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Reimbursement of Overpaid Child Support: The Meyer v. Content Factors

12/30/2016

Once child support payments have been established, either by way of a court order or a separation agreement, the recipient of child support normally has the most contact with the child or children for which support is payable. For that reason, the family law statutory scheme in Ontario places special obligations on the recipient of child support.

For example, once the circumstances have changed in an significant manner and it is beyond dispute that child support payments should cease, the recipient of child support should contact the Family Responsibility Office (FRO), the provincial government agency that enforces support orders, to inform FRO that support should be terminated. For example, if a child reaches the age of eighteen and goes into the workforce and no longer attends school, then the recipient of child support should contact FRO and indicate that support should be terminated.

That is the ideal situation, anyway. And many times, the recipient of child support actually performs his or her legal obligation and contacts FRO to terminate support.

However, sometimes the parent that receives child support may think that the change in the child’s life is only temporary, and does not believe that child support should be terminated permanently. For example, a teenager with mild behavioural issues and problems with the custodial parent may spend time temporarily living with a close relative or a family friend.

There are also cases that involve the child clearly withdrawing from ‘parental charge’ by moving out, getting a job, and withdrawing from school, but then resuming their education and moving back with the other parent just a few months later.

However, many of the cases that end up in the family law litigation cycle involve blameworthy conduct by one party, such as accepting child support payments while deceiving the payor of child support in circumstances where child support should have terminated.

In cases involving deception and/or an estranged relationship between the support payor and support recipient, if there was a long period of time during which support continued to be paid past the presumptive termination date, and the monthly amount of child support is high, then the payor of child support may overpay tens of thousands of dollars in child support to the recipient before even becoming aware that the circumstances have changed and their child or children were no longer entitled to support long ago.

Clearly this type of case can elicit very strong emotions. The payor of child support usually believes that they have been inappropriately paying money to their former spouse for no reason at all and is left feeling angry.

The recipient of support generally complains of inadequate support by the payor and “hidden costs” of child rearing that are not covered by support, and usually feels frustrated that they are being asked to pay back money when the payor of support did not contribute his or her ‘fair share.’

Common Cases Involving Overpayment of Child Support

In the case law authority in Ontario that pertains to reimbursement of overpaid child support, there is usually a distinction between cases involving children under the age of majority, being eighteen years of age, and cases involving adult children over the age of eighteen.

For children under the age of eighteen, there is a presumption at law under section 3 of the Child Support Guidelines that the Table amount pursuant to the Guidelines is payable. Essentially, the annual income of the parent that is to pay child support is located in a Table provided in the Guidelines, and the presumptive amount payable by that parent is whatever value is found in the legislation. However, in order for any person to be entitled to child support, they must meet the requirements of the governing legislation, which depends on whether his or her parents were married.

In relation to married couples, section 2 of the Divorce Act defines a “child of the marriage” as follows:

child of the marriage means a child of two spouses or former spouses who, at the material time,

(a) is under the age of majority and who has not withdrawn from their charge, or

(b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life; (enfant à charge)

Similarly, for couples that are not married, section 31 of the Family Law Act provides as follows:

Obligation of parent to support child

31. (1) Every parent has an obligation to provide support for his or her unmarried child who is a minor or is enrolled in a full time program of education, to the extent that the parent is capable of doing so.  R.S.O. 1990, c. F.3, s. 31 (1); 1997, c. 20, s. 2.

Idem

(2) The obligation under subsection (1) does not extend to a child who is sixteen years of age or older and has withdrawn from parental control.

Overall, for children under the age of eighteen, child support is only payable when the child is under the “charge” of his or her parents. The entire circumstances of the case are assessed in order for the court to make a determination in this regard, but the factors mentioned in the legislation are paramount. To distill the logic behind the provisions of the Divorce Act and the Family Law Act, a child is under the ‘charge’ of his or her parents when:

1)     The child is enrolled in school full-time;

2)     The child resides with the recipient of child support;

3)     The child must seriously consider the wishes of his or her parent, and/or the decisions of the parent have a significant impact on the child’s life; AND

4)     The child is not married.

If any one of the above factors changes, then there is at least a potential dispute as to whether child support should continue to be paid by the other parent for the child that is under eighteen. For children below the age of sixteen, there is a further presumption that the child is still under his or her parent’s “charge” unless the facts show otherwise and therefore child support is still payable.

Therefore, it is usually very difficult to prove that a child under the age of sixteen has withdrawn from parental charge and is no longer entitled to support. However, if one of the factors mentioned above changes and the child is over the age of sixteen, then there is at least a potential argument that child support should be terminated.

For instance, if the child is over the age of sixteen, is living with their long-term boyfriend or girlfriend, and is not attending school full-time, there is a very strong argument for the payor of support to claim that child support should be terminated.

