Family lawyers arguing for reductions in child support payments must carefully consider what actions on the part of their clients led to a claim of financial hardship, and whether any of these actions might be perceived by the court as “intentional acts.”
That’s the bottom line after a ruling released last week at the Ontario Superior Court of Justice in Racco v. Racco, where the former husband of a divorced couple claimed that his annual income had collapsed, from $150,000 to around $45,000, after the loss of his brokerage licence in March 2015.
The husband requested a significant reduction of monthly child-support payments, and typically, such a change in circumstances would warrant consideration. In this case, however, the husband had lost his licence as a result of a conviction for the sexual assault of a co-worker.
“[H]is inability to earn income of $150,000 arises solely because of his own actions, over which he had complete control,” writes Justice Jamie Trimble in the ruling. “Mr. Racco cannot earn $150,000 because of the notoriety of his conviction for sexual assault, an intentional act for which he was convicted, and with respect to which appeals failed at two levels.”
“All of this arose because of his intentional acts.”
Geoffrey Wells, the lawyer who represented Racco’s wife, says there was very little ambiguity in this case — a criminal conviction is by definition an intentional act — but that the ruling points to a loose area of family law around intent.
“It is a grey area,” he says. “If somebody does the bare minimum and gets fired, is that misconduct for the purposes of child support? I don’t think so. It’s a slippery slope, but in this case it was a criminal offence.”
Stephen Grant, a family lawyer at Grant and Sadvari, doesn’t believe the case creates legal precedents, but he says the ruling reinforces the importance of credibility in family law matters.
“There are cases that involve that kind of credibility determination,” he says. “There are some cases — like whether someone ought to have retired, or whether their health was such that they needed to retire — those are harder cases. Those are cases where the judge has to say, ‘I think it was reasonable or unreasonable for you to retire at that time.'”
Indeed, the decision points repeatedly to the husband’s lack of credibility and tendency to “hide information” about his sources of income. Justice Trimble also made the rare move of pointing out the poor optics resulting from the husband’s lavish spending:
As the decision states, “Mr. Racco pays $1,089 per month for a car loan used to purchase his 2014 Audi A7. This monthly amount is approximately equal to [the] child support order . . . . [H]is treatment of his auto expense indicates that he prefers his comfort to this support obligation . . . .”
Grant says such acts of conspicuous spending, while carrying no legal standing in a family law matter, nonetheless colour the way the judge looks at the case: “Judges are more inclined to believe somebody who’s sold their Porsche and is now driving a Volkswagen than somebody who’s claiming to be poor and driving an Audi, like this guy.”
Wells, for his part, says the fact that the husband was driving around in an Audi proved to be a damaging blow.
“It was a nice example of his priorities. You pull into the court parking lot with an $85,000 car claiming poverty? I think the court is going to care about that. My only regret is that the court didn’t have a window so we could all march over and point the car out in the parking lot.”