Canada’s highest court decided in Michel v. Graydon, 2020 SCC 24 that if you understate your income for a child support order you run the risk a court will later retroactively vary child support based on your actual income and order you to pay a hefty sum.
And, this could happen even after a child support order expires, or the child is fully grown and no longer a “child” under BC’s Family Law Act.
1. Background
First, in this case the parents lived in a common law relationship until they separated in 1994 when the child A.G. was four years old. A.G. lived with Ms. Michel, and Mr. Graydon agreed to pay child support of $341/month based on an annual income of $39,832. The child support for this amount was put into a consent order made March 29, 2001.
In addition, during A.G.’s childhood Ms. Michel was mostly dependent on Disability Income and Income Assistance in return for which she had to assign her rights to receive child support over to the Minister under the Employment and Assistance Act, S.B.C. 2002, c. 40. While Ms. Michel’s rights were assigned, the Minister never authorized an application to review and vary child support for A.G.
However, the problem was that Mr. Michel understated his annual income from the time of the Consent Order in 2001. It was actually $45,580 in 2001, and except for 2004 his annual income was more than $39,832 up to April 30, 2012 when the child support obligation terminated.
2. The BC Provincial Court Decision: Vary the Child Support Order Retroactively
Second, in 2015 Ms. Michel obtained an order from the BC Provincial Court for Mr. Graydon to vary child support and pay retroactively $23,000, for the period 2001 to 2012. One half was paid to her and one half was paid to A.G. who was by then 24 years old. The Court found by applying the reasoning in D.B.S. (D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v.Henry; Hiemstra v. Hiemstra, [2006] 2 S.C.R. 231, 2006 SCC 37) that:
- Mr. Graydon had engaged in blameworthy conduct by failing to accurately disclose his income,
- A.G. suffered as she could not attend her desired post‑secondary program, and
- Mr. Graydon would not experience hardship from a retroactive award.
3. The BC Supreme Court Overturned the BC Provincial Court Decision and Would Not Vary Child Support Retroactively
Third, in 2017 the BC Supreme Court overturned the Provincial Court decision, refused to vary child support retroactively under s. 152 of the Family Law Act, and terminated Mr. Graydon’s responsibility to pay child support because A.G. was no longer a “child” under the Family Law Act.
4. The Supreme Court of Canada Ordered Child Support Retroactively
Fourth, the Supreme Court of Canada found in 2020 that you can vary child support retroactively under s. 152 of the Family Law Act (FLA) even though in this case A.G. was no longer a “child” as defined by the BC Family Law Act:
Section 152 of the FLA authorizes a court to retroactively vary a child support order, irrespective of whether the beneficiary is a “child” at the time of the application, and irrespective of whether the order has expired. The order of Smith Prov. Ct. J. should therefore not have been disturbed.
(Michel v. Graydon, 2020 SCC 24, per Brown J. at paragraph 9)
5. Significance of the Decision
This is a very significant decision as the Supreme Court of Canada does not often hear family law cases due to the high cost, lengthy time and significant effort required to get through all levels of court.
Of special note is that the Supreme Court of Canada focused on the rights of the child for both the issue of child support itself, as well in the need for children to access justice and have their rights protected:
Today, children are viewed as individuals who, as full rights bearers and members of a group made vulnerable by dependency, age and need, merit society’s full protection. . .
The courtroom doors should not be closed because certain categories of debts owed to children are classified as coming “too late”
. . . courts are not to be discouraged from defending the rights of children when they have the opportunity to do so
(Michel v. Graydon, 2020 SCC 24, per Martin J. at paragraphs 73 and 77)
6. Conclusion
In conclusion:
- Child support is the right of the child, not the parents,
- Payors of child support need to disclose their income accurately and on an ongoing basis,
- Payors who understate their incomes for child support run the risk of having to pay in the future what they should have paid if the income were accurately stated,
- The age of the child and whether the original child support order has expired have no bearing on when a retroactive application is made: the child can be fully grown or the child support order expired
- Children have rights that are to be protected by the Court when there is an opportunity to do so.