The amount of child support payable by one parent to the other is directly tied to the payor's income. As income increases, so should the amount of child support. But what happens when the payor doesn't disclose a rise in income and fails to adjust the amount of child support paid to the other parent?
That was precisely the issue in a hearing before Justice Stanley Sherr of the Ontario Court of Justice on March 31. In the case, the father withheld details about increases in his income over the course of approximately 18 years. As the judge put it, this was "the longest retroactive support claim this court has seen."
The facts are straightforward. The parents never lived together, but they have a son, who is currently 25 years old. Throughout his childhood, the son lived with the mother and had no relationship with the father. In July 2003, a court order was made requiring the father to pay child support in the amount of $700 per month, based on his stated annual income of $89,100. In the years that followed, the mother and son lived in and out of poverty and relied on food banks to make ends meet.
Sixteen years later, the mother commenced court proceedings against the father, wherein she alleged the father's income had increased substantially since the 2003 court order. According to the mother, the father ought to have paid her an additional $1.4 million in child support for the years 2003 to 2021.
The case took approximately six years to make it to trial. Several times through that period, the court ordered the father to provide financial disclosure and make payment to the mother on account of her court costs. The father failed to comply with most of those obligations. According to the judge, the father's non-compliance was "done with an intention to obscure his real assets and income.
During the one-day trial, the limited documents and evidence submitted by the father were full of lies. According to the judge, the father "was not a credible or a reliable witness" and the court "could not trust anything (he) said, nor "rely upon any documentation he provided."
Chief among the father's unreliable documents were two financial statements filed earlier in the court proceedings in which he declared net worth of $890,000 (in 2019) and $2,622,000 (in 2022). At the hearing, the mother was able to prove the father's net worth was, in fact, in excess of $7.5 million. To do so, the mother relied on the father's 2020 mortgage application, which revealed the father owned three properties, not just the one property he declared to the court.
The father's evidence regarding his income was similarly unreliable. While the father told the court his annual income was consistently less than $100,000, he acknowledged he was paying child support for one of his other three children (from other relationships) in an amount based on annual income $317,000. The mother uncovered several other facts that further confirmed the father's income was well beyond that which he told the court, including diverting income to his second ex-wife through income-splitting.
Following his review of the father's false statements, the judge noted this was "one of the most egregious cases of financial deception this court has seen in many years." With that in mind, the judge turned his attention to whether the mother's claim for child support dating as far back as 2003 was appropriate in the circumstances.
In a nod to the two leading cases from the Supreme Court of Canada, Justice Sherr pointed out that an order for retroactive child support "simply holds payors to their existing (and unfulfilled) support obligations" and that such an order "can always be avoided by proper payment.
The "disclose-and-adjust" child support framework ensures children benefit from changes in a parent's income. Payors of child support who fail to meet this obligation run a real risk of being forced to correct the underpayment by way of an order for retroactive child support.
While a judge has discretion to determine the extent and amount of a retroactive order for child support, Justice Sherr confirmed that its exercise "must encourage financial disclosure and in no way reward those who improperly withhold, hide or misrepresent information they ought to have shared."
Perhaps the most important issue to be determined in a claim for retroactive child support is the starting point for such an order. In other words, how far back should it go? Presumptively, a retroactive order will not extend more than three years prior to the payor receiving formal notice of the claim for retroactive child support. In the case before Justice Sherr, formal notice was given by the mother in March 2017. However, the three-year rule is not absolute.
In determining if the order should be retroactive to 2003, Justice Sherr considered the mother's delay in seeking the adjustment and found it to be understandable. In particular, the mother had been physically assaulted by three men in 2010 shortly after she asked the father for more child support. While the mother believed the father was behind the assault, Justice Sherr did not need to make such a finding since the assault, consequent diagnosis with PTSD and fear of the father explained the delay.
The judge's analysis then shifted to an assessment of whether the father's conduct was blameworthy. If so, the period of retroactivity could be extended significantly, including as far back as 2003. Once again, Justice Sherr considered the leading cases from the Supreme Court and noted that blameworthy conduct is "anything that privileges the payor parent's own interests over his or her children's right to an appropriate amount of support" and includes the "failure of a payor to disclose actual income, a fact within the knowledge of the payor."
According to the judge, the "father's blameworthy conduct is as bad as it gets," including repeated misrepresentations of his income, intimidating and pressuring the mother, and a failure to pay "anywhere close to the proper amount of child support.
In the end, the judge ordered the father to pay support back to August 1, 2003, amounting to $899,811. While such a lengthy retroactive order is unusual, the judge pointed out that the case was "a classic example of the feminization of poverty." The father, through his conduct, "built up considerable net worth at the expense of the mother and the son."
This case, while extreme, serves as a warning to payors of child support to ensure they provide accurate and timely disclosure of changes in their income so that child support can be adjusted. Failure to meet these obligations will likely be met with judicial intervention to ensure proper child support is paid. After all, child support is the right of the child, and that right cannot and must not yield to a parent's pursuit of financial gain.
This article was originally published in the Financial Post.
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