Haq v. Haq, 2011 ONCJ 664

Toronto Registry No. D11654/02 B2 DATE: 2011·VI·21 CITATION: Haq v. Haq , 2011 ONCJ 664 ONTARIO COURT OF JUSTICE BETWEEN: AYESHA HAQ Applicant — AND — REZA HAQ Respondent Before Justice Ellen B. Murray Reasons for Judgment released on 21 June 2011 Ms. Lisa Baumal .................................................................................................... for the applicant Mr. Valois Ambrosino ......................................................................................... for the respondent [ 1 ] JUSTICE E.B.

MURRAY:— The main issue in this case is the proper test to be applied on a claim for a retroactive reduction of a child support order. [ 2 ] The support order was made on consent on November 6, 2007, and provided that the Respondent Mr. Haq was to pay to the Applicant. Mrs. Haq, support of $992 monthly for the parties’ two children, based on his annual income of $66,440.90.

The order, which also dealt with custody and access, was the culmination of years of litigation which began after the parties separated in 2001. [ 3 ] In December 2009 the Respondent brought a motion seeking a reduction of the child support ordered, retroactive to June 2008. The Applicant opposed that motion. [ 4 ] In January 2011, the Respondent obtained new employment with an annual income of $70, 380.

The parties have agreed and I order that the November 6, 2007 order be varied to provide that commencing January 1, 2011, the Respondent shall pay to the Applicant child support in a table amount of $1047 monthly. [ 5 ] What remains to be adjudicated is the Respondent’s request for a reduction of his support obligation between June 2008 and January 2011. Arrears on the November 6, 2007 order stand at approximately $20,000. [ 6 ] I heard the motion based on documentary evidence. There were no cross-examinations conducted. The issues in the case are: 1.

Has the Respondent demonstrated that there was a material change in circumstances which would justify a reduction in his support obligation during the period June 2008- December 2010? The Respondent says that the material change is obvious: he suffered two prolonged periods of unemployment during this time. The Applicant acknowledges the job losses, but submits that the Respondent has not demonstrated that his income was materially reduced as a result. She says that the motion should be dismissed. 2.

If the court does find that there has been a material change in circumstances, should a reduction in support owing be granted retroactively -- for the period preceding the commencement of the motion to change? The Respondent submits that if I find that there has been a material change, that a retroactive reduction in his support obligation must follow. The Applicant submits that the test set out in D.B.S. v. S.R.G.; Laura Jean W. v. Tracy Alfred R.; Henry v. Henry; Hiemstra v. Hiemstra , 2006 SCC 37 , [2006] 2 S.C.R. 231, 351 N.R. 201, 391 A.R. 297, 61 Alta. L.R. (4th) 1, 377 W.A.C. 297, [2006] 10 W.W.R.

379, 270 D.L.R. (4th) 297, 31 R.F.L. (6th) 1, [2006] S.C.J. No. 37, 2006 Cars​well​Alta 976, applicable to requests for retroactive support increases, should apply to requests for retroactive support decreases. She submits that on this standard, the Respondent’s motion should fail. 1. Preliminary issue: what is the proper exchange rate? [ 7 ] The Respondent lives and works in the U.S. The exchange rate varied for the period June 2008-December 2010.

Although the parties agree that Bank of Canada rates should be used in determining the Respondent’s income for this period, they do not agree on what dates should be referenced in selecting the exchange rate. [ 8 ] The Respondent submits that his income during this period should be calculated based on the exchange rate applicable on the date of any material change in his income.

For example, using this approach, if the Respondent received unemployment compensation payments from June 1- December 31, 2008, his income for that period would be calculated using the exchange rate applicable on June 1. [ 9 ] The Applicant submits that the average annual exchange rate should be employed. She submits that this is the fairest approach, as it avoids fluctuations that might occur if one uses the exchange rate applicable on one day to calculate the value of an income stream over a period of months during which the rate went up and down.

She submits further that this approach is consistent with the approach of

section 17 of the Child Support Guidelines, which allows a court when determining the Guideline income of a payor with a fluctuating pattern of income over the past three years to consider averaging this income. [ 10 ] I agree with the Applicant’s approach, and in my findings of fact I will employ the average Bank of Canada rate for the applicable year. 2. Background [ 11 ] During the parties’ marriage, they lived in the U.S. After the separation, the Applicant came with the children to Toronto. They continue to live here with the Applicant’s parents. The Applicant does not work outside the home. Mr.

