IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           Mr H (“the father”) and Ms T (“the mother”) separated in 2006. They entered into a separation agreement. The agreement provided that their daughter’s primary residence would be with the mother and the father would pay child support of $300 per month commencing on July 1, 2006, with a single adjustment to that amount occurring on or before January 1, 2007. The agreement did not provide for any further annual income disclosure or adjustments.

[2]           The separation agreement was never filed with the court and its terms were never incorporated into a court order.

[3]           The father stopped making support payments after September 2007.

[4]           The mother applies to have the arrears enforced and also seeks retroactive support consistent with the father’s Guideline income dating back to September 1, 2007.

[5]           The father, who has children in another relationship, opposes the application. He seeks an order either cancelling or reducing the arrears and opposes any retroactive relief.

[6]           No.

[7]           One of the primary factors that drive the analysis for retroactive relief is the need for certainty and predictability in the payor’s ability to manage his or her financial affairs. Payors need to have some confidence that if they comply with an order or agreement, they can direct money to other things. However, for obvious reasons, when it comes to noncompliance and enforcement, certainty and predictability are not a consideration.

[8]           To require a recipient parent to satisfy the complex test for retroactive relief to compel compliance with an existing order or agreement would undermine the integrity of the order or agreement. The burden is not on the recipient parent to justify why they should be granted the court’s assistance in ensuring compliance. Instead, the onus is on the payor to establish why he/she should not have to pay. 

[9]           In MacCarthy v MacCarthy, 2015 BCCA 496, the British Columbia Court of Appeal concluded that the chambers judge erred by applying the factors for retroactive relief and cancelling arrears flowing from the payor’s noncompliance of a support order. The court observed that instead of using the test for retroactive relief, the chambers judge should have applied a more simple one:

[10]        The court also emphasized that arrears should only be cancelled if the payor demonstrates that he/she is unable to pay “now” and in the future.

[11]        The court went on to reject Mr MacCarthy’s submission that he should not be required to pay arrears because of Ms MacCarthy’s delay in pursuing an application for their payment and because the award would provide no discernible benefit to their adult children. In doing so, the court cited with approval Madam Justice Martinson’s comments in Earle v Earle, 1999 CanLII 6914 (SC), which are worth repeating:

[12]        Delay in applying for enforcement will only be relevant if the obligor can demonstrate prejudice and an inability to pay at the time of the application or in the future. Because the right of support belongs to the child, not the parent, the right to enforce the agreement should not be easily displaced by a parent's delay or lack of diligence in enforcing the right. MacCarthy v MacCarthy, 2015 BCCA 496; Daniels v Lakes, [1987] BCJ No 237.

[13]        Under the separation agreement, the father was required to pay $300 per month and the parties were to adjust the amount on or before January 1, 2007, but failed to do so. According to the father, and the mother’s pleadings, the father complied with the agreement until September 1, 2007. The arrears are as follows:

[14]        The total arrears flowing solely from the separation agreement and the interim court order are $42,371.

[15]        No.

[16]        The onus is on the father to demonstrate that it would be grossly unfair not to cancel or reduce the arrears. Section 174, Family Law Act (the “Act”).

[17]        The onus is a heavy one, and the bar for establishing gross unfairness is particularly high. Luney v Luney, 2007 BCCA 567 leave to appeal refused [2008] SCCA No 90.

[18]        The father argues that because he has two other children to support, it would be grossly unfair for him to have to pay the arrears.

[19]        The father’s other support obligations are insufficient to meet the test of gross unfairness. 

[20]        The father committed to having more children knowing that he was in default concerning his support obligations for his first child. His daughter is not under a responsibility to subsidize the father’s other two children.

[21]        The father earns almost $100,000 per year and has substantial equity in his home, and vehicles. He has the ability to pay now and in the future.

[22]        Yes.

[23]        Although the pleadings are not explicit, I take from the mother’s application that she is applying for a variation of the parties’ separation agreement under section 148(3) of the Act.

[24]        The Act provides that a separation agreement can be varied, but only if the presiding judge is satisfied that he/she would have made a different order after considering the matters set out in section 150 of the Act.

[25]        Where an agreement deals with child support and a payor has complied with it, the court will give considerable weight and deference to the agreement reached. However, child support is the right of the child and parties should not be permitted to easily displace that right by bargaining it away for something less.

