Please read our latest blog, written by Anoushka P. Gandy, on the Colucci v Colucci case where the payor is found to have acted in bad faith, and the courts award $170,000.00 in retroactive child support.
Colucci v Colucci: Child Support and Bad Faith
The Supreme Court of Canada rendered a decision on June 4, 2021, for Colucci v Colucci, 2021 SCC 24 addressing Applications to retroactively vary Child Support.
In Colucci, the parties were married for about 13 years, and had two children together. The parties split up in 1996, custody of the two children was given to the mother, and the father was ordered to pay weekly child support for each child. In 1998, the father applied to the court to reduce his Child Support obligations, however, did not show any evidence or offer any financial disclosure to support his Application. The court denied his request, and for approximately 16 years after his Application, he did not make voluntary Child Support payments. The father also made efforts to hide his income, was not involved in the children’s lives, and often did not tell the family his whereabouts.
Fast forward to 2012, and the father’s legal obligation to pay Child Support had come to an end, however, he owed the children approximately $170,000 in Child Support arrears. The father then applied to court to have the entire balance of arrears terminated and to have the full debt forgiven. The father applied to the court under Section 17 of the Divorce Act, which allows payor parent to decrease Child Support retroactively. The father also claimed to have a reduced income during the 16-year period, however, he never notified the mother. The father claimed that Section 17, should be applied to adjust his past child Support obligations.
The matter proceeded to a Trail and the first instance Court reduced the $170,000 balance to $42,000, then the Court of Appeal restored the amount back up to the previous balance of $170,000. The father than appealed to the Supreme Court of Canada.
The Supreme Court set out a framework to be followed by the lower courts in regards to retroactive Child Support and stated that the entire Child Support system should be determined on “adequate, accurate and timely financial disclosure”. The Supreme Court also noted that the Courts “in no way reward those who improperly withhold, hide or misrepresent information they ought to have shared.”
When reviewing whether to vary Child Support obligations, the courts must also consider any changes in a paying parent’s income but cannot allow one party to be “better off from a legal standpoint if they do not pay the child support the law says they owe. Nor should payors receive any sort of benefit or advantage from failing to disclose their real financial situation or providing disclosure on the eve of the hearing.”
In Colucci, the Court also noted that in cases involving variation of Child Support and arrears, three interests must consider achieving a fair result:
1. the child’s interest in receiving the appropriate amount of support to which they are entitled;
2. the interest of the parties and the child in certainty and predictability; and
3. the need for flexibility to ensure a just result in light of fluctuations in the payor’s income.
The Supreme Court of Canada made the decision to dismiss the father’s Application for appeal and ordered him to pay the full Child Support amount of $170,000. The Court also noted that the father had engaged in “blameworthy conduct” by failing to provide his financial disclosure and evidence of the reduction in income, as well as found him to be operating in “bad faith” and trying to evade the Court of an Order. It seemed that the father’s Appeal failed heavily due to his inadequate disclosure. This is also an example of the payor parent trying to evade the courts and wait out their Child Support obligations until Child Support has come to an end pursuant the Federal Child Support Guidelines.