Court File and Parties

COURT FILE NO.: 2024-49 DATE: 20241206 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Linda Beauchamp (Calmes), Applicant AND: Guy Beauchamp, Respondent

BEFORE: A. Kaufman J.

COUNSEL: Linda Calmes, representing herself Veronique Fournier, Duty Counsel, for the Respondent

HEARD: December 6, 2024

Endorsement

[1] The respondent brings this motion to change the December 16, 1992 Order of Justice Morin. Pursuant to that order, the respondent was obligated to pay $200 per month in child support for the benefit of the parties’ children, Gaetan and Martin. The order included an 8% annual interest rate.

[2] On July 24, 1995, Madam Justice Metivier terminated the respondent’s child support obligations.

[3] The respondent did not make any payment towards the child support arrears until August of 2021, except for one payment of $100, resulting in significant accrued interest. In this motion, he seeks an order rescinding the interest owed under Justice Morin’s order or, alternatively, reducing his ongoing interest payments to $50 per month.

[4] Pursuant to section 19 of O. Reg 167/97, payments made on account of a support order and support deduction order must first be credited to the principal, and then to any interest on that principal. Using this methodology, the respondent owes $14,078.85 in interest, in addition to the principal of $6,200.

[5] With the exception of one $100 payment, the respondent did not make any payments toward his child support obligation until August 6, 2021. Before 2021, he was receiving social assistance and subsequently ODSP. Because his spouse is also an ODSP recipient, they received “family benefits” which were paid directed to her, as it is the Ontario Government’s practice to pay ODSP family benefits to the spouse who first applies for them. In the respondent's case, his spouse applied first; thus, the Family Responsibility Office (FRO) could not garnish these payments.

[6] In 2021, the respondent began receiving Old Age Security (OAS) benefits. Unlike ODSP payments, OAS payments were made directly to him, and the respondent currently receives $1,327.69 per month in OAS benefits. When he started receiving OAS benefits, the FRO began garnishing his benefits.

[7] Initially, the FRO garnished $397.38 from his OAS benefits. The respondent sought to reduce this to $50 per month on the ground of undue hardship. The FRO subsequently garnished thirteen $50 payments from the respondent. Following a motion to change initiated by the respondent, at the applicant’s request, the FRO began garnishing 50% of his OAS benefits from November 2022 to February 2023. The respondent entered into an agreement that reduced his support deductions to $253.45 per month, which remained in place until February 2024, after which the FRO once again deducted 50% of his OAS benefits. The respondent has since entered into a new agreement to set his monthly payments at $320.

[8] As of today, the respondent has paid the entire principal sum of child support ($6,200) and $3,971.82 in interest, but he still owes $10,342.03 in interest.

Respondent’s Claim for Undue Hardship

[9] After the deduction of $320 from his OAS benefit, the respondent is left with $1,007 per month. His share of rent is $435 per month, which leaves him with only $572 to cover his other expenses. The respondent claims that his financial situation is dire and that he cannot afford to pay for certain necessities, including medication.

[10] The respondent has health issues that qualified him for ODSP. He has provided evidence of ongoing care from a urologist, requiring medication costing $241.79 between four to six times per year. He was also hospitalized for psychiatric reasons on February 22, 2024, at Queensway Carleton Hospital, where his psychiatrist indicated that the child support enforcement issues have caused him acute distress, leading to suicidal thoughts.

[11] In August 2023, the respondent received an inheritance of $18,000 from his mother's estate. He utilized this money to pay debts accumulated from FRO's enforcement of child support arrears. Additionally, he purchased a 2014 Hyundai Accent for $10,000, which is registered in his spouse's name. The vehicle is used for transport to medical appointments and grocery shopping, as they reside in Clarence Creek, a small town with minimal services which is a 35-minute drive to Ottawa.

[12] The respondent’s spouse provided a letter indicating that the past few years have been extremely challenging from both financial and psychological perspectives.

The Applicant’s Submissions

[13] The applicant objects to any reduction in the interest owed to her.

[14] She contends that she has raised the parties' sons without any financial support from the respondent. The applicant argues that the respondent could have taken steps to pay off his debt earlier but chose not to do so. She asserts that when the respondent received an inheritance, he could have allocated a portion of those funds toward his child support obligation. As a widow, she emphasizes that she cannot afford to renounce the sum that is legally owed to her.