For adult children that are over the age of eighteen, the most common circumstance under which child support continues to be payable is when the child is enrolled in a full-time post-secondary education program, either college or university. The tuition expenses, book expenses, and other fees for the child’s post-secondary education program are considered ‘special and extraordinary expenses’ and are paid according to a proportionate share of both parent’s income.

If the child continues to live at home with the recipient of child support, the support payor usually pays an amount of money for child support in addition to university expenses, but the amount depends on the facts of each case. If the child does not live at home while attending college or university, the recipient parent may still receive an amount of monthly child support if he or she keeps an ‘open home’ for the child, or if the child returns home during the summer months.

However, each case is different, and the point is that even for children over the age of eighteen, monthly child support may continue to be payable, in addition to ‘special and extraordinary expenses’ for tuition and books.

In the case law in Ontario for adult children over the age of eighteen, the common reasons that the payor of support seeks termination of child support are as follows:

1)     The child has completed their first post-secondary degree program;

2)     The child is no longer attending school full-time and there is no reasonable prospect of the child resuming his or her studies within a reasonable amount of time;

3)     The child is not performing well at school and/or may be a ‘perpetual student’ by aimlessly taking courses;

4)     The child is over the age of 23 or 24; OR

5)     The child is living with another person in a marital relationship, or is living with someone in a “marriage-like” relationship

Again, if there is a great deal of time during which support continued to be paid past the presumptive termination date, and the monthly amount of child support is high, then the payor of child support may overpay thousands of dollars in child support to the recipient parent before even becoming aware that the circumstances have changed.

These cases often involve an estranged relationship between former spouses, and/or an estranged parent-child relationship. Many times in the context of a claim for reimbursement of overpaid child support, the support recipient and the support payor simply do not ever speak to each other, or the children do not speak to the support payor.

Furthermore, the recipient of child support may not live in the same city, the same province, or even the same country as the parent that pays child support. This creates the circumstances during which the payor would continue to pay support for a long timeframe without becoming aware of facts that would terminate child support.

However, the parent that receives child support takes on the risk of civil liability by continuing to accept child support payments when he or she knows that child support should terminate.

Both s.17(1) of the Divorce Act and s.37(2) of the Family Law Act provides a court with authority to retroactively vary a support order, meaning that a court may order that termination of child support ought to have occurred in the past.

Furthermore, the Family Responsibility and Support Arrears Enforcement Act, 1996, essentially imposes a positive duty on the recipient of child support to contact the Family Responsibility Office if it is beyond dispute by the facts of a case that child support should have terminated. For instance, sections 8.4(4)(5) of the Family Responsibility and Support Arrears Enforcement Act, 1996 provides as follows:

Order to repay

(4) A court that finds that a support obligation has terminated may order repayment in whole or in part from a person who received support after the obligation was terminated if the court is of the opinion that the person ought to have notified the Director that the support obligation had terminated.  2009, c. 33, Sched. 8, s. 2 (12).

Same

(5) In determining whether to make an order under subsection (4), the court shall consider the circumstances of each of the parties to the support order. 

Therefore, if a recipient parent continues to accept child support payments while the facts of his or her case clearly indicate that child support should terminate and FRO should be contacted, then that parent may have the risk of being ordered to reimburse the overpaid child support back to the other parent.

Meyer v. Content: Judicial Test and Factors for Reimbursement of Overpaid Child Support

Until recently, there has been little guidance from the courts or the legislature in terms of which factors should be considered for the court to order reimbursement of overpaid child support.

Clearly, s.8.4(5) of the Family Responsibility and Support Arrears Enforcement Act, 1996, above, provides that the court shall “consider the circumstances of each of the parties to the support order” before making an order for reimbursement of overpaid child support, but that is vague and is hardly useful.

Luckily, Justice Chappel of the Superior Court of Justice has recently provided guidance in the case of Meyer v. Content [2014] O.J. No. 4992 (“Meyer”) in relation to the proper judicial test to be used and factors that must be considered in a claim for reimbursement of overpaid child support.

At paragraph 94 in Meyer, Justice Chappel notes that a claim for reimbursement of overpaid child support is discretionary and is not automatic, and that there was very little case law authority relating to the factors to consider when assessing a claim for retroactive reimbursement of child support, as follows:

“It is clear from these provisions that there is no automatic entitlement to be reimbursed for overpayment of child support. This is a point that is often not clearly addressed in cases involving alleged overpayment. There is little case-law dealing with the factors which the court should consider in exercising its discretion under these sections. In Brumwell v. Brumwell, 2003 CarswellOnt 5398 (C.A.), our Court of Appeal upheld the decision of McIsaac J. at trial to decline a request for reimbursement for an overpayment of child support on the basis that the recipient mother was ill at the material time and this affected her ability to report the situation promptly to the FRO. In Chenard v. Hodgson, 2014 CarswellOnt 7127, Howden, J. sought guidance from the Supreme Court of Canada's decision in D.B.S. in deciding how to deal with an overpayment, and concluded that the factors set out in D.B.S. regarding the appropriate timeframes for allowing retroactive claims applied equally to retroactive claims for reimbursement of overpayment.” (Emphasis added)

