made, but if the payor's income changes the order or agreement stop being correct.
• When an order or agreement is no longer correct, a court can make an order requiring the payor to make up the difference between the amount of child support that was paid and the amount that should have been paid.

D.B.S. then says that four factors should be taken into account when a court is asked to make a retroactive order:

1. the reasons for the recipient's delay in asking for an order updating the amount of child support;
2. any misconduct on the part of the payor, such as hiding income, lying about income or pressuring the recipient not to ask for more support;
3. any hardship suffered by the children as a result of the payor's short support payments; and,
4. any hardship that the payor might suffer if forced to pay a retroactive child support order.

Courts should consider these factors and the facts of each case in a "holistic" manner.

When a court is prepared to make a retroactive child support order, the start date of the order should be the date the recipient let the payor know that child support needed to be updated, to a maximum of three years from the date of the recipient's application to court. However, if the payor has engaged in misconduct of some sort, then the start date can be as long ago as the date when the payor's income changed.

In Kerr, the court held that these same considerations also apply to claims for retroactive spousal support, with two modifications. First, the reasons for the recipient's delay are more important in claims for spousal support than in claims for child support. Second, the sort of misconduct that is relevant is misconduct relating to the support application itself.

After reviewing how Canada's courts of appeal have treated D.B.S. and Kerr, it seemed to me that orders and agreements for child support no longer offer blanket security against claims made in respect of the period covered by the order or agreement. Payors of spousal support are somewhat better off, subject to the propriety of their behaviour and the adequacy of their disclosure, but the period elapsing between separation and the first payment of support seems to be fair game. It also occurred to me that the issue of misconduct has become the dominant factor in deciding claims for retroactive support orders, despite the court's caution that it is only one of the four factors to take into account and that none of the factors are predominant.

At the end of the day, I concluded that the only reasonable court of action for people paying support, child support in particular, is to make voluntary disclosure of any changes in income and to update the amount of child support being paid whether the recipient asks for the change or not.

Court of Appeal Releases Decision on the Cancellation of Arrears of Child Support and Special Expenses

The Court of Appeal has just released its decision in Semancik v. Saunders, a helpful case which reviews and summarizes the law on many common issues relating to applications to cancel arrears of child support and the payment of children's special expenses. Here are the highlights of the court's review of the law:

• Under s. 96 of the Family Relations Act, the court may only reduce arrears of child support if it would be "grossly unfair" not to do so.
• A 1999 decision of the Supreme Court called Earle v. Earle held that this requires an applicant to prove (1) a significant and long lasting change in circumstances, and (2) that it would be grossly unfair not to cancel the arrears. Arrears will usually only be cancelled if the applicant proves that he or she is unable to pay “now and in the future.”
• The principles given by the Supreme Court of Canada in D.B.S. v. S.R.G. on orders involving retroactive child support under the Divorce Act also apply to retroactive child support orders under the provincial Family Relations Act.
• The D.B.S. principles also apply to orders involving retroactive payment for children's special expenses.
  
• There is, however, an important distinction between orders for child support and orders for special expenses. "In the case of child support, the payor parent’s income is determinative. That parent knows what his or her income is and can determine the amount of the child support obligation from the [Child Support] Guidelines. In the case of [special] expenses, it is the recipient parent who knows the details of the expenses. If that parent does not communicate that information to the payor parent, the payor parent cannot fulfill his or her legal obligation to contribute."
  
• Adult children should be required to make a reasonable contribution to the costs of their post-secondary education when those costs are claimed as a special expense. A "reasonable contribution" does not mean that an adult child should be expected to cover the cost entirely or to contribute all of his or her income to these costs.

Supreme Court Releases Decision on Retroactive Spousal Support

The Supreme Court of British Columbia has just released an important decision on retroactive spousal support, among other issues, in the case of Crowe v. Crowe. The law in this area has been changing in the last few years, roughly tracking the changes in the law on retroactive child support with a three or four year delay, and this case offers an excellent summary of the current state of things.

In this case, the court examined the recent case law, including two important recent cases of the Supreme Court of Canada, D.B.S. v. S.R.G. and Kerr v. Baranow, in the context of a review of spousal support and reached the following conclusions:

• Whether to order retroactive spousal support is a discretionary decision resting on the particular circumstances of the particular parties before the court.
  
