T.L.A. v. M.R. Date:, 2015 BCPC 151

Citation: T.L.A. v. M.R. Date: 20150126 2015 BCPC 0151 File No: 0525168 Registry: Prince George IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: T. L. A. APPLICANT AND: M. R. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S. KEYES Appearing on their own behalf: Ms.T. A. Counsel for the Respondent: Ms. Young Place of Hearing: Prince George , B.C.

Date of Hearing: October 21, 2014 Date of Judgment: January 26, 2015 [ 1 ] This is Mr. R.’s Application to vary a child support agreement so as to cancel or reduce arrears of child support from 2008 to the present. Background: [ 2 ] Mr. R. entered into a Separation Agreement in 2005 under which he agreed to pay $400.00 per month child support for his child to Ms. M. (now known as Ms. A.), the Guideline amount payable based on his then income of $35,000.00. That Agreement was filed with the Court on July 25, 2005. In 2005 and 2006, he made sporadic payments, but did not pay the full amount owed.

By 2007 he had stopped paying altogether. Arrears have accumulated since that time, to a total amount now owing of $20,284.42. The arrears had been much higher until FMEP began garnishing Mr. R.’s wages in March 2012. [ 3 ] On April 17, 2013 the parties made an agreement to reduce the child support payable to $270.00 per month retroactive to January 1, 2013, to reflect his then current income declared to be $30,120.00 (it was in fact $33,144.00 according to his 2013 Notice of Assessment, which was produced at the hearing before me). On May 28, 2014, Mr.

R. made an Application to court asking that the 2005 Agreement be changed and that the arrears of maintenance be canceled or reduced as follows “that my monthly maintenance reflect the amount stated in the new agreement in

section 9 dated April 17, 2013, and my arrears reflect Form A (attached) backed by financial statements (attached).” The Form A referred to is a handwritten document which notes, in table form, Mr. R.’s income for the years 2008 through 2012, the amounts due under the 2005 Agreement, and the amounts that would have been due under the Child Support Guidelines for his income in those years. Ms. A. filed a Reply to Mr. R.’s Application, ostensibly agreeing with it but noting that she has never received spousal support as noted on Mr.

R.’s Financial Statement and noting that his 2013 financial Tax Return information was not included with his Financial Statement. [ 4 ] He now seeks to reduce the child support arrears to the amounts that would have been owing had he applied in a timely fashion to vary the original Agreement to be in accordance with his income for Guideline purposes from 2008 to the present, and to cancel the interest that has accumulated on those arrears. [ 5 ] I note that both parties filed these documents apparently without the benefit of legal assistance and it is not obvious on the face of Mr.

R.’s Application that he is seeking to reduce child support arrears to match his income all the way back to 2008. It became apparent at the outset of the hearing that Ms. A. did not agree with a reduction of the arrears of child support back to 2008 and had not understood that that was Mr. R.’s intention in his Application. She told the Court that she was advised by the family justice counselor that child support could only be varied retroactively to January 1, 2013, which is exactly what she had agreed to in the Agreement dated April 17, 2013, and what she thought she was agreeing to in her Reply.

Her position was apparently no surprise to Mr. R. and his counsel (in his evidence he agreed that the family justice counselor had provided them both with that information) and the hearing therefore proceeded on a contested basis. Mr. R.’s circumstances: [ 6 ] Mr. R. said that after he and Ms. A. separated, he continued working at the same jobs as he had before until 2008 or so. He worked at [omitted for posting] and was a DJ at night. However, he paid child support only sporadically, providing cash occasionally in small amounts. There is no suggestion he paid anything near the amount required.

He did not keep records. He stopped making child support payments because he didn’t have the money, he said because his drug and alcohol habit took up a large part of the money that he was making. He quit his work at [omitted for posting] in 2008 and his income went down to about three quarters of what he had earned before. He was eventually fired from his job as a DJ due to his drug and alcohol habit. He did not tell Ms. A. that his income was lower but “imagines she would’ve been aware of that.” He does not recall Ms. A. asking him for money.

He does not recall talking to her about child support between 2007 and 2011. He made minimal efforts (“10 to 15 online applications”) to obtain employment thereafter and was often unemployed or under employed. His family helped him out by paying his rent, utilities and food. He said he was unable to find employment because he has no qualifications for doing anything.