In the case of Chenard v. Hodgson, mentioned above, Justice Howden held that there is a presumptive three-year retroactive time limit for claims for reimbursement of overpaid child support, which may be set aside in rare circumstances, usually involving blameworthy conduct. This is greater than the general two-year limitation period found in the Limitations Act, 2002, but still provides an incentive for the would-be litigant not to rest on his or her legal rights for very long.

At paragraph 95 in Meyer, Justice Chappel provides a three-step judicial test for determining a claim for reimbursement of overpaid child support, as follows:

“By virtue of section 8.4(4) of the Family Responsibility and Support Arrears Enforcement Act, the determination as to whether a repayment of support should be ordered involves a three step analysis. First, the court must determine that support should have terminated and make a finding respecting the termination date. Second, the court must be satisfied that the recipient should have informed the FRO that the support obligation had terminated. This question is distinct from the issues which the court must determine in Step 1. If the intention had been that the court's decision regarding the termination date for support would be the sole trigger for considering a reimbursement order, there would have been no need to include the phrase in section 8.4(4) "if the court is of the opinion that the person ought to have notified the Director that the support obligation had terminated." The question which the court must ask at this stage is whether a reasonable litigant who has made reasonable efforts to become informed about their support entitlement would have advised the FRO that support had terminated.” (Emphasis added)

By limiting claims for reimbursement of overpaid child support to only those cases involving facts where the parent receiving child support clearly should have contacted FRO because termination of child support was beyond dispute, the legislature has provided a high threshold that must be met before even making such a claim.

Nevertheless, many cases involving a claim for reimbursement of overpaid child support often involve circumstances that had changed periodically, and many involve special challenges for the recipient of child support in relation to determining when child support should cease.

For example, some young adults have a tumultuous relationship with the custodial parent, and spend a great deal of time at the home of their boyfriend or girlfriend. What if the child is not attending school full-time? When does this become a permanent situation, amounting to the child withdrawing from ‘parental charge?’  

At paragraph 96 in Meyer, Justice Chappel specifically addresses cases involving adolescent and young adult dependants, as follows:

“If the court determines that the recipient should have taken steps to stop the enforcement of support, it nonetheless maintains a discretion as to whether or not to order the recipient to reimburse the payor for all or part of the overpayment. The third step of the analysis involves the exercise of judicial discretion to determine whether an order requiring reimbursement of support already paid is appropriate having regard for the overall circumstances of each party. Judicial discretion is particularly necessary in support cases involving adolescent and young adult dependants due to the unique challenges involved in navigating through life with these dependants. As children approach and enter adulthood and move increasingly towards independence, their situations often become highly unpredictable and changeable. In many cases, it is difficult for child support recipients to accurately assess whether a change in a child's circumstances will be very short lived or permanent, or whether a change has even occurred. This reality can make it very difficult for recipients to determine how to address the child support issue. They may feel a need to maintain the status quo in terms of housing and general support which they are providing to the child for a period of time to allow them and the child an opportunity to further assess how the situation will eventually unfold. When the events are scrutinized at a later point in time in the context of a claim for reimbursement of child support, it is important to remember that the support recipient who is attempting as best they can to navigate the changing tides of these unpredictable years did not have the benefit of 20/20 hindsight vision. On the other hand, there are cases where it becomes apparent very quickly that a change in circumstances has occurred and that it will be long-term in nature. It is important that the court not allow recipients in these types of cases to receive an inappropriate windfall.” (Emphasis added)

The court in Meyer also noted at paragraph 97 that there are similarities between a claim for reduction of child support arrears and a claim for reimbursement of overpaid child support:

“Deciding how child support overpayment situations should be addressed involves a very careful and delicate balancing of the interests of the recipient, the payor and the child in question. In addressing this issue, it is helpful to seek guidance from the case-law involving requests by payors to either rescind or reduce child support arrears. In both situations, one of the parties is requesting the court to excuse them from paying a debt owed to the other party. Child support recipients who at the end of the day found themselves in an overpayment situation should receive the same benefit and degree of judicial discretion as payors who fail to comply with support obligations and later seek relief from payment from the court. Accordingly, in considering how overpayment of child support should be dealt with, I have sought guidance from the Court of Appeal's decisions regarding the rescission of child support arrears.”