• The factors to be considered on an application for retroactive spousal support are similar to the factors considered on an application for retroactive child support.
• These factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse.
• However, because spousal support has a different legal basis than child support and there is no presumptive entitlement to spousal support, concerns about notice, delay and misconduct will carry more weight.
• The Spousal Support Advisory Guidelines may be used to determine spousal support on a review application.
  

2008 In Review, Part 3: Case Law Roundup

This is an overview of some of the more interesting cases decided in 2008. The summaries below aren't a proper digest of each case, they just focus on the one or two issues which made the case interesting.

H(SM) v. P(R), 2008 BCSC

This case is a nice update on the law of retroactive child support. The wife sought a retroactive order going back to 2002 based on undisclosed increases in the husband's income. The court said that the simple payment of child support, which the husband had been doing all along, creates a presumption that the payor had discharged his duty. Given the wife's delay in bringing her application and the absence of any evidence that the child had suffered, the court only made an order with retroactive effect commencing mid-2007, the date when the parties exchanged financial statements.

Gonabady-Namadon v. Mohammadzadeh, 2008 BCSC

In this case, the husband, who lived most of the time in Iran, had been sending about $12,000 a month back to Canada to support his wife and children here. Following separation, the husband stopped supporting his family, pleading poverty. The court found that the husband hadn't made sufficient disclosure and imputed income to him of $250,000 a year for the purposes of support. The moral? If you're trying to duck a support obligation, you must make full and complete financial disclosure.

Loesch v. Walji, 2008 BCCA

In this case, the husband was found at an interim application to have an income of $1,600,000 per year, which figure was used to calculate a spousal support obligation of $50,000 per month, even though the Spousal Support Advisory Guidelines suggested that only the first $350,000 of the husband's income should be used to calculate his support obligation. The decision was upheld on appeal, partly on the basis that appellate courts should be very, very reluctant to interfere with interim orders.

Sihota v. Sihota, 2008 BCSC

The court in this case confirmed the dire consequences to one parent when the other parent has sole custody and sole guardianship. The mother had previously obtained an order for sole custody and sole guardianship and decided to send the child to school overseas. The husband objected and the court held that as the mother was the only person with custody and guardianship she alone had the right to make decisions about the child's living arrangements.

Majhenic v. Majhenic, 2008 BCSC

This is case is important for its discussion of the idea of "foreseeability" in variation applications. Where an order has been made about support or the care and control of children, it is usually open to someone to try and change the order where there has been a unforseeable change in circumstances. In this case, the husband had agreed at age 62 to an order requiring him to pay spousal support of $1,000 per month. On the husband's retirement at age 66 he applied to cancel his support obligation. The court required his support payments should end in three years on the basis that the husband's retirement was plainly foreseeable and it was unreasonable for the wife to assume his support payments would be permanent.

Trif v. Trif, 2008 BCSC

This case is remarkable for its unsual parenting arrangements. After separation, the wife sought to move from the Lower Mainland to Vancouver Island to pursue a new relationship and she applied for sole custody of the child. The father opposed the application and said that either the child should live with him or they should share the child's time on a rotating weekly basis. The court, after seriously criticizing a custody and access report, said that the child's time would be shared on a rotating yearly basis.

Stein v. Stein, 2008 SCC

This case is a bit complicated, but essentially the Supreme Court of Canada decided that a judge at trial can allocate responsibility for debts relating to the marriage that may or may not come into existence in the future and be for an unknown amount. The debt in question related to a tax shelter the parties had invested in during the marriage which was subject to unknown future tax consequences.

Francis v. Logan, 2008 BCSC

This is another variation-of-spousal-support-on-retirement case. Unlike Majhenic, however, the husband applied to reduce or end his spousal support obligation on retirement at age 63. The court refused the application as the husband's early retirement was entirely discretionary and not due to some illness or economic cause, and was done in the face of his spousal support obligation. The court allowed the husband to reapply when he turned 65.

Label v. Albanese, 2008 BCSC

The interesting part about this case concerns an application for retroactive child support made after the child had ceased to be a dependent minor child. The court dismissed the claim, saying that a child had to be a "child" as defined by the Family Relations Act at the time an application for child support is made, including an application for retroactive child support.