[26]        Unlike a variation of a court order, section 150 does not require the applicant to demonstrate a material change in circumstances to vary a separation agreement; the applicant is only required to show that the agreement does not provide “reasonable arrangements for the support of the child.”

[27]        Subsection 150(3) of the Act says I must consider the support Guidelines in determining whether reasonable arrangements have been made. However, I must not find the arrangements to be unreasonable “solely” because the amount required under the Guidelines differs from those arrangements.  

[28]        Yes.

[29]        The father argues that the agreement should not be varied. He says that deference should be given to the agreement and support should remain payable in the amount of $300 per month. He says the arrangement was reasonable at the time and remains reasonable today. He points out that even despite his failure to fulfil his obligation under the agreement, his daughter was not disadvantaged and suffered no hardship.

[30]        The mother argues that the arrangement is not reasonable. The father’s income has more than doubled and the agreement does not provide for any adjustments. Under the current Guidelines, the father’s support obligation is more than $900 per month; an increase of more than 300%.

[31]        There is no question that I would have made a different order than the terms set out in the separation agreement. I do not reach this conclusion “solely” because the Guideline amount differs from the arrangement, but instead, because the difference is so substantial.

[32]        There is no explanation in the agreement, nor was any explanation provided by the parties, why they would have bargained away even the minimum guideline amount at the outset and any requirement for future adjustments. There is no other provision for the child in the agreement that would have made such an arrangement reasonable.

[33]        Although the child has been well cared for over the years by her mother, she did not enjoy the sort of lifestyle she could have if the father had lived up to his obligations to pay child support consistent with his income.

[34]        Yes.

[35]        Although there is a divergence of opinion whether a court has authority to vary a separation agreement retroactively, I am satisfied that it can.

[36]        The courts in RM v NM, 2014 BCSC 1755, and Chutter v Chutter, 2016 BCSC 2407, both appear to suggest that separation agreements cannot be varied retroactively. However, Mr Justice Schultes in GJL v MJL, 2017 BCSC 688 says they can. I find his reasoning persuasive and after carefully reviewing all three decisions, prefer it. Two other decisions that I find instructive on this issue are A(TL) v R(M), 2015 BCPC 151, and D(SL) v G(SA), 2015 BCPC 370.

[37]        In deciding under 148(3) whether I should set aside the parties’ agreement on child support, and order retroactive relief, I am guided by the considerations identified by the Supreme Court of Canada in DBS v SRG, 2006 SCC 37.

[38]        In that case, the court identifies the general principles that guide the determination and four factors that must always be considered.

[39]        The general principles are:

[40]        Notwithstanding these general principles, I am required under the Family Law Act to maintain my focus on the best interest of the child. In this regard, the court in DBS reminds me that it is essential to acknowledge that:

[41]        The four factors that are to be considered along with the general principles in assessing the claim are:

[42]        Because the overarching principles remain key to the analysis, none of the factors are decisive; instead, a holistic approach must be taken and all of the circumstances considered in reaching a fair and just result.

[43]        Yes.

[44]        I begin my analysis by considering each of the factors identified by the Supreme Court.

[45]        Unlike arrears, unreasonable delay in commencing court proceedings can militate against a retroactive award.

[46]        In Brown v Kucher, 2015 BCSC 1258, aff’d 2016 BCCA 267, Justice Fisher explains at para. 34 that “[t]his factor responds to two important concerns: the payor parent’s interest in certainty and the child’s interest in discouraging delay by the recipient parent in seeking the appropriate amount of support.” Justice Fisher explains further:

[47]        Since child support is the right of the child, unreasonable delay by the recipient in advancing a claim is only one factor to consider in balancing the competing interests of the parties and the child, and determining the most appropriate action for the court to take. Therefore, even where there is a very long delay in advancing the claim for which there is no reasonable excuse, the court can still order retroactive relief based on other considerations.

[48]        In particular, where there is blameworthy conduct on the part of the payor, coupled with unreasonable delay by the recipient, the court is more likely to award retroactive relief despite the delay. Albeit, the court may decide to reduce the period of retroactivity or delay its implementation to achieve a just result.

[49]        An applicant’s reasons for the delay must be subjectively honest and objectively reasonable. The longer the delay, the more robust the excuse must be to qualify as a reasonable one.

