Cancelling BC Support Arrears Means Proving Not To Do So Would Be Grossly Unfair says Lorne MacLean, QC founder of MacLean Law. The takeaway from this is, that if you have lost your job, or taken a pay cut, or had your business fail, you must not procrastinate because the test to vary support up front is much less strict than procrastinating and coming back years later when collection proceedings are in play. Don’t ignore the problem deal with it promptly to avoid nasty results months or years later.
Cancelling BC support arrears requires the paying spouse who is behind on their payments to meet a very compelling onus to succeed. Unless the paying spouse shows it would be grossly unfair not to cancel the arrears the application to cancel or reduce arrears will fail.
Cancelling BC Support Arrears
Our Family Law Act sets out the test for Cancelling BC Support Arrears.
174 (1) On application, a court may reduce or cancel arrears owing under an agreement or order respecting child support or spousal support if satisfied that it would be grossly unfair not to reduce or cancel the arrears.
(2) For the purposes of this section, the court may consider
(a) the efforts of the person responsible for paying support to comply with the agreement or order respecting support,
(b) the reasons why the person responsible for paying support cannot pay the arrears owing, and
(c) any circumstances that the court considers relevant.
In order to meet the gross unfairness test, the applicant must establish that maintaining the arrears is so unfair that to enforce payment of the arrears would serve an injustice on the payor that the court cannot countenance. Leaving a payor in strained financial circumstances is not enough to meet the gross unfairness test. P. (J.L.) v. H. (S.D.), 2015 BCPC 378
We won a case dismissing the father’s claim to cancel arrears in Lightle v Kotar where Madam Justice Fenlon held:
48] In short, I do not accept Mr. Kotar’s submission that his income for 2013 justifies a reduction in child and spousal support arrears.
[49] An important factor in assessing whether it would be grossly unfair not to cancel the arrears is whether the arrears could be paid in future. As explained in Earle at para. 26:
[26] Not being able to pay now is not a valid legal reason to cancel or reduce arrears. They will only be cancelled if the person is unable to pay now and will be unable to pay in the future.
[50] On his own evidence, Mr. Kotar expects to regain his footing and earn substantial income comparable to his earnings at Canaccord. If the job with Mr. Pederson’s company pans out, Mr. Kotar could hold 2% of the company’s equity, valued at millions of dollars. While that position is not a certainty, I find it probable Mr. Kotar will find a comparable position. I therefore conclude that it is likely that Mr. Kotar will be able to pay arrears of support in future.
[51] In the result, I dismiss Mr. Kotar’s application to reduce arrears of support owing for 2013.
Delay Makes Things Worse
Two additional 2014 BC Supreme court cases have reiterated the heavy onus faced by paying spouses to cancel arrears of support that have built up as a result of non- payment of court-ordered support. In Holmstrom v. Holmstrom found at 2014 BCSC 545, which case’s analysis was followed in BF v JF 2014 BCSC 1892, two BC Supreme Court Justices refused to cancel arrears relying on the following principles (high-lighted for the good parts):
[38] In Earle v. Earle, 1999 BCSC 283 at paras. 25-43, Madam Justice Martinson clarified the criteria for a cancellation or reduction of arrears. In relation to a change in financial circumstances, she said:
[25] I will now consider a number of specific arguments that are often made to the courts on applications to cancel or reduce arrears and give the legal rules that apply to those arguments.
- “I cannot afford to pay now”
[26] Not being able to pay now is not a valid legal reason to cancel or reduce arrears. They will only be cancelled if the person is unable to pay now and will be unable to pay in the future.
- “I could not pay when I was supposed to because my financial circumstances changed”
[27] People making this argument have a heavy onus. It is not good enough just to say that they could not pay because they earned less. They can only get a reduction or a cancellation of arrears if they present detailed and full financial disclosure, under oath (usually in the form of an affidavit) that:
- the change was significant and long lasting and
- the change was real and not one of choice and
iii. every effort was made to earn money (or more money) during the time in question, and those efforts were not successful.
[Emphasis in original.]
These two recent decisions also cited with approval a 2012 decision that explained the reasoning behind having such a difficult test for cancelling arrears. One of them is discouraging disgruntled payers from refusing to work or slacking off with the hopes of changing an order they are disappointed with.
[39] In L.B. v. J.K., 2012 BCPC 231, Hamilton P.C.J. outlined some of the principles to consider in determining the meaning of “grossly unfair”:
[50] What is clear from these cases is that a determination of gross unfairness is a factual determination. As well, it is clear that the gross unfairness test applies to applications to reduce or cancel arrears of both child and spousal maintenance.
[51] So, what does “grossly unfair” mean?..
[53] I am of the view that gross unfairness means more than something that is a significant financial burden.
[54] In order to meet the gross unfairness test, I am of the opinion that the applicant must establish that maintaining the maintenance arrears is so unfair that to enforce payment of the arrears would serve an injustice on the payor that the court cannot countenance. If enforcing payment of the arrears leaves a payor in strained financial circumstances, that is not enough.
[55] Circumstances in which a court might conclude that an applicant has met the gross unfairness test might include situations where child maintenance arrears have accumulated during a time when the child was living with the payor and not the recipient, or where the child was removed from the recipient’s care by child welfare authorities, or was living with other extended family members. Gross unfairness might be established in circumstances where enforcing the payment of the maintenance arrears would force the payor into bankruptcy. A determination of gross unfairness in these examples would depend on the facts of each individual case. However, what is clear from the authorities is that cases in which maintenance arrears will be reduced or cancelled are rare: see [Luney v. Luney, 2007 BCCA 567] at para. 43.
[56] There is a reason for the test being as onerous as it is. The test is onerous because parents have a duty to their children to financially support those children throughout their childhood. This duty imposes an obligation on both parents to financially support their children commensurate with the parents’ financial circumstances – Earle, supra, at para. 16. This duty exists whether or not a court order is in place.
[57] When a parent fails to fulfil their duty, the children are deprived of the financial support they are entitled to receive, but which they cannot enforce. The children cannot go to court to secure the payment of the support they are due. The children suffer a deprivation, an injustice.
[58] When the parent’s duty is secured by a court order, the failure to fulfil that duty not only serves an injustice to the child, but the parent is disobeying a court order. Our courts cannot, and will not, tolerate such conduct except in the rarest of cases.
[59] So, when a parent comes to court having failed in their duty to their child, deprived the child of that which the child is entitled to receive but cannot enforce, and disobeyed a court order, our courts will not condone that parent’s behaviour unless, and only unless, to insist that the parent fulfil his or her duty would be grossly unfair. For these reasons, the grossly unfair test is not an easy test to meet.
If you have a spousal or child support arrears problem that requires legal advice from an experienced family lawyer, meet with us across BC at one of our offices in Vancouver, Richmond, Surrey, Kelowna, Calgary, and Fort St John. Cancelling BC support arrears is a thorny issue and the stakes are high. Call us today if you have a cancelling BC support arrears dispute.
