COVID-19 is no excuse to breach financial disclosure in family law, says Court

Unilaterally lowering support payments is not in children’s best interest: Superior Court

COVID-19 is no excuse to breach financial disclosure in family law, says Court

The impacts of the COVID-19 pandemic should not be an excuse to breach the fundamental family law principle of financial disclosure, the Superior Court of Justice of Ontario has said in a recent case.

In Isabelle Juteau v Daniel Orr, 2020 ONSC 5324, the applicant mother and the respondent father were separated and had three minor children. The mother, a 2020 graduate of a nursing program, and the father, a real estate representative, were parties to an agreement governing child and spousal support.

The mother filed a motion seeking monthly spousal support and offset child support, based on the father’s imputed income of $230,000 and on the mother’s imputed income of $40,000, among other amounts like expenses and costs. The mother alleged that the father had unilaterally decided to pay her monthly spousal and child support of $3,602, instead of the agreed amount of $5,000, and had refused to provide his 2019 income despite her repeated requests.

The Ontario Superior Court of Justice granted the mother’s motion, stating that the father’s action of unilaterally lowering support payments was improper and not in the children’s best interests. The court, however, found no malice or bad faith on the father’s part and recognized that he had made an effort to remedy this error by immediately paying all the arrears.

The father contended that there was no reason to modify the agreement because there was no change in the circumstances which would call for such deviation. The court disagreed, stating that the agreement clearly included a mechanism for the annual review and adjustment of support and an obligation to provide financial disclosure by a certain date. The court emphasized that financial disclosure is a fundamental family law principle.

“I can appreciate that the current pandemic has brought on new challenges for us all, but I do not believe that it should be used as an excuse not to provide financial disclosure,” wrote Justice Marc Smith for the court.

The court reviewed the father’s income tax returns from 2016 to 2018 and found no explanation or supporting documentation for the purposes of certain business expenses and the fluctuations of certain amounts. The court eventually stated that the fair and reasonable amount for the father’s imputed net income for 2019 was $230,000, as submitted by the mother.

A blog post written on behalf of NULaw analyzed this case, which involves unbalanced earnings between parents. “[E]ven if the father thought the mother should be working, it was not within his rights to make a decision on his own to reduce support payments,” stated the blog post.

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