Supreme Court of Canada Case Recap: Colucci v. Colucci

On June 4, 2021, the Supreme Court of Canada rendered a judgement that rejected a parent’s claim to reduce or cancel his child support debt of $170,000.

This blog post will outline how the Colucci v. Colucci, 2021 SCC 24 judgement established a framework for courts to follow when a parent applies to retroactively vary child support, pursuant to section 17 of the Divorce Act.

If you have questions about child support obligations in BC after reading this post, our team of Vancouver family lawyers would be happy to assist you. Contact our team (here) to book a consult appointment.

Facts of the Case:

For 16 years, a father failed to make any voluntary child support payments or disclose his income. The father never notified the mother about his decreased income. He moved countries twice without notice to his family. By 2012, his obligation to pay child support had ended, as the two daughters no longer qualified for support under the law, and he owed the mother almost $170,000 in unpaid child support.

In 2016, the father applied to have his child support debt cancelled or reduced pursuant to section 17 of the Divorce Act. This section allows for a court to make an order to retroactively vary, rescind, or suspend an order for child support. In the father’s application, he sought for the court to retroactively reduce his child support amount owed and to base it on the Federal Child Support Guidelines.

Main Issue:

Should the father’s unpaid child support be retroactively reduced to reflect past reduction in income, pursuant to section 17 of the Divorce Act?

The Decision:

The Ontario Superior Court of Justice agreed with the father. The Court ordered for his unpaid child support to be based on the Federal Child Support Guidelines and therefore be reduced retroactively to $41,642. The judge found this variation to arrears to be warranted because it would bring the child support in line with the Guidelines and reflect the father’s drop in income over the period when his arrears were owing.

The mother appealed to the Ontario Court of Appeal and the decision was overturned. The father was ordered to pay the full child support amount of $170,000.

The father appealed to the Supreme Court of Canada. The Supreme Court dismissed his appeal and ordered the father to pay the original $170,000 in child support. The Court found that the father was not entitled to a reduction in retroactive child support based on decreased income, largely because of his failure to produce adequate disclosure of his finances over time. He did not give the mother any notice of his alleged decrease in income until after arrears stopped accruing, and he did not provide reasonable proof to allow the mother, or the courts, to properly assess the change in his circumstances.

Legal Framework:

The Supreme Court explained that a parent who has established a past decrease in income is not automatically entitled to this decrease in support owed. Instead, it is up to the court to decide whether support should be reduced on a case-by-case basis. The Colucci judgement provides a legal framework for whether a court should allow for an increase, reduction, or cancellation of retroactive child support, pursuant to section 17 of the Divorce Act. In its analysis, the Supreme Court emphasized that the payment and enforcement of child support debt should be the rule, and any cancellations of child support should only be in exceptional circumstances.

1-      The Threshold Requirement

The Court in Colucci highlighted that the first step in its analysis is a threshold requirement. This means that a parent needs to show there was a material change in circumstances that would justify varying the quantum of child support under section 17(4) of the Divorce Act. The most common material change is a material change in income.

To increase child support in accordance with income of payor: If a payee parent seeks to prove that the payor has experienced an increase in income, and thus try to increase retroactive child support, then the onus is on the payee. The payor parent must disclose relevant financial information in this process. Any failure of the payor parent failing to disclose financial information allows the court to impute income, strike pleadings, draw adverse inferences, and award costs.

To decrease child support in accordance with income: If the payor parent experiences a decrease in income, they must prove that the decrease is significant, long lasting, and not one of choice in order to meet the threshold requirement of a material change in circumstances.

2-      The Presumption of the Effective Date of Notice

Once a material change in circumstances is established, then there is a presumption that support will be varied back to a certain date.

For applications to retroactively reduce child support, the Court states that this would be “the date the payor gave the recipient effective notice, up to three years before formal notice of the application to vary” (at para 113). The payor must give effective notice of their request to reduce child support alongside “reasonable proof” in the form of supporting documentation.

For applications to retroactively increase child support, the Court states that this would also be “the date the recipient gave the payor effective notice of the request for an increase, up to three years before formal notice of the application to vary” (at para 114). Effective notice to increase child support can be given by the payee in the form of a conversation with the payor.

3-      No Effective Notice Given

In situations where the payor failed to give effective notice of their change in income, then courts should prioritize the child’s need for certainty and predictability provided by an existing court order for appropriate support over the payor parent’s need for flexibility. In these cases, child support can be varied back to the date of formal notice, or the date of application to the court.

4-      Exceptions to the Presumption of the Effective Date of Notice

There is a presumption that support can be varied back to the date of effective notice, which can be up to the three years prior to the date of formal notice of application. But there are exceptions to this presumption.

These exceptions include the consideration of the following factors:

-          (1) an understandable reason for the delay such as significant health issues;

-          (2) the payor’s conduct and whether they are showing willingness to cooperate;

-          (3) the circumstances of the child; and

-          (4) hardship to the payor (though this factor is given less weight).

This means that a retroactive child support variation may be ordered to date back to a different date, depending on whether any of the four above factors are relevant for the court’s consideration.

5-      Quantifying the Appropriate Retroactive Support

The Court states that “once the court has determined that support should be retroactively decreased to a particular date, the decrease must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines” (at para 113).

Takeaways:

In 2006, the Court in DBS v SRG, 2006 SCC 37 formally established a free-standing legal obligation on parents to pay child support in line with their income. A free-standing duty means that parents have a legal obligation to pay child support independent of any court order. The Court in Colucci clarifies the framework for courts for applications for retroactive child support variations.

The Colucci framework emphasizes the importance of parents’ legal obligation to support their children. It acknowledged the important balance between a child’s need for consistent and appropriate support, and a payor parent’s ability to meet their support obligations, which may change over time if their income changes. The court recognized two key principles: (1) that children have a right to a fair standard of child support, and (2) that parents are obliged to financially support their children from birth and after separation (until the child is no longer a legal child of the marriage, e.g. above the age of majority). This duty exists regardless of whether there is a court order to pay child support in place. The Court’s framework now operates in a way that will put children interests first.

How We Can Help:

If you have questions about child support obligations as a payor or as a payee, we encourage you to reach out to our team of Vancouver family lawyers to discuss your situation. We would be happy to answer your questions with respect to whether you or the other parent should be paying child support, what amount should be paid, and how to address income disclosure issues.

Want to learn more? Please contact our team of Vancouver family lawyers for a consultation.

The material provided in this blog is for general information and education purposes only and does not contain, and should not be construed as containing, legal advice applicable to a particular set of facts. If you require legal advice, please contact us for a consultation.