He made no attempts to upgrade his qualifications. [ 7 ] I note, however, that he appears to have applied only for jobs that required considerable expertise and experience, such as management positions, in fields completely unrelated to the work he had been previously employed at. It appears that he did not apply for jobs that were suitable for a person with little experience or education until 2011 when he obtained work at [omitted for publishing] in shipping and receiving. In 2011, according to his Financial Statement, he earned $19,221.00.

He obtained employment with [omitted for posting], a plumbing supplies company in 2012. In 2012, his income according to his Financial Statement, was $29,034.00. He is now a salesman. He has remained employed there and his income has increased annually. He expects his 2014 income to be $36,000.00. [ 8 ] Mr. R. also testified that the only payments that have been made towards child support were “garnished” from his wages or attached from funds due to him from the federal government. Despite his earnings from 2011 to the present, he has made no voluntary payments at all. [ 9 ] Mr.

R. made no attempt to seek to vary the child support agreement until April 2013 when he made the aforementioned Agreement to reduce the child support from January 1, 2013 onward to reflect his then current income, despite the fact that he had, he said, become aware that FMEP was seeking to recover the arrears about three years ago. The current Application was not made until a year later in May 2014.

[ 10 ] He has one other outstanding debt - owed to Revenue Canada in the amount of $10,000.00. He moved in with his current wife in April 2012 and they married in 2013. His wife earns approximately $35,000.00 annually. He drives a 1994 Sunfire automobile. He says it is a hardship to him to have the child support debt hanging over him because he is unable to obtain financing to get a new vehicle due to the “garnishing order” affecting his credit rating. Ms. A.’s evidence: [ 11 ] Ms. A. told the Court that Mr.

R. actually stopped making child support payments in 2005, aside from occasional small contributions, but because she wasn’t completely sure of what small occasional amounts he paid, she told FMEP to commence the arrears in 2007 after which no payments whatsoever were made by Mr. R. She says that she did ask him for child support on occasion, but that they didn’t really talk. Applicant’s Submissions: [ 12 ] Ms. Young, counsel for Mr. R., argues that Mr. R. attempted to deal with the arrears as soon as he became aware that there was an issue with child support, by obtaining an amended Agreement.

She also argues that upon being informed by the family justice counselor that the arrears could not be retroactively reduced by agreement beyond January 1, 2013, he then proceeded to make the Application before the Court. She submits that up until that time both of the parties had “tried to avoid court” so that things would be “smooth” but acknowledges that they had difficulties in communication. [ 13 ] With respect to the legal underpinnings of this Application, Ms.

Young submits that since the 2005 Agreement was filed with the court, s. 148 of the Family Law Act permits the court to set aside or replace all or any part of that Agreement if the court would make a different order on consideration of the matters set out in

section 150 of the FLA . In addition, s. 152 of the FLA permits the court to change, suspend or terminate an order respecting child support prospectively or retroactively, and sets out the factors which the court must consider on such an application.

Section 174 of the FLA specifically addresses the standard the court must apply when considering applications to reduce or cancel arrears of child support, specifically, that such applications should be granted only if the court is satisfied that it would be grossly unfair not to do so. Ms. Young argues that the standard to be applied under

section 152 with respect to a retroactive application to reduce child support (which would have the same effect as an application to reduce or cancel arrears) is not so rigorous. [ 14 ] Ms. Young drew to the attention of the Court the decision of R.M. v. N.M , 2014 BCSC 1755 . (“ RM ”). The RM decision held that whereas

section 152 of the FLA permits the court to change child support orders retroactively, s. 148(3), which deals with agreements about child support, does not confer jurisdiction upon the court to retroactively vary an agreement . Ms. Young argues that the parties could have engaged in litigation resulting in a court order in 2005 instead of making an agreement, and that if they had done so, such an order could have been varied retroactively under s. 152 simply by demonstrating a “change in circumstance”.

However, since they chose to make an agreement instead of going to court to obtain an order, s. 152 is not available to them. Ms. Young argues that this result is grossly unfair, because it means that Mr. R.’s only option is to apply to the court under s. 174 which permits the court to reduce or cancel arrears of child support owing pursuant to agreements or orders, but only if it would be “grossly unfair not to do so” as opposed to simply a “change in circumstance” as provided in s. 152.

