Retroactive Child Support Ruling - SCC

[Divorcemanagement]

As I expected, the SCC ruled against the four fathers in the big retroactive child support case - here is the link to the story:

http://tinyurl.com/ev95z

It was a unanimous ruling which basically says that payors of support have an obligation to report the increase in support at the time of the increase - not once a year as is currently done in most cases. So if you don't report it immediately then it's really "at your peril".

This decision means that there will be a lot more litigation on a more frequent basis for a variety of reasons:

a) Paying for other children
b) Reporting a drop in income - this means that the recipient of support would argue that the payor is purposefully under-employing himself/herself.
c) More undue hardship claims

What needs to be clear is that the fathers in the case before the SCC were not deadbeat parents - they were following their existing agreements and/or court orders. What's perhaps troubling about this decision is that no mechanism exists in the law that provides for the reporting of the income. My sense is that Parliament will have to open the books on child support law to either tighten it up or clarify the rules.

This decision isn't exactly a victory for recipients of support either. Because no mechanism exists that provides justification for asking for disclosure if you suspect that your ex has had an increase in their income, you have to be very careful about opening pandoras magic box if litigation if you choose to pursue action against your former spouse. As well, if you do get disclosure and your ex-spouse has had a decrease in his/her income, are you prepared to accept a lower monthly amount or are you going to impute his/her income. The cost of accessing the courts can be prohibitive so you really have to go with your gut on this one.

I predict that child support will be opened up for legislative change or "fixing" in the fall sitting of the House of Commons.

[Jeff]

You're quick - I was just about to post about this story :-)

[Jeff]

Here's the official text:

http://scc.lexum.umontreal.ca/en/200...2006scc37.html

[Divorcemanagement]

It's early and I am expecting a flood of calls on this one..

Here's the dilemma for governement - how do you create a mechanism in the various provincial maintenance enforcement programs to monitor income of child support payors - and how do you do it so that it doesn't become another billion dollar boondogle like the firearms registry!

[OB1]

The family law system fails again. Talk about the ex having total control, I feel like I ahve no control over my life anymore. My ex's will be laughing all the way to the bank. Maybe I'll move to Panama now

[Divorcemanagement]

There is going to be some degree of chaos in the courts until the government addresses the way in which income is to be reported. If it's through maintenance enforcement, good luck on getting the provinces to agree to the way in which monitoring will be done and who will foot the bill for the program. Most MEP offices are understaffed and underfunded already...

[Decent Dad]

Once again we see a symptom of a larger problem and once again the media fuels the fire of a stereotypical payor (i.e. dad). The larger problem, IMO, is the divorce laws, family law and CSG are ill-thought out messes.

One of the intangible human factors in all this is that men are completely afraid of the courts and the system.

Off the top of my head, lets look at some of the unevenness in income disclosure, court orders, CSG, etc.

So, it stands to reason that the payor must increase payment when income goes up (as per the SCC) and for that matter, common sense. Having not read the decision, did they also state that payments automatically go down when income decreases? What about losing your job? Having read several cases and personal experiences, having a decrease in income or losing your job usually equates to NO CHANGE in support. Judges love to impute income and so on.

Interesting too how legal fees for raising support are tax deductable. Lowering support is not.

Lets skip on over to the FRO. On there FAQ page they state:

What is the Family Responsibility Office?
The Family Responsibility Office (FRO) works under the authority of the Family Responsibility and Support Arrears Enforcement Act, 1996. Its role is to help support payments flow from payors (people who make support payments) to recipients (people who receive them).

What does the Family Responsibility Office do?
The Family Responsibility Office (FRO) receives every support order made by a court in Ontario and enforces the amounts owed under the order.
The FRO has the legal authority to collect court-ordered support payments and arrears of support and to take any of the following enforcement actions against those parents who do not meet their support responsibilities:

Okay... so everyone must go back to adjust their court order (since the system has no inherent mechanism to make adjustments). Once again, income up, support up, income down... not so black and white.

Or, lets say you reduce you support due to reduced income. Well, thats a no-no with the FRO. You are now in arrears! No where on the site could I find information regarding reduced income or any form to indicate reduced income.

Also, child support awards (the table amount) are increasingly getting bigger and bigger. Yikes... it is about $500 per child. And it just went up.

I think they need to look at the entire picture here... not just some guys following the court order.

[Divorcemanagement]

Decent Dad:

Everything you are mentioning points to why this decision though on the surface upholds a moral requirement for a payor to report income increases voluntarily, creates a framework for increased litigation on a case by case basis and a policy quagmire for the Government of Canada. The only way to ensure 100% compliance is to have everyone reporting their income to MEP, but there is no agreement with the provinces on how that would work and who would foot the bill. I wouldn't be surprised if the whole issue is re-examined.

[Decent Dad]

D.B.S. v. S.R.G. is certainly interesting. Full of double-standards...

Lines like this:

" Finally, she remarked that even if the award might not have helped the children, the potential it had to compensate the mother for her past sacrifices should have been considered."

