A.M. v. K.S.R. Date:, 2016 BCPC 347

Citation: A.M. v. K.S.R. Date: 20161101 2016 BCPC 347 File No: 16688 Registry: Quesnel IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: A.M. APPLICANT AND: K.S.R. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE E.L. BAYLIFF Appearing on their own behalf: A.M. Appearing on their own behalf: K.S.R. Place of Hearing: Quesnel , B.C.

Date of Hearing: August 2 and 5 and October 7, 2016 Date of Judgment: November 1, 2016 [ 1 ] A.M. applies for spousal support from her estranged husband, K.S.R. (“K.R.”). [ 2 ] The couple had a 21 year relationship beginning in the fall of 1994 (followed by marriage on May 11 th , 1996) and ending in separation on March 1 st , 2015. They own a home together and Ms. M. continued to live there after the separation, while Mr. R. moved out and has lived in rented accommodation since then. Ms. M. took over the payments on the mortgage and Mr.

R. took over the payments on consumer debt and paid child support. [ 3 ] The cost of maintaining and repairing this home since the separation is a key factor in Ms. M.’s application for spousal support. The couple’s equity in the home is a key factor in Mr. R.’s resistance to her application. As a Provincial Court Judge I have no jurisdiction to deal with the division of this couple’s matrimonial property. That being said, this is certainly a case in which property issues are closely tied to the positions of the parties on spousal support.

If both could retain lawyers experienced in family law I am confident that they could fairly quickly come up with a satisfactory resolution of all of their issues. As it is, I can only deal with the narrow issue of spousal support. [ 4 ] The couple has two daughters, now aged 19 and approximately 18 years old. The oldest, A., now has her own apartment and a good part time job. She is pursuing some post-secondary education. She is on her way to becoming self-supporting. The younger, K., has just started Grade 12.

There has been a recent change in the parenting arrangements for K. that have implications for the payment of child support. K. had been living primarily with Ms. M. since the separation and Mr. R. was paying $800/mo in child support. Starting in August or September K. decided to live 50% with Mr. R. and 50% with Ms. M. and, as a result, Mr. R. has reduced the amount of child support he is paying to Ms. M. by 50% to $400/mo. [ 5 ] I have decided as follows: 1.

K.R. shall pay A.M. spousal support in the amount of $1,100.00 per month by way of bi-weekly installments of $507.69 commencing on November 18th, 2016 and continuing bi-weekly thereafter until further order of the court or written agreement of the parties; 2. K.R. and A.M. shall exchange copies of their Canada Revenue Agency notice of assessment or re-assessment not later than May 30 th of each year commencing in 2017; 3.

This matter shall be placed on the family remand list in Quesnel approximately 1 year from now, in the fall of 2017, for the purposes of scheduling a review of spousal support (s. 168, Family Law Act) . The parties can anticipate that the remand court judge will determine a time estimate and make orders for financial disclosure and then refer the matter to the Judicial Case Manager to

schedule a date for the review. 4. Judge Bayliff is seized of this matter. [ 6 ] I will explain my reasons for making this order. Entitlement to Spousal Support [ 7 ] Ms. M. has established that she is entitled to spousal support principally on the basis of need: “to relieve any economic hardship of the [spouse] arising from the breakdown of the relationship between the spouses” (s. 161(

c) Family Law Act ). [ 8 ] Ms. M. has established economic hardship arising from the breakdown of the relationship in two ways - declining income and increase in living expenses. Declining Income [ 9 ] Ms. M.’s income has declined partly because of changes she chose to make in her own career and partly because of recent changes in the parenting arrangements of the couple’s two children, A. and K. [ 10 ] Ms. M. made a career change in 2011 which resulted in a decrease in her income. She had been working for many years in the social services field as a family support worker.

She stopped that and started working as a travel consultant but this business did not produce much income. As she said in her evidence, when she made this somewhat risky career change she did not have a crystal ball and could not predict that within 5 years her marriage would end. Ms. M. sought other work both before and after the separation but has found it hard to find a stable, well paid position. Of course, once the marriage ended in March, 2015, Mr. R.’s income was no longer available to cover any shortfall between Ms. M.’s income and living expenses. Economic hardship on the part of Ms.

M. has been the result. At present Ms. M. has contract employment as events manager and custodian at a local community hall, earning about $12,000/year. Her work as a travel consultant also brings in some income. In her Financial Statement filed May 6 th , 2016 Ms. M. reported a total income of $14,875. She receives no benefits - towards health costs or building a pension - with her contract employment. [ 11 ] The other big change in Ms. M.’s overall financial situation results from a considerable reduction in the amount of child support she receives from Mr. R.

