2016 ONCA 152, 2016 ONCA 152

Gray v. Rizzi Ontario Reports Court of Appeal for Ontario, Sharpe, D.M. Brown and B.W. Miller JJ.A. February 25, 2016 129 O.R. (3d) 201 | 2016 ONCA 152 Case

Summary Family law — Support — Variation — Final support order made in 2005 after husband failed to make financial disclosure — Husband subsequently moving successfully to vary final order under s. 17 of Divorce Act — Trial judge recalculating husband's imputed income for period from 2002 through 2013 — Decision eliminating substantial support arrears and imposing substantial repayment obligation on wife — Trial judge erring by finding that events that pre-dated final order constituted material change in circumstances for purposes of s. 17 — Trial judge effectively rewarding husband for his failure to make financial disclosure in 2005 — Husband meeting threshold for variation for period from 2006 to 2013 as he experienced significant reduction in income — Some retroactive relief appropriate as long as it did not result in any hardship to wife — Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 17 .

The parties married in 1989 and separated in 2002. They had two children. Both children suffered from mental health problems. The wife commenced an application for divorce and corollary relief in December 2003. The parties reached an agreement on an interim order for custody and access, one term of which required the husband to serve and file his answer and financial statement within 30 days, failing which the wife had leave to proceed by way of uncontested trial. He failed to do so.

A final order was made in November 2005 granting the wife sole custody of the children and ordering the husband to pay monthly child support of $1,584 and monthly spousal support of $2,874, retroactive to the date of separation, based on an imputed income of $133,000. The husband brought a motion to vary the final order under s. 17 of the Divorce Act on the ground that [page202] he had experienced a material change in circumstances as a result of a significant reduction in his income.

The trial judge found that the husband had demonstrated that he experienced a material change in circumstances in the period prior to the making of the final order which justified a reduction in his child and spousal support obligations retroactive to the date of separation. She terminated the wife's spousal support effective 2006. She recalculated the husband's imputed income for the period 2002 through 2013 and, based on that recalculation, fixed the total spousal and child support due from the husband to the wife from the date of separation to the end of 2013 at $171,118.

That decision eliminated a substantial amount of the support arrears owed by the husband and imposed on the wife an obligation to reimburse the husband for a significant amount of overpayment of support. The wife appealed. Held , the appeal should be allowed in part. The trial judge erred in principle by relying on changes in the husband's circumstances that pre-dated the making of the final order to hold that the husband had met the threshold requirements for a variation of the support order. Moreover, she erred by effectively conducting a correctness review of the final order.

The fact that the final order was made in the absence of full information about the husband's reduced income was entirely the husband's fault. The trial judge proceeded on the erroneous premise that if a support payor has failed to make proper financial disclosure before the determination of a final support order, the payor may remedy his failure on a subsequent motion to change under s. 17 of the Divorce Act . The husband had clearly experienced a significant and sustained reduction in his annual income compared with the income imputed to him in the final order.

He met the threshold in s. 17 for the period from 2006 through 2013. Where a payor demonstrates that a change in circumstances took place during the time that arrears were accumulating which rendered the payor unable to make child support payments for a substantial period of time, the court may provide relief by varying the child support order or rescinding arrears. Some retroactive relief was appropriate.

However, given the husband's desultory pursuit of his motion to change, his failure to provide timely financial disclosure and his failure to co-operate with the support enforcement agencies, absolutely no hardship should result to the wife from any retroactive support order. The husband was not entitled to any retroactive variation of his child support obligations for his daughter or to any rescission of his arrears with respect to those obligations. His child support obligations towards his son terminated at the end of 2010, when the son began to receive disability payments.

The husband was not entitled to any variation in child support for his son before that date, nor was he entitled to any rescission of any child support arrears. The wife had achieved economic self-sufficiency and was not entitled to indefinite spousal support. There was no basis for retroactively varying the husband's spousal support obligations

before January 1, 2012. Varying the final order to terminate spousal support as of January 1, 2012 would not work an undue hardship tothe wife. Brown v. Brown, [2010] N.B.J. No. 18, 2010 NBCA 5, 353 N.B.R. (2d) 323, 315 D.L.R. (4th) 293, 76 R.F.L. (6th) 33; Corcios v.Burgos, [2011] O.J. No. 2422, 2011 ONSC 3326, 203 A.C.W.S. (3d) 137 (S.C.J.); P. (L.M.) v. S. (L.), [2011] 3 S.C.R. 775, [2011] S.C.J.No. 64, 2011 SCC 64, 2012EXP-22, J.E. 2012-18, EYB 2011-199870, 424 N.R. 341, 339 D.L.R. (4th) 624, 6 R.F.L. (7th) 1, 208A.C.W.S. (3d) 561; S. (D.B.) v. G. (S.R.), [2006] 2 S.C.R. 231, [2006] S.C.J.

No. 37, 2006 SCC 37, 270 D.L.R. (4th) 297, 351 N.R. 201,[2006] 10 W.W.R. 379, J.E. 2006-1543, 61 Alta. L.R. (4th) 1, 391 A.R. 297, 31 R.F.L. (6th) 1, EYB 2006-108061, 149 A.C.W.S. (3d)626; [page203] Trembley v. Daley, [2012] O.J. No. 5330, 2012 ONCA 780, 23 R.F.L. (7th) 91, 222 A.C.W.S. (3d) 180, consd Other cases referred to DiFrancesco v. Couto (2001), (ON CA), 56 O.R. (3d) 363, [2001] O.J. No. 4307, 207 D.L.R. (4th) 106, 155 O.A.C.32, 109 A.C.W.S. (3d) 617 (C.A.); Gray v. Rizzi, [2011] O.J. No. 2563, 2011 ONCA 436, 202 A.C.W.S. (3d) 554; Gray v. Rizzi, [2012]O.J. No. 5343, 2012 ONSC 6335 (S.C.J.); Hickey v.

Hickey, (SCC), [1999] 2 S.C.R. 518, [1999] S.C.J. No. 9, 172D.L.R. (4th) 577, 240 N.R. 312, [1999] 8 W.W.R. 485, J.E. 99-1206, 138 Man. R. (2d) 40, 46 R.F.L. (4th) 1, REJB 1999-12847, 88A.C.W.S. (3d) 1044; Kerr v. Baranow, [2011] 1 S.C.R. 269, [2011] S.C.J. No. 10, 2011 SCC 10, 274 O.A.C. 1, 328 D.L.R. (4th) 577,2011EXP-624, 411 N.R. 200, J.E. 2011-333, [2011] 3 W.W.R. 575, 64 E.T.R. (3d) 1, 14 B.C.L.R. (5th) 203, 300 B.C.A.C. 1, 93 R.F.L.(6th) 1, EYB 2011-186472, 199 A.C.W.S. (3d) 1214; Roberts v. Roberts, [2015] O.J. No. 3236, 2015 ONCA 450, 65 R.F.L. (7th) 6, 254A.C.W.S. (3d) 797; Shamli v. Shamli, [2004] O.J.