[15] The applicant requests that 50% of the respondent's Old Age Security (OAS) payments be garnished and that the calculation of amounts owed be calculated differently from the methodology set out in O. Reg 167/97. Specifically, she seeks an order that the respondent’s payments be applied pro-rata to both principal and interest, similar to the manner in which banks apply payments to credit card debt.

[16] Furthermore, she states that the respondent’s debt in 1992 dollars is worth $10,004 in today's dollars due to inflation.

[17] The applicant also notes that the respondent and his spouse’s combined annual income is $34,000, and they possess a vehicle. She requests an order for the seizure and sale of the car to satisfy the debt owed.

Analysis

[18] In Colucci v. Colucci, 2021 SCC 24 (“Colucci”), the Supreme Court clarified that a payor's claim for rescission may be regarded as a "hardship" application when the arrears consist of amounts that the payor could have paid when they were due (Colucci, para 134). The payor’s current financial capacity is the sole relevant factor, and they must provide sufficient evidence to demonstrate a precarious financial situation. The payor is required to successfully challenge a “presumption against rescinding any part of the arrears” (Colucci, para 138).

[19] Courts should adopt a highly restrictive approach to guarantee that rescission is regarded as a "last resort" option (Colucci, para 138). The presumption will only be rebutted when the payor parent establishes, on a balance of probabilities, that—despite a flexible payment plan—they cannot and will not ever be able to pay the arrears. A present inability to pay does not automatically eliminate the prospect of future ability to pay, although it may warrant a temporary suspension of arrears.

[20] This presumption ensures that rescission is available only as a last resort, when suspension or other creative payment options are inadequate to alleviate the payor’s prejudice. It also encourages payors to fulfill their support obligations rather than allowing arrears to accumulate in the hope of obtaining relief from the courts when the amount becomes significant. Arrears are considered a “valid debt that must be paid, similar to any other financial obligation,” regardless of their magnitude. If the court determines that the payor’s financial circumstances will create challenges in paying down the arrears, it should first explore whether hardship can be alleviated through a temporary suspension, periodic payments, or other creative payment arrangements.

[21] I express significant sympathy for the applicant, who has borne sole responsibility for financially supporting the parties' children. I concur with her assertion that the respondent could have taken measures over the past 30 years to make modest payments toward his child support obligations. Had he made such efforts, he would not find himself in the difficult predicament he faces today.

[22] That said, I also conclude that fully enforcing the child support order imposes hardship on the respondent, who has relied on social assistance, ODSP, and now the Old Age Security (OAS) program. He has very limited financial means, and strict enforcement of the order renders him unable to meet his basic expenses, including medication. Furthermore, I take into account that the principal portion of the child support order has been fully paid and that the 8% interest rate, while applicable in 1992, is significantly higher than the interest rates that have been in effect over the last 20 years.

[23] I decline to order that any payments the respondent made be applied pro-rata to both principal and interest, similar to the manner in which banks apply payments to credit card debt. Subsection 19(2) of O. Reg. 167/97 provides two specific situations in which payments made toward a support order may be credited differently than outlined in subsection 19(1). Such an adjustment may occur where the support order has been assigned to an agency or social assistance provider, or where the support order and support deduction order explicitly state that payments should be credited in a different manner. As neither of these conditions are present in this case, the payments made by the respondent must be credited first to the principal and then to the interest accrued on that principal.

Disposition

[24] I determine that the respondent’s outstanding interest debt should be set at $2,229, which corresponds to the total repayment of the principal plus 100% of the arrears in interest ($3,971 + $2,229 = $6,200).

[25] This amount recognizes that the principle that arrears are debts that must be repaid, takes into account the historically low rates that have prevailed after Justice Morin’s order, while also recognizing the respondent’s dire financial situation.

[26] I also order that the Family Responsibility Office enforce the remaining balance owed at a rate of $75 per month, and collect 100% of any lump sum payments the respondent receives, until the debt is fully paid.

[27] I make no order as to costs.

Justice A. Kaufman Date: December 9, 2024