Difference between revisions of "Spousal Support Arrears"
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FMEP is a free service for recipients that is largely funded by late fees and penalties charged to delinquent payors. | FMEP is a free service for recipients that is largely funded by late fees and penalties charged to delinquent payors. | ||
FMEP has no discretion to change the orders and agreements that are filed with it for enforcement. FMEP cannot increase or decrease the amount of a spousal support obligation and it cannot reduce or cancel arrears of spousal support. FMEP will not help you defend an application to vary the support order, set aside the agreement, or reduce or cancel arrears. You will have to do that on your own. But | FMEP has no discretion to change the orders and agreements that are filed with it for enforcement. FMEP cannot increase or decrease the amount of a spousal support obligation and it cannot reduce or cancel arrears of spousal support. FMEP will not help you defend an application to vary the support order, set aside the agreement, or reduce or cancel arrears. You will have to do that on your own. But from the recipient's perspective, having FMEP take over enforcement of the order or agreement itself can be a huge relief. | ||
==Reduction or cancellation of arrears== | ==Reduction or cancellation of arrears== |
Revision as of 22:20, 26 June 2019
When a person who is obliged to pay spousal support fails to meet some or all of that obligation, a debt begins to accumulate and the amount owing is called the payor's arrears of support.
People generally have two different goals when arrears begin to mount up: the person responsible for paying support likely wants the court to reduce or cancel the arrears, while the person receiving the support will want the court to force the payor to pay what's owing.
This section provides an introduction to the problem of arrears. It discusses the reduction and cancellation of arrears of spousal support and the collection of arrears.
Introduction
If spousal support is owed under a court order or an agreement, a failure to pay the support owing is a breach of that order or agreement, and, in the case of orders, it can be contempt of court as well. The court places a high value on the financial support of spouses and will usually take an extremely dim view of anyone who defaults on such an obligation in the absence of a very good excuse or some very compelling circumstances.
A person who owes arrears of spousal support, a payor, will likely be interested in the ways that the outstanding amount can be reduced, while a person to whom support is owing, a recipient, will be interested in collecting on the arrears. A person who owes arrears will generally have a difficult time convincing the court to forgive all or some of their debt. On the other hand, collecting arrears can be difficult as well, if for no other reason than the fact that you can't get blood from a stone. Unless the payor has another source of funds to draw upon, a recipient may discover that the outstanding support will never be recovered.
Despite these barriers and obstacles, it is possible for a payor to have their arrears reduced and, sometimes, cancelled altogether. At the same time, recipients have access to some very powerful and effective enforcement tools to collect outstanding arrears of support.
Orders for support
Orders for the payment of spousal support are enforceable like any other order of the court. Someone who breaches a Supreme Court order can be punished for contempt of court. As well, under the Family Law Act, the Supreme Court and the Provincial Court can:
- require the payor to provide security for their compliance with the court order,
- pay any expenses incurred by the recipient as a result of the payor's actions,
- pay up to $5,000 for the benefit of another party or a child whose interests were affected by the payor's actions,
- pay up to $5,000 as a fine, or
- if nothing else will ensure the payor's compliance with the order, jail the payor for up to 30 days.
Unfortunately for people who would rather be jailed than pay, s. 231(3)(c) says that:
imprisonment of a person under this section does not discharge any duties of the person owing under an order.
Since orders for support require the payment of money, arrears can also be enforced as a judgment debt under the provincial Court Order Enforcement Act for up to 10 years after the obligation to pay support has ended.
Payors can apply for an order reducing arrears that have accumulated under a court order under both the Divorce Act and the Family Law Act. Such applications must be made using the act under which the support order was made.
Agreements for support
Arrears that have accumulated under a separation agreement are owed as a result of a contractual obligation to provide support. A separation agreement is a contract that can be enforced in the courts just like any other contract.
Agreements for support are most easily enforced by filing them in court, after which they can be enforced as if they were court orders. Although agreements can still be enforced under the law of contracts, it's a lot simpler to file them in court. Section 163(3) of the Family Law Act says:
A written agreement respecting spousal support that is filed in the court is enforceable under this Act and the Family Maintenance Enforcement Act as if it were an order of the court.