No. 4999, , 135 A.C.W.S. (3d) 680 (S.C.J.); Trang v. Trang, [2013]O.J. No. 1618, 2013 ONSC 1980, 29 R.F.L. (7th) 364, 227 A.C.W.S. (3d) 212 (S.C.J.); Willick v. Willick, (SCC), [1994]3 S.C.R. 670, [1994] S.C.J. No. 94, 119 D.L.R. (4th) 405, 173 N.R. 321, J.E. 94-1704, [1994] R.D.F. 617, 125 Sask. R. 81, 6 R.F.L. (4th)161, 51 A.C.W.S. (3d) 106 Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(1) (

a) Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 17 [as am.], (4) [as am.], (4.1),

(7) Family Law Act, R.S.O. 1990, c. F.3, s. 37 [as am.], (2) [as am.],

(2.1) Rules and regulations referred to Family Law Rules, O. Reg. 114/99 [as am.], rules 10(1) [as am.], 13(1)(b) [as am.] Federal Child Support Guidelines, SOR/97-175 [as am.], ss. 7 [as am.], 14(

a) APPEAL from the order of Olah J. of the Superior Court of Justice varying a child and spousal support order. Cheryl Goldhart and Maneesha Mehra, for appellant/respondent by way of cross-appeal. Peter B. Cozzi, for respondent/appellant by way of cross-appeal. The judgment of the court was delivered by D.M. BROWN J.A.: — I. Overview [1] This appeal concerns the principles informing a retroactive variation order under s. 17 of the Divorce Act, R.S.C. 1985, c. 3 (2ndSupp.).

In this case, the variation granted by the trial judge resulted in the elimination of substantial child and spousal support arrears andimposed substantial repayments from recipient to payor. [page204] [2] Nadine Ellen Gray and Mario Rizzi started living together in June 1986, married in October 1989 and separated in August 2002. Theyhave two children. Their son is now 25 years old; their daughter is 20 years old. Both children suffer from mental health problems.Following their parent's separation, both children primarily resided with their mother.

In recent years, however, the son has alternated hisresidence between his parents. Since December 2010, the son has received payments under the Ontario Disability Support Program.

[ 3 ] Nadine commenced an application for divorce and corollary relief in December 2003. At a case conference on February 4, 2005, the parties reached agreement on an interim order for custody and access. One term of the agreement required Mario to serve and file his answer and financial statement within 30 days, failing which Nadine had leave to proceed by way of uncontested trial. He failed to do so. [ 4 ] As a result, Loukidelis J. made a final order dated November 1, 2005 (the "final order") dealing with custody, access, child support and spousal support.

The final order granted Nadine sole custody of both children and placed Mario's access to the children in Nadine's sole discretion. It imputed annual income to Mario in the amount of $133,000. Finally, it ordered Mario to pay monthly child support of $1,584, monthly spousal support of $2,874, as well as a proportional share of s. 7 [of the Federal Child Support Guidelines , SOR/ 97- 175] expenses, all retroactive to the date of separation. [ 5 ] In 2009, Mario initiated two proceedings. The first was a motion to set aside the final order.

Boswell J. dismissed that motion in May 2010, and this court dismissed Mario's appeal in 2011. [ 6 ] The second was a motion to change the final order pursuant to s. 17 of the Divorce Act on the ground that Mario had experienced a material change in circumstances as a result of a significant reduction in his income.

The motion ultimately was heard by the trial judge in November 2013, and disposed of by order dated June 10, 2014 (the "variation order"). [ 7 ] The trial judge held that Mario had demonstrated he experienced a material change in circumstances in the period prior to the making of the final order, which justified a reduction in his child and spousal support obligations retroactive to the date of the parties' separation. [ 8 ] The trial judge terminated Nadine's spousal support effective 2006.

She recalculated Mario's imputed income for the period 2002 through 2013 and, based on that recalculation, fixed the total spousal and child support due from Mario to Nadine from [page205] the date of separation to the end of 2013 at $171,118. She then specified the deductions to be made from that amount, including all moneys paid by Mario for child and spousal support. [ 9 ] That decision eliminated about $320,000 in support arrears owed by Mario. It also imposed on Nadine an obligation to reimburse Mario a significant amount for overpayment of support.

The parties disagree on the precise amount of the repayment, but seem to agree that it would be in the neighbourhood of $113,000. [ 10 ] The trial judge also held that child support for the parties' daughter in 2014 would continue at the greater of Mario's imputed income of $60,000 and his actual income from all sources that year. The trial judge ordered the parties to exchange their income tax returns by July 1 of each year, commencing July 1, 2014. [ 11 ] On appeal, Nadine asks that the Variation Order be set aside and Mario's motion to change be dismissed.

Both parties appeal from the trial judge's September 10, 2014 cost award of $15,000 in favour of Mario. [ 12 ] For the reasons set out below, I would grant most of the relief sought by Nadine on the appeal. In my view, the trial judge erred in principle by relying on changes in Mario's circumstances that pre-dated the making of the final order to grant the variation order and, in effect, conducted a correctness review of the final order. She also failed to apply the principles governing variations in child and spousal support set out by the Supreme Court of Canada in the cases of S. (D.B.) v.

G. (S.R.) , [2006] 2 S.C.R. 231 , [2006] S.C.J. No. 37 , 2006 SCC 37 and P. (L.M.) v. S. (L.) , [2011] 3 S.C.R. 775 , [2011] S.C.J. No. 64 , 2011 SCC 64 . Finally, she erred in failing to advert to the fact that the elimination of support arrears would require Nadine to repay Mario a substantial amount of the support previously paid. [ 13 ] In light of those errors of principle, I have considered Mario's motion to change. I find that Mario experienced a material change in his financial circumstances after the final order.

Applying the principles governing the variation of child and spousal support orders under s. 17 of the Divorce Act , I would vary Mario's child and spousal support obligations. However, while the variation will have some retroactive effect, Mario will remain obliged to pay significant support arrears and Nadine will not be required to make any repayment to Mario. II. Issues on Appeal [ 14 ] Three issues are raised on this appeal: (

i) Did the trial judge err in finding that Mario had experienced a material change in circumstances prior to the making of [page206] the final order that justified a retroactive change in his child and spousal support obligations, which eliminated his support arrears and required Nadine to reimburse him for the overpayment of support? (ii) Did the trial judge err in her determination of the parties' income for support purposes? (iii) Did the trial judge err in awarding Mario costs of $15,000? III.