Wow... does that not scream back-door alimony. So now CS is to compensate the mother. Interesting... Again, uneven implementation.

[OB1]

I'm a bit unclear on this ruling. Do I have to tell my ex how much of a raise I get everytime I get one? If so do I adjust the child support payment myself or do I still need to get it done through the courts. There is already a huge backlog, this will only tie the courts up even more.
Furthermore, As was mentioned in earlier posts what happens if my income reduces as a result of me being to stressed out to work, and I have to go on WSIB.

[Decent Dad]

DM,

I have stated so many times that Family Law and the Divorce Act are frameworks for litigation. Even the much glorified CSG is so full of holes it is mind-boggling.

You are correct that "on the surface" decisions like this look good. And personally I have no issue with payements going up with income increasing... as long as the same rules apply the other way. It comes to mind my thread on ND Shared Parenting. It is the overall perception that one parent (i.e. Dads) are not paying, that they are scum and the children are suffering.

Funny thing is that you report your income and orders already to CRA through form T1157 and T1158. Apparantly CRA can't connect the dots...

One has to wonder if all these retractive awards apply to anyone whose income has gone down... dot hey get a refund?

[Decent Dad]

OB1... it is hard to adjust payements yourself, especially if you go through the FRO (in Ontario). Like I said, technically you should give a copy of your notice of assessment each year... and make adjustments up AND DOWN. But things like shared parenting, 50-50, kids flipping back and forth... it just gets bloody complicated.... pay up and down... work stopages... yikes almighty.

This ruling opens a quagmire in the quagmire.

I guess the problem is, in a microcosm rulings make sense and everyone can agree... but you only need to take one step back and the entire thing starts to crumble...

[Decent Dad]

Interesting comments here:

http://www.theglobeandmail.com/servl...#comment317788

[OB1]

I found this article from the Globe.
The Globe and Mail, by GLORIA GALLOWAY,
February 3, 2004 - Page A8

TORONTO -- Courts cannot retroactively increase child-support payments solely because the parent making the payments failed to tell his or her ex-spouse of a salary increase in the years since the initial support order was made, the Ontario Court of Appeal ruled yesterday.

The three-judge panel of the appeal court said it must be shown that the children needed more money during the period in question or that other factors had come into play, such as a revelation that the non-custodial parent had failed to disclose the full extent of his or her financial situation before the original agreement was struck.

In addition, the court said, the custodial parent must explain his or her delay in asking for an adjustment.


"Parliament did not create a regime where child support varies annually with a payor's change in income," Judge John Laskin said in a unanimous decision that overruled an Ontario Superior Court ruling of a year ago.

"Retroactive support is tied to need [of the child] in part to ensure that a retroactive payment does not amount to a wealth transfer to the [other parent] disguised as child support."

This decision contrasts with an earlier Court of Appeal decision that implied there was a duty on the part of the non-custodial parent to disclose such changes in income.

It will affect similar child-support cases across Canada, said Harold Niman, the lawyer for Michael Walsh, a vice-president of institutional investments at a large insurance company who had been asked to make such payments retroactively.

Had the original judgment been allowed to stand, Mr. Niman said, all that "the custodial parent would have to do would be simply get the tax returns and come to court and say, 'I want to get child support dating back' to whatever year they separated forward."

The Walshes arrived at an initial support agreement in 1997 after a lengthy trial. They were granted joint custody, but Mrs. Walsh, who had given up a financial-services job in 1992 to take care of their two children, was to be the primary caregiver.

Mr. Walsh was ordered to pay child support of $2,021 a month, an amount that corresponded with accepted guidelines for his annual salary, which was then $175,000.


But Mr. Walsh changed jobs and, between 1998 and 2001, saw his annual income climb to $376,957, something Mrs. Walsh discovered in 2002 only after obtaining copies of his tax returns for the intervening years. She went back to court, and Mr. Walsh agreed to increase the payments to $3,071 a month for the two children.


Mrs. Walsh then asked that the increase be made retroactive to 1998. That case has yet to go to trial, but Madam Justice Lorna-Lee Snowie of Ontario Superior Court retroactively recalculated the payments and ordered Mr. Walsh to pay $42,917.88 in the interim.


There may be valid grounds for ordering such payments because, when support is not automatically adjusted "as the payor's income increases, the child effectively subsidizes the payor's improved standard of living," Judge Laskin said in his ruling yesterday. But such recalculations are not permitted under Canadian law, he said.


Instead, "Mrs. Walsh had to establish, and the motions judge had to find, that the children needed more support and that Mr. Walsh was able to pay more support during the relevant period."


Carole Curtis, the lawyer for Mrs. Walsh, said she was not as convinced as Mr. Niman that the decision would have wide application, pointing out that it struck down a temporary order as opposed to a permanent judgment.

[Decent Dad]

Wow...that is bloody unreal.

I wish once... just for once... when they report these "stories" that the reporters did some fact finding and laid it all out... but no... you just get quips like "So who suffers here? The recipient spouse, to some extent, as he or she scrambles to feed, clothe and shelter the kids. And the children are denied a better education.... ".

hmmm... okay......