Haq continues to live in the U.S., and has remarried. He works in information technology. His second wife is a clinical supervisor in a health care facility. They have no children. Although the November 2007 order provides for access between the Respondent and the children, it appears that the Respondent has no contact with them. The reason for this was not established in evidence. 3. Evidence [ 12 ] I set out my findings of fact below, in the context of the litigation history of the motion to change. 1. On May 30, 2008, the Respondent was terminated without notice from his employment. 2.

Soon after, the Respondent began receiving unemployment benefits of $27,162.04 [1] . 3. In June 2008, The Respondent stopped paying support. In making this finding, I have rejected the Respondent’s allegation that he continued to pay support until August 2008. The Applicant’s evidence is that the Respondent paid no support during this period. Prior support payments were made by cheque or money order. The Respondent offered no documentary evidence of the alleged payments, although that evidence would have been available. 4.

On March 30, 2009, the Respondent’s lawyer wrote to the Applicant’s former solicitor advising that he had lost his employment and was seeking a reduction in the support order. This was the first time the Respondent raised the issue with the Applicant. In making this finding, I have rejected the Respondent’s allegation that he advised the Applicant at some earlier time of his unemployment and desire to change the order. The Respondent offers no particulars as to when and or how he communicated this information to the Applicant. He provides no documentary support for the allegation.

The Applicant denies receiving any such communication from him before the lawyer’s letter. Given the history of acrimonious litigation between the parties, I believe that if the Respondent had in fact advised the Applicant earlier of his unemployment and asked for a variation, that he would have communicated with her in writing and kept a copy of the communication.

5. On June 11, 2009, the Respondent brought a motion requesting a suspension of the November 2007 support order. He submitted there was urgency to the motion, because his US citizenship hearing was pending, and he would not be granted citizenship if he owed arrears on a child support order. He alleged that U.S. citizenship would assist him in gaining employment. 6. On June 12, 2009, a temporary “without prejudice” suspension of the support obligation was granted on consent. The motion was adjourned for the Respondent to commence his motion to change. His materials were to be served by July 3, 2009.

The case was put over to July 28, 2009. The Respondent undertook to pay $2500 towards arrears by July 1, 2009. 7. On July 15, 2009, the Respondent secured new employment, paying an annual salary of $74,710 [2] and beginning on July 29, 2009. 8. The Respondent did not disclose the fact that he had obtained employment. 9. The Respondent did not serve his materials or pay the $2500 as set out in the June 12 th order. 10. In July 2009, the Applicant and the children began received social assistance payments. These payments continued until November 2009. 11.

On July 28, 2009, the parties consented to an order that provided: • the Respondent was to pay support of $350 monthly commencing August 1, 2009 on a without prejudice basis; • the Respondent was to pay the $2500 towards arrears; • the parties were to agree to a new timetable for the delivery of materials for the Respondent’s proposed motion to change, and the case was put over to a date in November to be arranged with the trial coordinator. 12. In August 2009, the Respondent paid the $2500, and began making monthly payments in an amount of $338 [3] . 13.

By October 2009, the Respondent had not commenced his motion to change. On October 14, 2009, the Applicant brought a motion, returnable November 17, 2009, asking that the suspension of the 2007 support order be lifted. 14. On November 13, 2009, the Respondent’s solicitor advised that the Respondent had obtained new employment. The particulars of that employment were revealed later, in the Respondent’s affidavit supporting his motion to change. 15. On November 17, 2009, the Respondent was ordered to bring his motion to change by December 4, 2009, and to provide certain disclosure by the same date. 16.

The Respondent brought his motion within the timeline, and furnished some, but not all of the disclosure. 17. On December 14, 2009, the motion to lift the suspension of the 2007 order was heard. The court was then aware of the fact that the Respondent had obtained new employment in July 2009. A temporary order was made, varying the November 2007 order, and providing that effective August 1, 2009, the Respondent was to pay support of $1094 monthly, and, commencing January 1, 2010, an additional amount of $400 monthly towards arrears.

The order provided for further disclosure, and payment of $1500 costs forthwith by the Respondent. 18. The Respondent began paying higher amounts of support, although not enough to fully comply with the December 14, 2009 order. 19. On March 12, 2010, the Respondent was again terminated from his employment. He received two weeks’ pay in lieu of notice. The Respondent began receiving unemployment compensation in May 2010 in an amount of $580 per week [4] . 20. A further disclosure order was made on April l8, 2010. 21. The Respondent did not bring a further motion to suspend the December 14, 2009 payment order.