The couple’s oldest daughter, A., turned 19 in June so Mr. R. ceased paying child support for her. In August their youngest, K., decided that she would prefer to live 50% with each parent rather than primarily with Ms. M., so Mr. R. reduced the amount payable for her to $400/mo. As of May, 2016 Ms. M. was receiving $15,600/year ($1,300/mo) in child support. By October 6 th , 2016, the last day of trial, the amount Ms. M. was receiving from Mr. R. in child support had dropped about 70% to approximately

$4,800/year ($400/mo). [ 12 ] The amount of the government Child Tax Benefit received by Ms. M. may also have dropped below the $3,700/year reported in her May 6th, 2016 Financial Statement because A. has now turned 19, but I have no evidence on this particular point. [ 13 ] In May of this year Ms. M. reported an annual income for a spousal support claim totaling $34,225.09. [1] Due to the reductions in child support that have occurred since then this total has now dropped to approximately $23,400. [2] Increase in Living Expenses [ 14 ] Ms.

M. testified that she may have been able to “get by” financially despite this significant drop in income were it not for the fact that she has undergone a very significant increase in living expenses since the separation because of various expensive repairs needed to the matrimonial home, which she occupies. These increased expenses are mainly to do with the septic system. [ 15 ] There have been problems with drainage and the septic system going back to about 2010. While he still lived in the home, Mr. R. did some work that he hoped would solve the problem.

However, in mid-March 2015, just after he moved out, there was a 3 day power outage; the system backed up and flooded the basement. Mr. R. helped with clean-up and repairs and paid the $1,000 [3] home owner insurance deductible. [ 16 ] Around the same time it was discovered that the house needed a new roof. The cost was about $8,400.00. Mr. R. paid ½ of this cost. [ 17 ] Later in the summer of 2015 Ms. M. hired [omitted for publication] Septic Service Ltd. to do an assessment of the septic system and suggest solutions. A less expensive option and a more expensive option were identified.

It was decided that the less expensive option was worth a try. This involved certain excavation work and the installation of a high-level alarm. In total, this first attempt at a fix cost about $6,500.00. Mr. R. paid ½ this cost. [4] [ 18 ] However, by the fall of 2015, [omitted for publication] Septic advised that the rock pit was still not functioning. In their opinion the only solution was the more expensive option, which involved installing a new septic tank. At that point Mr.

R. made it clear that he was not going to pay anything further towards the cost of repairing the septic system or, for that matter, any sort of further maintenance or repair at the matrimonial property. I will set out his reasons for this momentarily. I gather his refusal to continue sharing in the substantial costs associated with the septic system was a key factor in Ms. M.’s decision to file the current application for spousal support in November, 2015. [ 19 ] Ms.

M. paid to have a load pumped out of the rock pit and over the winter of 2015-2016 she and the girls had to exercise great caution in the use of the septic system. They had to rent and use a Porta-Potty. They had to shower downtown at the swimming pool, or at friends’ houses. Ms. M. was put in the position of nagging the girls endlessly about limiting their usage of water. She testified that it added a lot of stress to all their lives and had a negative effect on her relationship with A. and K.

She believes it is one of the factors that has led both of the girls to move either fully, or partly, out of her home - the matrimonial home - in the year since. [ 20 ] In the summer of 2016, Ms. M. obtained a quote from [omitted for publication] Septic for the installation of a new septic system. It came to just over $22,000.00. [5] By borrowing money against a life insurance policy and cashing in RRSP’s, Ms. M. was able to raise a total of $19,500.00. With that deposit in hand, [omitted for publication] Septic proceeded to do the work in September of this year (between the August and October trial dates).

As of October 7 th , the last day this matter was in court, Ms. M. did not yet have a final invoice from [omitted for publication] Septic but she anticipates that it will be close to their estimate of $22,000.00. So far, Ms. M. reports that the new septic system is functioning well although the excavation site will have to be cleaned up and landscaped come spring. [ 21 ] With this history in mind, Ms.

M. argues that her living expenses - the cost of maintaining and repairing the matrimonial home which she occupies - have increased enormously in the past 2 years, at a time when her income is falling - and the result is a clearly proven need for spousal support. Mr. R.’s Position [ 22 ] On the issue of entitlement Mr. R. argues that Ms. M. has failed to establish a need for spousal support because, when he left, he told her “You can have the house and everything in it. Just don’t come after me for spousal support.” He says that if Ms.

