• by Jessica Melchiorre
Originally published in the OFLM 2024-11 edition
Overview
Child support is an area of the Ontario family legal system in which the court has considerable powers and discretion at its disposal to make orders and then subsequently vary them. In recent years the court has sought to further clarify these powers and their boundaries.
The significant decision in the Supreme Court case of Colucci v. Colucci, 2021 SCC 24 has done this by building on principles established in D.B.S. v. S.RG., 2006 SCC 37 and Michel v. Graydon, 2020 SCC 25. Colucci distinguishes three main areas of retroactive variation: a retroactive decrease of support, a retroactive increase of support, and a rescission of arrears (at para. 30). This article will explore the legislative foundation for decreasing child support, the Colucci principles, as well as its impact on recent case law.
Background of Colucci v. Colucci
In Colucci, the parties were married for 13 years before divorcing in 1996. They had two daughters who were 8 and 6 years old at the time. The consent order (pre-Guidelines) gave sole custody to Ms. Colucci and required Mr. Colucci to pay the indexed amount of $997 per month. Mr. Colucci did not provide any evidence of his income at the time.
In 1998, Mr. Colucci contacted Ms. Colucci through counsel and asked for a reduction in child support. He did not provide any financial disclosure, nor did he pursue further legal action. He then left the country. In 2016, Mr. Colucci returned to Canada (after his daughters had ceased to be children of the marriage) and applied to retroactively reduce his child support and rescind the arrears. The motion judge found a material change of circumstance based on the Federal Child Support Guidelines coming into effect in 1997. Mr. Colucci was imputed a minimum wage income for some of those years. Again, Mr. Colucci did not provide the court with the relevant documentation or financial disclosure to verify his position. The court ordered to reduce the arrears to $41,642.
On appeal, the Ontario Court of Appeal reversed the decision and ordered full arrears of more than $170,000 to be paid.
The Supreme Court of Canada ultimately upheld the child support arrears ordered by the Court of Appeal, covering 14 years, and finally held Mr. Colucci accountable for his debt.
The Supreme Court noted the following in its decision:
…courts must bear in mind that child support arrears are a debt. Under general principles of debtor-creditor law, the debtor is required to seek out and pay the creditor, and debts are not forgiven by the mere passage of time in the absence of a statutory limitation period… (at para. 100)
Family Law Act
In Colucci, the court cited section 17 of the Federal Divorce Act in its proceedings.
Similarly, section 37 of the Family Law Act provides the following:
Powers of the court: child support
2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines, or that evidence unavailable at the previous hearing has since become available, the court may,
(a) discharge, vary or suspend a term of the order, either prospectively or retroactively;
(b) relieve the respondent from the payment of part or all of the arrears, or any interest due on them; and
(c) make any other order for support of a child that the court could make on an application under section 33. 1997, c. 20, s.6
The following framework for varying a retroactive decrease in child support was set out by the court in Colucci at paragraph 113, cited in full:
(1) The payor must meet the threshold of establishing a past material change in circumstances. The onus is on the payor to show a material decrease in income that has some degree of continuity, and that is 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 gave the recipient effective notice, up to three years before formal notice of the application to vary. In the decrease context, effective notice requires clear communication of the change in circumstances accompanied by the disclosure of any available documentation necessary to substantiate the change and 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, or a later date where the payor has delayed making complete disclosure in the course of the proceedings.
(4) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors (adapted to the decrease context) guide this exercise of discretion. Those factors are: (i) whether the payor had an understandable reason for the delay in seeking a decrease; (ii) the payor's conduct; (iii) the child's circumstances; and (iv) hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased). 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.
(5) Finally, once the court has determined that 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. (emphasis added)
In his article Retroactive Support After Colucci (40, CFLQ 61, 2021), Mr. Rollie Thompson provides a helpful approach to the Colucci framework by breaking it down into the following steps:
Step 1: Material change
Material change is contemplated at section 14 of the Child Support Guidelines. Section 14(a) states that when the amount of child support has been determined in accordance with the Tables, a material change occurs in any circumstance that would result in a different child support order. In this context the threshold for the payor to establish a material change is very low.
Conversely, section 14(b) of the Child Support Guidelines applies to cases where the Tables have not been used to calculate a child support obligation. In such instances, the court thus has discretion to evaluate a material change in accordance with its traditional test.
Step 2: Effective notice
The Supreme court provides guidance on what constitutes “effective notice”. The court makes it clear that an email from the payor requesting a reduction in support is insufficient to successfully meet the threshold for “effective notice”. Instead, “effective notice” is only established when the payor provides specific details of the alleged change, along with corresponding evidence “to support the legitimacy of the change.”
Furthermore, the court notes at paragraph 87 that “the timing and the extent of disclosure will be critical in ascertaining whether and when effective notice has been given.”
Payors must also act diligently by initiating a proceeding if the recipient does not agree to reduce the support obligation (Jonas v. Akwiwu 2021 ONCA 641).
Step 3: Formal Notice
Where the payor has not provided “effective notice”, the presumptive date for retroactivity will be the date of formal notice. In many instances, this will be the date an application is brought to vary the order, which may occur much later than the date of the material change.
Step 4 – D.B.S. factors
The court adapts the D.B.S. factors to the retroactive decrease context in circumstances where adhering to the presumptive retroactive date would result in an unfair outcome.
- Understandable reason for delay:
- One example is if the payor is suffering from health problems or other difficulties that prevent the payor from confronting the situation (Colucci, at para. 98).
- Other examples are where the recipient threatens to withhold the child or uses other tactics to dissuade the payor from initiating court proceedings to address the material change (Colucci, at para. 99).
- Payor’s conduct:
- The payor’s efforts to disclose information and maintain communication with the recipient regarding the material change will be important in assessing the application for retroactive decrease in support (Colucci, at para. 102).
- Circumstances of the child:
- If the child has experienced hardship or remains in need, the court is likely to favour a shorter period of retroactivity (Colucci, at para. 104).
- Hardship
- The payor must “establish real facts supporting a finding of hardship” (Colucci, at para. 107).
- A full accounting of the payor’s financial situation, including income, assets, and debts, is required.
Step 5 - Qualification
The Guidelines provide the basis for calculating the quantum of support. The court retains discretion in cases involving undue hardship or where it is necessary impute income. This qualification largely depends on the disclosure provided by the payor.
Recent Case Law
Since Colucci, the trend in applications to retroactively decrease child support has largely been consistent, with payors frequently failing to meet the high threshold of providing effective notice. In short, it is a demanding test that very few payors can pass.(40,CFLO 61, 2021, at page 8).
On the heels of Colucci, Thompson notes the Ontario Court of Appeal upheld the dismissal of a reduction claim in Dreesen v. Dreesen (2021 ONCA 557). The onus was on the payor, who failed to provide effective notice by omitting his corporate tax returns from his disclosure (40,CFLQ 61, 2021, at page 8).
Smith v. Smith
In Smith v. Smith, 2024 ONSC 5735, Justice Price found that a material change had occurred when the payor accepted a promotion that increased his hourly wage but reduced opportunities for overtime. The court noted that this did not constitute intentional underemployment, as the position was a promotion with prospects for further advancement in the company. While the payor’s salary was higher, his income without overtime was lower overall.
Accordingly, the presumption would seem to be in favour of retroactively decreasing support to Mr. Smith’s requested date of January 2017. However, the payor failed to provide effective notice with significant disclosure under Colucci. The court stated that“Mr. Smith provided no evidence of having given Ms. Smith any notice of the change in his income as of 2017, or of an intention to seek a change in child support“. Further, Mr. Smith acknowledged he had not provided Ms. Smith with financial disclosure in 2017, or “until he commended proceedings, in 2018” (at para. 130). As a result, although the material change occurred in January 2017, the presumptive retroactive date was set as January 1, 2019, which was the first day of the month after the Motion to Change was issued.
Soo-Chan v. Rodriguez
In Soo-Chan v. Rodriguez (2024 ONSC 3390), the Respondent was seeking to recalculate his support and decrease it based on two Family Responsibility Office (“FRO”) orders dating back to 2007. The first order made in April of 2007 required the Respondent to pay $117 a month based on an imputed income of $14,700. The second order made in November of that year set child support at $239 a month based on an income of $27,456. The Respondent asserted that FRO had been double dipping by garnishing his wages according to both orders.
However, the court in Soo-Chan asserted that “it is not open to a litigant to fail to produce financial information, run the risk that a trial judge will impute an income, and then come back to a new court and suggest the imputed income was wrong” (at para. 70). The Respondent had repeatedly disregarded his obligation to provide financial disclosure for over 14 years, even though the 2007 orders required him to do so (at para. 72). . Justice Ramsay therefore stated that “non-disclosure of financial information which exists even to date, this is not a case where the court ought to exercise its discretion in his favour, as to do so would be to condone his repeated breach of the orders for annual financial disclosure” (at para. 77).
Tsafaroff v. Plejic
Conversely, in Tsafaroff v. Plejic (2024 ONSC 5198), Justice Kraft found that the Respondent father was entitled to a reduction in arrears for the year 2022 following the loss of his employment. The court utilized the D.B.S. factors cited in Colucci in its analysis. Justice Kraft noted that the father did not delay in seeking a reduction. She stated, “in fact, he asked for leave to bring a motion to change in January 2022, just two months after his employment was terminated” (at para. 71).
Additionally relevant was the support recipient’s conduct, as the Applicant mother did not cooperate with the agreement to obtain a voice of the child report. The report was needed to ascertain the child’s living arrangements and if a set off was appropriate (at para. 71).
The mother’s delay meant the court was unable to decide on the issue until the report’s completion. Next, Justice Kraft examined the payor’s conduct and stated, “he did not shrink from his child support obligation” and the FRO statement of accounts illustrated this by showing the father was paying what he could (at para. 71).
The child’s circumstances were contemplated where the father was found to be contributing significant sums toward the child’s section 7 expenses. The court clarified that the father had experienced a change in circumstances while the arrears were accruing which resulted in him being unable to make his ongoing child support payments when they came due (at para. 74).
Conclusion
The decision in Colucci v. Colucci has established a clear framework for seeking a retroactive decrease in child support. It emphasizes the critical importance of effective notice and comprehensive disclosure in these cases.
Additionally, the recent decisions noted above demonstrate that the courts are holding payors to a high standard in meeting these requirements. Therefore, when coming to court on behalf of a client to reduce support, remember to review the notice requirements carefully and double check the evidence, just to be sure.