Background
Following a 2025 family-law trial, Michael Wolf was ordered to pay his former spouse, Sarah Wolf, $967,931.08 for child and spousal support arrears, equalization and costs, plus interest. He was also ordered to make $13,418 in monthly child and spousal support payments and to pay 72% of the children’s special and extraordinary expenses. The trial judge imputed annual income of $421,364 to him based on his ownership of a construction company.
Earlier, the parties had sold their matrimonial home and two other jointly owned properties. Sarah received her share of the proceeds, but Michael’s $392,859.72 share remained in the real-estate lawyer’s trust account. The lawyer later died and it emerged that the trust accounts had a shortfall. Michael could not recover $375,859.72 of his funds, and any compensation from the Law Society of Ontario’s Compensation Fund was uncertain.
The Court’s Holding
The Court of Appeal allowed the appeal in part. It held that the trial judge erred by failing to consider the missing trust funds and their effect on Michael’s ability to pay, and by giving no reasons showing that this circumstance had been considered. Sarah conceded the error on appeal.
The court declined to order a new trial. It found no reversible error in the income imputation, the treatment of spousal support at the high-income level, or the trial judge’s consideration of the children’s special and extraordinary expenses. Instead, it varied the order to reduce spousal-support arrears from $325,543.91 to nil and child-support arrears from $231,817 to $181,501.19. It also directed that any compensation otherwise payable to Michael by the Law Society’s Compensation Fund be paid to Sarah.
Key Takeaways
- A court must consider a payor’s proven loss of funds, through no fault of the payor, when assessing ability to satisfy support obligations.
- The missing trust funds justified a targeted variation of arrears, not a new family-law trial.
- At high income levels, the Spousal Support Advisory Guidelines do not automatically dictate the support result; the trial judge retains substantial discretion.
Why It Matters
The decision illustrates that support enforcement must account for a genuine, involuntary reduction in a payor’s available assets, particularly where non-payment can expose the payor to enforcement consequences including imprisonment. It also shows the Court of Appeal’s preference for a practical corrective remedy where the error can be fully addressed by varying the order.