Positions of the Parties [ 15 ] Nadine submits that the trial judge erred in finding that events which took place prior to the making of the final order could constitute a material change in Mario's circumstances, and erred in making a support variation order extending back to 2002. According to Nadine, in so doing the trial ignored the principles governing retroactive support orders set down by the Supreme Court of Canada in the cases of S. (D.B.) and P. (L.M.) . [ 16 ] Mario submits that the trial judge committed no error of law in retroactively varying his child and spousal support obligations.

He contends that her discretionary order is entitled to a high degree of deference, arguing that the trial judge correctly held that the principles in S. (D.B.) and P. (L.M.) provide little guidance for retroactive variations of support orders where the payor's income has gone down. Mario argues that the trial judge properly applied the principles concerning retroactive variations of support established by

this court in DiFrancesco v. Couto (2001), (ON CA), 56 O.R. (3d) 363, [2001] O.J. No. 4307 (C.A.) and Trembley v.Daley, [2012] O.J. No. 5330, 2012 ONCA 780, 23 R.F.L. (7th) 91. [17] On the issue of costs, Nadine submits Mario was not entitled to any; Mario submits that he should have received costs on a fullindemnity basis in light of the offer to settle he made a month before the trial. IV.

Standard of Review [18] An appeal court should not overturn a support order unless the reasons disclose an error in principle, a significant misapprehensionof the evidence or unless the award is clearly wrong; it is not entitled to overturn a support order simply because it would have reached adifferent decision or balanced the factors differently: Hickey v. Hickey, (SCC), [1999] 2 S.C.R. 518, [1999] S.C.J. No.9, at paras. 11 and 12. [page207] V. First Issue: Did the Trial Judge Err in Relying on Events that Pre-Dated the Final Order to Grant a Variation? A.

Analysis [19] Mario brought his motion to change under s. 17(4) and (4.1) of the Divorce Act, which read as follows: 17(4) Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that a change ofcircumstances as provided for in the applicable guidelines has occurred since the making of the child support order or the last variation order made in respect of that order.1

(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in thecondition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or thelast variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. [20] The trial judge held that Mario had met the statutory requirements for two reasons: (

i) Mario demonstrated that he had experienced achange in circumstances prior to the making of the final order; and (ii) the final order that Mario sought to vary contemplated that sincehe had not yet made the requisite financial disclosure, he could move to vary the support orders after making such disclosure: see para.41. These two reasons disclose errors in principle. The trial judge improperly relied on events that pre-dated the final order to concludethat Mario had met the threshold for a variation of support. She also improperly reviewed the correctness of the final order. Let meconsider each in turn. First reason:

Section 17 of the Divorce Act [21] The parties separated in 2002. The trial judge found that Mario had experienced "a material change in circumstances both in theperiod between 1999 -- 2002 and between the period of 2003 -- 2005": para. 33. Mario was (and remains) a self-employed computerprogrammer. On the motion to change, Mario deposed that his "self-employment income was reduced to near zero because the two self-employment contracts from which I derived my income between 1987 and 2003 were terminated in July 2003 [page208] and Septemberof 2003".

He also gave evidence that in 2003, the software languages in which he had worked became obsolete, necessitating that heundertake a two-year retraining program. [22] Mario argued that, because the final order required payment of child and spousal support retroactive to August 2002, namely, whenthe parties separated, establishing a material change after August 2002 entitled him to a variation of the final order.

The trial judgeeffectively accepted that argument, holding that Mario had experienced a "significant decrease in income during the period 2003 -- 2005"that constituted a material change in Mario's circumstances: at paras. 33 and 37. [23] However, the final order was not made until November 1, 2005. Before varying the final order, s. 17(4) and (4.1) of the Divorce Actrequired the trial judge to satisfy herself that a change in Mario's circumstances had occurred "since the making" of the final order -- notsince the date of separation: P. (L.M.), at para. 31, citing Willick v.

Willick, (SCC), [1994] 3 S.C.R. 670, [1994] S.C.J.No. 94, at p. 688 S.C.R. She failed to do so. Instead, the trial judge incorrectly relied on circumstances that pre-dated the final order tohold that Mario had met the threshold requirements for a variation of the support order. In so doing, the trial judge committed an error inprinciple.

Second reason: Other orders contemplated reviewing the final order [24] The trial judge also formed the view that, when the final order was made, "neither the Respondent Father's income nor theApplicant Mother's income were fully assessed for the determination of appropriate child and spousal support payable. In large part,these unfortunate circumstances were created by the Respondent Father. . . [H]e failed to organize his financial data to file his [IncomeTax Reports "(ITRs )"]": para. 8.

The trial judge went on to state, at paras. 8, 18, 25 and 41 of her reasons: Justice Loukidelis' endorsement anticipated a change to his order. The endorsement's purposes were: firstly, to motivate the Respondentto provide full financial disclosure to the Applicant; and, secondly, to establish the appropriate child and spousal support according to theRespondent's income, as ultimately disclosed. . . . . . [D]espite the Respondent Father's inaction, at no time was his income and the Applicant's needs properly assessed. . . . . . [page209]

Had Justice Loukidelis been aware of the change in circumstances experienced by the Respondent from 1999-2005, the terms of thedefault order would have been radically different. . . . . .

Given that the Divorce Act, s. 17 does not eliminate a judge's "broad discretion on a motion to change", it would be a travesty in this casenot to address the variation from the date of the Loukidelis J. order and [its] retroactive applicability, given that I have found that amaterial change of circumstances existed sufficient to ground a variation of both child and spousal support and given that both JusticeLoukidelis and Justice Boswell contemplated a variation based on proper disclosure. [25] Nadine submits that instead of deciding Mario's motion to change by applying the relevant legal principles, the trial judge reviewedthe correctness of the final order and impermissibly substituted her view about what final order should have been made at first instance.

Iaccept this submission. In my view, the passages reproduced above disclose two material errors. A motion to vary is not an appeal [26] First, with respect, the trial judge's approach to the final order ignored the Supreme Court of Canada's clear direction in Willick v.Willick, supra, that an application for a variation order is not an appeal of the original order: p. 687 S.C.R.

As Sopinka J. stated, at pp.687-88 S.C.R.: [I]n a variation proceeding, it must be assumed that, at the time it was made, the original child support order or the previous variationorder accurately assessed the needs of the children having regard to the means of the parents. As such, the correctness of the previousorder must not be reviewed during the variation proceeding. The previous order will not be departed from lightly and will only be variedif the requirements under s. 17(4) of the Divorce Act are properly satisfied.

