Case Update (3 May 2024): Stone v. Henneke; Court has discretion to conduct currency conversions in a child support order in a manner it deems equitable
The parties are parents to one child, who is the subject of a custody order from the Superior Court of Justice for Kitchener, Ontario. The order also required the Father to pay monthly child support of $1003 CAD and monthly alimony for several years of $2250 CAD. There was a provision for interest to accrue on arrears of 2% per annum, and, although the order anticipated the relocation of Mother and Child to Vermont in the USA, it did not address currency conversions for the support amounts. After the order was entered, Mother and Child relocated to Vermont, with Father later moving to New Mexico. The Ontario support agency stopped providing services to Mother in 2013, so she sought assistance from the Vermont Office of Child Support (OCS). OCS initially used an administrative process to collect support, and in doing so, converted the obligation from CAD to USD using the Bank of Canada exchange rate in effect on February 23, 2010, the date of the Canadian order. This resulted in a monthly obligation of $953.69 USD child support and $2139.39 USD in alimony. OCS collected the amount it calculated per the exchange rate, but it did not adjust the amounts at any time, based on fluctuations in the exchange rate. The Father never objected or sought to modify his support.
Finally, in October 2020, OCS filed a motion with the Vermont family division to register the Canadian order and to modify the child-support obligation to zero because the child was no longer living with the Mother. In doing so, it asked the court to calculate arrears, since the Father missed a few payments and made some partial payments. In May 2021, the Vermont magistrate modified the Ontario child support order. At a further hearing in November 2021, OCS provided affidavits arguing that the Father owed arrears in the amount of $9811.14 USD, which the Father opposed, arguing that OCS should have applied the exchange rate in effect at the time he made each payment. In December 2021, the magistrate concluded that it was permissible to calculate the obligation using the exchange rate in effect at the time of the order, however, after considering caselaw from other states, determined that OCS should calculate arrears for each year using the exchange rate in effect on the first day of that year. In making these adjustments, the new arrearage calculation was that the Father had OVERPAID by $11,892.13 USD. Therefore, the magistrate directed the Mother to repay the Father this amount. Everyone appealed. The family division affirmed the magistrate’s order, and OCS then appealed. The issue on appeal was whether the magistrate erred in applying a different currency-conversion method when calculating arrears under the Canadian order than the method OCS used in administratively collecting payment under the order.
On appeal, the Supreme Court of Vermont cited to the Uniform Interstate Family Support Act saying that it “specifically authorizes the responding tribunal to perform a currency conversion when it is asked to enforce or modify a foreign order.” Therefore, it argued that the plain language of UIFSA, as enacted in Vermont, authorizes the family division to do what it did. OCS’s argument is, however, that in this case, the family division was required to calculate arrears using the conversion method applied by OCS when it began administratively enforcing the Canadian order. But, the Supreme Court noted that UIFSA does not specify a particular conversion method, and OCS’s decision to convert the amounts in the Canadian order as of the date of the Canadian order did not violate any law. The conversion of the support amounts in the Canadian order from CAD to USD did not modify the order. The order remained the controlling order until someone sought to modify it. Converting the currency was merely a practical prerequisite to collecting payment, and did not modify the amount in the original order. Because the Canadian order remained the controlling order, the court was then authorized to perform its own currency conversion when OCS asked the court to enforce the order and calculate arrears. “In other words, the fact that OCS had performed a currency conversion when it was collecting payment under the order through wage withholding did not preclude the court from adjusting the conversion method in the later judicial proceeding.” The court, citing to Jack Sampson, who was the reporter for UIFSA, said: “In the complex world of international finance and unpredictable monetary gyrations, the drafters believed that there are too many variables for a one-size-fits-all approach. Wide (and wild) swings in the value of a particular currency are better dealt with in an ad hoc manner by a trial court in the expectation that is the most likely approach to achieve rough equity.” This will not lead to unpredictability and chaos - “[t]he number of international child-support orders OCS is asked to enforce is surely small.”