[50]        The mother provides a few reasons for not pursuing the application sooner.

[51]        First, she describes the father as intimidating and vindictive. She said she believed that merely initiating an application to enforce the $300 obligation under the agreement would provoke the father.

[52]        She described their relationship as dysfunctional with the father bullying, pushing and pinning her against walls during arguments. The father disagreed with her characterization and denied any physical violence during the relationship.

[53]        Although there may have been some degree of dysfunction and even physical violence during the relationship, since 2007 the mother has lived several hundred miles away from the father, for many of those years she was living with a partner, and there is no evidence of any intimidation, threats or suggestion of violence by the father.

[54]        Although the mother may honestly fear physical harm by the father, it is not a fear that is well-grounded and able to provide a reasonable excuse. 

[55]        The mother also said she feared the father would disrupt the current parenting arrangement by not returning their daughter after his parenting time, or apply to change their daughter’s primary residence to [omitted for publication]. She presented no evidence that he had done so in the past. When the parties separated, he consented to her relocating from [omitted for publication] to [omitted for publication] with their daughter. 

[56]        The mother said her fear of the father being successful with such a claim diminished as their daughter grew older and was in a position to decide for herself where she would live, implying that her daughter would most likely choose to remain living with her.

[57]        Although I accept the mother feared disruption of the current parenting arrangement, I do not accept her fear is reasonably placed and can provide a reasonable excuse.

[58]        The mother also said that she lacked the financial ability to pursue even the barest of application for enforcement of the agreement. I reject this as a reasonable excuse. Since the separation, she has earned as much as $50,000 per year. Although not a significant income, for most of the time she was in a relationship and in 2010 sold a house freeing up a substantial portion of the money that could have been put towards an application. 

[59]        Finally, the mother said she did not apply for increased support sooner because she was unaware of the changes in the father’s income. The father did not challenge this assertion and admits not sharing any information with the mother.

[60]        The mother has not lived in the same community as the father for several years, and the father has not changed companies since the breakdown of their relationship. There were no reasons for the mother to even suspect his income had changed in any measurable way.

[61]        A recipient parent’s lack of knowledge about the true magnitude of a payor’s income increase can support a finding that a delay in filing is reasonable. Burchill v Roberts, 2013 BCCA 39 and Reis v Bucholtz, 2010 BCCA 115; DBS v GSR, 2006 SCC 37.

[62]        I find the mother’s last excuse the most compelling and reasonable in the circumstances. It was not until she pursued the application for arrears that she learned about the substantial increase in the father’s income. It was only then that there would have been a reason and incentive to pursue an application for a retroactive increase in support.

[63]        The mother argues that the father engaged in blameworthy conduct by not complying with his obligation under the agreement and by failing to disclose and adjust support when his income increased.

[64]        A payor’s interest in certainty and predictability will be at its lowest when the payor has engaged in blameworthy conduct concerning his or her child support obligations.

[65]        The court in DBS encourages an expansive view of what constitutes blameworthy conduct in the context of analysing retroactive support claims, and characterizes the phrase as including “anything that privileges the payor parent’s interest over his child’s right to an appropriate amount of child support.”

[66]        A payor who knowingly avoids or diminishes his or her support obligation should not be allowed to profit from such irresponsible conduct. The payor will not be absolved of any retroactive liability by merely stating that the recipient did not ask for disclosure, especially when the increase in income is so substantial.

[67]        Like this case, where the separation agreement does not provide for annual automatic income disclosure and adjustments, the cases have gone both ways in deciding whether a failure to do so amounts to blameworthy conduct. The cases that say that failing to pay higher amounts voluntarily does not amount to blameworthy conduct typically are ones where there is no other blameworthy conduct, like requests for disclosure that are ignored, misleading information, or intimidation. 

[68]        In other cases, courts have said a simple failure to disclose and adjust is blameworthy, even in the absence of a clause requiring the same. Greene v Greene, 2010 BCCA 595; Hinds v Hinds, 2008 BCCA 547.

[69]        In each case whether a payor has engaged in blameworthy conduct will be a subjective question that is ultimately a matter of judicial discretion.