See, also, P. (L.M.), at para. 33. [27] In 2009, Mario moved to set aside the final order and the order of Nelson J. His motion was dismissed by Boswell J. In its June 7,2011 endorsement dismissing Mario's appeal, this court stated that Mario's arguments about the final order "go to the correctness of theorder -- arguments which can only be made on appellate review": at para. 5. However, Mario never appealed the final order. [28] Consequently, it was not open to the trial judge to reconsider the correctness of the final order.

Her task was to ascertain whetherMario had demonstrated a material change in circumstances "since the making" of the final order. [page210] Non-disclosure should not be rewarded [29] The handwritten endorsement made by Loukidelis J. was quite brief. He wrote: Matter ongoing for 2 years. [Mario] has failed to provide required financial statements. Any further delays will not improve the situation. I will sign the defaultjudgment as requested.

The ball will then be in [Mario's] court to prove his income and apply for a variation of the support. [30] Relying on this endorsement, the trial judge proceeded on the erroneous premise that if a support payor has failed to make properfinancial disclosure prior to the making of a final support order, the payor may remedy his failure on a subsequent motion to changeunder s. 17 of the Divorce Act. That is, a payor may achieve a support variation by arguing that his new disclosure of income earnedprior to the final order constitutes a change in circumstances "since the making" of the final order.

With respect, such an approach is notopen to a court on a s. 17 motion to change. [31] "[T]he disclosure rules and the sanctions for non-compliance are the centrepiece of the Family Law Rules": Shamli v. Shamli,[2004] O.J. No. 4999, (S.C.J.), at para. 8. As this court emphasized in Roberts v. Roberts, [2015] O.J. No. 3236,2015 ONCA 450, at paras. 11-13: The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing.

Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage ofthe opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled. Financial disclosure is automatic. It should not require court orders -- let alone three -- to obtain production. [32] The Divorce Act, the Federal Child Support Guidelines, and the Family Law Rules, O.

Reg. 114/99 clearly and comprehensivelyidentify the financial disclosure a person must make in response to a claim for child or spousal support. The disclosure obligations areneither complicated nor onerous. For a respondent like Mario, who operates a small business, the disclosure obligation in large partconsists of producing income tax returns and business records that any such business generates in the ordinary course.

Such disclosuremust be made quickly, within 30 days after a respondent is served with an application: Family Law Rules, rules 10(1) and 13(1)(b).[page211] [33] At the time the parties separated in 2002, Mario had run his own software development business for many years. Nadinecommenced her application in December 2003. By the time the parties appeared before Loukidelis J. almost two years later, Mario hadmade no financial disclosure whatsoever. Indeed, as the trial judge observed, Mario had not filed income tax returns since 1999.

Whilethat may go some way to explaining why Mario did not make financial disclosure, it certainly does not excuse his failure. Where arespondent, like Mario, ignores his financial disclosure obligations, that party assumes the risk that a judge ultimately may refuse to

tolerate any further delay and proceed to grant a final support order based on imputed, rather than declared, income. [ 34 ] To allow a party who ignores his or her financial disclosure obligations to later satisfy the requirement and argue that the late disclosure constitutes a material change in circumstances would eviscerate the financial disclosure regime. The practical dangers of such an approach were well described by Pazaratz J. in Trang v. Trang , [2013] O.J.

No. 1618 , 2013 ONSC 1980 , 29 R.F.L. (7th) 364 (S.C.J.) , at paras. 53 , 54 and 59, discussing motions to change where the final order imputed income to the payor: If "declared income" automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place. It might even be a disincentive for payors to participate in the initial court process. They could simply ignore support Applications -- as they often do. They could wait to see if the court imputes income, and how much.

If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong. Support claimants should not be forced to go through this two-step process. Our family court system certainly can't afford it. [ 35 ] In this case, the trial judge relied on ss. 37(2) and 37(2.1) of the Family Law Act , R.S.O. 1990, c. F.3, which authorize the variation of spousal and child support orders not only where there is a material change in circumstances, but also on the ground that "evidence not available on the previous hearing has become available . . .".

In her view, "[t]here seems to be no good reason why there should be different tests for varying support under the FLA as opposed to the Divorce Act ": para. 23. [ 36 ] Whether that should be so or not, the fact remains that the statutes do contain different tests.

Section 17 of the Divorce Act does not recognize, as a ground for a variation, that evidence not available prior to the making of a final order later becomes available.

Furthermore, while it is not necessary on this appeal to interpret ss. 37(2) and 37(2.1) of the Family Law Act , I have [page212] great difficulty in conceiving that "evidence not available on the previous hearing" could include financial information that was "not available" because of a party's deliberate failure to meet his disclosure obligations. [ 37 ] The trial judge therefore erred in accepting that a motion to change is available to a payor on the basis of financial information that is new to the court because the payor had failed to meet his prior disclosure obligations. B.

Reconsideration of whether Mario experienced a material change in circumstances [ 38 ] Since the trial judge erred in principle both in finding that events pre-dating the final order constituted material changes in circumstances for the purposes of s. 17 and in conducting a review of the correctness of the final order, her decision is not entitled to deference. Neither party asked this court to remit the matter for reconsideration on proper principles.

Given the lengthy delay below in disposing of the motion to change, it is appropriate for this court to deal with the issues raised by Mario's motion to change: Courts of Justice Act , R.S.O. 1990, c. C.43, s. 134(1)( a ). [ 39 ] Turning to those issues, to ascertain whether a change in circumstances has occurred, a court must consider whether the change advanced was "material" -- meaning a change that, "if known at the time, would likely have resulted in different terms" -- and a change with some degree of continuity, and not merely a temporary set of circumstances: P. (L.M.) , at paras. 32 and 35 .

A material change in the financial means or circumstances of a payor can constitute a change in circumstances for the purposes of a motion to change child or spousal support: Federal Child Support Guidelines , s. 14(a); Divorce Act , s. 17(4.1). [ 40 ] In making the final order in November 2005, Loukidelis J. imputed a gross annual income to Mario of $133,000 for 2005.

After considering the evidence on the motion to change, the trial judge found as fact that Mario's income for support purposes was as follows: in the range of $60,000 to $68,000 for the years 2006 through 2011; $12,000 in 2012; and $60,000 in 2013. [ 41 ] Nadine submits that the trial judge made errors in calculating the incomes of the parties during that period and should have imputed a greater level of income to Mario. I disagree.

In calculating his income, the trial judge did not solely rely on Mario's tax returns for that period; rather, she took into account all the evidence and, for most of the years, also imputed income to Mario. I see no reason to interfere with the trial judge's calculation of Mario's income for the period 2006-2012. [page213] [ 42 ] It is clear from these findings that Mario experienced a significant and sustained reduction in his annual income compared with the income imputed to him in the final order.

