By Douglas J. Manning, Partner, Certified Specialist in Family Law

A recent Ontario Court of Appeal decision has re-affirmed the principle that if a support payor’s income increases and they fail to reveal this information to the support recipient then they are in jeopardy of having their support obligation increased retroactively so as to result in a significant lump sum payment.

The recently decided case of S.P. v R.P. [2011] O.J. No. 1968 (Ont. C.A.) is a textbook case of what not to do if you are a child or spousal support payor.  In this case the parties had a 1993 Separation Agreement that set the child support (and spousal support) obligation of the husband/father to the wife/mother after 18 years of marriage for herself and the 3 children.  The husband later sought to decrease his support obligation on the basis that he had lost his high paying job as a chartered accountant and partner with a large Toronto accounting firm.  He sought reductions on 2 occasions in the mid-1990’s and the wife must have agreed with the requests given that there had been no court proceedings until the wife’s application in 2007 seeking financial disclosure and an increase in support.

Since the introduction of the changes to the child support legislation in 1995 the courts have relied upon the mandatory income disclosure sections of the legislation to impose positive obligations to provide full and timely disclosure of changes in the incomes of the parties especially where child support is concerned.  In doing so, a theme running through many of the decisions is that child support is a right of the child and parents ought not to deprive their children of what they are entitled to  by way of the potential for improvements in their standard of living which would presumably be reflected by a higher child support obligation.

In this case, the support paying former husband not only had misrepresented his income at the times he sought to reduce his support and he failed to notify the support recipient former wife of when his income increased, he also refused to comply with requests for income information made by the former wife when she suspected the husband had resumed employment and she wished to re-visit the amount of child and spousal support being paid.

The income disparity between the parties was noteworthy.  In some years the husband’s income exceeded $400,000 while the wife’s income was never more than $66,000.  What was also of significance in this case was that the court made the adjustment in support retroactive to 1996 (the time when the husband first asked for a reduction) at a time when he could have exercised some stock options which would have constituted income and justified a continuing child support obligation at the original amount set out in the parties’ 1993 Separation Agreement.

The concept of the husband’s blameworthy conduct underlies much of the rationale for the decision which reaches back 11 years from the date of the judgment.

When advising clients about their support obligations and rights, I always remind them of the positive duty to keep the other parent up to date with changes in income in order to avoid being second guessed by a court at some point down the road.  No one looks forward to paying more, but is for the children’s well-being.