It is the legislative difference in the burden he is required to meet, the argument goes, which amounts to “gross unfairness” to Mr. R. [ 15 ] Also, Ms. Young also argues that Mr. R. was not aware of the need to apply to court to vary the 2005 Agreement because Ms. A. did not file for enforcement until 2012. She submits that the lack of discussion between the parties regarding child support created an implied understanding that payments of child support were not required. Thus, the argument goes, since Mr. R. agreed to pay child support rather than being ordered to do so, and because Mr.

R. was only subjected to legal proceedings after several years of failing to pay child support, the “grossly unfair not to do so” test has been met. [ 16 ] Finally, if I am persuaded that Mr. R. has met the “grossly unfair” test, Ms. Young submits that I should reduce the arrears owing to the amounts that would have been payable under the Child Support Guidelines for his actual income from 2008 forward.

She submits that it is not clear that the principles enunciated in the DBS decision which restrict retroactive increases of child support, in most circumstances, to three years, govern retroactive reductions of child support. Issues to be decided: 1. Is retroactive variation precluded under s. 148 of the FLA ? 2. If s. 148(3) does permit retroactive variation on the same principles applied to s. 152, should Mr.

R.’s Application be characterized as an Application to Vary Child Support rather than an Application to Cancel or Reduce Arrears, and if so, has he met the burden of demonstrating a change in circumstance that warrants a different order for child support under s. 150 of the FLA ? 3. If s. 148, unlike s. 152 (which permits retroactive effect for persons bound by court orders) does not permit the court to set aside all or part of an agreement respecting child support retroactively, does that legislation thereby create a gross unfairness to Mr.

R. simply because s. 174 thereby governs his application to cancel or reduce child support arrears? 4. Has Mr. R. met the test to cancel or reduce his child support arrears under s. 174?

5. If Mr. R. is entitled to a reduction or cancellation of his childsupport arrears, can he receive relief retroactive to 2007? 1. Is retroactive variation of child support agreements precluded under s. 148 of the FLA? [ 17 ] In R.M. v. N.M. 2014 BSCS 1755, Mr Justice Armstrong was dealing with a situation in which the claimant sought to vary his past and future child support obligations based upon a change of his income. The claimant had voluntarily ceased his highly remunerative employment in order to take up self-employment opportunities, which reduced his income by approximately 75%.

He unilaterally reduced his child support without making any application or taking steps under the agreement to vary the child support, for several years. The child support level had been determined in an agreement which provided a mechanism for changes to child support and explicitly prohibited any retroactive change in child support. [ 18 ] Upon considering the evidence of the claimant, Mr. Justice Armstrong found that he was voluntarily under-employed and chose to impute income to him under s. 19 of the Federal Child Support Guidelines to a level commensurate with his previous income. Mr.

Justice Armstrong also declined to retroactively vary the claimant’s child support obligations specifically because the parties had fully addressed their minds in the agreement to the issues of child support and mechanisms to vary child support based on changes in income, and had specifically precluded retroactive effect in their agreement. He went on to say that s. 148(

c) of the FLA must govern any application to vary that agreement. In considering s. 148, he had the following to say: “[146] nothing in

section 148 or

section 150 authorizes the court to prospectively or retroactively change a child support order. S.152 allows the court to make changes to orders retroactively but not to agreements about such child support. The same option is not available in

section 148 dealing with agreements about child support. …. 150] I find that the order can be made under

section 148 on a prospective basis only; the court does not have the power to retroactively replace part of the agreement with respect to child support. In my view, where the parties have addressed issues in a separation agreement that were clearly designed to provide mechanisms for dealing with changes in circumstances, they intended to adopt these mechanisms to eliminate the need to recalculate and change their obligations in a more adversarial process.

Agreements between parties on support issue should be given considerable weight. [Authorities omitted] [Italics added] [151] In any event, I am satisfied that the agreement also takes into account the factors described in s.150 of the act. The agreement contemplates that child support will be payable based upon the guidelines as does section 150(1). [152] I have made a finding imputing income to the respondent. In my view, the claimant’s obligations under the agreement conformed to his obligations under the Act and the Guidelines.” [ 19 ] It is clear that Mr.