That reduction in income constituted a material change in Mario's means and circumstances, meeting the threshold for a variation of the final order under s. 17(4) and (4.1) of the Divorce Act . VI. Second Issue: Did the Trial Judge Err in Making Retroactive Adjustments to Mario's Child Support Obligations? [ 43 ] Having met the threshold for a variation of child support, the next question is how to approach the retroactive variation requested by Mario. A. The general principles [ 44 ] As I noted at the outset, the parties disagree about the applicability of S. (D.B.) to Mario's motion to change.

Nadine submits that the trial judge ignored the principles governing retroactive support orders set down in S. (D.B.) , while Mario argues that those principles do not apply to cases like this, in which the payor's income has decreased substantially. [ 45 ] In S. (D.B.) , the Supreme Court of Canada extensively canvassed the principles applicable to a request to vary child support payments. The court identified four factors that a court should consider before making a retroactive child support order: (

i) the reason why a variation in support was not sought earlier; (ii) the conduct of the payor parent; (iii) the circumstances of the child; and (iv) any hardship occasioned by a retroactive award: paras. 94 to 116. The court also held that, as a general rule, the date of effective notice should serve as the date to which the award should be retroactive: para. 118. Finally, it usually will be inappropriate to make a support award retroactive to a date more than three years before formal notice was given: para. 123. [ 46 ] The four cases decided in S. (D.B.) all involved circumstances in which recipient parents sought increases in child support payments

with retroactive effect. The trial judge distinguished S. (D.B.) on the basis that in the present case it was the payor, not the recipient, who was seeking the variation, and that it was a reduction in child support, not an increase, that was sought. [ 47 ] The trial judge also pointed to this court's decision in Trembley v. Daley , where a payor successfully sought to reduce child support payments because of a material change in circumstances.

In Trembley , this court observed that the S. (D.B.) decision was "of limited assistance because the [Supreme Court of Canada] explicitly stated, at para. 98, that aethese factors are [page214] not meant to apply to circumstances where arrears have accumulated'": para. 15. The trial judge concluded that the reasoning in S. (D.B.) similarly was inapplicable in the case before her: para. 27. [ 48 ] In my view, the trial judge erred in principle in reaching that conclusion. The comments made in S. (D.B.) and Trembley must be read in their proper context.

The S. (D.B.) principles and support arrears [ 49 ] Turning first to the S. (D.B.) decision, the passage in para. 98 of the reasons of Bastarache J., quoted by this court in Trembley and relied upon by the trial judge, is part of a discussion about the role played by predictability in considering whether to retroactively vary support. Bastarache J. observed that retroactive awards disturb the certainty and predictability a payor parent has come to expect: para. 63.

If, however, a payor's income increases, the court must balance the child's entitlement to receive the full amount of support due against a payor's need for predictability in managing his financial affairs.

In determining whether to exercise its discretion to order a retroactive child support award, a court must remain alive to "the delicate balance between certainty and flexibility in this area of the law"; courts must avoid gratuitously disrupting settled obligations: para. 96. [ 50 ] It is at this point in his analysis that Bastarache J. writes, at para. 98: Before canvassing the myriad of factors that a court should consider before ordering a retroactive child support award, I also want to mention that these factors are not meant to apply to circumstances where arrears have accumulated.

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. There is no analogy that can be made to the present cases. (Emphasis added) [ 51 ] Read in context, these comments do not render the S. (D.B.) factors inapplicable in all cases of arrears. Rather, the passage suggests that a payor who has let arrears accumulate has no claim to resist an increase in support on grounds of certainty and predictability.

A delinquent payor cannot use the principle of predictability as a shield against paying the full amount of support to which his child is entitled. Since the payor did not comply with the existing support order, he cannot claim reliance on that order in managing his financial affairs.

In contrast, where a payor seeks a retroactive decrease in support, the [page215] S. (D.B.) factors -- such as taking into account the circumstances of the child, the conduct of the payor parent, the hardship of a retroactive award and the reason for delaying in seeking a variation in support -- remain relevant. [ 52 ] The respondent relies on the decision of the New Brunswick Court of Appeal in Brown v. Brown , [2010] O.J. No. 18 , 2010 NBCA 5 in support of his submission that so long as a payor is in arrears, the factors outlined in S. (D.B.) for motions to vary do not apply.

The Brown case involved a motion to change by a payor on the basis that he had suffered a significant reduction in his income since the making of the final order. The New Brunswick Court of Appeal held that, on such a variation motion, a court should ask two questions: (

i) did the payor experience a material change in circumstances during the period of retroactivity; and (ii) having regard to all other relevant circumstances during this period, would the payor have been granted a reduction in his support obligation but for his untimely application (para. 49)? The "other relevant circumstances", according to the New Brunswick Court of Appeal, would not include the factors outlined in S. (D.B.) : para. 22 .

Notwithstanding that broad proposition, the New Brunswick Court of Appeal limited the balance of its legal analysis to confirming that the failure of the recipient to pursue timely enforcement measures was not a sufficient basis for cancelling support arrears: para. 50.

Since the New Brunswick Court of Appeal remitted the matter to the motion judge, the decision provides little practical guidance about the "other relevant considerations" a court should take into account on a motion to change. [ 53 ] I can conceive of a scenario where the existence of arrears might operate to support a payor's request for a reduction. Such unusual circumstances were found in Trembley v.

Daley . 2 In that case, the payor had suffered a "catastrophic injury" to his hand some years after the making of the final support order, as a result of which he could no longer perform the manual work which had been the sole source of his income. Overwhelming hardship to the payor caused by that injury emerged as the prevailing consideration in that case.

In those circumstances, it would be understandable that the court would take into account the ability of a payor to satisfy existing support arrears given the payor's permanently diminished earning capacity stemming from the catastrophic injury. [page216] [ 54 ] Such exceptional circumstances aside, the factors the Supreme Court of Canada identified in S. (D.B.) provide useful guidance to a court faced with a request to reduce child support based upon a payor's material decline in income.

Although those factors require some minor alteration to suit circumstances where the payor's income has gone down, not up, the fundamentals still apply. Accordingly, the trial judge erred in principle in concluding that she need not consider the factors identified in S. (D.B.) . Modifying the S. (D.B.) principles to a motion to change based on a payor's reduced income [ 55 ] In Corcios v. Burgos , [2011] O.J.

No. 2422 , 2011 ONSC 3326 (S.C.J.) , Chappel J. adapted the S. (D.B.) principles to a motion to change a child support order where the payor requested a retroactive decrease in support or rescission of arrears. I find it hard to improve on the analysis set out at para. 55 of her reasons. I adopt her analysis and summarize the key principles below. [ 56 ] First, when applying the adapted S. (D.B.) principles on a motion to retroactively vary child support, one must always keep in mind the ultimate issue, namely, the best interests of the child: DiFrancesco , at para. 24 .

