Imputing Income to Support Payor involves risk for Recipient
Recipients of child support ought to be aware of the risks associated with support calculated using an imputed income, particularly where arrears have accrued. Pursuant to Court of Appeal decision, Trembley v. Daley, imputing income to the payor, may not afford recipients the closure and finality that they may believe.
The parties commenced living together in 1986 and were separated in 2004.
In July 2007, the parties attended trial where the court addressed the issue of child support. Based upon the Respondent’s lack of disclosure, failure to satisfy undertakings and the complex nature of his employment, the trial court calculated the Respondent’s child support obligation and arrears based upon an imputed income.
In 2008, the Respondent brought a Motion to Change the trial court’s Order. While the matter was waiting to be heard, the Respondent suffered a catastrophic injury whereby he lost several fingers on his right hand. The parties agreed that said injury constituted a ‘material change in circumstance’, as required for a Motion to Change a final Order, pursuant to Section 37(2.1) of the Federal Child Support Guidelines.
The Motions court calculated ongoing support based upon the Respondent’s reduced earning capacity following his injury. The difficult issue for the Motion court however, surrounded how to address the trial court’s Order, which calculated both support and arrears based upon the imputed income, prior to the material change.
The Motions judge held that it was the court’s duty to render a fair decision based upon all the evidence currently before it. The Motions judge reiterated the sentiments of the trial court, in that while before the trial court the Respondent deliberately withheld evidence surrounding his income. Notwithstanding this finding, the court recalculated child support and arrears prior to the material change, based upon the disclosure provided by the Respondent before the Motions judge.
Court of Appeal
The Appellant appealed the Motion court’s decision by arguing that the Motions judge lacked jurisdiction to retroactively recalculate the findings of the trial court.
The Appellant relied upon the Supreme Court of Canada decision, Hickey v. Hickey,  2 S.C.R in stating that the trial court ought to have been afforded significant deference in relation to support orders. The Appellant maintained that absent a ‘material error, a serious misapprehension of the evidence, or an error in law’ a higher court should not intervene in the support judgments of a trial court.
The Court of Appeals however, looked to Section 37(2.1), of the Federal Child Support Guidelines S.O.R ./97-175, which outlines the court’s authority on a Motion to vary a child support order. Section 37(2.1) states that:
In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may:
- Discharge, vary or suspend a term of the order, prospectively or retroactively;
- Relieve the respondent from the payment of a part or all of the arrears or any interest due on them; and
- Make any other order for the support of a child that the court could make on an application under section 33.
The Appellant further argued that the Motion court should have exercised jurisdiction under Section 37(2.1)(b), by relieving all or part of the arrears, rather than varying the Order pursuant to subsection (a).
The Court of Appeals held that once a material change in circumstance occurs, the Motions court has automatic jurisdiction to vary the Order pursuant to Section 37(2.1)(a). The court further reveals that the plain meaning of 37(2.1)(a), affords a Motion court broad discretion.
Therefore, the Court of Appeals held that there is no basis for interfering with the Motions judge’s decision to vary the Order. The Motions judge acknowledged the material change, and then found that the trial court’s Order was based upon inaccurate information, and accordingly varied the Order retroactively.
For the aforementioned, reasons the Court of Appeals dismissed the Appellant’s appeal.
Trembley outlines the scope of the court’s authority on a Motion to change, and establishes that notwithstanding an imputed income, imposed as a result of the payor’s failure to provide proper disclosure, a Motions judge may still retroactively vary support. It is important for recipients of support to be mindful of this element, where the payor’s obligation to pay has been calculated using an imputed income.
This case further emphasizes that when imputing income, the court may focus on equity and fairness, rather than penalization for misconduct.
Furthermore, this decision should not be read to mean that the Appellant was not afforded any remedy for the Respondent’s misconduct. The Motions judge ordered that the Respondent pay the Appellant’s disbursements, which totaled approximately $12,000.00.