Enforcing Annual Adjustments in Child Support Orders

By Maria Golarz, Senior Associate Research Lawyer, Lam Family Law*

When a court order or an agreement for child support includes a requirement to make annual financial disclosure and adjustments, but the payor ignores these obligations, what is the recipient’s recourse?

In many cases, a recipient will seek a motion for retroactive support dating back to the date of the first adjustment. However, a growing body of case law confirms that where a recipient is seeking only to increase support based on the terms of the court order or what the parties agreed to, this is more appropriately framed as an “enforcement motion” rather than a motion for retroactive support.

This article discusses the difference between retroactive child support and enforcing unpaid increases to child support orders, and why the correct framing of the request matters.

Presumptive Approach to Child Support

Child support is the right of the child, and parents have a financial obligation to their children arising at birth and continuing after separation. Under the Federal Child Support Guidelines, the payor is “always under a free-standing legal obligation – independent of any court order – to pay child support commensurate with income”: Colucci v. Colucci, 2021 SCC 24 (CanLII), at para 36, citing D.B.S. v. S.R.G., 2006 SCC 37 (CanLII).

Retroactive Child Support

Retroactive awards involve “enforcing past obligations”. Unlike prospective child support awards, retroactive awards “implicate the delicate balance between certainty and flexibility”: D.B.S. v. S.R.G., ibid, at para 2.

For retroactive child support claims, the court must consider the following non-determinative factors: (a) the recipient’s excuse for not seeking support sooner; (b) the payor’s conduct in relation to their support obligation; (c) the needs and circumstances of the child; and (d) the hardship to the payor of a retroactive award: Sondhi v. Sondhi, 2022 ONSC 202 (CanLII), at paras 18-20, citing D.B.S. v. S.R.G., ibid; leave to appeal ref’d, Sondhi v. Sondhi, 2022 ONSC 1510 (Div Ct).

The recipient’s delay in seeking support is a complex issue, and this concept was recently refined by the Supreme Court of Canada: see, e.g., Abumatar v. Hamda, 2021 ONSC 2165 (CanLII), at para 55, citing Michel v. Graydon, 2020 SCC 24 (CanLII).

Even where a claim for retroactive support is made out, however, D.B.S. v. S.R.G. (2006) (“D.B.S.”) establishes that generally, a retroactive child support order should commence as of the date of effective notice that a request is being made for an adjustment to child support. In most cases, it will be inappropriate to make a support award retroactive to a date more than three years back from when formal notice was given of the requested change (the “three-year rule”): D.B.S. v. S.R.G., 2006 SCC 37 (CanLII), at para 123.

Enforcing Annual Increases in a Previous Order or Agreement

Where there is already an existing order or agreement with respect to child support, a claim based on the explicit or implicit (in the form of disclosure requirements) adjustments to that support are not a retroactive claim.

Instead, the issue in such cases is more appropriately characterized as enforcing unpaid child support orders.

Why does this matter?

Because the threshold is much higher for a motion for retroactive support and, as noted by Justice Chappel in a number of cases, requiring recipients to meet the criteria for a claim for retroactive support when they are, in fact, seeking enforcement, “places an unfair burden on the recipient to jump legal hoops to pursue rights that they have already been granted”: see Meyer v. Content, 2014 ONSC 6001 (CanLII), at para 61 & MacEachern v. Bell, 2019 ONSC 4720 (CanLII), at para 103.

Ontario Case Law

Justice Chappel thoroughly addressed this issue in Meyer v. Content (2014) and more recently in MacEachern v. Bell (2019). In both cases, Her Honour found that where an existing order or agreement establishes an obligation to increase table child support in accordance with increases in income, a subsequent variation proceeding by the recipient to pursue the increased amount “is more akin to an enforcement proceeding” than a claim for retroactive support. As such, neither the D.B.S. criteria nor timing guidelines apply: Meyer v. Content, ibid, at para 61; MacEachern v. Bell, ibid, at paras 44-45 & 103.

In D.B.S., the threshold test evolved primarily out of the Supreme Court of Canada’s concern for the payor’s need for predictability and certainty, and the hardship that could result from an unexpected retroactive claim: MacEachern v. Bell, ibid, at para 103; Meyer v. Content, ibid, at para 61.

These concerns about predictability and certainty “do not arise” where an agreement or order clearly sets out the payor’s obligation to make increases to table support and they fail to do so. In such circumstances, the payor should instead bring a cross-motion to vary the order and the onus should be placed “unequivocally” on the payor to satisfy the criteria for retroactively varying and reducing their support obligation. The D.B.S. threshold would only apply to a claim by the recipient that includes relief not provided for in the original order, such as claims for contribution to past s. 7 expenses that were not addressed in the earlier order: Meyer v. Content, ibid, at para 61; MacEachern v. Bell, ibid, at para 103.

If the payor’s income increased and the table amount should also have increased, the shortfall in the amount of support paid is better characterized as being in the nature of arrears under the order or agreement: MacEachern v. Bell, ibid, at para 103, citing various cases.

In Meyer v. Content, ibid, the father sought to terminate support for a child who was over 18 and no longer in school. He also sought reimbursement for overpayment of support. The mother opposed the application, arguing that the father had actually underpaid support under the terms of a separation agreement which required payments to be reviewed on an annual basis: paras 1-4. Justice Chappel held that the threshold test set out in D.B.S. does not apply in a case where an agreement or a previous court order “requires that child support be adjusted annually in accordance with changes in the payor’s income” and the recipient seeks to enforce that requirement: paras 56-57.

