



COURT OF APPEAL FOR ONTARIO

CITATION: Colucci v. Colucci, 2019 ONCA 561

DATE: 20190704

DOCKET: C66264

Brown, Roberts and
    Zarnett JJ.A.

BETWEEN

Lina Colucci

Applicant (Appellant)

and

Felice
    Colucci


Respondent (Respondent)

Surinder K.
    Multani
, for the appellant

Richard M. Gordner, for the respondent

Heard: April 26, 2019

On appeal from the order of Justice P.B. Hockin of the
    Superior Court of Justice, dated November 5, 2018, and from the costs order,
    dated December 17, 2018.

Roberts
    J.A.:

[1]

This appeal concerns a delinquent payor who was granted a retroactive reduction
    in his child support obligations that extended far into the past.

[2]

The appellant appeals from the order of the motion judge allowing the
    respondents request under s. 17(1) of the
Divorce Act
, R.S.C. 1985 c.
    3, to vary and retroactively reduce a 1996 child support order. The respondent
    seeks leave to cross-appeal from the costs order awarded to the appellant.

[3]

In my view, this case is governed by the principles articulated in
D.B.S.
    v. S.R.G.
, 2006 SCC 37,
    [2006] 2 S.C.R. 231
and
Gray v. Rizzi
, 2016 ONCA 152, 129 O.R.
    (3d) 201. The motion judge erred in failing to apply those principles and the
    appeal should be allowed.

A.

Background

[4]

The parties were married on October 1, 1983. They had two daughters, born
    respectively on March 27, 1988 and August 4, 1989. The parties separated on
    February 23, 1994 and were divorced on June 14, 1996.

[5]

The parties divorce judgment, dated May 13, 1996, provided for custody
    of the parties two daughters to the appellant and required the respondent to
    pay child support in the amount of $115 per week per child, so long as the daughters
    remained children of the marriage under the
Divorce Act
. At that
    point, their children were 8 and 6 years old.

[6]

The respondents child support obligations ended in 2012 when the
    daughters ceased to be children of the marriage. By 2012, both daughters had
    completed post-secondary education and were employed. As a result, from 2012
    forward, no further arrears accumulated apart from interest.

[7]

By 2012, the respondent had fallen into substantial arrears of child
    support. His taxable income was in decline from 1997 onwards. In April 1998,
    through counsel, he asked the appellant to consider a reduction of his child
    support obligations, which she refused. However, he did not commence a motion
    to change the order with respect to his child support obligations until
    November 17, 2016. He made few payments and the Family Responsibility Office
    was required to compel payment of the respondents support obligations.

[8]

From 2001 to 2016, the respondent resided first in the United States and
    then in Italy. During these years, there were significant periods of time in
    which no voluntary support payments were made; there were also significant
    periods of time in which there were no support payments from income diversion
    or other sources. The arrears accumulated and became substantial. The respondent
    left Canada without notifying the appellant and the Family Responsibility
    Office of his whereabouts and income during his absence. As of the date the respondents
    change motion was heard, the arrears with interest amounted to more than $170,000.

B.

Motion to change and order varying child support

[9]

In his November 17, 2016 notice of motion, the respondent sought the
    following order:

a) retroactively varying the
    child support set out in the divorce judgment dated May 13
th
, 1996,
    commencing May 1, 1997 (the coming into force of child support guidelines in
    accordance with s. 14(c) of the
Federal Child Support Guidelines
, SOR/
    97-175);

b) fixing the arrears of
    child support, if any, and determining the payments on those arrears in
    accordance with the respondents income. The respondent alleged that he was
    currently employed at minimum wage.

[10]

Relying
    on s. 14(c) of the
Federal Child Support Guidelines
, the motion judge,
    at paras. 10-13 of his reasons, found that the coming into force of the
Guidelines
on May 1, 1997, subsequent to the child support order in this case, constituted
    a change of circumstances, which permitted a variation order under s. 17(4)
    of the
Divorce Act
.

[11]

The
    motion judge determined at para. 15 that the respondent is entitled as of
    right to a variation and a calculation of support based on table amounts and
    his drop in income from employment. The motion judge, at para. 20, rejected as
    inapplicable the three-year rule suggested by
the
    Supreme Court in
D.B.S.
,
at para. 123, that it
    will usually be inappropriate to delve too far into the past and make a support
    award retroactive to a date more than three years before formal notice is given
.

[12]

Imputing
    income to the respondent at minimum wage or at his actual earned income, and
    following the table amounts of the
Guidelines
, the motion judge
    recalculated the arrears and reduced them to $41,642.

C.

Issues

[13]

The
    appellant submits the motion judge made the following three errors:

i.

