Neglecting Court Can Cost You Far More Than Court Costs
That was the message from the Ontario Court of Appeal in the case of Gray v. Rizzi, 2016 ONCA 152 (CanLII). You can read the entire decision here.
The parties separated in 2002. In 2003 the Mother brought an Application to court for child and spousal support. In 2005 the Father was given a deadline to provide financial disclosure or else he would be noted in default and the matter would be resolved by an Uncontested Hearing. The Father failed to provide the disclosure.
On 1 November 2005 the judge in the uncontested hearing imputed an income to the Father of $133 000.00 per year. The judge then ordered child and spousal support based on the imputed income. The final Order also assigned support arrears from the date of separation to the date of the uncontested hearing. The final Order included a provision that the Father can have the Order changed if he provides new and better evidence as to his true income.
In 2009 the Father brought two proceedings. One was a motion to set aside the final Order of November 2005. That motion and the appeal of that motion failed.
The Father also brought a motion to change the 2005 Order. He argued that his income between the date of separation and the date of the Final Order was actually around $65 000.00 per year and for legitimate reasons (lost an important contract, computer language he used became obsolete). The motion’s court judge believed that the Father had legitimate reasons for earning less and reduced the amount of child and spousal support owing.
The Honourable Justice David Brown of the court of Appeal held, however, that there should be no reduction of the imputed income because the Father’s actual income was known before the 1 November 2005 hearing. The Father’s refusal to provide financial disclosure should not be rewarded.
The court held, however, that it could consider the Father’s reduced income after 2005 to be a material change in circumstances. There should be a retroactive reduction in the support ordered (and therefore the amount of arrears owing).
When considering whether arrears should be waived, one must remember:
The overriding issue is the child’s best interests
Was the payor always unable to pay the arrears or only unable to pay for the arrears now? Arrears should not be rescinded if the payor failed to make past payments and is currently in a “bad patch”. The payor may be able to pay the arrears when his or her financial situation improves.
The following factors to guide a court in determining whether to grant retroactive relief, the date of retroactivity, and the quantum of relief:
- 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;
- 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. As put by Chappel J.:
[I]f a retroactive order reducing child support would result in the child support recipient having to repay money to the child support payor, this may militate against making the order, particularly if the payor has not given the recipient notice of the change in their circumstances, has not provided appropriate disclosure to support their claim for an adjustment to the child support, or has delayed initiating court proceedings to change the order.
If a retroactive reduction of child support is appropriate in light of these factors and any other relevant considerations, the court must determine the date from which the reduction should take place and the extent of the reduction. Following D.B.S., a retroactive order normally should commence as of the date of effective notice that a request is being made for a child support adjustment. It is generally inappropriate for a retroactive order to extend back more than three years before formal notice is given.
Where a payor seeks a retroactive reduction in child support or rescission of arrears, effective notice requires the payor to provide “reasonable proof to support the claim for a change to the [order], so that the recipient can independently assess the situation in a meaningful way and respond appropriately.”
What if a judge suspects that the court participant has an inflated estimate of the other party’s income? The Court of Appeal seems to have removed one discretionary tool of lower court judges in order to put pressure on parties to fully participate in court proceedings in a timely manner.