Rather, the terms of the order “clearly establish” that the recipient claimed and was accorded the legal right to receive increases in the table amount, and the court “should proceed directly to the merits of the case”, at which point any issues regarding ongoing entitlement, whether the table amount continues to be appropriate, and the timing of any adjustments to the table amount can be addressed: para 61.

A term requiring automatic adjustments to child support based on income changes establishes a legal obligation on the payor to take the initiative and make the necessary adjustments, given that the payor is the party who has the income information in their possession. It “does not create a legal obligation on the recipient to annually pursue the payor and pressure them to comply.” The recipient is entitled to expect compliance: para 61.

The key question is whether the proceeding is “truly just an attempt to enforce clear terms in an agreement or order or whether there is a claim to change the order or agreement so as to seek increased support on a retroactive basis. The threshold test set out in D.B.S. would apply in the latter situation”: para 61.

Justice Chappel’s analysis was followed in the Ontario cases of Pitre v Lalande, 2017 ONSC 208 (CanLII), Corthorn J., at paras 58-85 & Mackenzie v. Mackenzie, 2018 ONSC 3090 (CanLII), Price J., at paras 22-26.

More recently, in MacEachern v. Bell, 2019 ONSC 4720 (CanLII), a 2014 court order required the father to “automatically adjust child support” each year if his income increased. The father now sought to terminate support on the basis of a loss of employment and an inability to work due to terminal cancer. The mother, however, responded with a request for retroactive support, increasing the table amount payable: paras 1-4.

Again, Justice Chappel found that the mother’s claim for increases in the table amount as of June 2015 was “more in the nature of enforcement” and the threshold criteria did not apply: para 105.

However, in the event that the D.B.S. criteria did apply, the mother had satisfied the criteria. Her explanations for delay were reasonable and understandable. Given the terms of the order, the mother was entitled to assume the father would comply without the need for her to raise the issue annually. With respect to the payor’s conduct, Justice Chappel considered that the father made “fairly regular” payments until late September 2017. Overall, however, he engaged in “extremely blameworthy conduct”, including resisting providing income information, failing to contribute to extraordinary expenses, unilaterally stopping payments for some time, and providing misleading information to the mother and the court on several occasions. The court also considered the past and current circumstances of the two children, and found that both would benefit greatly from a retroactive award. Finally, the court considered hardship and found that, while the father’s income had decreased, he still had a regular income stream of approximately $80,000 and a significant amount of savings: paras 105-107 & 109-110.

Further, even if the D.B.S. criteria were to apply to cases where an order includes a clause for automatic increases, the analysis should be guided “largely by the terms of the clause.” Failure on the payor’s part to comply with such a provision is a factor that should “weigh heavily” at every stage of the D.B.S. analysis in such circumstances: para 104.

Case Law in Other Jurisdictions
This issue has been addressed by courts in other jurisdictions as well. For example, in LEH v YMT, 2019 BCPC 146 (CanLII), the Provincial Court of British Columbia held that the tests for enforcement of outstanding arrears and claims for retroactive support are not the same (at paras 7-8):

The court went on to note that, in cases of enforcement, delay will “only be relevant if the obligor can demonstrate prejudice and an inability to pay at the time of the application or in the future”: para 12.

This issue was also thoroughly considered by the Court of Appeal for Saskatchewan in the context of a domestic contract in Hnidy v Hnidy, 2017 SKCA 44 (CanLII), at paras 89-131.

Citing heavily from Meyer v. Content, 2014 ONSC 6001 (CanLII), the Court of Appeal noted that a claim that there has been a breach of an agreement containing a provision for review and/or adjustment of support “does not implicate retroactivity in the sense of increased obligations imposed for a past period when those obligations did not exist.” Rather, it is “simply a present assessment of prescribed contractual duties and undertakings, having regard to the nature and scope of the particular provision in question”: para 110. The Court of Appeal also confirmed that the critical consideration is “the existence of a contractual provision for reviewing and/or adjusting child support”: para 107 (emphasis in original).

On the issue of certainty and predictability, the Court of Appeal in Hnidy cited to an earlier decision from the Court of Appeal of Alberta, noting that where parties make an agreement with a clear fixed contractual obligation to disclosure annual income increases, the payor’s primary interest in certainty and predictability “is found in the terms of that Agreement – in disclosing his income and increasing his support payments accordingly”: paras 95-96, citing Goulding v Keck, 2014 ABCA 138 (CanLII).

In Hnidy, the Court of Appeal disagreed with the father’s argument that the mother was seeking to vary the parties’ agreement. Rather, the mother was asking the court to determine whether a breach of the agreement’s terms had occurred and to award an appropriate remedy. Such a determination, if made, “would be a measure of damages in contract – an amount that restores the contracting parties, as nearly as possible, to the positions they would have occupied if the terms of their domestic agreement had been fully honoured”: para 111.

While in that case, the parties’ Interspousal Contract did not expressly provide for an annual disclosure of income, the court found that separation agreements can implicitly require disclosure obligations: para 126, citing D.B.S. v. S.R.G., 2006 SCC 37 (CanLII). Further, the parties’ agreement had a provision for a right of review simply in the event of a “change in circumstances.” Contractual terms of this kind imply an obligation to notify the other parent of changed financial circumstances: para 126, citing Marinangeli v. Marinangeli, 2003 CanLII 27673 (ON CA).

Key Takeaways

 
*with thanks to Vanessa Lam for her suggestions and edits.