No Reduction in Support Payments After Husband Claims 42% Loss of Income Due to COVID-19September 24, 2020
In a recent case, a court refused to reduce or terminate child and spousal support payments, after a husband sought relief based on a 42% loss of income due to the COVID-19 pandemic.
Husband Claims Loss of Income
The couple married in 2008 and separated in 2014.
The husband had been paying $2,086 a month for child support and $3,197 a month for spousal support to the wife since an October 30, 2017 order.
However, in April 2020, the father brought a motion relating to his financial circumstances that he claimed was urgent. He sought an order reducing child support and reducing or terminating the spousal support that he was paying pursuant to the 2017 order.
The husband stated that the relief was required because he had suffered a “material change in circumstances in light of the COVID-19 Pandemic” that had caused a 42% reduction in his income.
On April 17, 2020, the court authorized hearing the motion on the basis that the matter was “presumptively urgent”.
To support his motion, the husband produced a brief affidavit that attached a March 31, 2020 letter from the Chief Financial Officer of his company. The letter stated that “due to the COVID-19 Pandemic we are reducing your salary by 42% and cancelling all benefits effective April 1 2020”. The 42% reduction resulted in an income that was the equivalent of CAN $95,837. His previous financial statement had been filed in January 2019, in which he had reported a yearly income of $243,463.
The husband’s second affidavit revealed that his motion was a preemptive attempt to prevent what he feared might happen. He stated that the motion was urgent because “if I cannot pay the support…the [wife] will proceed to suspend my passport and this will cripple me, as my job requires constant international travel”.
Additionally, the husband claimed that his rental income from investment properties had all dried up because his tenants could not pay the rent.
The husband also strongly believed that spousal support should be terminated given the short duration of the marriage, the wife’ income and her level of self-sufficiency.
Finally, the husband provided a financial statement that showed that he had savings that he could access, if necessary, to pay support: he owned real estate in Manesar, India and Ontario and had just over $48,000 in a bank account. Although the husband said he was in “extreme financial need”, he had been paying the support and payments for two mortgages, on which he owed about $1.4M.
In response, the wife argued that the husband’s application did not reveal the fact that he was a 90% shareholder in the company and that, as the controlling shareholder, the husband set his own income. Additionally, she submitted that there was no evidence to explain why and how COVID-19 had impacted the business, nor any consideration of how quickly the business might recover. Finally, the husband had not identified the rental properties nor specified the number of tenants and had offered no evidence of the rent that had been lost. In addition, in the husband’s January 2019 and April 2020 financial statements, the properties and rental income were not even listed.
Court Dismisses Husband’s Motion
First, the court noted that despite the 42% reduction in the husband’s employment income and the alleged loss of rental income, he had paid all child and spousal support owed and there were no arrears.
The court then found that the husband’s motion was not urgent, stating:
“There is nothing “dire” about the [husband]’s financial circumstances. While I appreciate that COVID-19 has created financial challenges for many people, the limited resources of the court during this pandemic must be reserved for the most urgent cases, as theNotices to the Profession direct[…].”
Additionally, the court found that if the husband’s motion proceeded, he would be seeking termination of spousal support. The court stated that such an issue should be decided at trial, not on a motion for temporary relief.
As a result, the court dismissed the father’s motion and ordered the husband to pay the wife costs of the motion in the amount of $3,000.
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaum is able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation.