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Civil Court Not to Be Used for Getting “Refund” of Child Support

Civil Court Not to Be Used for Getting “Refund” of Child Support

In a decision released over the summer, the Ontario Court of Appeal made it clear that payors of child support cannot try to use the guise of a civil damages claim to try to recoup any overpayments they may have made.

In Cunningham v. Moran, the parties had a common-law relationship that produced one child. When the relationship ended, they went to family court to temporarily settle some of their issues until a full family law trial could be heard. This resulted in an interim order that the man, Cunningham, was to pay the woman, Moran, $800 per month in temporary child support, and another $1,100 for 60% of the cost of hiring a nanny.

Even though a date for a full trial was set, the parties agreed to settle their issues through mediation/arbitration. In the resulting settlement agreement, which was reached with the benefit of independent legal advice, they agreed to share joint custody of their child, and Cunningham’s monthly support obligation was reduced to $400 per month for contribution towards the costs of the nanny, and $250 per month for extracurricular costs. Any arrears still payable by Cunningham under the temporary order were deemed to be waived. The settlement agreement also provided that it was final and binding on each of them, i.e. that they both gave up the right to appeal it.

The terms of the settlement agreement were then incorporated into an arbitration award and a court order, by consent of both parties.

However, Cunningham later brought two motions to have this award and the underlying settlement agreement set aside, claiming that they were invalid on various grounds. These were both dismissed by the courts.
Cunningham then tried a different course: he both Moran in civil court, on the basis that she had fraudulently misrepresented some of her finances, and concealed her ability to contribute to child support. Specifically Cunningham claimed that Moran – who happened to be a law professor and later the Dean of the University of Toronto Faculty of Law – had not fully disclosed her compensation and in particular the details of certain bridge financing from the University to allow her to purchase a home. Cunningham claimed that the loan amounts were really advances, and were structured on her financial statements as liabilities, rather than as income.

As a result, according to Cunningham, he had been paying more temporary child support than he should have. He claimed damages for the overpaid child support/child care, his legal fees, and certain damages for Moran’s underpayment of child support.

He did not succeed at trial, and his subsequent appeal was dismissed, as well.

First of all, the Ontario Court of Appeal found that Cunningham’s civil claim amounted to a collateral attack on the appeal-proof arbitration award that had been reached in the family law proceeding, and on the underlying agreement he and Moran had reached. In those circumstances – and since his earlier attempts to have the application and award set aside had been dismissed – he could not now try to litigate the matter again.

More importantly, the court concluded that Cunningham’s claim for damages in civil court was really a back-door attempt to address family law and child support issues, and to adjust the child support arrangement that had been reached. Despite characterizing the civil claim as being for “damages”, he was really just attempting to recover child support and child care costs he had overpaid.

This was not an appropriate use of the civil courts, and amounted to an “abuse of process”. Instead, Cunningham should have applied for an adjustment under the family law legislative regime in the normal manner. The court also noted that any concerns he had with Moran’s level of disclosure arose before he gave his consent to the settlement agreement, and before the mediation/arbitration awarded had been rendered.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit www.RussellAlexander.com.

For the full text of the decision, reference: http://www.ontariocourts.on.ca/decisions/2011/2011ONCA0476.htm