M. is having difficulty getting by financially she should use the house to get herself out of difficulty by: (

a) borrowing more money against the house (increasing the mortgage), or, if she can’t do that, (

b) selling the house and benefiting from the substantial equity they have in the home which he is willing to sign over to her. [ 23 ] The assessed value of the home is currently about $250,000. A realtor consulted by Ms. M. in July said that it could be listed at $275,000. As of May the amount owing on the mortgage was about $97,000, leaving equity of about $150,000. [ 24 ] Mr.

R. explains his refusal, starting in 2016, to pay half of the costs of maintaining and repairing the home - half the $22,000 cost of the new septic system plus some minor repairs to the barn and to the siding - by saying that he is willing to sign the house over to Ms. M. and there has to be an end to his liability for it. He says that it has been 19 months since their separation and Ms. M. ought to have done more to either re-finance or sell the house at an earlier stage.

He insists that it was not necessary to fix the septic system before listing the house for sale - that it could have been marketed on an “as is, where is” basis with the buyer taking on the risk and cost of finding a solution to the septic and drainage problems. [ 25 ] Mr. R. emphasizes, and Ms. M. acknowledges, that he has been more than generous in paying child support for A. and K. He has always paid slightly more than Guideline amount and done so regularly and without quibble or complaint. [ 26 ] I respect Mr.

R. for his straightforward approach and the responsible way in which he has paid child support and assumed a

good portion of the family debt. His proposal to give Ms. M. the house - in other words to not claim a share in the equity in the house - may well be reasonable and even generous. I did think about adjourning the case to allow this couple time to try to mediate an overall resolution of their matrimonial issues. [ 27 ] However, the difficulty with Mr. R.’s proposal is that Ms. M. does not currently make enough money to take Mr. R. up on his offer to “take the house and everything in it”.

As I found above, her income (not counting the spousal support I intend to order) is currently expected to be about $23,400 per year. The lending institution that holds the mortgage on the property says: “Given her current income level and the mortgage qualification … [Ms. M.] will not qualify to solely hold the mortgage in her own name. With the current payment

schedule & amortization, [Ms. M.] would require a two year average self-employment income of $53,300 to qualify to solely hold the mortgage in her own name. If [Ms. M.] were to re-amortize the mortgage over 25 years, she would only require a two year average self-employment income of $25,500 to qualify to solely hold the mortgage in her own name.” [6] [Emphasis added] [ 28 ] Mr. R. argues that Ms. M. could and should do more to increase her income which would then allow her to assume the mortgage and benefit from the equity in the house.

He points out that [omitted for publication], her former employer was advertising several positions in 2016. Ms. M.’s response to this suggestion is that with all that has occurred she is in no position, emotionally, to take on social service work. In my view, her position is reasonable at this point in her life. I am confident her ability to do more demanding work will change as her financial distress is eased. [ 29 ] Mr. R. argues that even if Ms.

M. is not currently able to return to social service work, she should take on a part time, minimum wage job at Tim Horton’s or Walmart to supplement the income she receives from the community hall and her travel business. Certainly, as the letter from Jaymie Kohler of Investor’s Group makes clear, Ms. M. would only need to make about $2,100 more per year in order to qualify to hold the mortgage solely in her own name, which, in turn, would greatly relieve her financial situation assuming Mr. R. continued to hold to his commitment to “give her the house.” [ 30 ] Mr. R.’s suggestion about Ms.

M. seeking part time, minimum wage work does not provide an immediate answer to Ms. M.’s financial distress. Assuming Ms. M. could find a job at Tim Horton’s or Walmart in the near future, there is no guarantee the bank would agree to allow Ms. M. to assume the mortgage in her own name in the near future. I note that J. Kohler wrote that they require a “ two year average self-employment income of $25,500”. The bank would likely require Ms.

M. to establish that she could earn an income of $25,500, or greater, over some period of time before they would be willing to grant her a loan in her own name. [ 31 ] Although the possibility of Ms. M. obtaining part-time, minimum wage work does not provide a realistic alternative to spousal support in the short-run, it will likely be an important consideration a year from now at the review of this matter. One of the objectives of spousal support is “[a]s far as practicable, to promote the economic self-sufficiency of each spouse within a reasonable period of time”: s. 161(d).

It is quite clear on the evidence that Ms. M. is in need of spousal support now, but her economic self-sufficiency within a reasonable period of time is an objective that will become increasingly relevant over time. [ 32 ] As for Mr. R.’s point that Ms. M. should have listed the matrimonial home for sale at some earlier time, before the septic and drainage problems were addressed, it is my view that Ms. M. was correct in deciding that she had to get these problems properly and completely fixed before listing the property for sale.