As a result, the Supreme Court and the Provincial Court can:
- require the payor to provide security for their compliance with the agreement,
- pay any expenses incurred by the recipient as a result of the payor's actions,
- pay up to $5,000 for the benefit of another party or a child whose interests were affected by the payor's actions,
- pay up to $5,000 as a fine, or
- if nothing else will ensure the payor's compliance with the agreement, jail the payor for up to 30 days.
Payors can apply under s. 174 of the Family Law Act for an order reducing arrears that have accumulated under an agreement that has been filed in court just like they can for arrears accumulating under an order. Alternatively, they can apply to set aside and vary the agreement, prospectively or retroactively, under ss. 164 and 167 of the Family Law Act, or seek an order in terms different from the agreement under s. 15.2 of the Divorce Act.
The Family Maintenance Enforcement Program
Although recipients can enforce orders and agreements for spousal support on their own, most of the time recipients will give that job to the Family Maintenance Enforcement Program, a BC provincial government program under the provincial Family Maintenance Enforcement Act which has been contracted out to an American company, Maximus ― not that you'd know this from the government website.
FMEP is a free service for recipients that is largely funded by late fees and penalties charged to delinquent payors.
FMEP has no discretion to change the orders and agreements that are filed with it for enforcement. FMEP cannot increase or decrease the amount of a spousal support obligation and it cannot reduce or cancel arrears of spousal support. FMEP will not help you defend an application to vary the support order, set aside the agreement, or reduce or cancel arrears. You will have to do that on your own. But from the recipient's perspective, having FMEP take over enforcement of the order or agreement itself can be a huge relief.
Reduction or cancellation of arrears
Payors may apply to court to have their arrears cancelled or reduced. Technically, there are two ways to do that and each has its own considerations.
The two approaches are these. The first is to say, in effect, “Yes, that is the proper amount of arrears. I owe that, but I can’t pay it. Please allow me some relief.” It is essentially a debtor’s relief approach and as you might expect, the law takes a fairly hard view of this approach.
This is the approach the former Family Relations Act took. In order to succeed, the payor had to show that failure to grant relief would be “grossly unfair” to the payor.
The second approach is to say, in effect, “Yes, this is the amount I owe under the original order or agreement, but my situation changed. If I had applied when the change happened, the amount would have been reduced. So, please let me apply now and recalculate the arrears accordingly.”
This is the retroactive variation approach (applying late, or after the fact). The court still requires the payor to explain why they deserve a second chance, but is a little easier to persuade the court to do this than to allow the payor to pay something less than the full amount.
Now, the Family Law Act allows both for a reduction or cancellation of arrears (s 174) and for a retroactive variation of support order (s 167). So, the cases that said there is only one approach under the former act no longer apply. Payors have a choice. This is important because it is a little easier to succeed on a retroactive variation than a pure cancellation or reduction of arrears. Just be sure you are clear with the court which route you are taking.
Retroactive reduction of support
Section 17 of the Divorce Act says this about varying orders for spousal support:
(1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,
(a) a support order or any provision thereof on application by either or both former spouses; or
(b) a custody order or any provision thereof on application by either or both former spouses or by any other person.
(3) The court may include in a variation order any provision that under this Act could have been included in the order in respect of which the variation order is sought.
(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration.
(7) A variation order varying a spousal support order should
(a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;
(b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.
Section 167 of the Family Law Act says this:
(1) On application, a court may change, suspend or terminate an order respecting spousal support, and may do so prospectively or retroactively.
(2) Before making an order under subsection (1), the court must be satisfied that at least one of the following exists, and take it into consideration:
(a) a change in the condition, means, needs or other circumstances of either spouse has occurred since the order respecting spousal support was made;
(b) evidence of a substantial nature that was not available during the previous hearing has become available;
(c) evidence of a lack of financial disclosure by either spouse was discovered after the order was made.