However, after April 2010 he reduced his payments to approximately $330 monthly. 22. On September 9, 2010, a further disclosure order was made, and the case was sent to assignment court for October 25, 2010 to obtain a hearing date. 23. At assignment court, the date of January 17, 2011 was set for the hearing, and a timeline for delivery of any further material was established. 24. On January 3, 2011, the Respondent obtained new employment. The next month he began paying support in an amount of $1047, the amount commensurate with his income. 25.

On January 11, 2011, the Applicant brought a motion to strike the Respondent’s pleadings, alleging that he had not complied with the disclosure orders. The Respondent furnished most of that disclosure shortly before and on the return date of the motion. The January 17, 2011 trial date was vacated and February 22, 2011 set as the new trial date, with costs of that motion reserved to trial. 26. The Respondent’s counsel was called to a Superior Court matter on February 22 nd , so the trial was put over again to May dates. 27.

The total amount of support payments made by the Respondent from January 1, 2008- May 19, 2011 (the date of the latest Director’s statement filed) is $24, 994.23 [5] . The particulars of payment follow: • January 1, 2008 to May 30, 2008 (Direct payments) - $4,857.00

• June 1, 2008 to December 31, 2008 – Nil • January to June 2009 – Nil • July 2009 (Lump sum payment to Mary McLaughlin, the Applicant’s former solicitor, not reflected in FRO

Schedule "A") - $2,500.00 • August 1, 2009 to September 30, 2009 – Nil • October 1, 2009 to December 31, 2009 - $2,855.83 • January 1, 2010 to December 31, 2010 - $9,660.43 • January 12, 2011 - $317.88 • January 1, 2011 to May 19, 2011 (date of latest FRO Director’s statement filed)- $4,803.09 4. Has the respondent established a material change? [ 13 ] I find that the Respondent has established a material change in two respects which are relevant to the calculation of his support obligations in the period from June 1, 2008 to December 31, 2010: 1.

Loss of employment on May 30, 2008, with unemployment continuing until July 2009; 2. Further loss of employment on March 12, 2010, with unemployment continuing until January 2011. [ 14 ] I agree with the Applicant that a job loss itself might not constitute a material change, if the Respondent had equivalent income following the job loss. That is not the case here. The Respondent’s evidence is that his income between June 2008 and December 2010 was significantly below the income which was the basis for the 2007 order.

I accept the Respondent’s evidence on this point, and have summarized my findings of fact as to his income on

Schedule A, attached. The evidence also demonstrates that the Respondent made a reasonable search for new employment after each job loss. [ 15 ] The Applicant’s submissions were that during this period the Respondent had significant undisclosed sources of income. In essence, she asked that I impute income to the Respondent. I am not persuaded that the Respondent had undisclosed sources of income.

I explain below why I reject the Applicant’s arguments on this point. • Alleged unexplained bank deposits The Applicant asserts that her analysis of deposits to the Respondent’s bank account over a 20- month period show over $90,000 in transfers into that account, transfers not referable to the Respondent ’s identified sources of income. The accounts in fact cover a 33-month period. The Respondent deposed that these transfers were made by his wife from her account and represent her contributions to household expenses. The Respondent’s wife gave evidence confirming her income from employment and this explanation.

The explanation makes sense, and I accept it. • Alleged employment at Zee Consulting The Applicant alleges that the Respondent was employed at Zee Consulting during his period of alleged unemployment. The allegation stems from the fact that his resume shows employment at Zee Consulting from March 2008- July 2009. Zee is owned by the Respondent’s brother, Zia Haq. Both the Respondent and his brother depose that the Respondent was not employed or paid by Zee at any time. Zia Haq permitted the Respondent to add Zee to his resume to increase his chances of obtaining employment -- a case of resume padding.

I do not find this explanation implausible in this economy, where potential employers often find the already-employed more attractive candidates than the unemployed. I also note that the evidence indicates that the Respondent was in fact seeking employment during the period that his resume lists him as an employee of Zee. • The Respondent’s lifestyle The Applicant argues that the fact that the Respondent’s lifestyle remained apparently unchanged throughout two lengthy periods of unemployment supports her assertion that he had undisclosed income.

She points to the fact that he reduced his debt load during the period in question. His December 2009 financial statement shows debt of $45,000, and his February 2011 statement shows debt of $30,000. I am not persuaded that these facts demonstrate undisclosed sources of income. The Respondent’s lifestyle is not extravagant. He did incur significant debt at the early period of his unemployment. His wife was employed throughout the periods in question, and she according to the evidence contributed between $2100 - $2700 monthly to family expenses. She deposes that her family provided some assistance.

