Lorne N MacLean, QC addresses the thorny issue of applications to reduce or cancel support due to a material change in circumstances in today’s blog. Our award winning Vancouver Variation Reduce Support Lawyers explain the test to vary or reduce support is designed to ensure frequent court applications do not occur if there has been no real change in the finances of the spouses or their children.
Lorne N. MacLean, QC says family clients need to know:
“the change must be a material change of circumstances. This means a change in financial circumstances of the spouses or their children, such that, if known at the time, would likely have resulted in different terms.”
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The important thing to take away from today’s blog is that when you have a change in your financial circumstances you need to pick up the phone and call one of our top Vancouver Variation Reduce Support Lawyers at 1-877-602-9900.
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This week’s BC Court of Appeal decision in Moazzen-Ahmadi v. Ahmadi-Fa provides a complete update for our readers on the test Vancouver Variation Reduce Support Lawyers and their clients must meet to succeed in changing an original support order:
[11] The central issue before the chambers judge was whether Mr. Moazzen established a material change of circumstances in the context of s. 17 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.).
[12] The judge found Mr. Moazzen failed to establish a material change of circumstances. The critical finding is at para. 27(d):
(d) accordingly, well before March 2013 when the agreement was reached and the Consent Orders were made, Mr. M.-A. either knew or ought to have known that his illegal conduct could result in disciplinary action by the College and that this may affect his capacity to generate an income. He has not established that what occurred after March 2013 when the Consent Orders were made was “unforeseen”.
Appeal Court Explains Test For Vancouver Variation Reduce Support Lawyers
[13] In my opinion, the judge erred in articulating the test for an application to vary a support order.
[14] The seminal decision is Willick v. Willick, [1994] 3 SCR 670 where Mr. Justice Sopinka stated at 688:
…In deciding whether the conditions for variation exist, it is common ground that the change must be a material change of circumstances. This means a change, such that, if known at the time, would likely have resulted in different terms. The corollary to this is that if the matter which is relied on as constituting a change was known at the relevant time it cannot be relied on as the basis for variation.
[15] Thus, the test, at its core, requires subjective knowledge of the change.
[16] In concurring minority reasons, Madam Justice L’Heureux-Dubé agreed that the threshold test was as described by Mr. Justice Sopinka. She stated the test requires the parties to have contemplated the change. She then directed courts to consider the surrounding factual circumstances to determine whether the change was sufficient to meet the threshold test. She stated at 734:
Nonetheless, the threshold test cannot be applied properly unless the sufficiency of the change in circumstances is evaluated against the backdrop of the particular facts of the case at hand. It is important to point out that the Act does not qualify “change” but merely states that “the court shall satisfy itself that there has been a change”. We must therefore give this term meaning in light of the preceding discussion on the context in which child support orders, and variations, are made. To begin with, “sufficiency” of the “change” must be defined in terms of the parties’ overall financial situation. Moreover, the fact that a change was objectively foreseeable does not necessarily mean that it was contemplated by the parties. Finally, although any change which is not contemplated may be considered by a judge to be sufficient, it is obvious that not every change will justify variation. Most importantly, however, and notwithstanding the above observations, while the onus of proving the sufficiency of the change in condition, means, needs or other circumstances rests upon the applicant (Payne, supra, p. 217), the diversity of possible scenarios in family law dictates that courts maintain a flexible standard of judicial discretion which does not artificially limit the adaptability of the Divorce Act provisions. [Emphasis from Willick.]
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[17] I note that the 1994 Willick decision predates the Federal Child Support Guidelines, enacted in 1997, and thus calls for a more extensive inquiry into the factual circumstances to determine the extent of the variation. Nevertheless, even with the Child Support Guidelines in place, the test to meet remains whether there was a material change of circumstances. The change must have been subjectively known, and whether the change was known can be assessed based on the objective circumstances.
[18] Section 17(4) of the Divorce Act pertains to child support orders, and refers to the Child Support Guidelines as the “applicable guidelines”. Section 17(4) of the Divorce Act reads:
Factors for child support order
(4) Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that a change of circumstances as provided for in the applicable guidelines has occurred since the making of the child support order or the last variation order made in respect of that order.