It is unrealistic to expect that the property would have sold within a reasonable time and at an appropriate price with a defect of that magnitude. The other factor that Ms. M. had in mind in not trying to sell the home earlier was the children’s need for stability, at least until they had both graduated from high school. Finally, there is the fact that the home will probably look and sell better in the spring and summer, particularly since clean up and landscaping is required to restore the appearance of the property after the excavations in September. All things considered, I find that the earliest time Ms.

M. could reasonably be expected to try to sell the home is in the spring or summer of 2017. Accordingly, Mr. R.’s willingness to sign all of the equity in the home over to her is not a present solution for her current financial need. Quantum of Spousal Support [ 33 ] Ms. M. has established that she is entitled to spousal support. The second issue is the amount or “quantum” of spousal support. “Conditions, means, needs and other circumstances…”: s. 162 FLA [ 34 ]

Section 162 of the Family Law Act of B.C. says that “the amount and duration of spousal support … must be determined on consideration of the conditions, means, needs and other circumstances of each spouse, including the following: (

a) the length of time the spouses lived together; (

b) the functions performed by each spouse during the period they lived together; (

c) an agreement between the spouses … relating to the support of either spouse.” [ 35 ] The Spousal Support Advisory Guidelines (available on Department of Justice website www.justice.gc.ca) provide guidance on many issues that arise in spousal support cases such as the determination of spouses’ income, the role of child support in the calculation, duration and self-sufficiency. [ 36 ] I will begin with the three factors specifically referred to in s. 162. [ 37 ] Ms. M. and Mr. R. lived together for 21 years.

Although there was almost no direct evidence about the functions performed by each during the marriage, I infer that they played a fairly equal role in child rearing and household duties. Both worked outside of the home. Ms. M was the main financial contributor in the first 10 or 11 years of their marriage; they lived in her house in 100 Mile House, and the equity in that house assisted them in buying the home in Quesnel when they moved there in about 2001. In 2005 Mr. R. obtained stable employment at a local mill. He has worked there ever since building considerable experience and seniority. Since then, and

particularly since Ms. M. changed careers in 2011, it is Mr. R. who has been the main financial contributor to the family. [ 38 ] Was there an “agreement between the spouses” concerning spousal support? The evidence is unclear. Mr. R. certainly believes there was a verbal agreement that Ms. M. could “have the house” so long as he did not have to pay spousal support. Ms. M.’s position on this alleged verbal agreement is less clear. It may be that she listened to what Mr.

R. asserted but never actually agreed to it. [ 39 ] In any case, I find that circumstances changed dramatically less than 2 weeks after the couple’s separation on March 1 st , 2015 with, first, the septic back up and all the expense subsequently associated with fixing that problem over the next year and a half, and, second, the cost of a new roof. Their house has cost this couple about $38,000 [7] since their separation. This is something they could not have foreseen at the time any verbal agreement was reached about Ms. M. not seeking spousal support. Nor, I am sure, were the couple aware that Ms.

M. would not qualify to assume the mortgage on her own. Thus, any agreement that may have existed about not claiming child support in exchange for the equity in the home is invalidated in light of these various circumstances that were not known at the time. [ 40 ] I now turn to a broader consideration of the “conditions, needs, means and other circumstances” of each spouse as required by s. 162. [ 41 ] As noted earlier (see para. 13 above), Ms. M.’s income going forward is estimated to be about $23,400.00.

She lives in the family home and makes the mortgage payments which currently amount to $16,160.82/year (property taxes are included in this sum) [8] . Although she could greatly reduce this cost if the mortgage could be re-amortized, as noted, the bank is not willing to do that at her current low income. This leaves Ms. M. just $7,000 to cover all the rest of her living expenses - insurance on the house, utilities, food, personal care, car related expenses plus some sort of contribution to the costs of the couple’s daughters. She has since sold her horse to reduce her expenses.

Her “Household Expenses” will be reduced because K. is now living 50% of the time with Mr. R. Her spending under the heading of “Children” has also been reduced as she no longer has the income. Ms. M. said that her inability to continue to pay for what her daughters either need or want has, together with the difficulties of living at the family home for the past year without a functioning septic system, damaged her relationship with her daughters. [ 42 ] Ms. M. is hoping to rent out a room in the house to raise a bit more income and she is looking at selling certain items (some of which Mr.

R. says are his - which has added to the level of conflict between them). But, even with these various reductions and economies Ms. M.’s annual expenses exceed her income by about $15,000 [9] . It is absolutely clear that Ms. M. cannot meet even her current, reduced living expenses on her current income. This does not take into account the extraordinary additional expenses over the past two years for a new roof and resolution of the septic and drainage problems at the family home. [ 43 ] Mr. R. has stable employment with a local mill. His total income for 2015 was $84,600.00 [10] .