I also note that in the period between his two financial statements, the Respondent was employed for approximately 9 months. 5. Is there discretion to deny relief post-application? [ 16 ] As set out further below, the parties disagree as to whether a court has discretion, once a payor has established a material change, to deny a reduction in support retroactively simply because of a delay in the application.

The Applicant goes further, and argues that a court has discretion to deny a decrease even for the period after the Respondent brought his motion to change, although he may have shown a decrease in income during that period. In my view, any variation order made after the commencement of a motion to change is not properly characterized as retroactive relief. I do not accept the Applicant’s position on this point. [ 17 ] A court when considering a request for a variation—upwards or downwards – of prospective support is bound to make an order based on the Guidelines once a material change is established.

There is no discretion to depart from the Guidelines. This issue

arose when the Guidelines were first enacted. Payors or recipients who were disadvantaged by the application of the Guidelines (ascompared with the support arrangements in orders or agreements pre-dating the Guidelines) resisted variation applications, arguing thatthe court had a residual discretion not to allow a variation if it provided less support for a child, or was unfair to a payor or recipientspouse. The Ontario Court of Appeal in Wright v.

Zaver[6] rejected this argument, and held that if the income of the payor indicated aspecific quantum of support prospectively payable pursuant to the Guidelines, that a court had no residual discretion (outside of thatprovided for in the Guidelines) to order a different amount. [18] Based on my findings as to the Respondent’s income from December 2009 (when he brought his motion to change)onward, the Respondent is entitled to a reduction of his support obligation for the period December 2009-December 2010. I deal withthe particulars of that variation below. 6.

Should the respondent receive a retroactive variation? [19] What remains in question is whether the Respondent should receive a retroactive variation for the period between June2008 to December 2009. [20] What test should be applied to the Respondent’s retroactive claim? 6.1 Respondent’s position [21] The respondent relies upon the reasoning in a case of the New Brunswick Court of Appeal, Brown v. Brown, 2010NBCA 5, 353 N.B.R. (2d) 323, 910 A.P.R. 323, 315 D.L.R. (4th) 293, 76 R.F.L. (6th) 33, [2010] N.B.J. No. 18, 2010 Cars​well​NB 30.

This case concerned a payor who failed for some 4 years to pay child and spousal support which had been ordered. The recipient motherhad not taken steps to enforce the order for some time, and the payor did not seek a variation until enforcement proceedings exactedsome payments towards arrears. He then asked for a retroactive variation which, if granted, would have required a significant repaymentfrom the recipient.

The trial court dismissed his application (other than granting a rescission of arrears of child support for the periodduring which the child was living with him) because of concern about how the order would affect the recipient’s and child’s standard ofliving. [22] The New Brunswick Court of Appeal set aside the trial judge’s order, and returned the case for a new trial. The court,relying upon Justice Bastarache’s statement in D.B.S. v. S.R.G., supra, that that decision was “not meant to apply to circumstances wherearrears have accumulated”, held that the discretionary factors set out in D.B.S. v.

S.R.G., supra, governing claims for a retroactiveincrease in support have no application to cases requesting a decrease. Justice J.T. Robertson, speaking for the court, held that the onlyquestions to be asked in a case requesting a retroactive reduction of child support are : 1. Was there a material change in circumstances during the period of retroactivity? 2. Would the applicant have been granted a reduction in his support obligation but for the delay in bringing the application?

The court held that if the answer to both questions is “yes”, then a reduction in support should follow. [23] The Respondent submits that he meets the test set out in Brown v. Brown, supra, and that a retroactive reduction insupport must be granted. 6.2 Applicant’s position [24] The Applicant submits that there is discretion to deny a retroactive reduction even if the payor has established that therewas a material change at the relevant time that would have led to a reduced support order if the application had been made in a timelymanner.

She relies upon jurisprudence going back many years, jurisprudence summarized by the Ontario Court of Appeal in DiFrancesco and Coutu, (2001) (ON CA), 56 O.R. (3rd) 363. That case held that a court asked to rescind supportarrears should consider the following factors: 1. Nature of the support obligation; 2. Financial capacity of the payor 3. Need of the child and recipient parent; 4. Unreasonable delay by the recipient in enforcing the support obligation; 5. Unreasonable delay by the payor in seeking “appropriate relief”’ 6.