(3) Despite subsection (2), if an order requires payment of spousal support for a definite period or until a specified event occurs, the court, on an application made after the expiration of that period or occurrence of that event, may not make an order under subsection (1) for the purpose of resuming spousal support unless satisfied that
(a) the order is necessary to relieve economic hardship that
(i) arises from a change described in subsection (2) (a), and
(ii) is related to the relationship between the spouses, and
(b) the changed circumstances, had they existed at the time the order was made, would likely have resulted
Retroactive variation applications are relatively new. In 2006, the Supreme Court of Canada established rules for applying for retroactive child support, or for a retroactive increase in child support. This is the case of D.B.S. v S.R.G. discussed in the chapter, Making Changes to Child Support. In the recent case of G.M.W. v D.P.W. 2014 BCCA 282, our Court of Appeal said these principles also apply to applications for a retroactive reduction of support. Both involve child support, but the rules will be similar for spousal support. For another example, see P.M B. v. M.L.B., 2010 NBCA 5, in particular paragraph five.
Among other things, the court must consider:
- the circumstances surrounding the delay in bringing the application; and
- any hardship caused by making or not making the order, to either party.
Delay might be explained if the other party promised not to rely on the full amount, or if the payor was temporary incapacitated, or was unable to get appropriate information or advice. But the delay will have to be explained somehow. The courts will not be sympathetic to someone who just chose to let it slide.
Hardship is a two-way street. The court has to consider the position of both the payor and the recipient. If the recipient relied on the order or agreement and went into debt in the expectation that the arrears would eventually be paid, that weighs against granting relief. If, on the other hand, it was clear to both parties that the order or agreement was unreasonable in light of current circumstances, that weighs in favour of granting relief. A retroactive reduction will be very unlikely if it would require the recipient to pay back money already received and spent.
There was some doubt whether a retroactive reduction was allowed under the Family Law Act, but several cases have held that it does, including N.M. v G.M., 2015 BCSC 1732.
Remember, though, that a retroactive variation application can only adjust the arrears to what they should have been, had the order or agreement been adjusted for current circumstances in a timely manner. If arrears would still have accrued, it does not allow any relief beyond that.
Cancellation or reduction of (proper) arrears
Section 17 of the Divorce Act says this:
17 (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,
- (a) a support order or any provision thereof on application by either or both former spouses; or …
The power to cancel or reduce arrears under the Divorce Act is not often pursued, but it does exist: Haisman v Haisman, 1994 ABCA 249; and Earle v. Earle, 1999 CanLII 6914 (BCSC).
Section 174(1) of the Family Law Act says this:
(1) On application, a court may reduce or cancel arrears owing under an agreement or order respecting child support or spousal support if satisfied that it would be grossly unfair not to reduce or cancel the arrears.
(2) For the purposes of this section, the court may consider
(a) the efforts of the person responsible for paying support to comply with the agreement or order respecting support,
(b) the reasons why the person responsible for paying support cannot pay the arrears owing, and
(c) any circumstances that the court considers relevant.
(3) If a court reduces arrears under this section, the court may order that interest does not accrue on the reduced arrears if satisfied that it would be grossly unfair not to make such an order.
(4) If a court cancels arrears under this section, the court may cancel interest that has accrued, under section 11.1 of the Family Maintenance Enforcement Act, on the cancelled arrears if satisfied that it would be grossly unfair not to cancel the accrued interest.
The courts have interpreted "gross unfairness" under the Family Relations Act to mean that the payor is not only incapable of repaying the arrears but is also unlikely to be able to repay them in the foreseeable future without suffering severe financial hardship.
If you are asking the court to make an order of reducing arrears, you must be prepared to prove that it would be not just unfair but grossly unfair for you to have to pay off the arrears, and you must be prepared to address the criteria set out in s. 174(2).
- What efforts have you made to pay the spousal support you were required to pay?
- Why did you wait until arrears had accumulated before you tried to vary the spousal support order?
- Why can you not pay your arrears now?
- Are there any other circumstances, such as catastrophic business losses or the unintended loss of your employment, or new financial obligations in relation to your family that the court should take into account?
Be prepared to provide to the court a Financial Statement (Form F8 in the Supreme Court and Form 4 in the Provincial Court) summarizing all of your assets and income, liabilities and expenses, if you intend to show the court that you cannot pay your arrears. Complete financial disclosure is absolutely essential.