Finally, after summarizing several of the legal principles and key factors that underlie a claim for reduction of child support arrears in several Court of Appeal cases, Justice Chappel at paragraphs 100 and 101 in Meyer provides the various factors that should be considered by the court in relation to a claim for reimbursement of overpaid child support, as follows:

“Drawing upon the principles which the Court of Appeal has established in the aforementioned cases, and taking into consideration the unique dynamics of cases in which overpayments arise, I conclude that the court should consider the following factors in dealing with a claim for reimbursement of child support paid to a support recipient:

1.  The amount of the overpayment;

2.  The overall financial situation of the parties, including their incomes and their net worth;

3.  The extent to which each party continued to support the child financially during the period of uncertainty regarding the outcome of the support dispute, and whether it was objectively reasonable for them to do so;

4.  Whether an order requiring the support recipient to repay all or part of the child support overpayment would cause the recipient hardship;

5.  The overall condition, means, needs and circumstances of the child of the relationship, and the extent if any to which the child's situation may impact on the level of hardship which a reimbursement order would create for the recipient;

6.  Conversely, whether an order releasing the recipient from repaying the overpayment in full or in part would result in hardship for the support payor;

7.   Whether there is a reasonable explanation for any delay on the part of the payor in commencing proceedings to request reimbursement;

8. Whether the support recipient has a reasonable explanation for why they continued to accept support during the time frame when the overpayment accrued;

9.   Any evidence of blameworthy conduct on the part of either party relevant to the overpayment issue;

10.   Whether the recipient made reasonable efforts to keep the payor apprised of changes in the child's situation which were relevant to the overpayment issue;

11. Conversely, whether the payor made reasonable efforts to keep abreast of developments in the child's life and maintain contact with the recipient so as to enable discussion and negotiation about issues involving the child;

12. The extent to which either party attempted to make efforts to resolve any concerns about overpayment with the other party or through the Family Responsibility Office; and

13.  Evidence of any oral or written agreement between the parties during the period when the overpayment arose that sheds light on the intentions of the parties respecting child support payments during that time.

None of these factors is determinative, and the weight if any that should be given to any factor depends on the unique facts of the case.” (Emphasis added)

The court in Meyer was not sympathetic to the applicant’s claim for reimbursement of overpaid child support. After considering certain credits for expenses that were paid for by the recipient, the total amount of the overpaid child support was only $3,569.00. Overall, at paragraph 103 in Meyer, the court held that the applicant, Mr. Meyer, should not receive any money from the recipient of child support as reimbursement for the child support that he overpaid, as follows:

“I have taken into account the fact that the amount in question is not large. However, as outlined earlier in these Reasons, Mr. Meyer's income has consistently been much higher than Ms. Content's income over the past several years. Mr. Meyer's net worth is also much greater than Ms. Content's. I have also factored in the fact that Ms. Content has incurred significant legal fees on behalf of Darryn, and that she has consistently supported Darryn both emotionally and financially despite the termination of support. I am satisfied that it was reasonable for her to continue supporting Darryn, having regard for the challenges which he has experienced, the efforts which he has made to overcome them, and the progress which he has made in this regard. In the circumstances, I find that an order requiring Ms. Content to repay support would have caused her considerable hardship. By contrast, I conclude that the impact on Mr. Meyer of not receiving any reimbursement would not have been significant.”

I understand that the court in Meyer had attempted to provide guidance in relation to the factors that must be considered in a claim for reimbursement of overpaid child support, but I disagree with the court’s application of those factors in this particular case.

The court seems to indicate at paragraph 103, above, that even though it finds that child support should have terminated, since the recipient is likely going to continue to support her adult son, it would cause her ‘considerable hardship’ for the recipient to repay the overpaid child support.

Once child support should have terminated, I do not believe that it is fair for the recipient to voluntarily continue to support their adult child, and then claim ‘undue hardship’ as a shield against a claim for reimbursement of overpaid child support as a result of deciding to continue to support their child.

Even though I am sympathetic to the challenges that the young adult in Meyer had experienced, the court’s reasoning in Meyer essentially means that the recipient of support can ‘have it both ways’ by claiming to support their adult child after child support should have terminated, and claiming ‘undue hardship’ as a shield against a claim for reimbursement of overpaid child support.

I think that any analysis relating to financial hardship should be focused on the financial position of either party, and that analysis should not include an inherently contradictory assessment of whether continuing to support the adult child was ‘reasonable’ since the court had already held that child support should have terminated.

Furthermore, in the context of a relatively low claim of only $3,569.00, I think the court could have balanced the competing concerns of financial hardship on either party by ordering that the aforesaid amount be paid back over a long period of time at a low monthly rate.

If you require assistance with a case involving a claim for reimbursement of overpaid child support, then please send me an e-mail at lutfallah@flbarrister.com in order to set-up a free initial 30-minute consultation. After hearing your story, I hope that I could provide you with legal representation at an affordable rate.


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