He failed to apply the principles respecting retroactive support
    variations as articulated in

D.B.S.

and
Gray
; more
    specifically, the motion judge erred by failing to conduct a further inquiry,
    after accepting that the threshold for material change in circumstances had
    been met due to the coming into force of the Guidelines, as to whether it was
    appropriate to retroactively reduce the respondents child support obligations

far into the past.

ii.

He failed to apply the three-year rule, as set out in
D.B.S.
,
    and determine whether a retroactive support variation should be made for
    support amounts owing more than three years prior to the date of the
    respondents motion to vary.

iii.

He incorrectly imputed income to the respondent.

The respondent seeks leave to appeal costs, on the
    basis that the motion judge erred in principle by failing to apply the
    presumption in r. 24 of the
Family Law Rules
, O.Reg. 114/99, that a
    successful party is entitled to costs.

D.

Analysis

(1)

Governing principles:
D.B.S.
and
Gray

[14]

In
    my view, the motion judge erred in his approach to the retroactive child
    support variation requested by the respondent. As the appellant conceded and
    the respondent submitted, the motion judge was correct to find that the enactment
    of the
Guidelines
amounted to a change in circumstances that permitted
    the respondent to seek a variation:
Guidelines
, s. 14(c);

Marinangeli
    v.

Marinangeli

(2003), 66 O.R. (3d) 40. I agree that the
    threshold for variation has been met. However, the motion judge erred by
    continuing on to conclude that the respondent was entitled as of right to a
    retroactive reduction extending years into the past without any consideration
    of the principles relating to retroactive variation set out in
D.B.S.
and
Gray
, including the application of the three-year rule.

[15]

Specifically,
    the motion judge erred in distinguishing
D.B.S.
and failing to follow
Gray
.
    While
D.B.S.
involved an application for a retroactive increase in
    support, the factors articulated by the Supreme Court were intended to serve as
    general principles applicable, with appropriate adaptation, to retroactive
    support variations that would decrease the quantum of child support.  In
Gray
,
    this court adapted and applied
D.B.S.
to a motion, like here, to vary retroactively
    a child support order under s. 17 of the
Divorce Act
, on the basis
    that the payors income had decreased substantially.  In
Gray
, like in
    the case at bar, the motion judges order had the effect of respectively
    eliminating and reducing support arrears.

[16]

This
    court in
Gray
clarified the approach to be followed when the threshold
    for a retroactive variation of support had been met. Specifically, at paras. 44-
    54, the court made it abundantly clear that the four factors governing
    retroactive support orders identified in
D.B.S.
, subject to
    exceptional circumstances, should be adapted to apply to applications to
    decrease support retroactively in cases like the present:

i.

Whether there was a reasonable excuse as to why a variation in support
    was not sought earlier;

ii.

The conduct of the payor parent;

iii.

The circumstances of the child and;

iv.

Any hardship occasioned by a retroactive award.

[17]

Gray
rejected the notion that
D.B.S.
and its factors for analysis are
    inapplicable in cases of arrears, at para. 51:

[A]
payor who has let arrears
    accumulate has no claim to resist an
increase
in support on grounds of
    certainty and predictability. A delinquent payor cannot use the
    principle of predictability as a shield against paying the full amount of
    support to which his child is entitled.



In
    contrast, where a payor
seeks a retroactive decrease in support
,
    the
S. (D.B.)
factors  such as taking into account the
    circumstances of the child, the conduct of the payor parent, the hardship of a
    retroactive award, and the reason for delaying in seeking a variation in
    support  remain relevant. [Emphasis added.]

[18]

At
    paras. 45 and 61-62, the court also endorsed the general rules from
D.B.S.
that the date of effective notice should serve as the date to which the award
    should be retroactive and that it usually will be inappropriate to make a
    support award retroactive to a date more than three years before formal notice
    was given (the three-year rule).  While
D.B.S.
framed these rules in
    the context of giving certainty and predictability to the payor parent when the
    change is an increase sought by the recipient parent,
Gray
clarified
    that the same underlying principles apply when the change is sought by the
    payor parent:  see
D.B.S.
, at para. 123;
Gray
, at para. 61.

[19]

The
    court in

Gray
, at para. 60, adopted in its entirety Chappel
    J.s analysis in
Corcios v. Burgos
, 2011 ONSC 3326, and, in
    particular, her adaptation of the
D.B.S.
principles to a motion to
    change child support retroactively and effectively rescind arrears based on a
    payors reduced income.

[20]

First,
    at paras. 56-59 of
Gray
, the court identified the overarching
    considerations on a request to retroactively reduce child support, which I
    summarize as follows:

i.