Possibility of undue hardship to the payor. [25] The Applicant’s counsel submits that this jurisprudence should be interpreted through the lens of the reasoning in D.B.S.

v. S.R.G. , supra . She cites cases which have applied D.B.S. v. S.R.G. principles to requests for retroactive decreases in a support obligation [7] , and argues that those principles should apply in this case.

She asks that the Respondent’s motion be dismissed because of: • his unexplained and unreasonable delay in commencing his motion; • his failure to provide timely and sufficient disclosure; and • his blameworthy conduct in not paying the support that was due, even on his own calculations, in a timely manner. 6.3 Why D.B.S . principles are applicable to requests for retroactive decrease [ 26 ] I am not persuaded by the reasoning in Brown v. Brown , supra .

Justice Robertson proceeds on the premise that Justice Bastarache did not intend his reasoning to apply to cases of requests for a retroactive reduction in a support order (as contrasted with a request for a rescission of arrears). I do not interpret Justice Bastarache’s comments in D.B.S. v. S.R.G. , supra , in that fashion. [ 27 ] Justice Bastarache stated at paragraph [1] of D.B.S. v. S.R.G. , supra , that the reasoning of the case did not concern “non- payment of arrears”. I take this comment to refer to cases in which a rescission of arrears is all that is requested.

In such cases, it is not argued the support provided for in the order was not properly due in the past; rather, the argument is that the payor, now and in the foreseeable future, is simply unable to pay accumulated arrears.

The idea that Justice Bastarache, in making this comment, had in mind only the cases in which a rescission alone is requested is reinforced by his observation [8] that “in such situations, the payor parent cannot argue that the amounts claimed disrupt his/her interest in certainty and predictability; to the contrary, in the case of arrears, certainty and predictability militate in the opposite direction.” [ 28 ] There is a significant difference between cases requesting a stand-alone rescission of arrears and cases alleging a material change during the retroactive period, a change which would have furnished grounds at the time to seek a reduction in a support order. [ 29 ] In my view, the principles expressed in D.B.S. v.

S.R.G. , supra , are aptly applied to this latter category of cases. In D.B.S. v. S.R.G. , supra , the court held that in determining whether to award a retroactive increase, the court must balance the payor’s interest in certainty (the certainty provided by the terms of a prior order or agreement) with “the need for fairness and flexibility”. The court emphasized the interest the child has in receiving the appropriate amount of support in a timely manner.

Similar principles are in play in a request for retroactive reduction of support order. [ 30 ] In cases in which a retroactive decrease is sought, the recipient as well as the payor has a reliance interest in the “certainty” of the terms of the existing support order or agreement. The support amount provided for in the prior order or agreement will have formed a part of the recipient parent’s budget.

The support recipient often will have undertaken financial obligations premised on the continuation of the support set out in the order. [ 31 ] There is a need for “fairness and flexibility” in cases of claims for retroactive decreases; the payor’s interest and the child’s interest must be balanced. The payor’s interest requires an expeditious resolution of his/her request for a decrease. The child’s interest requires the maintenance of an economic environment which, even if support is to be reduced, is as stable as possible.

To that end, if a decrease of support is requested, then the recipient parent should be aware of this request as soon as possible. Early notice from a payor that he/she wishes a review of the amount of support should be promoted. Delayed notice and the resulting retroactive claims can result in orders for repayment of support, support which was collected during the period of retroactivity. A repayment order means that the child may be deprived of proper support at the time that it is needed. [ 32 ] In D.B.S. v.

S.R.G. , supra , the Court found that each parent had a duty to ensure that a child received appropriate support under the Guidelines. Those duties exist in cases of potential support decrease, as well as in cases of potential support increase. The payor, in addition to notifying the recipient as soon as possible of his/her request for a decrease, should disclose in a timely fashion the particulars of his income decrease or job loss, severance pay, receipt of Employment Insurance payments, and details of any job search undertaken.

The recipient should assess and respond in a timely fashion to requests for a support reduction. If more information is required, that should be communicated. Where appropriate, the recipient should agree to a temporary suspension of support. [ 33 ] I agree with the conclusion reached by Justice William Dyer in D.M. v. S.A., 2008 NSFC 15 , that the test set out in D.B.S. v.

S.R.G. , supra , applicable to consideration of claims for retroactive increases, may, with some modification, be properly applied to case of claims for retroactive decreases. [ 34 ] I discuss that test below, and its application to the facts of this case. 6.4 D.B.S . principles applied to claims for retroactive reduction [ 35 ] Delay in bringing a motion for a decrease . Unreasonable delay by a payor in seeking a reduction, while not fatal to a claim, is a negative factor in considering the request. A delay occasioned by efforts to settle the issue is acceptable; unnecessary litigation should not be encouraged.