Justice Armstrong found on the evidence in that case that the claimant had not met the burden required under s. 148(

c) of the FLA , in any event, regardless of whether it could be applied retroactively or not. Thus, Mr. Justice Armstrong’s finding that the

section cannot be applied retroactively was not necessary to his decision and was therefore obiter . Mr. Justice Armstrong does not provide any authority for the proposition that s. 148(

c) has prospectively application only. The

section itself makes no mention of having prospective or retroactive effect nor does it explicitly preclude either one. I have been unable to find any other authority which holds that s. 148 has no retroactive application, although I have found one case in which an agreement was varied under s. 148(

c) where the variation would have the effect of increasing child support obligations retroactively: Isacson v. Isacson 2014 the BCSC 2351 Canlii, at para 147. [ 20 ] Given that the Family Law Act is relatively newly enacted, I have considered the explanations provided by the Ministry of Justice in the Family Law Act transition guide, and the provisions in the former legislation dealing with the same subjects, and cases decided under that legislation, to assist in the

interpretation of the FLA provisions. [ 21 ] Under the Family Relations Act , an application to vary an agreement could be made under s. 121(4) , subject to s. 96 , which provided the considerations and tests to be met on variation applications regardless of whether the term to be varied was in an agreement or in a court order. No distinction was made between agreements or orders as far as variation applications were concerned. Section 96(2) and (3) governed applications to cancel or reduce arears, and maintained the “grossly unfair” test.

Section 96 did not specifically mention whether applications to vary could be made prospectively or retroactively, but the BC Court of Appeal considered that question in Luney v.Luney 2007 BCCA 567 and said the following: “[47] Mr. Luney sought a retroactive variation, however. If successful, such an application would presumably result in a reduction of his arrears. Although it appears that maintenance may be awarded retroactively under s. 93(5) of the Act (see also the dicta at paras 40- 81 of L.S. v.

E.P. 1991 BCCA 393 (decided prior to the amendment to s. 93(5) enacted effective January 31, 2003 by the Interjurisdictional Support Orders Act , SBC 2002, c. 49)), I doubt very much that a court may reduce maintenance retroactively under s. 96(1) without meeting the standard of gross unfairness that applies under s. 96(2) to the reduction of arrears. Of course, a court may order a prospective reduction if the required change in circumstances is shown. [48] In the result, I am of the view that Martinson J. was correct in applying the standard of gross unfairness to Mr. Luney’s application

for a retroactive reduction, as well as to that for the cancellation of arrears….” [ 22 ] I have also considered the

Interpretation Act , RSBC 1996, c 238 , which provides as follows: S.8 Every enactment must be construed as being remedial, and must be given such fair, large and liberal construction and

interpretation as best ensures the attainment of its objects. [ 23 ] I have also considered Ministry of Justice explanation contained in the Family Law Act transition guide, which states that the words “prospectively or retroactively” were added to s. 152 specifically to address the problem created by the application of Luney to situations where the arrears had accumulated through no fault of the payor: Family Law Act Transition Guide p. 3-219 and p.3-242. [ 24 ] I further note that s. 164 of the FLA , which governs variation of spousal support agreements, does not include the words “prospectively or retroactively” but does specifically contemplate the variation of agreements where there has been a failure to disclose income, assets or debts that would have been relevant to the negotiation of the agreement.

Any variation granted on those grounds would be, of necessity, retroactive. In a recent case dealing with such an application, there was no suggestion that the court had no power to make a retroactive order to vary a spousal support agreement: Megson v.

Megson 2014 BCSC 2467 . [ 25 ] It seems unlikely to me that having recognized that the wording of old legislation created an unfairness to all persons (bound by agreements or orders) who might seek to vary child support obligations retroactively, the legislature then chose to remedy that situation only for persons bound by orders, leaving persons bound by agreements worse off than before (if the

interpretation of s. 148 in RM is correct, and s. 148 has no retroactive application at all). It also seems particularly unlikely that the legislative intent was to particularly penalize those parties bound by child support agreements by prohibiting retroactive variation, while permitting such applications to be made with respect to s pousal support agreements. [ 26 ] Accordingly, I am of the view that s. 148 should not be construed as having prospective application only.