[70]        Indeed, it will be less blameworthy if the payor is complying with terms of an existing order or agreement. Dyck v Bell, 2015 BCCA 520.

[71]        An important consideration will always be whether the payor had a reasonably held belief that he was meeting his support obligations.

[72]        A helpful indicator for assessing the reasonableness of their belief on this issue is the extent to which the child support the payor was paying diverges from the amount he/she should have been paying; the closer the two amounts are, the more reasonable the payor’s belief will be that he/she was meeting his or her obligation and vice versa.

[73]        By not disclosing and adjusting, and ignoring, his obligation to support his daughter for more than ten years despite his income almost doubling, the father engaged in blameworthy conduct.

[74]        The father’s blameworthy conduct favours a retroactive award.

[75]        The past and present circumstances of the child must also be considered to determine the extent to which the child would benefit from a retroactive award. If there is no evidence of need, the court may assume that other sources are meeting any increases in the child's expenses. On the other hand, proof that the child suffered hardship due to insufficient support in the past will support an award.

[76]        In Swiderski v Dussault, 2009 BCCA 461, the British Columbia Court of Appeal observed that the requirement of considering the circumstances of the child does not impose a burden on the recipient parent to prove “significant need” on the part of the child to succeed. A payor parent cannot avoid a retroactive award by merely arguing that, despite his or her past default, the recipient was able to care for the child sufficiently.

[77]        In Hartshorne v Hartshorne, 2010 BCCA 327, the court also emphasizes that past and current needs of the child are only one factor to consider, and the fact that the child’s needs may have been met despite the payor’s shortcoming concerning support will not be determinative. Child support is the right of the child and the child is entitled to share in the financial position of the payor parent, even though their basic needs have already been met.

[78]        Typically, where there has a been a significant increase in the payor’s income, the court will conclude as a matter of common sense that the child suffered as a result of the payor’s failure to pay increased support. Burchill v Roberts, 2013 BCCA 39; Swiderski v Dussault, 2009 BCCA 461.

[79]        The parties’ daughter is now [omitted for publication] years old. According to the mother, there were times throughout the child’s life when she could not participate in extracurricular activities, sports, go to summer camps, or on vacations. When the child was in elementary school, the mother said she did not have enough money to buy their daughter winter boots. When she asked the father to assist, she was rebuffed.

[80]        Although the mother currently earns around $50,000, there were years that she made much less, sometimes close to minimum wage.

[81]        The mother testified that their daughter expresses plans to attend university, but she has been unable to put away any savings.

[82]        I cannot conclude in the circumstances that the child has or is enjoying even a modest standard of living. The circumstances of the child favour a retroactive award.

[83]        Finally, the Supreme Court of Canada noted in DBS that a broad consideration of hardship is also required in determining whether a retroactive award is appropriate.

[84]        The hardship to the payor for a retroactive support analysis is distinguishable from the notion of undue hardship referred to in section 10 of the Guidelines for prospective support orders. The assessment when considering retroactive relief is less stringent. T(LC) v K(R), 2017 BCCA 64.

[85]        Income earned during the retroactive period may no longer be available and new family obligations need to be considered.

[86]        The onus is on the payor to establish evidence of hardship. Hardship cannot be inferred and it is insufficient to raise vague allegations of alleged hardship without providing concrete proof.

[87]        Hardship for the payor parent will not be given significant weight in the analysis where the hardship is the result of the parent’s blameworthy conduct, including improperly stopping the payment of all child support.

[88]        Where a payor like the father has not complied with an existing agreement, he or she cannot use the principle of predictability as a shield. He or she cannot claim reliance on the agreement for managing his financial affairs, and a successful defence will have to be founded on other considerations. Gray v Rizzi, 2016 ONCA 152; Collins v Collins, 2017 ONSC 2232

[89]        Given the size of the arrears, the amount of retroactive relief, and the adjustment of his support obligations going forward, there is no doubt that the father and his current family will experience some hardship. However, I must temper these findings of hardship with the blameworthy conduct engaged by the father.

[90]        I am not satisfied that the potential hardship to the father and his current family ought to stand in the way of an award.

[91]        Generally, a retroactive child support order should commence as of the date that effective notice is given to the payor. The court in DBS described effective notice very broadly as “any indication by the recipient parent that child support should be paid or re-negotiated.” All that needs to be established to satisfy this requirement is that the topic of child support is raised.

