Primer on rescinding child support arrears and Family Responsibility and Support Arrears Enforcement Act default orders provided in recent case.
By: Philip Epstein
Rescinding Child Support Arrears - Family Responsibility and Support Arrears Enforcement Act
Baxter v. Beharry, 2015 CarswellOnt 182 (Ont. C.J.): This judgment penned by Justice Stanley Sherr of the Ontario Court of Justice is a road map and primer on how to deal with applications to rescind arrears. Since these are very common applications, this is an important case to keep on hand because it cites virtually all of the relevant case law on this topic. As usual, Justice Sherr has thoughtfully and carefully drafted reasons which are a delight to read.
The father brought a motion to change a support order that was made back in 2006. That 2006 order reduced the husband’s arrears as a result of a previous order that was made back in 2000 that imputed to the husband a very significant income that is extremely doubtful he had ever earned.
The father has been consistently in arrears and done whatever he could to avoid his child support responsibilities.
The father was now seeking to rescind arrears that were owing to the City of Toronto who was the assignee of the support order because the mother was on public assistance.
I comment on this case because of the significant number of cases referred to by Justice Sherr and the principles for which they stand.
All of them need to be carefully reviewed by anyone involved in such an application.
Ultimately, Justice Sherr was satisfied that there was a change of circumstances that warrant a re-examination of the existing support order and the arrears owing to the mother. Given that the child that was the subject matter of the support order was probably no longer a child (the mother did not defend and was noted in default), the arrears owing to the mother were rescinded and the ongoing support order was terminated.
However, the arrears owing to the City of Toronto were required to be treated differently because they had accumulated prior to the last court order and before any change in the father’s circumstances. The father wanted to go behind the existing court order, but Justice Sherr was not going there. As he noted in Nejatie v. Signore, 2014 CarswellOnt 17198 (Ont. C.J.):
It is well settled law that, if income is imputed, then the issue will generally be res judicata on a motion to vary or change support.
See: Bemrose v. Fetter, 2007 42 R.F.L. (6th) 13. Although the court always has discretion with respect to the issue of res judicata and can consider fraud, fresh evidence, additional disclosure or issues of fairness, the principle of res judicata provides that generally, a matter cannot be re-litigated once it has been determined on its merits.
He also noted in Trang v. Trang, 29 R.F.L. (7th) 364 (Ont. S.C.J.):
When a court imputes income, that’s a determination of a fact. It’s not an estimate. It’s not a guess.
It’s not a provisional order awaiting better disclosure, or further review. It’s a determination that the court had to calculate a number, because it didn’t feel it was appropriate to rely on - or wait for - representations from the payor.
. . .
Similarly, the onus should not fall on the support recipient to establish why income should still be imputed on a motion to change. That determination has already been made. The onus is on the support payor to establish that there should be a change in the way their income is to be calculated.
. . .
If a trial judge imputed income to a self-employment person on the basis that their tax return didn’t reflect cash sales and excessive write-offs, there should be a presumption that so long as the payor maintains the same business activities and accounting practices, subsequent tax returns will be equally unreliable.
Imputed income matters. The reason why income had to be imputed matters.
Justice Sherr was not satisfied that the evidence put forward by the father was sufficient to establish that he would be unable to work and subsequently pay the arrears. The Court found that the father was not likely able to earn a significant income at this time, but he had an insurance claim pending, and a right to apply to the Ontario Disability plan in order to obtain some income. The Court left the arrears of some $31,000 in place and required the father to pay them at the rate of $150 per month. The husband is 42 years old and, accordingly, he will be relieved of his obligation when he turns 60, unless he comes up with some money in the meantime.
The director of the Family Responsibility Office also sought a default order under section 41(10) of the FRSAE and that the father be committed to jail for three days for each default in the monthly payments. Justice Sherr made such an order but, of course, noted that the director will be required to serve the father with any motion for committal arising from any default. Justice Sheer, gracious as ever, leaves the parties and the public with the following note:
The court understands that this was a very difficult process for the father. It was intimidating to act on his own with two highly skilled lawyers opposing him. Despite this anger and frustration he treated the process and the court with respect. The court appreciates that. Hopefully, this decision will provide him with clarity about his child support obligations. The monthly amounts he has to pay to avoid jail are relatively modest. The court hopes that he will follow his doctor’s recommendations and move forward constructively with his life, now that this case is over.
The decision also means that, even though it will likely take many years, the taxpayer will be indemnified for supporting the child, during the time that the father should have been paying this support.