As Chappel J. stated [at para. 55], "Ultimately, the goal in addressing child support issues is to ensure that children benefit from the support they are owed when they are owed it, and any incentives for payor parents to be deficient in meeting their child support obligations should be eliminated."

[ 57 ] Next, a court should distinguish cases where a payor seeks relief from payment of arrears based on current inability to pay from those where arrears accumulated due to a change in the payor's circumstances that affected the payor's ability to make the child support payments when they came due. [ 58 ] A payor's request for relief from payment of arrears based on a current inability to pay generally will not result in the rescission or reduction of arrears unless the payor has established, on a balance of probabilities, that he cannot and will not ever be able to pay the arrears.

Evidence that the recipient agreed to non-payment of the support is irrelevant, as child support is the right of the child and cannot be bargained away by the recipient parent. [ 59 ] Where, however, the payor demonstrates that a change in circumstances took place during the time that arrears were accumulating which rendered the payor unable to make child support payments for a substantial period of time, the court may [page217] provide relief by varying the child support order or rescinding arrears.

As Chappel J. stated [at para. 55], "[the court] may determine that it is appropriate to retroactively suspend enforcement of the support order during the time when the payor was unable to pay, or decrease the amount of child support owed during that time and reduce or rescind the arrears owing accordingly". [ 60 ] The present case falls into this second category.

While there is no fixed formula a court must follow when exercising its discretion in this circumstance, Chappel J. identified the following factors to guide a court in determining whether to grant retroactive relief, the date of retroactivity and the quantum of relief: (1) the nature of the obligation to support, whether contractual, statutory or judicial; (2) the ongoing needs of the support recipient and the child; (3) whether there is a reasonable excuse for the payor's delay in applying for relief; (4) the ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears; (5) the conduct of the payor, including whether the payor has made any voluntary payments on account of arrears, whether he has co- operated with the support enforcement authorities, and whether he has complied with obligations and requests for financial disclosure from the support recipient.

As stated by Chappel J. [at para. 55]: "Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission or reduction of arrears"; (6) delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears; (7) any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears.

As put by Chappel J. [at para. 55]: [I]f a retroactive order reducing child support would result in the child support recipient having to repay money to the child support payor, this may militate against making the order, particularly if the payor has not given [page218] the recipient notice of the change in their circumstances, has not provided appropriate disclosure to support their claim for an adjustment to the child support, or has delayed initiating court proceedings to change the order. [ 61 ] If a retroactive reduction of child support is appropriate in light of these factors and any other relevant considerations, the court must determine the date from which the reduction should take place and the extent of the reduction.

Following S. (D.B.) , a retroactive order normally should commence as of the date of effective notice that a request is being made for a child support adjustment. It is generally inappropriate for a retroactive order to extend back more than three years before formal notice is given. [ 62 ] Where a payor seeks a retroactive reduction in child support or rescission of arrears, effective notice requires the payor to provide [at para. 55] "reasonable proof to support the claim for a change to the [order], so that the recipient can independently assess the situation in a meaningful way and respond appropriately".

As put by Chappel J. [at para. 55]: A child support recipient is entitled to expect that the existing order will be complied with, and to arrange their financial affairs respecting their children accordingly, unless they are in receipt of reasonable proof that a relevant change in the payor's circumstances has occurred. [ 63 ] This obligation to disclose and negotiate with the recipient parent is ongoing, so that the recipient can assess and react to changes in the payor's financial situation.

A payor's failure to comply with his continuing notice and financial disclosure obligations most likely will impact the remedy which the court crafts. [ 64 ] Finally [at para. 55], "with respect to the quantum of any retroactive child support order, the Child Support Guidelines apply, provided that the date of retroactivity is not prior to the date when the Guidelines came into force, and subject to the principles set out in the statutory scheme under which the Court is operating". B.

Application of the principles to the present case The effect of Mario's change in circumstances on his ability to pay child support [ 65 ] I have already concluded that Mario met the threshold for a variation of the final order under s. 17(4) and (4.1) of the Divorce Act . It is the details of the variation that must be determined at this stage of the analysis, including whether Mario's change in circumstances rendered him unable to make child support payments, and whether the variation should be given retroactive effect. [page219]

[ 66 ] I have accepted the trial judge's findings about Mario's income for the period 2006 -- 2013. At an average annual income of $60,000 (save for 2012, when his income was lower), Mario would not be able to service the child and spousal support payments contained in the final order, which were calculated using an imputed income of $133,000. [ 67 ] The final order required support payments to begin in 2002. Between 2002 and 2013, Mario did make some support payments, albeit often involuntarily as a result of the Family Responsibility Office ("FRO") seizing his assets to satisfy outstanding arrears.

According to Mario's evidence, from 2003 through 2012, the amount of support he voluntarily paid totalled $129,854. To that amount must be added the $104,847 in Mario's RRSPs paid to the appellant through RRSP seizures by the FRO, resulting in total support contributions by Mario of $234,701. During that same period of time, Mario's support obligations under the final order totaled $534,960, consisting of child support due of $190,080 and spousal support of $344,880.

In sum, from 2003 until 2012, Mario satisfied approximately 44 per cent of his support obligations under the final order, and for much of that time Mario was experiencing a significant reduction in his income. [ 68 ] Against that must be weighed two facts. First, the trial judge made an uncontested finding that in the years following the final order, Mario, as the sole beneficiary of his mother's estate, occupied his mother's residence.

Although Mario's mother died in June 2005, he did not probate her will or transfer title in the house to himself until shortly before the trial, no doubt, as the trial judge stated, "in a futile attempt to avoid seizure by FRO for the outstanding child and spousal support arrears . . .": para. 13. Mario could have used the equity in the home to avoid the accumulation of support arrears, but chose not to. [ 69 ] Second, the trial judge made no finding that Mario suffered from any kind of impairment to his future earning capacity, a key fact distinguishing this case from Trembley v. Daley .

On the contrary, the trial judge's decision to fix 2014 child support for Victoria at the greater of Mario's imputed income of $60,000 and his actual taxable income from all sources strongly indicated that Mario could earn more than the imputed level. [ 70 ] Although the evidence supports the conclusion that Mario's change in circumstances contributed, to an extent, to his inability to make all ordered support payments, the evidence does not support a finding that Mario will not be able to pay the arrears in the future. As a result, in my view, this is a very close case for any retroactive variation.