[92]        Once effective notice has been provided, the payor parent can no longer assume the status quo is fair, and any interest he/she has in certainty becomes less compelling.

[93]        The mother separated from her recent partner about three years ago. At that time she asked the father to pay child support. He refused and suggested she pursue her former partner.

[94]        Several years earlier she also asked the father to pay for winter boots, again this would have put the father on notice that support needed to be paid.

[95]        In DBS the court observed that where there was no effective notice, the starting point will be when the formal notice was given to the payor. Formal notice is when the application is served on the other party and not the commencement of the application.

[96]        The court also said that in the interests of certainty, predictability and ensuring the child support claims are pursued in a reasonably timely manner, as a general guideline, retroactive support should not go back further than three years from the date of formal notice.

[97]        However, like any guideline, the Guidelines is not absolute. In appropriate circumstances, retroactive relief can extend further back, even as far back as when the child support should have first been adjusted.

[98]        In DBS the court cites blameworthy conduct, like a failure to disclose increases in income, as an example of when a court might be inclined to go further back. 

[99]        Evidence of such blameworthy conduct, according to the court, will usually move the presumptive date of retroactivity back to the time when the circumstances materially changed, to disentitle the payor parent from using his or her informational advantage to justify deficient child support payments.

[100]     However, courts are generally reluctant to go too far back. In Brown v Kucher,  2016 BCCA 267, leave to appeal dismissed [2016] SCCA No 381, in overturning the trial judge’s decision to award retroactive child support for 19 years, the court noted that the longest period of retroactive support was seven years in Swiderski v Dussault, 2009 BCCA 461.

[101]     In the case at hand, the circumstances regarding the father’s income materially changed in 2012. It was in 2012 that one would have reasonably expected the father to disclose to the mother that his income had increased substantially from when they entered the separation agreement. Although his income changed before this time, the changes were much less significant.

[102]     As a starting point, I am satisfied that retroactive relief should begin on June1, 2012.

[103]     Using June 1, 2012 as the starting point the retroactive relief is $34,398 which is in addition to the arrears arising from his original obligation to pay $300 per month. Alternatively, if the retroactive relief were to apply to January 1, 2007, the amount would be in excess of $45,000.

[104]     Yes.

[105]     In DBS the court held that judges retain a broad discretion concerning the quantum of retroactive awards and emphasized that they should not order a retroactive award in an unfair amount, having regard to all of the circumstances of the case. Judges should always strive to craft awards in a way that minimize hardship to the payor and any other children requiring support.

[106]     Using the Guidelines as a starting point, the award for retroactive relief from June 1, 2012, is $34,398. The father is also obliged to pay $42,371 in arrears, and $922 per month in support going forward.

[107]     The father argues that ordering all the retroactive relief sought by the mother will overwhelm him financially and pose a hardship for him because he has two children from another relationship. The children are four and seven. According to the father, he recently separated from the mother of his children, but no formal child support arrangement has been made.

[108]     He has expressed a willingness to provide for his two other children, an assertion I accept with some guarded scepticism.

[109]     He also argues that his income is less than what it was last year because he was demoted as a result of an industrial accident and is currently on stress leave. According to the evidence presented by the father, his company intends to have him return to his original position and pay scale once he is fit to operate the machinery. Unfortunately, it is not clear how long that might be.

[110]     The evidence does not demonstrate that the reduction in income will be indefinite or even long-lasting. If it does become so, it could constitute a material change in circumstance necessitating a variation of this order.

[111]     The father also owns a home with approximately $270,000 equity and $253,000 owing. He has approximately $60,000 in vehicles and farm equipment and $5,000 in RRSPs. He owes $5,000 on a line of credit.

[112]     The father has $345,000 in assets and $258,000 in debts, for net a worth of $87,000.

[113]     The mother on the other hand has assets totalling $70,539 and debts of $47,955, for a net worth of $22,583.

[114]     After considering all of the circumstances, I am satisfied an adjustment of the start date for retroactive relief should be made to June 1, 2014. Doing so will achieve a fair and just result. The total retroactive relief award is $29,946.

[115]     The total arrears including those flowing from the obligation under the existing agreement and Judge Daneliuk’s order of December 1, 2018, is $72,317.