The question to be asked, when contemplating an application which, if granted, will have the effect of retroactively reducing arrears of child support, is whether the application is properly characterized as a variation under s. 148(3), in which case the change in circumstance test applies, or whether it is really simply an application to cancel or reduce child support arrears, in which case the “gross unfairness” test applies. 2. If s. 148(3) does permit retroactive variation on the same principles applied to s. 152, should Mr.

R.’s Application be characterized as an Application to Vary Child Support rather than an Application to Cancel or Reduce Arrears, and if so, has he met the burden of demonstrating a change in circumstance that warrants a different order for child support under s. 150 of the FLA ? [ 27 ] This question was considered in A.B.Z. v. A.L.F.A.

(2014) BCSC 1453, by Madam Justice Warren. In that case, in a shared parenting situation, she had decided to impute income to the payee parent retroactively and as a result, had to consider whether to reduce the child support arrears (which had accumulated pursuant to an interim order) to reflect that increased income on the part of the payee spouse. She approached the problem as follows: [230] Similarly, pursuant to the Family Law Act , ss. 152 and 167, the court may change, or vary, orders respecting child support and spousal support, “prospectively or retroactively”. The Family Law Act repeats similar tests as found in the Divorce Act (see s. 152(2)(

a) and s. 167(2)(a)), but adds two additional grounds for each of them: evidence of a substantial nature that was not available when the prior order was made and evidence of a lack of financial disclosure that was discovered after the last order was made. [231] the change in circumstances test applicable to child support orders under both the Divorce Act and the Family Law Act refers to a change in circumstances under the Guidelines which includes, in s. 14: (

a) in the case where the amount of child support includes a determination made in accordance with the applicable table, any change in circumstances that would result in a different child support order or any provision thereof; [and] (

b) in the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either spouse or of any child who is entitled to support[.] [232] In contrast, on an application for the cancellation or reduction of arrears, the applicant must prove, first, a material change in circumstances (defined as one that is significant and long lasting), and, second, that it would be “grossly unfair” not to cancel the arrears: Beavis v. Beavis , 2014 BCSC 422 , at para. 14 .

The standard of “grossly unfair” is set out at s. 174 of the Family Law Act (and was previously set out at s. 96(2) of the FRA ). The reduction or cancellation of arrears is a form of retroactive variation that imposes a heavy burden on the party seeking the reduction or cancellation: Earle v.

Earle , 1999 BCSC 283, at paras. 22-23, 46. [233] A question arises as to whether the test applicable to a retroactive variation applies or whether, given that a retroactive variation will necessarily result in a reduction or elimination of arrears, the more stringent “grossly unfair” test applicable to the cancellation of arrears applies. [….] [234] In Beavis , Madam Justice Fenlon upheld, in part, a Provincial Court decision where the judge had accepted that a withdrawal from the workforce by the payor parent had been appropriate for two years (but not the entire eight in question), imputed income to the payor parent for the remaining six years, and reduced the amount of arrears owing on that basis.

Madam Justice Fenlon held that there was

sufficient evidence to justify the trial judge’s finding that it would be grossly unfair not to reduce the arrears; however, she concluded that the trial judge had erred in principle by recalculating the arrears in accordance with the imputed income. Citing the recent decisions in L.B. v. J.K. , 2012 BCPC 231 , and P.L. v. J.D.L. , 2013 BCSC 1492 , she stated as follows: 44 The starting point on an application to reduce or cancel arrears is thus the arrears as they stand under the order or separation agreement, not what they would be if the annual adjustments contemplated by the agreement or order had been made.

The court may cancel or reduce the arrears as they stand, but only if it would be grossly unfair not to do so. [235] the rationale for this approach was explained in L.B. , at para. 42 (and applied in P.L. , at para. 42 ), as follows: … I am of the view that if a payor's annual income falls below the income upon which the maintenance payments are calculated, then it is incumbent on the payor to bring the necessary application in a timely manner to have the maintenance payments adjusted.