However, sufficient evidence [page220] exists which could lead a court to exercise its discretion to grant some retroactive relief. Although the trial judge's decision to grant retroactive relief was based on the application of incorrect legal principles, some retroactive relief is nevertheless appropriate. To establish the appropriate retroactive order in the circumstances of this case, I return to the modified S. (D.B.) factors, set out in paras. 55 to 64 above. Date of effective notice of request to vary child support [ 71 ] Mario filed his motion to change in July 2009.

There is no other evidence in the record to support any earlier effective date of notice of change given by Mario. However, a number of factors weigh heavily against using a date as early as July 2009 as the one from which any change in support obligations should be retroactive. The needs of the children [ 72 ] The first factor concerns the needs of the two children. The parties do not contest the trial judge's conclusion that child support payments for the daughter should continue in 2014.

The parties agree that the son began to receive payments under the Ontario Disability Support Program ("ODSP") in December 2010. As a result, the continuing needs of the children during much of the time period under consideration at the trial weigh strongly against making any retroactive child support variation order for any period before 2011, when the son started to receive ODSP payments.

The delay in pursuing the motion to change and the lack of full financial disclosure [ 73 ] Second, although the trial judge appeared to accept that Mario had offered something of an explanation for his delay in bringing his motion to change when she stated that it was only in the summer of 2008 that he "was able to muster enough funds to have his ITRs prepared from 2002 -- 2008", she failed to give appropriate weight to Mario's delay in pursuing his motion once initiated. [ 74 ] As mentioned, after filing his motion to change in 2009, Mario changed tack and brought a motion to set aside the final order.

Boswell J. dismissed the latter motion, and Mario's appeal was dismissed by this court in June 2011 [ Gray v. Rizzi , [2011] O.J. No. 2563 , 2011 ONCA 436 ]. Only then did Mario move forward with his motion to change. [ 75 ] Numerous case conference attendances ensued, not only regarding Mario's motion to change, but also in proceedings taken [page221] by FRO to enforce Mario's support obligations. With the motion to change still unheard as of October 2012, Nadine served a motion to stay the change motion.

In her case conference endorsement dated October 12, 2012, McGee J. noted that Mario's support arrears had reached approximately $288,220. She continued: To date, the respondent father's Motion to Change has been largely conducted as a series of adjournments and promises to provide disclosure. Whether deliberate or inadvertent, the father's lack of diligence in advancing his Motion to Change has forestalled the enforcement process . (Emphasis added) [ 76 ] McGee J. ordered Mario to pay unpaid costs of $16,583 within 20 days and provide certain disclosure. He failed to do so.

On January 2, 2013, McGee J. stayed Mario's motion to change until he had paid outstanding costs. [ 77 ] In October 2012, a FRO default hearing was conducted by McGee J., who made a further order requiring Mario to pay support, failing which he would be incarcerated for five days. In the course of her reasons ( Gray v. Rizzi , [2012] O.J. No. 5343 , 2012 ONSC 6335 (S.C.J.) ), McGee J. wrote [at paras. 4 and 33]: The payor is the beneficial owner of a property held in the estate of his deceased parents of which he is the sole executor and beneficiary.

He has taken no steps to transfer the property for a period in excess of three years. . . . . . In this case, there is no question that the payor father has failed to make full, frank disclosure to the Court. And that failure cannot be simply attributed to a decision not to file timely Income Tax Returns for the past decade.

Neither has he filed sworn Financial Statements in either the Motion to Change or the enforcement proceedings until quite recently . [ 78 ] Mario finally mortgaged the house he inherited from his mother to pay the outstanding costs, and the hearing of motion to change proceeded in November 2013.

Nadine's evidence at trial was that as of October 15, 2013, Mario owed $321,754.26 in child and spousal support arrears. [ 79 ] Mario's delay in moving his motion to change forward to a hearing with due dispatch, when coupled with his failure to make full and frank disclosure of financial information until the eve of trial when he filed an October 16, 2013 financial statement, weigh heavily against making any retroactive variation of the child support order.

The conduct of the child support payor [ 80 ] Third, the record discloses that Mario did not co-operate with enforcement agencies in addressing the issue of child support. His lack of co-operation resulted in the suspension of his [page222] driver's licence, default enforcement hearings and the seizure of his RRSPs by FRO. Hardship to the recipient [ 81 ] In her reasons, the trial judge did not explain what, if any, consideration she gave to the hardship that her retroactive variation order would work on the recipient, Nadine.

In failing to do so, the trial judge erred in principle by ignoring a material consideration in any variation analysis.

Although the parties were unable to provide us with a consensus view on the precise amount of the support payments Nadine would be required to repay Mario under the trial judge's order, there did not appear to be any serious disagreement that the repayment would be a significant one of approximately $113,000. [ 82 ] Given Mario's desultory pursuit of his motion to change, failure to provide timely financial disclosure, and failure to co-operate with the support enforcement agencies, absolutely no hardship should result to Nadine from any retroactive variation order.

Conclusion [ 83 ] Although in S. (D.B.) the Supreme Court of Canada stated that, as a general rule, the effective date of notice should act as the date to which an award should be made retroactive, every general rule has its exceptions. In my view, Mario has brought himself within an exception. Not only did he engage in unacceptable delay in pursuing his motion to change, he learned nothing from his failure to provide financial disclosure in 2005 before the final order was made.

Mario repeated the same misconduct in his motion to change, to the prejudice of his children and to Nadine. [ 84 ] In my view, Mario is not entitled to any retroactive variation of his child support obligations for his daughter because he only saw fit to fulfill his financial disclosure obligations on the eve of trial, over four years after he had initiated his application.

Consequently, I would not rescind any arrears of child support owed by Mario for his daughter. [ 85 ] I would not interfere with the trial judge's variation of Mario's 2014 child support obligations for his daughter so that they are calculated using the greater of an imputed income of $60,000 or his actual taxable income from all sources. [ 86 ] As to child support for their son, the parties acknowledge that he began to receive ODSP payments in December 2010. Consequently, child support obligations for their son should terminate as of December 31, 2010.

Mario is not entitled to any [page223] variation in child support for his son before that date, nor is he entitled to any rescission of such child support arrears. VII. Third Issue: Did the Trial Judge Err in Making Retroactive Adjustments to Mario's Spousal Support Obligations? A. Positions of the parties [ 87 ] The final order required Mario to pay to Nadine monthly spousal support of $2,874, retroactive to the date of separation.

No time limit was placed on his spousal support obligations. [ 88 ] In his motion to change, Mario sought to change his spousal support obligations so that they terminated as of July 1, 2009, and he sought to rescind all spousal support arrears existing as of that date. [ 89 ] The trial judge terminated Mario's spousal support obligation as at January 1, 2006. [ 90 ] Nadine submits that the trial judge erred in terminating spousal support. In her submission, spousal support should be reinstated and continue indefinitely.

