By Munera Lawyers
The COVID-19 crisis has had a significant impact on every aspect of our lives, including on our financial stability. People are losing their jobs, working reduced hours, experiencing pay cuts, and losing their businesses. As a result, payors and recipients of child support and/or spousal support are also impacted.
Until recently, the courts only heard urgent family law matters. Payor spouses either applied for a variation of their child and spousal support obligations due to reduced income while recipient spouses applied for support or increase in spousal and child support on the basis of reduced or lost income. The courts tended to take into consideration the impact of COVID-19 on the parties when rendering its judgement.
In Dhaliwal v Dhaliwal, the Respondent, an optometrist, was forced to shut down both of his practices, thereby reducing his income drastically and rendering him unable to pay his mortgage and child and spousal support obligations.[1] As a result, the court ordered that the matrimonial home and investment property be listed for sale and for the parties to secure a deferral of mortgage payments to keep the parties afloat.[2]
In Browning v Browning, the Respondent mother was laid off from her job and thereby dependent on CERB monthly payments of $2,000.00.[3] The court found that this was an urgent matter since the financial security of the children were at stake.[4] Nonetheless, the court took into account the fact that the father’s income was also impacted by the pandemic and therefore imputed an annualized income of $50,000.00 to him based on his March and April 2020 income and the probability that his income may reduce further in the future.[5]
Likewise, in Small v Small, the court determined each party’s income at the date of trial but gave leave to the parties to re-determine their income post-trial in the event their income is further affected by COVID-19.[6] In Jauhari v Jauhari, the Respondent’s business was hit hard by COVID-19[7]. Consequently, the parties relied on their investments from their accounts in Lebanon.[8] They also obtained a loan of $10,000.00 from the Canadian government in response to the pandemic. Since separation, the Respondent had refused to transfer income from their accounts in Lebanon.[9] In this case, the court ruled in favour of the applicant based on the Guidelines amount and based on the annual income imputed to the Respondent.[10] The courts in this case did not give considerable significance to the failed business because the Respondent still had income flowing from other sources meaning he could meet his support obligations.
Similarly to Jauhari v Jauhari, in JAB v JAB the Respondent’s business significantly reduced due to COVID-19 and the business suffered a loss of $167,274.87 in 2020.[11] As a result, the Respondent argued that he reduced his living expenses significantly and could no longer afford travels nor to eat out in restaurants.[12] The court held that despite claiming to experience significant losses in business income, he chose to work reduced hours, not because of the shutdown, but because he had been working reduced hours since the birth of his daughter.[13] Overall, the court was not convinced that the Respondent suffered a major loss justifying a reduction in child and spousal support. He had not laid off more staff, had not attempted to work longer hours, and had only paid wage subsidies for two months only.[14] As such, given the lack of certainty regarding whether the impact of COVID-19 will be short term or long term, the court used the business’s last year’s profits which included some COVID-19 months to impute income to the Respondent.[15]
The court also took into consideration the uncertainties surrounding COVID-19 in Simons v Comrie.[16] In this case, the father alleged a “change in circumstances,” being the impact of COVID-19 on his income alongside his criminal record.[17] The court stated that child support is dependent on the payor’s capacity to earn and not on his or her actual earnings.[18] As such, in dismissing the father’s motion, the court took into account his criminal record together with the impact of COVID-19 and ruled that he must increase the number of hours he works after 12 months.[19]
In HJRH v JCD, the father also claimed a change in circumstances due to COVID-19, namely the loss of his employment as a sightseeing tourist bus.[20] As a result, he depended on CERB payments and expected to receive insurance benefits.[21] In this case, the court was satisfied that there had been a material change since January 21 of 2020 (date of interim support order).[22] As a result, the court imputed an income to him and ordered child and spousal support payments based on his CERB benefits which is the equivalent of $24,672.00 annual.[23]
Overall, the courts took into account the urgency of the matter,[24] the impact of COVID-19 on the income of the parties,[25] the financial security of the children,[26] and even CERB payments[27] in determining the parties’ income and support obligations.
[1] Dhaliwal v Dhaliwal, 2020 CarswellOnt 8983, 2020 ONSC 3971, at para 13(j) & (l).
[2] Ibid, at para 27.
[3] Browning v Browning, 2020 CarswellOnt 5998, 2020 ONSC 2697, at paras 1 and 6.
[4] Ibid, at para 7.
[5] Ibid, at para 29.
[6] Small v Small, 2020 CarswellBC 1159, 2020 BCSC 707 at paras 210-211.
[7] Jauhari v Jauhari, 2020 ONSC 4205, 2020 CarswellOnt 9569 at para 19.
[8] Ibid.
[9] Ibid, at para 22.
[10] Ibid, at para 73.
[11] J.A.B. v C.A.B., 2020 SKQB 251, at para 13.
[12] Ibid.
[13] Ibid, at para 18.
[14] Ibid, at para 19.
[15] Ibid, at paras 20 and 24.
[16] Simons v Comrie, 2020 ONCJ 232 at paras 55-56.
[17] Ibid, at paras 22 and 34.
[18] Ibid, at para 31.
[19] Ibid, at paras 56-59.
[20] H.J.R.H. v. J.C.D., 2020 BCPC 182, at paras 13 and 18.
[21] Ibid, at paras 17-18.
[22] Ibid, at para 30.
[23] Ibid, at para 33.
[24] Browning, supra note 1.
[25] Dhaliwal, supra note 1.
[26] Browning, supra note 3.
[27] Carlson v Flanagan, 2020 CarswellBC 1721, 2020 BCSC 1030 & DiStefano v DiStefano, 2020 CarswellOnt 13600, 2020 ONSC 5688.
NOTE: This article has been written for general information purposes only and does NOT constitute legal advice. For further questions and/or legal advice please consult a qualified lawyer.