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Failure to Disclose True Income Results in $23,000 Retroactive True Child Support Award

Parents who pay child support have a duty to disclose their true income. Unfortunately, some parents use inadequate or delayed disclosure of income increases as a strategy to avoid paying child support.

 A recent landmark decision of the Supreme Court of Canada in Michel v. Graydon, 2020 SCC 24, affirmed that a BC parent who knowingly avoids or diminishes his or her child support obligation by failing to disclose income increases should not be allowed to profit from such conduct. BC family law permits a retroactive child support award to be made where a payor parent has failed to disclose increases in their income – even if the child has since become an adult.

 

What brought about the retroactive child support claim in Michel v. Graydon?

The payor parent, Mr. Graydon, understated his true income for a period of 11 years. He and Ms. Michel were in a common-law relationship when their daughter was born in 1991. After they separated in 1994, their daughter lived with Ms. Michel. Mr. Graydon agreed to pay child support of $341/month, based on his stated annual income of $39,832. The agreement was formalized in a consent order made in May 2001. Mr. Graydon had, in fact, earned $45,580 in 2001, and — with the exception of 2004 — his actual annual income continued to exceed his disclosed income until his child support obligation was terminated by court order effective April 30, 2012. In 2015, Ms. Michel applied under s. 152 of BC’s Family Law Act to retroactively vary child support for the period between April 2001 and April 2012, to reflect Mr. Graydon’s actual income during that period of time. At that point, their daughter was in her mid-20s and no longer dependent on Ms. Michel. Mr. Graydon argued that because the original child support order had expired and because their daughter was no longer a “child” when Ms. Michel brought her application, the court lacked authority to grant the order sought.

 

Can back child support be ordered where the support beneficiary is no longer a child?

The key question was whether BC courts have the authority to retroactively vary a child support order under the Family Law Act after the order has expired, and after the child support beneficiary ceases to be a “child” as defined in the Act. The hearing judge said yes and ordered Mr. Graydon to pay $23,000 in retroactive child support, half to Ms. Michel and half to the daughter. Importantly, the hearing judge found:

  1. Ms. Michel’s delay in bringing the application was reasonable;
  2. Mr. Graydon had engaged in blameworthy conduct by failing to accurately disclose his income;
  3. Their daughter suffered as a result as she could not attend her desired post secondary program. In fact, the evidence established that Mr. Graydon knew about his daughter’s financial circumstances over the 11 years in question and made disparaging remarks about her standard of living instead of modifying his child support payments to assist her; and,
  4. Mr. Graydon would not experience hardship from a retroactive award.

The Supreme Court of British Columbia allowed Mr. Graydon’s appeal and set aside the hearing judge’s order. The Court of Appeal dismissed Ms. Michel’s appeal. The Supreme Court of Canada ultimately reinstated the trial judge’s order affirming that s. 152 of BC’s Family Law Act authorizes a court to retroactively vary a child support order; even if the beneficiary is a “child” at the time of the application and the order has expired.

 

Why is the Michel v. Graydon decision so important?

Prior to this decision, the law on retroactive child support claims was confused, contradictory and divided. Some BC courts refused to hear applications to vary historical child support orders based on D.B.S. v. S.R.G., 2006 SCC 37, an earlier landmark decision on child support which precludes a court from granting an order on an original application for retroactive child support unless the child beneficiary is a “child of the marriage” as defined in the Divorce Act when the application is made. Michel v. Graydon clarified that no such bar exists when the claim is brought under s. 152 of BC Family Law Act. A debt exists if the child qualified as a beneficiary at the time the support was due regardless of their status at the moment of the application.

 

Payor parent should not be allowed to profit from misconduct

Mr. Graydon’s failure to disclose material changes in his income for 11 years constituted blameworthy conduct which justified an order for retroactive child support. Courts should not create a perverse incentive by granting payor parents immunity from variation applications after the child becomes an adult. When a payor parent fails to pay the appropriate amount of child support, the recipient parent is left to shoulder the burden. If the recipient parent does not have the means to provide their child reasonable support, the child suffers. Both the recipient parent and the child may experience hardship because of a payor parent’s neglect. Seen in this light, a retroactive child support is not exceptional relief. In other words, “retroactive” child support awards do not impose a new obligation but simply serve to enforce a past unfulfilled support obligations. Such a debt is a continuing obligation which does not evaporate or fade into history upon a child’s 18th or 19th birthday or their graduation from university. Interpreting BC family law in this way promotes the best interests of children, enhances access to justice, reinforces that child support is the right of the child and the responsibility of the parents, encourages the payment of child support, acknowledges that there are many reasons why a parent may delay making an application, and recognizes how the underpayment of child support leads to hardship and contributes to poverty.

 

Contact Valerie M. Little for advice on unmet BC child support obligations

If you would like to discuss the issue of child support obligations, contact Valerie, an experienced family lawyer. She has helped clients from Langley, Coquitlam to North and West Vancouver, B.C. She will give you up to the minute legal advice and provide you with a strategy to resolve your outstanding family law issues. She deals with all aspects of child support, including applications for retroactive child support. She can help you determine how best to approach your family law matter. Call us for help at 604-526-3333.

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