Although child support or spousal support payment amounts are often established soon after a separation or divorce, those amounts aren’t necessarily set in stone. If there is a “material change in circumstances,” the support payor or payee can apply to have support amounts changed. These changes can either increase or decrease the amount of support payable. One of the trickier issues to handle around support is a change in one of the parties’ incomes. A recent decision from the Court of Appeal for Ontario looks at how courts consider these situations.
The matter originated when the father applied to have the amount of child and spousal support he is obligated to pay lowered after he lost his job in July 2017. The minutes of settlement was agreed to in April 2017 and put in place in August 2017. At the time there were agreed to, the father’s income was imputed at $257,312 while the mother’s was set at $48,000. By following the Federal Child Support Guidelines, the court set the amount of spousal support payable by the father at $4,292 per month.
The father’s income came from two sources. He was employed by a company but also had his own business. However, the father lost his job in July 2017 (right in between the agreement being made and being put into force) and he asked the court to adjust his support obligations accordingly.
At the original hearing, the motion judge found that the father had not demonstrated a material change in circumstances since the father actually lost his job before the support order was put in place. Despite losing his job he continued to make significant income from his business and had complete control over how much his business paid him. In fact, the motion judge ordered that his income be imputed at $401,502 annually.
The father appealed, stating that the motion judge made a number of errors, particularly that the motion judge should not have found that his change in financial circumstances did not constitute a material change.
The court referred to a recent decision from the Supreme Court of Canada, which established that a where a payor applies to retroactively decrease child support, the onus is on the payor to establish a past material change in circumstances. The court agreed that the father’s loss of income came after the minutes of settlement were agreed to, but despite this, he didn’t actually experience a decrease in income. It would seem that the court is not so much concerned about whether a job is lost, but whether that leads to a reduction in income or not. In this case, the father was able to keep paying himself from his business and at an amount higher than he had originally been making. As a result of this, the court held up the motion judge’s decision, and the father was ordered to pay retroactive support and costs of $14,000 to the mother.
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