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MAINTENANCE AND SUPPORT - Child support - Retroactive awards

Monday, June 24, 2019 @ 9:30 AM  

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Appeal by the father from trial judgment determining child support payable. The parties separated in 2010. Their child was born in 2009. The father moved from Ontario to Newfoundland and was employed as a university professor. The parties had an oral agreement that the father was to pay $500 a month in child support. Despite numerous requests by the mother for the father’s updated financial information, he failed to provide it. The mother then applied in Ontario for a parenting plan and child support in 2016. The Ontario judge imputed income of $120,000 to the father and ordered him to pay $1,037 per month in child support retroactive to 2013. The confirmation court received and accepted evidence related to the father’s actual income from his university employment. The father also led evidence that a restaurant he started in 2015 as a sole proprietorship generated significant losses. The trial judge determined that using the Line 150 income was neither appropriate nor reasonable considering the extent of the net business losses of the restaurant. He further determined that there was no element of fairness in using these amounts for child support purposes as this would result in no child support being paid despite a solid source of employment income and a choice by the father to invest it in a money-losing restaurant venture. The trial judge ordered child support of $928 per month for 2016 based on an income of $107,158. For 2017, the child support order reflected an amount of $968 based on an income of $112,040. For 2018, the order was to continue at the same rate as 2017. The trial judge varied the provisional order by eliminating three years of retroactive child support, which reduced the amount of retroactive support from $25,313 to $9,734. The father argued the trial judge erred in not permitting business losses to be deducted from the determination of income for child support purposes and erred in not finding undue hardship and thereby adjusting child support either ongoing or retroactively.

HELD: Appeal dismissed. The trial judge correctly stated the law with respect to the determination of income under the Guidelines and then proceeded to exercise his discretion with respect to the treatment of the business losses once he determined that the Line 150 approach would not result in a fair determination of income for child support purposes. The determination of how to deal with business losses in determining income for child support purposes was fact-based and of a discretionary nature. The father did not demonstrate a palpable and overriding error or a material error in the judge’s determination of income for child support purposes. The trial judge recognized that he was exercising judicial discretion when he eliminated three years of retroactive child support. In exercising his discretion, the trial judge focused on appropriate factors including the timing of the request for increased child support, the date of the application, the father’s employment income and any hardship that might be occasioned by a retroactive award considering his new family obligations and business debts. The trial judge did weigh the factor of hardship in making a significant adjustment to the amount and duration of retroactive child support to be paid, in the context of the father’s financial and family circumstances. The judge could not be said to have erred in failing to complete a full analysis and comparison of household incomes when it was not requested, nor was evidence led which would have allowed an analysis of household standards of living to assess a claim of undue hardship.

Thomas v. Thomas, [2019] N.J. No. 172, Newfoundland and Labrador Court of Appeal, D.E. Fry C.J.N.L. and B.G. Welsh and F.P. O'Brien JJ.A., May 22, 2019. Digest No. TLD-June242019001