Reinforcing the Need of a Full Analysis for Retroactive Relief

Written on behalf of Arbesman Hamilton LLP

When a party applies for a retroactive change in spousal or child support, it is not enough to simply prove a material change in circumstances. Both the appropriate level of retroactive relief, as well as the retroactive date must be established. In 2016, the Ontario Court of Appeal issued a decision in Punzo v. Punzo, 2016 ONCA 957, reinforcing the proper analysis for such an application.

An Agreement is Reached, Circumstances Change

The facts in the case are fairly straightforward. Both the Mother and the Father consented to a Support Order based on the Mother’s annual income of $36,000 and the Father’s annual income of $105,000.

This resulted in spousal support payments of $1,700 per month and child support payments of $919 per month, for a total of $2,619. However, both parties agreed the Father’s income was not actually $105,000 at the time the Support Order was agreed to. Instead, that amount was the income the Father expected to earn as a salesperson. What’s more, the Father lost his job and accepted another at a lower income after the Support Order was consented to.

The Motion Judge found the Father’s new job at a lower salary did constitute a material change warranting a reduction in child and spousal support amounts. Furthermore, the Motion Judge held the amounts agreed to at the time the Order was negotiated would have been different had the current circumstances been in effect at the time the decision was made. As a result, spousal and child support were retroactively reduced to $446 and $647 per month respectively. Furthermore, spousal support would drop to $0 and child support would drop to $444 per month nearly one year later on January 1, 2014.

No Error in Finding Material Change

The Mother appealed the Motion Judge’s order, arguing the Judge had erred in finding that a material change had occurred. This position stems from the Father admitting his income was never $105,000.

The Court accurately summed up the meat of the appeal, stating

how could the continuation of the status quo constitute a material change in circumstances?

The Court found the Motion Judge had made no error in finding a material change in circumstances – the Father had lost his job and accepted a new one at a lower wage. If he had his new job at the time the Support Order was consented to, a different agreement would likely have been made.

But, There’s More to It

While the Court found no error in the Motion Judge’s finding of a change of circumstances, it went on to find that the Motion Judge stopped short of performing a proper analysis as set forth by the Supreme Court of Canada in S.(D.B.) v. G.(S.R.) While the test in that case was written with increases in support in mind, the Supreme Court would later hold the same analysis should apply to retroactive decreases in support.

The analysis from the Supreme Court means even if a material change of circumstances is found, both the appropriate level of retroactive relief (i.e.- is relief needed based on ability to pay, or based on a change in circumstances?) as well as the retroactive date and quantum of support must be determined (the date of effective notice, or a different date).

Having found the Motion Judge failed to apply the test set out in S.(D.B.) v. G.(S.R.), the Court remitted the matter back to the Motion Judge for a proper determination of the amount of support to be paid and the effective date of change.

If you are going through a separation, the lawyers at Arbesman Hamilton LLP can help you with our pragmatic approach to family law issues. Visit our website for more information on how child support is calculated in Canada. Contact us early in your separation to ensure the best possible support outcome for your children. We can be reached online or by phone at 416-481-5604.