Mario submits that the trial judge made no error of law in retroactively varying his spousal support obligations, and her discretionary order is entitled to deference. B. The general principles [ 91 ] In P. (L.M.) , at para. 50 , the Supreme Court of Canada enunciated the approach courts should take to motions to vary spousal support under the Divorce Act : [O]nce a material change in circumstances has been established, the variation order should "properly reflec[t] the objectives set out in s.

17(7), . . . [take] account of the material changes in circumstances, [and] conside[r] the existence of the separation agreement and its terms as a relevant factor" ( Hickey , at para. 27 ). A court should limit itself to making the variation which is appropriate in light of the change. The task should not be approached as if it were an initial application for support under s. 15.2 of the Divorce Act . [ 92 ] Section 17(7) of the Divorce Act provides: 17(7) A variation order varying a spousal support order should (

a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown; (

b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (

c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time. [page224] [ 93 ] In Kerr v. Baranow , [2011] 1 S.C.R. 269 , [2011] S.C.J.

No. 10 , 2011 SCC 10 , the Supreme Court of Canada confirmed, at para. 207, that similar considerations to those set out in S. (D.B.) in the context of child support are also relevant in deciding the suitability of a retroactive award of spousal support, although the factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support. [ 94 ] The trial judge held that the principles in P. (L.M.) did not apply in the present case because, unlike in P. (L.M.) , no separation agreement had been entered into between Mario and Nadine: para. 26.

With respect, the trial judge erred in principle in so holding. As the Supreme Court of Canada stated, in para. 46 of P. (L.M.) : "The examination of the change in circumstances is exactly the same for an order that does not incorporate a prior spousal support agreement as for one that does." [ 95 ] The trial judge terminated spousal support as at January 1, 2006. However, she gave no reasons explaining why she did so, thereby preventing any meaningful appellate review of that part of her decision.

Nor in her reasons did the trial judge engage in any analysis of the factors identified in s. 17(7) of the Divorce Act . Accordingly, this court need not defer to her decision on spousal support. C. Application of the general principles [ 96 ] I begin the variation analysis with a consideration of the relative economic positions of Mario and Nadine at the time the final order was made and then thereafter. [ 97 ] As described by Nadine in her evidence, following the birth of Michael she stopped working outside of the house and cared for their children.

She assisted with the book-keeping for Mario's software development business. Nadine recommenced outside work on a part- time basis in 2001 with a publishing company, and began working there on a full-time basis in 2003. In the fall of 2004, Nadine commenced studies to become a law clerk.

That is where matters stood at the time of the final order. [ 98 ] After a period of unemployment in 2005, Nadine started to work as a law clerk with a law firm in 2006, subsequently switching to another law firm where she continues to work full-time. [ 99 ] Just as I accept the trial judge's findings regarding Mario's annual income in the years after the final order, I see no basis upon which to interfere with her findings about Nadine's income for that period of time.

The trial judge found that for the years 2006 through 2009, Nadine's annual employment income usually was about $10,000 less than Mario's of [page225] $60,000. Only in 2011 did Nadine's income begin to approximate Mario's, and that situation continued in 2013. That comparative income history strongly indicates that by 2011, Nadine had overcome the economic disadvantages she suffered from the break-down of the marriage and had achieved a level of economic self-sufficiency.

Consequently, I do not accept Nadine's submission that her spousal support should continue indefinitely. [ 100 ] At the same time, I see no basis for retroactively varying Mario's spousal support obligations before January 1, 2012, notwithstanding his initiation of the motion to vary in July 2009.

His delay in pursuing the variation application and instead pursuing his motion to strike into 2011, his failure to make timely financial disclosure, and his failure to co-operate with the support enforcement agencies, as described above, all work against any earlier retroactive variation date. [ 101 ] Varying the final order to terminate spousal support as of January 1, 2012 will not work an undue hardship on Nadine.

She has re- established her economic self-sufficiency and, on the financial information before us in the record, there is no risk that such a variation would require Nadine to repay any amount to Mario. [ 102 ] Nor would the variation impose undue financial hardship on Mario. The record discloses that the financial impact of the child and spousal support variations I would make to the final order likely would result in some reduction of Mario's support arrears. [ 103 ] Mario owns a home in the west end of Toronto. At trial, he did not file a current property valuation.

On his October 16, 2013 financial statement, Mario valued the house at $289,000; on a credit application to a bank he placed a value of $300,000. The house is subject to a $50,000 mortgage. Accordingly, the evidence discloses that between the equity in his house and his future earning capacity, Mario has the financial ability to pay off his outstanding arrears. VIII. Fourth Issue: Costs (Appeal and Cross-Appeal) [ 104 ] The trial judge ordered Nadine to pay Mario costs of $15,000 for his motion to change.

Nadine submits the trial judge should not have awarded Mario any costs, and she seeks her costs of the motion to change or, alternatively, a reduction in the $15,000 awarded to Mario. [ 105 ] Mario cross-appeals the trial judge's award of costs, submitting that he should receive full indemnity costs for his motion to change

from October 16, 2103, the date of his offer to settle. [ 106 ] In respect of the appeal, Nadine seeks partial indemnity costs of $25,000; Mario seeks costs of $15,000. [page226] [ 107 ] Although there has been mixed success by the parties on the issues on this appeal, in the result Nadine has been relieved of the obligation under the variation order to reimburse Mario for support previously paid, and Mario remains under an obligation to pay substantial, but reduced, support arrears. Given that result, in my view Nadine is entitled to some costs of the motion to change and the appeal.

I would award her costs of $10,000 for the motion to change and $7,500 for the appeal. IX. Disposition [ 108 ] By way of

summary, on the issues of child and spousal support, I would set aside paras. 1, 2 and the first sentence of para. 4 of the variation order. In their place, I would grant an order varying the final order as follows: (

i) terminating Mario's child support obligation for Michael as of December 31, 2010; (ii) terminating spousal support for Nadine as of January 1, 2012. [ 109 ] Child support for Victoria will be calculated as set out in para. 3 of the variation order. [ 110 ] If the parties cannot agree on the precise amounts of child and spousal support arrears that result from this decision, they shall submit to the court, within 30 days, a brief joint submission which sets out their respective calculations and the reasons therefor. [ 111 ] I would award Nadine costs of $10,000 for the application and $7,500 for the appeal.

Appeal allowed in part. Notes 1 The Federal Child Support Guidelines , SOR/ 97-175 provide that a change of circumstances that gives rise to the making of a variation order in respect of child support includes, where the determination was made in accordance with the applicable table, "any change in circumstances that would result in a different child support order or any provision thereof": s. 14 ( a ). 2 Trembley v. Daley involved a motion to vary under s. 37 of the Family Law Act , not s. 17 of the Divorce Act . End of Document