To accede to J.K.'s proposal would encourage payors to do nothing in the face of a reduction in income, disobey a court order over a period of several years and allow a significant sum of arrears of maintenance payments to accumulate, and then when it suits the payor, bring an application for an order which not only deprives the recipient of the maintenance she has a court order to receive, but also uses this retroactive recalculation to deprive the recipient and the children of future maintenance payments they are entitled to receive.

I do not believe such an approach would do justice between the parties, nor do I believe such an approach accords with the law and the obligations the payor parent has to financially support the children. [236] Thus, where a recipient, or payee, parent seeks to increase, retroactively, the amount of support payable, the court will take note of any unreasonable delay in the payee’s application, and consider it in relation to the payor’s need to be able to rely on a degree of certainty and predictability in managing his or her financial affairs ( D.B.S. v. S.R.G. , 2006 SCC 37 , at paras. 5 , 6, 101-102, 115).

While fairness demands that the court consider the payor’s need for certainty and predictability, in the case of a reduction or cancellation of arrears, certainty and predictability militate in the opposite direction ( D.B.S. , at paras. 6, 98 ).

A payor who fails to bring the necessary application to decrease the amount of support payable, and seeks, as a result, the reduction or cancellation of arrears, cannot argue that his or her need for certainty has been unjustly affected ( L.B. , at para. 42 ; D.B.S. , at para. 98 ). [237] the present case, in my view, is properly characterized as a retroactive variation of support rather than a claim for the cancellation or reduction of arrears (though, implicitly, it would have a similar effect).

The defendant, or payor, in the present case seeks to decrease the amount of support payable, not on the basis that his income decreased but rather on the basis that the plaintiff, the payee, has now had additional income imputed to her. [ 28 ] In that case, Madam Justice Warren also took into account that the order which had set the child support order was an interim order, which was made before the Court had a full picture as to the financial situation of the parties.

She was also of the view that even if the test were “gross unfairness”, that test had been met, in part because the payee spouse was not forthcoming about her income, (in fact, she was found to have been untruthful) and because the payor spouse could not be expected to go to the time and expense of a variation application without full knowledge of the financial circumstances, pending the trial. [ 29 ] Thus it appears that where the application is in the nature of a correction of a previous order, based upon substantial evidence that was not previously available, or where a lack of financial disclosure has been discovered, an application that will have the effect of retroactively reducing arrears will be treated in the same way as any other change of circumstance.

However, where the nature of the application is essentially an application to reduce or cancel arrears (based on an historical change in the payor’s income), then the test in s. 174 applies. [ 30 ] In my view, Mr. R.’s Application is properly characterised as an Application to Reduce or Cancel Arrears, rather than as a retroactive application based upon a “change in circumstance” for a number of reasons: 1. Mr. R. was fully employed at the same employment he had prior to the parties separating in 2005, until, according to his evidence, sometime in 2008.

However, throughout that time, he did not pay child support as agreed; in fact, he paid very little. He stopped paying anything at all in 2007, when he was still fully employed. As he candidly admitted, he simply chose to spend his income on his drug and alcohol habits instead of his child. Thus, Mr. R. had a well-established practice of failing to meet his obligations to his child long before any “change in circumstance.” Since then, despite regaining employment he has made no voluntary payments at all.

The only contributions to child support have been attached from his wages or from funds due to him from the federal government. I am therefore not satisfied that he was making bona fide efforts to comply with his child support agreement, but was prevented from doing so by a change in circumstance, because in fact he was making no efforts whatsoever. 2. The change in circumstance alleged was one that was entirely within Mr. R.’s control: that is, he quit one job and was fired from his other employment due to habits he indulged in that were voluntary.

This is not a situation in which the change results from the actions of another party - such as a failure to disclose financial information as required, or a change in the residence of the child. 3. He could have made efforts to vary the agreement, by negotiating with Ms. A. (as he did in 2013) or by court application, when his circumstances allegedly changed, but he chose not to do so for years, until enforcement proceedings caught up with him. No evidence was advanced to suggest that he was prevented from doing so by anything beyond his control.