The best interests of the child is the paramount issue. Parents cannot
    bargain away their childrens rights to support when they need it. Delinquency
    in paying support should not be incentivized.

ii.

There is a distinction to be made between (i) requests for a reduction
    of arrears based on a current inability to pay and (ii) arrears arising from a
    change in financial circumstances that affected the payors ability to make the
    support payments when they came due. A current inability to pay will generally
    not result in a reduction unless the payor can demonstrate on a balance of
    probabilities that he or she cannot and will not ever be able to pay the
    arrears. However, a change in circumstances while arrears were accumulating,
    which rendered the payor unable to make support payments for a significant
    period of time, may allow for a retroactive decrease in the amount of child
    support owed during that time and a reduction of the accumulated arrears.

[21]

Next,
    at para. 60 in
Gray
, the court set out the following key factors of
    the
Corcios/D.B.S.
analysis to guide a court in deciding whether to
    grant retroactive relief, the date of retroactivity, and the appropriate
    quantum of relief:

i.

The nature of the obligation to support, whether contractual, statutory
    or judicial;

ii.

The ongoing needs of the support recipient and the child;

iii.

Whether there is a reasonable excuse for the payors delay in applying
    for relief;

iv.

The ongoing financial capacity of the payor and, in particular, his or
    her ability to make payments towards the outstanding arrears;

v.

The conduct of the payor, including whether the payor has made any voluntary
    payments on account of arrears, whether he or she has cooperated with the
    support enforcement authorities, and whether he or she has complied with
    obligations and requests for financial disclosure from the support recipient;

vi.

Delay on the part of the support recipient, even a long delay, in
    enforcing the child support obligation does not, in and of itself, constitute a
    waiver of the right to claim arrears and;

vii.

Any hardship that may be occasioned by a retroactive order reducing
    arrears or rescinding arrears, or by an order requiring the payment of
    substantial arrears.

(2)

The motion judge erred by failing to apply these governing principles

[22]

The
    motion judge made no reference to
D.B.S.
(and none to
Gray
)
    other than to reject the application of the three-year rule, reasoning at
    para. 20: [t]his is not a retroactive support order but a case where arrears
    have accumulated and require adjustment. In any event, it would be wrong to
    limit the calculation in view of the respondents delinquency.

[23]

This
    was an erroneous approach and the motion judges reasons disclose a clear error
    in principle that justifies appellate intervention:
Gray
, at para. 18;

Hickey v. Hickey
, [1999] 2 S.C.R. 518, at paras. 11-12. While the
    motion judge correctly determined that the respondent met the threshold for a
    retroactive variation of the support order and was delinquent, he erred by
    failing to go on to consider whether and to what extent a variation order
    should be made in the light of the
D.B.S.
factors as adapted by this
    court in
Gray
.

[24]

Instead,
    the motion judge appears to have relied only on this courts decision in
Wright
    v. Zaver

(2002), 59 O.R. (3d) 26 (C.A.) and failed to consider how
    that decision and
D.B.S.
interact.

[25]

In
Wright
, this court determined that the enactment of the Ontario Child
    Support Guidelines (the Guidelines) in 1997 created a right to vary
    pre-existing child support orders to bring
prospective
support in line
    with the amount specified in the Guidelines.  The court further held that the discretion
    not to apply the Guidelines, again
prospectively
, was limited to the
    circumstances set out in s. 37 (2.3) and (2.5) of the
Family Law Act
.

[26]

The
    decision in
Wright

in no way determines that a request for
retroactive
support reductions, including requests to bring historical support in line with
    the Guidelines, will be automatic.   In such cases, the support amount provided
    for in the prior order or agreement will have formed a part of the recipient
    parents budget and the support recipient often will have undertaken financial
    obligations premised on the continuation of the support set out in the order.
    As such, the guiding principles relating to retroactive requests set out in
D.B.S.
and
Gray

clearly apply.

(3)

D.B.S.
and
Gray
applied

[27]

Given
    the motion judges errors, it falls to this court to carry out the appropriate
    analysis. Applying the
D.B.S.
factors as adapted by this court in
Gray
,
    I am of the view that the respondent is not entitled to a retroactive variation
    order more than three years from November 17, 2016, the date he commenced his motion.

[28]

Given
    the respondents failure to make full and accurate financial disclosure, I am
    unable to determine whether the facts of this case give rise to a current
    inability to pay arrears on his part or from a change in financial
    circumstances that affected his ability to make the support payments when they
    came due.  I agree with the appellants submission that the outcome is the same
    under either scenario because of the respondents delay and other blameworthy
    conduct.  As already noted, the conduct of the child support payor is one of
    the factors to consider when deciding whether to grant retroactive relief, the
    date of retroactivity, and the appropriate quantum of relief.

