Supreme Court of Canada Opines on “Hardship” as it Applies to Child Support Obligations
The COVID-19 pandemic has impacted separated and divorced parents in myriad ways, but from an economic-only standpoint it may have prompted job losses, reduced value of investments and “nest eggs”, and an overall increase in financial struggle and uncertainty.
For those parents who are obliged to pay child support, these new economic factors may serve to exacerbate existing challenges they already have, in terms of meeting the obligation to pay child support on a regular basis.
The recent landmark decision by the Supreme Court of Canada called Michel v. Graydon touches on this issue directly, by addressing how a support-paying parent’s “hardship” might factor into a Family court’s decision on whether to still hold that parent responsible for historical debt in the form of unpaid past child support.
The decision is lengthy and covers a lot of ground; our Blog from September covered some of the more technical elements of the ruling as applied to the facts, and the more recent November Blog highlights the concurring opinion by the Honourable Justice Martin which covers the historical basis for child support legislation, the impact on access to justice, and the what the Judge called the “feminization of poverty”.
As we noted in those prior Blogs, the majority judgment (which was concurred-in by three of the Supreme Court Judges) clarified the B.C. law as it applies to retroactive child support, by examining the governing law in that province (namely s. 152 of the Family Law Act) requiring that in applications to vary child support retroactively, the child who benefits must be a “child” (i.e. under the age of majority) at the time the variation application is made.
The Supreme Court ultimately ruled that it was eminently clear under the B.C. legislation that: 1) children who are dependent on their parents are eligible to receive child support; and 2) the Family courts in that province are authorized to change, suspend, or terminate an order respecting child support, and to do so either prospectively, or retrospectively. This is true regardless of whether the original child support order has expired.
Indeed, as the majority of the Court ruled: “Far from erecting barriers, s. 152 creates an avenue for courts to retroactively change any child support order, irrespective of the beneficiary’s dependent status and irrespective of whether the order is extant at the time of the application.”
But what is also noteworthy about the decision, is the Supreme Court’s elaboration on some of the principles set out in its own prior ruling in a 2006 case called D.B.S. v. S.R.G. That earlier judgment included a list of factors a Family court had to take into account, in determining whether to order the parent to pay the historical child support debt; these include the reasons for the paying parent’s delay, the circumstances of the child, and the hardship the award creates for the paying parent.
On that last factor, the Supreme Court in Michel v. Graydon had some important additional observations to make, and these are worth repeating at length here:
(4) Hardship the Award Might Entail
This factor takes into account the ease with which the payor might be able to pay the award. If the award would cause the payor undue hardship, and if the other factors do not militate against it, this factor may weigh against an award or affect its temporal scope to achieve a fair result. It is not necessary that there be no hardship caused by the award for it to be granted. If there is the potential for hardship on the payor’s part, but there is also blameworthy conduct which precipitated or exacerbated the delay, it may be open to the courts to disregard the presence of undue hardship…. In all cases, hardship may be addressed by the form of payment …
While the focus is on hardship to the payor, that hardship can only be assessed after taking into account the hardship which would be caused to the child and the recipient parent from not ordering the payment of sums owing but unpaid. … In D.B.S., the majority recognized at para. 115 that “courts should recognize that hardship considerations in this context are not limited to the payor parent.” While they referred to the impact on other children, it is clear that hardship cannot be measured in the abstract but must be grounded in the facts and the totality of the circumstances. For example, the payor may be able to establish that paying past due child support in the amount of $20,000 would create hardship because the payor does not have the funds on hand and would be required to obtain a loan or sell property to discharge that child support debt. However, it must be taken into account that the payor had the benefit of the unpaid child support for the full time in which it was unpaid and such monies may have funded a preferred lifestyle or the very purchase of property which may now need to be sold.
If children have gone without the appropriate level of support it often means that the recipient parents have been forced to go into debt themselves or spend all their monies, not on property, but on the child. … It may also mean that custodial parents have foregone opportunities, like spending time with the child or pursuing higher education and enhancing their career prospects, because they had to work an additional job or two to provide for the child. The recipient parent may therefore have incurred debt to cover the cost of the child’s essentials or have no savings because all monies were absorbed by monthly outlays. Viewing matters in this holistic way places hardship to the payor in its actual factual and legal matrix. While it may appear difficult to ask the payor to obtain a loan for $20,000 to repay the debt of unpaid child support, the recipient may be in debt in a similar amount. Thus, the hardship caused to the child and the recipient parent from non-payment is also a crucial part of the equation. With historical awards, there may be a longer period of unpaid child support, resulting in larger amounts and greater hardship on all sides. All of which increases the need to see the full picture and assess hardship based on all the circumstances.
In the end, even though the case focuses technically on B.C. legislation, the importance of the Supreme Court of Canada’s decision in Michel v. Graydon resonates across the rest of Canada as well, in numerous respects. In particular, the Court’s general comments on “hardship” add needed clarity to the law, especially in light of the new and unforeseen economic challenges that may be heaped on support-paying parents in connection with the COVID-19 pandemic.
For the full text of the decisions, see:
Michel v. Graydon, 2020 SCC 24
D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 SCR 23
