Introduction

The court in A.J. v. D.C. examined whether there was a material change in circumstance warranting amendment to a negotiated Separation Agreement. In his analysis, Justice Smith examined the payor parent’s income over several years to analyze whether the increase in income for 2020 constituted a material change.

Background

The parties separated in June of 2010. As part of their separation, the parties signed a Separation Agreement to address financial issues and care of their one child. The child lived primarily with the Applicant mother, while the Respondent father paid child support. This support was based on an estimated income of $70,000 and required monthly payments of $647.

The Applicant mother eventually brought a motion to change the provisions of the Separation Agreement, seeking to increase the father’s child support payments. This claim was based on the mother’s position that the father’s income was much higher than $70,000. The mother believed that the father earned a substantial amount of cash from his landscaping business that he did not report. Likewise, that various amounts deducted from the father’s income were improperly claimed or inflated.

Analysis

The Respondent father made his child support payments pursuant to the parties’ Separation Agreement. Therefore, for the mother to request any change in the agreed upon amount, she would have to show that there was a material change warranting an increase in the payments. The Separation Agreement provided that the material change could include a change in either party’s financial position. As a result, in Justice Smith’s analysis, he had to determine whether the Respondent father had a material change in his financial position requiring an increase in child support.

The Applicant mother wanted child support to be based on the father’s higher income seen in 2020. She argued that the income agreed upon in the Separation Agreement was just a starting point, and did not take into consideration sources of income such as the cash the father makes from his business.

In response, the Respondent father emphasized that the $70,000 was an amount agreed upon by both parties. Likewise, although he did make more money in 2020, this was because of circumstances that would not be replicated in later years. In each of the other relevant years, the father made less than the $70,000, but he still paid support based on the higher amount. Similarly, in the Separation Agreement, terms showed that both parties anticipated that the father’s income might fluctuate.

Regarding the Applicant’s position that the Respondent earned substantial amounts of undeclared cash, Justice Smith decided against the Applicant’s claim. The reasoning being that the Applicant made a submission of her claim but failed to engage in any meaningful analysis of the evidence to prove such claim. In response, the Respondent had dozens of invoices and receipts over the years that represented the expenses he incurred.

The Applicant also argued that the Respondent was underreporting his income because he lived a lifestyle beyond his means. She specifically pointed out that the Respondent owned several expensive trucks. However, although the Respondent did own five trucks, they were of varying ages and states of repair. The Respondent also argued that in the long run, it is cheaper to buy a newer, higher quality truck than an older one needing repairs. Justice Smith accepted the Respondent’s evidence.

The Applicant then argued that the Respondent overstated his personal expenses, arguing that a new partner covered 50% of the expenses. Justice Smith found no foundation for this argument, as the Respondent’s financial statement clearly indicated he was only claiming 50% of the household expenses to account for his new partner.

The Applicant then made several other claims regarding the Respondent’s expenses. For example, his expensed meals, expenses related to maintenance and repair, and his utilities expenses. In response, Justice Smith stated that there was nothing unreasonable about these expenses.

There were, however, some funds Justice Smith agreed should be included in the Respondent’s income. For example, funds from the sale of the Respondent’s home, funds from the sale of his personal possessions, and cash received from his mother.

Given all the circumstances, Justice Smith did not believe that the Respondent’s higher income from 2020 was an accurate representation of his yearly salary, and did not constitute a material change justifying amendment to the Separation Agreement. However, because the Respondent did have the higher income at one point, and had funds that should have been included in his income, Justice Smith ordered a one-time top-up payment. This payment would apply only to the Respondent’s 2020 child support responsibilities, and in the future, he would continue his payments as per the Separation Agreement.

Conclusion

In A.J v. D.C., the court was tasked with potentially changing the provisions of a signed separation agreement and showed caution in doing so. To change the provisions of a separation agreement, the moving party must prove there was a material change in circumstance to warrant such an amendment. In this case, the Applicant mother did not meet this standard and as such, the court could not award her the changes she sought.