Supreme Court of Canada Case on Retroactive Child Support: Colucci v. Colucci
The Supreme Court of Canada has recently issued a decision on the case of Colucci v. Colucci, 2021 SCC 24, in a hard-fought battle over the issue of retroactive child support.
In Colucci, the father sought to retroactively reduce child support and cancel his child support arrears of approximately $170,000. The parties had divorced in 1996 and an order was made requiring the father to pay child support for his two daughters in the amount of $230 per week. The father’s child support obligations ended in 2012. However, from 1998 to 2016, the father had made no voluntary child support payments, accruing over a decade worth of child support arrears. He had made one request in 1998 to reduce his child support obligations on the basis of a decrease in his income, but had provided no evidence of the same, and no agreement to reduce child support was reached. During the period where arrears accrued, the father was absent from the children’s lives and his whereabouts unknown.
In 2016, the father’s initial motion in front of the Ontario Supreme Court judge was granted, and his child support arrears were retroactively reduced to $41,462. The father had provided little financial disclosure to support his claim that he needed a reduction. However, the motion judge found that the reduction was warranted, in order to bring the child support in line with the Federal Child Support Guidelines and to reflect the decrease in the father’s income.
On appeal at the Ontario Court of Appeal, the motion judge’s decision was overturned, and the father was ordered to pay the full amount of the arrears.
The father then appealed the decision to the Supreme Court of Canada. The Supreme Court of Canada dismissed his appeal, and delved into the law on retroactive child support in detail.
Test for Retroactive Child Support
The leading case oft-cited in retroactive child support cases is a previous Supreme Court of Canada case, D.B.S. v. S.R.G., 2006 SCC 37, which set out four factors to be considered in an application for retroactive child support:
- the recipient’s delay in seeking retroactive support;
- the payor’s conduct;
- the child’s circumstances; and
- hardship entailed by a retroactive award.
D.B.S. also considered the issue of “effective notice”, and found that the date of retroactivity of any retroactive child support award should generally be the date of effective notice. Effective notice in the context of child support simply requires the recipient to broach the subject of an increase in child support with the payor. The Court also noted that recipients should be encouraged to move discussions forward after giving effective notice. To that end, the Court concluded that retroactive awards should generally extend no further than three years before the date of formal notice. This is known as the “three-year rule”, although it is a presumption only.
The court retains discretion to depart from the presumption date of retroactivity where the result would otherwise be unfair in the circumstances. For example, in cases where there was blameworthy conduct on the part of the payor parent, such as a failure or refusal to provide financial disclosure, the date of effective notice is not relevant, and instead, the date of retroactivity is adjusted to align with the date of material increase in income, despite the general three-year rule. This was the case in Colucci, as well as another recent Supreme Court of Canada Case, Michel v. Graydon, 2020 SCC 24, which also considered the issue of the date of retroactivity. In Michel, the Court clarified the principles in D.B.S., and has now clearly set out that a recipient parent can apply to retroactively vary an existing child support order even after the child becomes an adult. Prior to Michel, provincial trial and appellate courts had interpreted D.B.S. as standing for the principle that once the child was no longer a “child of the marriage” (essentially, an independent adult), a parent no longer had standing to apply for or vary retroactive child support. Michel distinguished between applications to retroactively vary child support, in which case the child becoming an adult would not bar the application, and applications seeking an original child support order under s. 15.1 of the Divorce Act, which would be barred once the child reached adulthood.
The Court in Colucci also noted that in cases involving variation of child support and the rescission of arrears, three interests must be balanced to achieve a fair result:
- the child’s interest in receiving the appropriate amount of support to which they are entitled;
- the interest of the parties and the child in certainty and predictability; and
- the need for flexibility to ensure a just result in light of fluctuations in the payor’s income.
The core concern is the child’s interest in a fair standard of support commensurate with income, and all other rules and principles must yield to that. In addition, the need for full and frank disclosure of the payor’s income is critical to the determination of fair support. As it is the payor parent who controls this information, timely and fulsome disclosure is critical.
Test for Rescission of Child Support Arrears
The considerations for a reduction or cancellation of child support arrears are different than the considerations for a retroactive variation of support. In rescission cases, the prior support order or agreement is based on the payor’s actual income and thus accurately reflects the amount of support that should have been paid. Thus the test for a reduction or cancellation of child support is based on the payor’s current inability to pay, or in other words, financial hardship. The only relevant factor is the payor parent’s ongoing ability to pay, which again requires full and frank disclosure of the payor’s financial circumstances.
The presumption is that the payor should pay the arrears, and this presumption is only rebutted if the payor parent establishes on a balance of probabilities that even with a flexible payment plan, the payor cannot and will not ever be able to pay the arrears. The interests of the recipient and child in certainty and predictability are paramount, as the payor has failed to comply with a court order or agreement without any excuse for non-payment of support when it came due. The rescission of arrears is a last resort and only granted in exceptional cases, and the courts should first consider if the payor’s financial hardship can be mitigated by ordering a temporary suspension, periodic payments, or other creative payment options.
SCC Decision in Colucci
The Supreme Court of Canada ultimately dismissed the father’s appeal, requiring him to pay the full amount of retroactive child support of $170,000. In doing so, the Court found that the father had engaged in blameworthy conduct in failing to provide any evidence to the mother of his reduction in income in 1998. He could not have been found to have given effective notice of his reduction in income in 1998, since he had provided no evidence of the same. In addition, in not making any voluntary payments of child support from 1998 to 2016, his conduct was blameworthy and showed bad faith efforts to evade the enforcement of a court order. Further, in providing insufficient financial disclosure before the motion judge of his earnings during the years in which child support arrears accrued, as well as his current financial circumstances, the father’s motion was doomed to fail. The inadequate financial disclosure was fatal to the father’s application, as he had not discharged his onus of proof that he suffered hardship and was unable to pay the arrears now or in the future.
Both Michel and Colucci are examples of cases where a payor parent’s blameworthy conduct of “waiting in the weeds” – trying to wait out their child support obligations until their children were no longer children of the marriage – backfired. The payor parent has a duty to provide full and timely financial disclosure, and not doing so may result in the court refusing to retroactively vary a child support order or agreement. Payor parents avoiding their obligations to pay child support are treated similarly to debtors in civil cases who avoid payment of debt, and it is an uphill battle to vary child support orders and/or reduce or cancel arrears of child support. Parties are encouraged to take active steps to address their child support obligations.
If you have questions about retroactive or prospective child support, please contact one of our lawyers in the Family Law Practice Group.