The Federal Child Support Guidelines provide:
Variation of Child Support Orders Circumstances for variation
14 For the purposes of subsection 17(4) of the Act, any one of the following constitutes a change of circumstances that gives rise to the making of a variation order in respect of a child support order:
(a) in the case where the amount of child support includes a determination made in accordance with the applicable table, any change in circumstances that would result in a different child support order or any provision thereof;
(b) in the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either spouse or of any child who is entitled to support.
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Section 17(4.1) of the Divorce Act pertains to spousal support orders:
Factors for spousal support order
(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration.
[19] In B.G. v. G. (L.) [1995] 3 S.C.R. 370, Sopinka J. confirmed the knowledge requirement of the test for establishing a material change of circumstances. L’Heureux-Dube J. quoted from her concurrence in Willick where she directed courts to consider the objective circumstances in assessing the sufficiency of the change.
[20] In LM.P. v. L.S., [2011] 3 S.C.R. 775, the majority referred to the need to examine the objective circumstances to assess whether a change is material:
[29] In determining whether the conditions for variation exist, the threshold that must be met before a court may vary a prior spousal support order is articulated in s. 17(4.1). A court must consider whether there has been a change in the conditions, means, needs or other circumstances of either former spouse since the making of the spousal support order.
…
[34] The decisions in Willick and G. (L.) also make it clear that what amounts to a material change will depend on the actual circumstances of the parties at the time of the order.
[21] In Dedes v. Dedes, 2015 BCCA 194, this Court reiterated the principles articulated in the Supreme Court of Canada jurisprudence in the context of an application to vary a child custody order. The Court stated the test for variation as follows:
[25] As articulated in LM.P., the test for material change is based not on what one party knew or reasonably foresaw, but rather on what the parties actually contemplated at the time the order was entered by agreement. A function of the material change threshold is to prevent parties from re- litigating issues that were already considered and rejected; in such cases, an application to vary would amount to an appeal of the original order (see Gordon at para. 15). As was stated by L’Heureux-Dube J. in Willick at p. 734, “the diversity of possible scenarios in family law dictates that courts maintain a flexible standard of judicial discretion which does not artificially limit the adaptability of the Divorce Act provisions”. See also G. (L) v. B. (G.)t [1995] 3 S.C.R. 370 at paras, 49-51 and Jakob v. Jakob, 2010 BCCA 136 at para. 40.
[22] In my opinion, the judge fell into the same error identified in Dedes – he focused on what Mr. Moazzen “knew or ought to have known” rather than on what he actually knew.
[23] The matter is not helped by the absence of any analysis as to whether the change was material. The judge noted the inadequacies in Mr. Moazzen’s financial disclosure:
[33] Mr. M.-A. has filed voluminous binders of financial records in an attempt to establish his income for support purposes. I accept Ms. A.-F.’s submission that this material raises more questions than it answers. Also, a portion of the pharmacy’s business over the years included what appear to be acknowledged illegal cash payments.
[34] This all results in the inherent unreliability of the various financial statements prepared over the years on representations made by Mr. M.-A. to his accountants. As I have noted, full and forthright financial disclosure is required as a pre-requisite before the court can determine whether there has been a material change of circumstances or make the determination of a different amount of support: Kurvers [2002 BCSC 2] at paras. 26, 28.
[35] In my view, an audit of Mr. M.-A.’s historical expenses and income is required such that the court is not obliged to “ferret out the necessary information from inadequate or incomplete financial disclosure”: Jeffery v. Motherwell, 2006 BCSC 140 at para. 23 cited with approval in Hausman v. Klukas, 2009 BCCA 32 at para. 51.
[24] In my opinion, the judge’s dissatisfaction with the state of Mr. Moazzen’s financial disclosure was justified. However, the analysis of whether Mr. Moazzen proved a material change of circumstances required findings as to whether the change was in fact material. In my view, the applications should have been adjourned to require Mr. Moazzen to provide the audit the judge considered necessary.
Vancouver Variation Reduce Support Lawyers can help assess whether a material change has occurred and help negotiate a fair settlement on the issue to reduce your stress.
If a fair settlement can be reached our award winning Vancouver Variation Reduce Support Lawyers will help present a compelling argument for the judge that hears your case. Call us toll free at 1-877-602-9900.