[29]

Particularly
    apposite is Chappel J.s statement in
Corcios
, at para. 55, stating [b]ehaviour
    that indicates wilful non-compliance with the terms of the order or failure to
    work cooperatively to address the child support issue is a factor that
    militates against even partial rescission of or reduction of arrears.

[30]

The
    respondent has been, at best, a recalcitrant payor who over 23 years has made
    few support payments, particularly when he disappeared and was out of the
    country for 15 years. The respondent was underemployed and left the appellant
    to carry alone the heavy responsibility of raising and supporting their two
    daughters. The respondent has placed a substantial financial burden on his
    familys shoulders. His daughters have accumulated considerable debt in their
    pursuit of post-secondary education. Any alleged hardship arising from the
    substantial arrears that the respondent has permitted to accumulate results
    from his own blameworthy conduct.

[31]

The
    respondent has not discharged his onus to explain his significant failure to
    make support payments and his extraordinary delay in proceeding with his
    application to vary, nor has he produced reliable evidence of his inability to
    pay while arrears were accumulating, particularly during the periods when he
    absconded without a trace to the United States and Italy, and was in receipt of
    a substantial inheritance from his mothers estate. The plain fact remains that
    even if the motion judges order should remain unaltered, the respondent still
    owes substantial arrears that he has failed to reduce.

[32]

Not
    only has he failed to honour his support obligations to his children, in the
    course of these proceedings, the respondent has continued to be in breach of
    the ongoing requirement to make full documentary and financial disclosure. Throughout
    his motion, the respondent misrepresented his inheritance from his mothers
    estate and failed to produce relevant and comprehensive financial documentation
    about his income and assets, which was only partially remedied by some financial
    disclosure made in 2018. This is simply unacceptable and, in my view, should
    have been fatal to the respondents motion to change. As Brown J.A. for this
    court underlined in
Gray
, at para. 31:

[T]he disclosure rules and the sanctions for non-compliance
    are the centrepiece of the Family Law Rules":
Shamli v. Shamli
,
    2004 CanLII 45956 (Ont. S.C.J.), at para. 88. As this court emphasized in
Roberts
    v. Roberts
, 2015 ONCA 450, at paras. 11-13:

The most basic obligation in family law is the duty
    to disclose financial information. This requirement is immediate and ongoing.

Failure to abide by this fundamental principle
    impedes the progress of the action, causes delay and generally acts to the
    disadvantage of the opposite party. It also impacts the administration of
    justice. Unnecessary judicial time is spent and the final adjudication is
    stalled.

Financial disclosure is automatic. It should not
    require court orders  let alone three  to obtain production. [Citations in
    original.]

[33]

I
    do not accept the respondents submission that his support obligations should
    be retroactively varied to April 1998 when he purported to give notice to the
    appellant that he sought to reduce his support obligations.

[34]

The
    respondent took no steps to further his request to reduce his support
    obligations between 1998 and his motion in 2016: he produced no proof of his
    changed financial circumstances, nor, after his initial request for a reduction
    in 1998, did he instigate any further negotiations, mediation or court proceedings.
    Given the appellants refusal of his request, it was incumbent on the
    respondent to initiate proceedings in a timely manner:
Templeton v. Nuttall
,
    2018 ONSC 815, at para. 52;
Corcios
, at para. 55(8). However, in the
    case at bar, the respondent unreasonably failed to do anything for 18 years. As
    a result, the effective date of notice should be November 17, 2016, the date he
    commenced his motion to change.

[35]

November
    17, 2016 as the effective date of notice does not affect the amount of the
    accumulated arrears to 2012 when the respondents support obligation ceased. 
    Nor does it reduces the interest that has been accruing on the accumulated
    arrears from November 17, 2013 forward.

[36]

Accordingly,
    I would allow the appeal and order no reduction to the arrears owing by the
    respondent to the appellant.

[37]

Given
    my proposed disposition of this appeal, it is unnecessary to deal with the
    question of whether more income should have been imputed to the respondent, or with
    the cross-appeal.

E.

Disposition

[38]

I
    would allow the appeal and set aside para. 2 of the motion judges order. I
    would dismiss the cross-appeal.

[39]

The
    appellant is entitled to her partial indemnity costs of the appeal in the
    amount of $5,816. She seeks no variation of the costs awarded to her on the
    motion.

Released: DB July 4, 2019

L.B.
    Roberts J.A.

I
    agree. David Brown J.A.

I
    agree. B. Zarnett J.A.