The mere fact that he was not subjected to enforcement proceedings until 2011 is not evidence that his obligations under the agreement had ceased, nor does the lack of discussion with Ms. A. about it constitute a waiver on her part. [ 31 ] Thus, in my view Mr. R.’s Application is not properly characterised as an application to revise child support retroactively based upon a change in circumstance, because I am not satisfied that there is a causal connection between his failure to pay all these years and

his change in circumstance. However, if I am wrong about that, I have considered whether Mr. R. has met the burden of satisfying methat there has been a change in circumstance which would justify me making a different child support order than that provided in the2005 Agreement. [32]

Section 148(

c) of the FLA provides that I may make an order setting aside an agreement if I would make a differentdetermination concerning child support upon considering s. 150 of the FLA. Section 150(1) of the FLA requires me to make adetermination of child support according to the Federal Child Support Guidelines. Mr. R. asks me to accept that his income wasreduced due to his unemployment or reduced employment, but the inquiry does not end there.

Section 19(

a) of the Guidelines providesthat I may impute income to a payor spouse where the spouse is intentionally under-employed or unemployed, (or for other reasons notapplicable here.) [33] Applying the foregoing to the particular circumstances of Mr. R. , I note the following: 1. Mr. R.’s employment circumstances did change in 2008, in that he quit his (omitted for publishing) job. That change was entirelyvoluntary. Thereafter he says he was fired from his DJ employment due to his drug and alcohol habit.

He presented no medical or otherevidence to me to indicate that his drug and alcohol habits were not anything but voluntary, nor did he provide me with any evidenceconcerning efforts on his part, if any, to obtain treatment or to otherwise deal with those habits. I am not satisfied that Mr. R. trieddiligently to obtain employment during his periods of unemployment - making 10 or 15 applications ‘on line’ in a year is not diligent, inmy view. Also, making applications for jobs that he is clearly not qualified for is not a genuine effort to obtain employment, it is a sham. 2. Mr.

R. is now employed and anticipated that his 2014 income would be $36,000.00, which is greater than his income in 2005, whenthe Child Support Agreement was made. His 2013 Notice of Assessment indicates that his 2013 income was $33,144.00. His 2012income was $29,034.00. Thus his income once he returned to work was only marginally lower than the income upon which the ChildSupport Agreement was based. It is clear that as soon as Mr. R. chose to return to work full time he was earning close to his 2005income despite working fewer hours. [34] Thus, I have no basis upon which to find that Mr.

R.’s unemployment or under-employment was anything other than voluntary. The evidence before me satisfies me that with the application of reasonable diligence, Mr. R. could have obtained employment thatwould have provided him with an income close to, or better, than his 2005 income. Thus, I find it is proper to impute income to himunder s. 19 of the Guidelines of $35,000.00 per annum, the same as stipulated in the Agreement. [35] Given that imputed income, Mr.

R. has not met the burden of satisfying me, on a balance of probabilities, that there is a changein circumstance that would justify setting aside the child support provisions of the 2005 Agreement. 3. If s. 148, unlike s. 152 (which permits retroactive effect for persons bound by court orders) does not permit the court to setaside all or part of an agreement respecting child support retroactively, does that legislation thereby create a gross unfairness toMr. R. simply because s. 174 thereby governs his Application to cancel or reduce child support arrears? [36] In view of my finding that Mr.

R.’s Application is properly characterised as an Application to Reduce or Cancel Arrears, towhich s. 174 applies, not a retroactive variation based on a change in circumstances, and in view of my finding, that even if he had metthe threshold of establishing a prima facie change in circumstance, that he has not satisfied me that he has met the requirements of s.148(

c) such that I would impose a different child support order in consideration of the change he alleges, Mr. R. has clearly not sufferedany unfairness in having to satisfy the test under s.174. He is in exactly the same place he would be whether s. 148 permits retroactiveapplications or not. 4. Has Mr. R. met the test to cancel or reduce his child support arrears under s. 174? [37] With respect to the cancellation or reduction of arrears, s. 174 of the Family Law Act provides that child support arrears may bereduced or cancelled only if the court is satisfied that it would be grossly unfair not to do so.

In coming to a decision, I must considerwhat efforts, if any, the payor made to comply with the child support order, the reasons why the payor cannot pay, and any othercircumstance I consider relevant.