But if efforts to resolve the dispute are unsuccessful, then the claim for the decrease should be brought in a timely manner. [ 36 ] There may be reasons--such as illness, or absence from the jurisdiction, or threats to cut off access by a recipient parent who is displeased at the request for a decrease-- that provide an acceptable explanation for some delay.

[ 37 ] In this case, the Respondent has given no evidence as to the reasons for his delay in initiating his motion to change the support order. He also failed to pursue his request for a decrease diligently after he obtained the initial order suspending the 2007 support order, in that he did not comply with the timetable ordered for bringing his motion to change. [ 38 ] Blameworthy conduct. As the Supreme Court held in D.B.S. v. S.R.G. , supra , “blameworthy conduct” is made out at any time that a parent puts his own interests ahead of his child’s interest.

In the context of a case requesting a support decrease, blameworthy conduct would include the following: • Failure to pay the amount of support which corresponds to the payor’s reduced income; • Failure to comply with any temporary support order made while the request to reduce the original support order is under consideration; • Failure to make proper disclosure of new employment or increased income in a timely fashion. [ 39 ] Should obstructive conduct by a recipient parent —such as failure to respond to requests for a decrease in a timely manner —be labelled as “blameworthy conduct” that is properly considered in the determination of whether to grant retroactive relief?

This is the view of Justice Dyer, expressed in D.M. v. S.A. , referred to above. . My view is that such conduct, although not to be encouraged, cannot be said to demonstrate that a parent is putting her/his interest ahead of her/ his child’s.

This conduct may furnish an explanation for a payor’s delay in starting the case, and may also be considered in awards of costs. [ 40 ] In this case, the Respondent displayed blameworthy behaviour. • He paid no child support from June 1, 2008 to July 28, 2009, despite the fact that he had income from unemployment compensation payments that would have mandated support payments. • He failed to disclose his new employment and greatly increased income in July 2009, and as a result, a consent order was made which substantially and unjustifiably reduced his support obligation.

The amount of child support he paid from July 28, 2009 to October 1, 2009 was far below that required by his actual income. • He disclosed his new employment only in November 2009, in the face of a motion by the Applicant to lift the suspension of the original support order. • He failed to comply with the temporary support order of December 14, 2009. [ 41 ] The child’s circumstances This factor involves consideration of circumstances of the child currently and during the period of proposed retroactivity.

The prospect of a repayment order being made if a retroactive claim is granted may be significant here, as it may mean that no funds will flow to support the child for a significant period. [ 42 ] In this case, I have no evidence as to the effect of non-payment of proper support on the children. I know that the Applicant was in receipt of social assistance payments from July-November 2009. But I also know that the Applicant and the children live with the Applicant’s parents. I have no knowledge of their resources, and of how they may assist in the children’s support.

I cannot conclude that the children suffered during the period of retroactivity claimed. [ 43 ] The prospect of a repayment order from the applicant is not an issue here, because the enforcement system in Pennsylvania was not effective in enforcing the original order. There is no allegation by him that he overpaid support. [ 44 ] Hardship of a retroactive award. A court considering a request for retroactive decrease in a support obligation should consider the potential hardship created by such an order on a payor or on a recipient.

Unlike the situation which obtains in cases of requests for a retroactive increase, in cases of requests for a retroactive decrease, the payor or the recipient may face an order for payment of a substantial sum. A retroactive decrease, if denied, can mean that the payor will be obligated to pay arrears which have accumulated during a period in which he was unemployed.

If a retroactive decrease is ordered and the support order has been enforced throughout the period of retroactivity, then the recipient can be ordered to make repayment, even for period which predates her knowledge that a decrease in support was requested. [ 45 ] I have no evidence that a retroactive award here would cause hardship to the Applicant. There is no prospect of a repayment order from her.

I have no evidence that she incurred debt based on an expectation of receiving the amount of support in the original order. [ 46 ] With respect to the Respondent’s situation, consideration of the potential hardship he may face depends in part on the amount of arrears that remain after consideration of the merits of the claim for retroactive relief. At this point, the range is from between $3215 (his figure) to approximately $15,000 (the arrears that had accumulated by the date the motion to change was issued).