Along with his income he receives certain health care benefits plus employer contributions to his pension plan. He lives in rented accommodation with his new partner. They sub-let part of the premises to relatives of his partner and, as a result, are able to reduce their net rent to about $800/month. Mr. R. does not list any utilities costs in his Financial Statement from which I assume that heat and light are included in his rent [11] . His telephone costs ($2,400/year) are nearly 3 times those of Ms. M.’s.

Other discretionary costs (entertainment and a Netflix account) at $1,320 are also substantially higher than the $150 listed by Ms. M. On the other hand, when it comes to gifts, Ms. M. lists $2,350 [12] , mostly for the children, whereas Mr. R. lists the much lower figure of $800. Mr. R.’s vehicle related expenses are about $2,600 higher than Ms. M.’s but this is probably due to the fact that he works, and therefore commutes, full time, and also, according to the Financial Statements, he drives an older vehicle than Ms. M. [ 44 ] Mr.

R.’s largest annual expense - even higher than his compulsory deductions for income tax and CPP - are consumer debt payments which total about $22,200 per year. Mr. R. took this on when he left the marriage, leaving Ms. M. to pay the mortgage on the house. [ 45 ] At the time he prepared his Financial Statement in June, Mr. R. was paying $15,600 per year in child support. As noted earlier, this figure has recently dropped to $4,800 per year ($400/month x 12 months) because A. is now 19 and K. is living 50% of the time with him. Mr.

R.’s total annual expenses are now approximately $76,000. [13] Thus, his total annual income currently exceeds his total annual expenses by about $8,600. This is in contrast to the shortfall of about $15,000 faced by Ms. M. [ 46 ] As was the case with Ms. M., Mr. R. does not include in his list of expenses the extraordinary and hopefully, unique, expenses totaling $38,000 for a new roof and resolution of the septic problem at the matrimonial home. [ 47 ] This review of the “conditions, needs, means and other circumstances” of Ms. M. and Mr.

R. leads me to conclude that the appropriate amount of spousal support is $1,100/month. With child support for K. (assuming a continued 50/50 parenting arrangement), this will result in Mr. R. paying Ms. M. a total of $1,500/month in child and spousal support. This adds up to $200 per month more than he was paying in child support when he was supporting both A. and K. at full Guideline amount. This imposes a significant financial burden on Mr.

R., particularly since he now has the increased household expenses and child related expenses associated with having K. living with him 50% of the time. [ 48 ] However, I cannot justify a spousal support amount of less than $1,100/month given Ms. M.’s current financial situation. Even with spousal support in this amount her income will not be sufficient to meet the current shortfall in her expenses which I have calculated to be approximately $15,000 per year (or about $1,250/month). Duration [ 49 ] At this point the evidence does not satisfy me that a limit should be placed on the length of time Mr.

R. should pay spousal support for Ms. M. There are too many issues still to be resolved between this couple. They include: - whether the new septic system performs successfully over time and whether there are further large and unexpected expenses associated with the house;

- whether Ms. M. and Mr. R. are able to negotiate an overall resolution of all their issues - including division of property and support; - whether parenting arrangements concerning K, and perhaps A, will change; - whether the house can be sold or re-mortgaged so that the equity in the home becomes available to relieve the financial stress on this family; - whether Ms.

M.’s employment situation will improve. [ 50 ] Since I think there is a good chance that there will be a change in one or more of these issues over the next 12 months, I am ordering a review of spousal support, to take place approximately one year from now, in the fall of 2017. The matter will be scheduled initially into a family remand court at which point the presiding judge can give a time estimate, make orders concerning financial disclosure and refer the matter to the Judicial Case Manager for the scheduling of the actual hearing. I am seized of this matter.

Conclusion [ 51 ] For the reasons set out I make the following order: 1. K.R. shall pay A.M. spousal support in the amount of $1,100.00 per month by way of bi-weekly installments of $507.69 commencing on November 18th, 2016 and continuing bi-weekly thereafter until further order of the court or written agreement of the parties; 2. K.R. and A.M. shall exchange copies of their Canada Revenue Agency notice of assessment or re-assessment not later than May 30 th of each year commencing in 2017; 3.

This order shall be placed on the family remand list in Quesnel approximately 1 year from now, in the fall of 2017, for the purposes of scheduling a review of spousal support. The parties can anticipate that the remand court judge will determine a time estimate and make orders for financial disclosure and then refer the matter to the Judicial Case Manager to

schedule a date for the review. 4. Judge Bayliff is seized of this matter. __________________________ E. L. Bayliff Provincial Court Judge