Collecting arrears of support
The collection of debts and enforcement of judgments occupies a whole course at law school and is not a simple matter. The provincial government has, however, established an agency responsible for enforcing support obligations, the Family Maintenance Enforcement Program (FMEP). You can find more information about FMEP earlier in this section. Someone entitled to receive support under an order or agreement can sign up with this program and the program will tend to the enforcement support without a great deal of further involvement on the part of the recipient.
FMEP is free for recipients. All you have to do is file your order or filed separation agreement with the program and fill out an application form. FMEP will take the matter from there, and the program is authorized by the Family Maintenance Enforcement Act to take whatever legal steps are required to enforce an ongoing support obligation, and track and collect on any outstanding arrears, plus interest accumulating on those arrears.
Under the Family Maintenance Enforcement Act, FMEP has the authority to commence and conduct any court proceedings that can be undertaken by a private creditor, as well as some unique actions that the program alone can take. Among FMEP's collection powers are:
- garnishing the payor's wages,
- collecting from a corporation wholly owned by the payor,
- redirecting federal and provincial payments owed to the payor, like GST or income tax rebates, to the recipient,
- prohibiting a payor from renewing their driver's licence,
- directing the RCMP to seize a payor's passport,
- registering a lien against personal property and real property owned by the payor, and
- obtaining an order for the payor's arrest.
While it is possible to undertake collection or enforcement proceedings on your own, this will cost money and time and possibly require you to hire a lawyer and bear that expense as well. Since any private collection efforts you might take may interfere with efforts being made on your behalf by FMEP, recipients enrolled with FMEP are required to obtain the permission of the program's director before they can take independent enforcement actions.
You can find more information about enforcing orders in the chapter Resolving Family Law Problems in Court within the section Enforcing Orders in Family Matters. You can also find more information at the website of the Department of Justice, which includes a helpful overview of support enforcement mechanisms in Canada.
Separation agreements
Section 163(3) of the Family Law Act allows a party to an agreement, usually a separation agreement, to file the agreement in the Provincial Court or in the Supreme Court. An agreement that is filed in court can be enforced as if it were an order of the court. It is not necessary for a court proceeding to have been started before an agreement can be filed in court.
FMEP will enforce agreements for support, however they require that an original copy of the agreement be filed in court and sent to them with the court's stamp before they can enforce the agreement.
You can find more information about enforcing agreements in the chapter Family Law Agreements within the section Enforcing Family Law Agreements.
Orders made outside British Columbia
Section 20 of the Divorce Act says that an order made in a divorce action has legal effect throughout Canada. It also provides that such an order may be filed in the courts of any province and be enforced as if it were an order of the courts of that province. In other words, if your divorce order was made in Alberta and contains a term requiring spousal support to be paid, you can register that order in the Supreme Court of British Columbia and it will have the same effect and be enforceable here as if it were an order of the courts of British Columbia.
The provincial Interjurisdictional Support Orders Act allows orders for spousal support made under provincial laws elsewhere in Canada, and in certain foreign states, to be filed in our courts and enforced as if they were British Columbia orders. The reciprocating states under the Interjurisdictional Support Orders Act are South Africa, Zimbabwe, Austria, the Czech Republic, Germany, Gibraltar, Norway, the Slovak Republic, the United Kingdom, the United States of America and its protectorates, the Special Administrative Region of Hong Kong, Singapore, Australia, Fiji, Papua New Guinea, New Zealand, and Barbados and its dependencies.
Foreign orders that are filed in this province may be enforced by FMEP as if they were orders made by the courts of British Columbia. You can find more information in the chapter Resolving Family Law Problems in Court, and in particular in the section Enforcing Orders in Family Matters.
Resources and links
Legislation
- Family Law Act
- Divorce Act
- Family Maintenance Enforcement Act
- Court Order Enforcement Act
- Interjurisdictional Support Orders Act
Links
- Family Maintenance Enforcement Program Website
- Department of Justice: Provincial and Territorial Information on Interjurisdictional and International Support Order Enforcement
- Clicklaw: Spousal support help from BC Ministry of Justice
This information applies to British Columbia, Canada. Last reviewed for legal accuracy by David Dundee and Gillian Oliver, May 15, 2019. |
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