The Respondent has an annual income of $70,000 and has no dependents other than the two children who are the subject of the support order. Any hardship that may result from denial of his retroactive claim can be dealt with in the terms governing payment of arrears. 6.5 Conclusion [ 47 ] The decrease in the Respondent’s income during the period under consideration was significant. Although he was guilty of blameworthy conduct during this period, I have no evidence that the children were negatively affected.

Although the Respondent’s delay in commencing his motion to change is unexplained, I have no evidence that a retroactive award would cause hardship to the

Applicant. In my view, a retroactive decrease in the November 2007 order is justified. What remains to be determined is the start date for retroactivity. 6.6 Start date of retroactive order [ 48 ] The Supreme Court in D.B.S. v. S.R.G. , supra , held that the presumptive start date for retroactive awards increasing support should be the date of effective notice—the date on which the recipient communicated to the payor that an increase in support might be required, or the date on which a request for current income information was made.

Selection of this date involved the balancing of a number of interests: • society’s interest in promoting resolution of disputes out of court, and preventing unnecessary litigation; • society’s interest in insuring that children receive appropriate support in a timely manner; • society’s interest in maintaining a fair process that takes into account the hardship to a payor that may flow from a retroactive award . [ 49 ] In my view, the logic of the Supreme Court in D.B.S. v.

S.R.G. , supra , in selecting the date of effective notice as the presumptive start date of a retroactive increase in support is equally applicable to cases of retroactive decrease. [ 50 ] Selecting the date of effective notice as the presumptive date for retroactivity promotes proper disclosure and timely negotiation. It discourages the “hide and seek” mentality that too often prevails in cases in which a change in support may be required.

It promotes a culture in which parents work together to insure that the consequences that may result from a decrease in income are managed as sensitively as possible. [ 51 ] Selection of the date of effective notice as the presumptive start date for a retroactive decrease order may seem harsh if viewed only from the perspective of the payor whose income was reduced at an earlier date. But the issue must be viewed from a perspective that takes into account the child’s situation.

As already noted, allowing retroactive decreases prior to the date of effective notice raises the prospect already noted of overpayments, and claims for repayment. Allowing retroactive decreases prior to the date of effective notice means that a custodial parent may incur financial obligations based on the assumption of receipt of income from the existing support order. Such an approach will ultimately impact on the home in which the child resides. It is not in a child’s interest to promote such instability. [ 52 ] There will be factors which support selection of an earlier or of a later date for retroactivity.

For example, serious illness which prevents a payor from communicating with the recipient expeditiously may indicate an earlier start date. An unreasonable delay in pursuing the issue of a decrease after the matter was initially raised with the recipient may indicate that a later start date is appropriate. Blameworthy behaviour that caused difficulties for the child involved may also support a later start date. [ 53 ] I considered ordering a start date later than the date of effective notice here, because of the blameworthy behaviour by the Respondent which I noted.

If I had evidence of difficulties suffered by the children because of this behaviour or of potential hardship to the Applicant from such an award, I would likely have selected a later date. I do not have such evidence. [ 54 ] What is the date of effective notice here? In closing argument, counsel for the Respondent suggested that the simple act of non-payment of support constituted “effective notice”. I cannot accept that argument. There can be a number of reasons for non- payment of a support order other than a loss of income.

Such an approach does not promote the orderly resolution of disputes which may arise when a support payor requires a decrease in his obligation. In the case of a payor who has suffered a decrease in income, it should be his onus to start the negotiation for a decrease in the support order, as it is he who has the relevant information on the issue. [ 55 ] It is clear that in this case the date of effective notice was March 30, 2009, the date on which the Respondent’s solicitor wrote to the Applicant’s former solicitor requesting a decrease in the order.

March 30, 2009 is the date that I have selected as the start date for the retroactive order I will make. 7. Retroactive order [ 56 ] I order that, commencing March 30, 2009, the support order of November 6, 2007 be varied as follows: 1. Commencing April 1, 2009, up to and including July 1, 2009, the sum of $405 monthly, based on an annualized income of $27, 162 [9] : 2. Commencing August 1, 2009, up to and including March 1, 2010. the sum of $1094 monthly, based on an annualized income of $74, 710; 3.

Commencing May 1, 2010, up to and including December 1, 2010, the sum of $170 monthly, based on an annualized income of $19, 720 [10] .

