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SUPREME COURT DENIES FATHER’S APPLICATION TO DECREASE OR FORGIVE $170,000 CHILD SUPPORT OWING

5 cards and the rest of the deck

“Getting to the age of 62 without paying a dollar voluntarily ... should not be rewarded.”

Parents have a financial obligation to their children that arises at birth and continues after separation. The amount of child support payable is based on the payor parent’s income, but income often fluctuates. If the payor parent’s income goes up, child support can be backdated. Conversely, if income drops, a retroactive reduction in child support may be warranted. The outcome, in either case, will depend on adequate, accurate, and timely financial disclosure—the “linchpin” of the child support system.

The Supreme Court of Canada recently made clear that a payor parent will not be granted any benefit or advantage from failing to disclose their real financial situation. The payor parent “holds the cards” when it comes to changes in their income level; the recipient parent is at a disadvantage. Above all, the ultimate goal is to ensure that children benefit from the support they are owed at the time when they need it. Any incentives for payor parents to be deficient in meeting their obligations should be eliminated.

 

Father’s application rejected due to his own blameworthy conduct

 

In Colucci v. Colucci, 2021 SCC 24 the father’s application to retroactively decrease or forgive his child support debt was denied by the Supreme Court of Canada. Deficient communication, lack of evidence, and inadequate financial disclosure were fatal to his case. He was ordered to pay the full $170,000 in child support arrears. Here are the key facts that led to the Supreme Court’s landmark ruling:

  • Mr. and Ms. Colucci were married in 1983 and divorced in 1996. A Divorce Order was made in 1996. The Order provided that Ms. Colucci would have sole custody of the parties’ two daughters, aged 8 and 6 at the time, and required Mr. Colucci to pay child support of $115 per week per child until they were no longer children of the marriage.

  • In April 1998, Mr. Colucci contacted Ms. Colucci through counsel to request a reduction in his child support obligations on the basis of a decrease in his income. He provided no financial disclosure to support his request and the parties reached no agreement at that time.

  • Mr. Colucci did not make any voluntary payments toward his child support obligations for over 16 years. During the period in which arrears accrued, the father was absent from the children’s lives and his whereabouts were unknown.

  • Mr. Colucci’s child support obligations ended in 2012 when the daughters were no longer children of the marriage. After that time, no further support payments accrued.

  • In 2016, Mr. Colucci applied under s. 17 of the Divorce Act to retroactively reduce child support and rescind arrears. At the time of his application, Mr. Colucci owed approximately $170,000 in child support arrears. Until he brought his application in 2016, Mr. Colucci took no further steps to vary the Divorce Order. After 1998, he simply cut off communication and took no steps.

Mr. Colucci provided little documentation or financial disclosure to support his claims, making it difficult to determine his actual income for the relevant years or his current and ongoing ability to pay. Nevertheless, the motion judge retroactively decreased support by imputing minimum wage earnings to Mr. Colucci to fill informational gaps, reducing arrears to $41,642. The Ontario Court of Appeal overturned that decision and ordered that the father pay the full amount of the arrears. The Supreme Court of Canada agreed, dismissing the father’s appeal and holding him accountable for the full amount of support owed.

 

Framework for applications to retroactively reduce child support

 

Colucci v. Colucci provided important clarification of the law in this area. Where the payor parent applies under s. 17 of the Divorce Act to retroactively decrease child support, the following analysis applies:

  1. The onus is on the payor parent to meet the threshold of establishing a past material change in circumstances. To meet the threshold, a decrease in income must be significant and have some degree of continuity, and it must be real and not one of choice.

  2. Once a material change in circumstances is established, a presumption arises in favour of retroactively decreasing child support to the date the payor parent gave the recipient parent effective notice up to three years before "formal notice" is given of an application to vary under s. 17 (known as the "presumptive three-year rule”). "Effective notice" requires clear communication of the change in circumstances and disclosure of documents to substantiate the change to allow the recipient parent to meaningfully assess the situation.

  3. Where no effective notice is given by the payor parent, child support should generally be varied back to the date of formal notice.

  4. The court has discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The Supreme Court affirmed that the D.B.S. factors apply, adapted to the decrease context, and must guide the exercise of discretion. Those factors are:

    1. whether the payor had an understandable reason for the delay in seeking a decrease;

    2. the payor’s conduct (the payor’s efforts to pay what they can and to communicate and disclose income information on an ongoing basis will often be a key consideration under the factor of payor conduct); https://www.family-law.ca/b/failure-to-disclose-true-income-results-in-$23000-retroactive-true-child-support-award

    3. the child’s circumstances; and

    4. hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased).

  5. If the court determines that child support should be retroactively decreased to a particular date, the decrease must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines. Full and complete disclosure is required to quantify the appropriate amount of support for the period of retroactivity, just as it would be when quantifying prospective support. The onus is on the payor to show the extent to which their income decreased during the period of retroactivity. If the payor fails to provide all relevant evidence required for the court to fully appreciate their true income during any part of the period of retroactivity, the court may draw an adverse inference against the payor.

Applying the framework to the instant case, Mr. Colucci’s failure to adduce adequate evidence of his income since 2000 was fatal to his application. Even if he adduced sufficient evidence of his income, the three-year rule applied. The application of the three-year rule would preclude any retroactive decrease, given that his children were no longer eligible for child support beginning in 2012 and he gave formal notice in 2016. Nor would the application of the D.B.S. factors support a longer period of retroactivity. Indeed, all D.B.S. factors, particularly that of payor conduct, supported a shorter period of retroactivity. It is not enough for the payor to give notice and then disappear.

Not only did he not prove a decrease in income, but he could also point to no actions which qualify as effective notice. The Court of Appeal properly rejected the submission that his child support obligations should be retroactively varied to April 1998, when he asked Ms. Colucci through counsel for a reduction in the amount of child support payable because of an alleged decrease in his income. Following Ms. Colucci’s refusal to vary support in 1998, Mr. Colucci “produced no proof of his changed financial circumstances, nor, after his initial request for a reduction in 1998, did he instigate any further negotiations, mediation or court proceedings.”

 

Need Legal Advice on Child Support from an Experienced BC Family Lawyer?

 

A payor parent is always under a free-standing obligation—independent of any court order—to pay child support commensurate with income. In an ideal world, parents will provide full and accurate income information every year and recalculate the proper amount of support owing.

When that does not occur, a court application may be necessary to vary an existing order retroactively to align with the payor’s actual income. These applications are complicated, despite the recent clarification of the legal framework in Colucci v. Colucci.

If you need advice from a BC family lawyer with respect to child support rights and obligations given your specific circumstances, contact Valerie M. Little Family Law Corporation. Ms. Little's practice is exclusively devoted to issues of family law in the Metro Vancouver area. No matter what family law questions or issues you might be facing, you will receive practical advice, legal guidance and strategic direction.

For more information about our family law office or to schedule a consultation with our BC child support lawyer, please call us today at 604-526-3333.

 

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