8. Arrears [ 57 ] As a result of this order, the arrears outstanding as of May 19, 2011 (the date of the latest report I have from FRO) are $11,202.65. This amount is calculated as follows: 2008 1. Monthly child support payable under order of November 6, 2007 - $992 2. Child support to be paid ($992 x 12) - $11,904 3. Child support actually paid - $4857 4. Underpayment by the Respondent - $7047 2009 [11] 1. Child support payable for January-March 2009 pursuant to order of November 6, 2007-$992 x 3 months- $2976 2.

Commencing date of effective notice, child support payable for April 200- July 2009- annualized income = $27, 162--$405 x 4 months- $1620 3. Child support payable for balance of 2009, after new employment- -annualized income = $74, 228 --$1094 x 5months- $5470 4. Child support paid by the Respondent - $ 5355.83 5. Underpayment by the Respondent - $4710.17 2010 [12] 1. Monthly Table Amount of Support for Income of $39,726.59 - $596 2. Child Support To Be Paid By Respondent ($596.00 x 12) - $7,152.00 3. Child Support Paid By Respondent - $9,660.43 4. Overpayment By Respondent - $2508.43 2011 (up to May 19) 1.

Monthly Table Amount of Support for Income of $70,380- $1047 2. Child Support to be paid by Respondent ($1047 x 5)- $5,235 3. Child Support Paid by Respondent -$4,803.09 4. Underpayment by Respondent - $431.91 [ 58 ] Adding in the unpaid costs award of $1500, which is enforceable as child support, the total amount owing by the Respondent is $11,180.65 . I order that this amount shall be paid by the Respondent within 60 days.

It is a substantial sum, but I note that during the period in question, the Respondent was able, by drawing on income or borrowing from family, to retire or pay down significant debts; I see no reason why he could not do the same with respect to this debt. I also note that he appears to have a significant surplus in his monthly cash flow. Although his latest financial statement indicates a shortfall of $220 monthly, that does not take into account the money which he and his wife depose that she contributes to household expenses.

When her contribution is taken into account, the Respondent has a healthy monthly surplus of income over expenses. [ 59 ] Of these arrears, which I have fixed, the City of Toronto has an interest in the amount of $660. [ 60 ] Success in this case has been divided. If costs are sought, then the party seeking costs should serve and file written submissions within 15 days; the opposing party shall serve and file responding submissions within a further 15 days.

Released on: June 21, 2011 Justice E.B. Murray

Schedule A The respondent’s income 2008-2010 [ 61 ] I accept the Respondent’s evidence as to the amount of his income, except for his attempt to exclude the severance pay he received in 2008 from his Guideline income [13] . The Respondent rolled this amount into a 401K (the equivalent of a Canadian registered retirement savings plan). [ 62 ] A core provision of the Guidelines is that child support payable is calculated in accordance with the payor’s total annual income from all sources. On occasion, income from non-recurring sources has not been included in the calculation of income.

However, as observed by Alfred Mamo in the 2010 Annual Review of Family Law , “The courts generally favour inclusion of such amounts in the year in which the funds are received”. [14] Severance pay received, whether it is directed by the payor into a vehicle to defer taxation or not, has been repeatedly found to be properly included in a payor’s income. [15] [ 63 ] I find that the Respondent’s severance pay should be included in the calculation of his 2008 income. [ 64 ] My findings with respect to the Respondent’s income for the years 2008-2010 are set out below.

The sources of these findings are the Respondent’s U.S. tax returns and source documents, as clarified by letters from the Respondent’s solicitor (clarification was necessary as the tax returns are jointly filed by the Respondent and his wife). 2008 1. Wages from Comcast - $10,833.00 USD 2. Bonus from Comcast rolled over into 401K - $10,541.86 USD 3. Unemployment Compensation - $15,232.00 USD 4. Total Income in US Dollars - $36,606.86 5. Total Income in Canadian Dollars (Bank of Canada Average Rate for 2008 - 1.06601429) - $39,023.43 Can 2009 1. Wages from Sunguard - $27,076.10 USD 2.

Unemployment Compensation - $17,414.00 USD 3. Total Income in US Dollars - $44,490.10 4. Total Income in Canadian Dollars (Bank of Canada Average Rate for 2009 - 1.14197729) - $50,806.68 Can 2010 1. Wages from Sunguard - $19,395.76 USD 2. Unemployment Compensation -(Commencing May 1, 2010 to December 31, 2010, $564.00 per week for 34 weeks)- $19,176.00 USD 3. Total Income in US Dollars - $38,571.76 4. Total Income in Canadian Dollars (Bank of Canada Average Rate for 2008 - 1.02993904) - $39,726.55 Can