Section 174 does not specifically include a requirement to show a change in circumstance, but s. 152 ofthe Family Law Act, which governs changes, suspensions and termination of child support, does provide that before making such anorder, the court must be satisfied that either a change in circumstances has occurred, evidence of a substantial nature that was notavailable during the previous hearing has become available, or a lack of financial disclosure by one party was discovered since thehearing. [38] Since the reduction or cancellation of child support arrears amounts to a variation application, the principles applicable tovariation orders apply, such as the requirement that the applicant show a material change in circumstance (or one of the other enumeratedfactors) since the order in question was made. [39] Obviously the difficult task will be to establish what a “material change” is and in what situations it would be “grossly unfair”not to reduce child support.

Mr Justice Romilly, in the recent decision of Holmstrom v. Holmstrom 2014 BCSC 545 , reviewedthe case authorities on the applicable principles: [35] The test for cancelling or reducing child support arrears was cited by Madam Justice Fenlon in her recent decision in Beavis v.Beavis, 2014 BCSC 422 , 2014 BCSC 422 (released March 13, 2014). Although it could not have been referred to by counsel inthis proceeding, the principles contained therein were adequately canvassed and addressed by both parties. Sitting on an appeal from aProvincial Court judgment, Fenlon J. succinctly summarized the applicable law:

[14] … In Semancik v. Saunders, 2011 BCCA 264 , 2011 BCCA 264 at para. 25, the Court of Appeal states that when applyingfor the cancellation or reduction of child support arrears: [25] … The applicant must prove a material (… defined as a “significant and long lasting”) change in circumstances and that it would be grossly unfair not to cancel the arrears. [Emphasis in original.] [15] Grounds A (Gross Unfairness) and B (Change in Circumstances) relate to the two main elements of this test.

Grounds C (FinancialDisclosure) and D (Obligation to Earn to Capacity) fall within ground B: they are two factors to consider when assessing whether theapplicant has proven a significant and long-lasting change in circumstances due to a reduction in income. Accordingly, I address the fourgrounds of appeal within the structure of this two-part test. [36] In other words, there are two criteria for determining whether a cancellation or reduction of child support arrears is appropriate: (1) amaterial change in circumstances; and (2) that it would be grossly unfair not to reduce or cancel the arrears. In P.L. v.

J.D.L., 2013 BCSC 1492 , 2013 BCSC 1492, Fleming J. reviewed some of the principles that should be applied on anapplication for the reduction or cancellation of child support arrears. She wrote, in relevant part: [21] The legal principles applicable to any application regarding child support and cancellation or reduction of child support arrearswere discussed by Madam Justice Martinson in Earle v. Earle, 1999 BCSC 283 (“Earle”).

With respect to child support generally, thoseprinciples are: parents have a joint and ongoing legal obligation to support their children; it is the child, not the parent, who has the rightto support; and the payment of child support, is based on the ability of the parent to pay, not only what the parent earns. The result of thislast principle is that parents have a legal obligation to earn as much as they are reasonably capable of earning to meet their obligation tosupport their children (Earle and G.(S.) v.

W.(G.), 2006 BCSC 991 , 2006 BCSC 991). [22] With respect to variation applications, the applicant must establish a material change of circumstances since the original order wasmade. The change must be significant and long lasting. A change to the Guidelines amount is not automatic: Earle. [23] The cancellation or reduction of arrears is a form of variation.

Madam Justice Martinson in Earle found the test under the FamilyRelations Act, R.S.B.C. 1996, c. 128, which required that arrears not be reduced or cancelled unless it would be grossly unfair not to doso, is similar to the one to be applied under the Divorce Act. The “grossly unfair test” has been found appropriate for consideration on avariation application under the Divorce Act: S.A.R. v. L.G.R., 2011 BCSC 712 , 2011 BCSC 712, at para. 45; and Lewis v.Lewis, (BC SC), [1999] B.C.J. 2537 (S.C.), at para. 16. [38] In Earle v.

Earle, 1999 BCSC 283 at paras. 25-43, Madam Justice Martinson clarified the criteria for a cancellation or reductionof arrears. In relation to a change in financial circumstances, she said: [25] I will now consider a number of specific arguments that are often made to the courts on applications to cancel or reduce arrears andgive the legal rules that apply to those arguments. a. “I cannot afford to pay now” [26] Not being able to pay now is not a valid legal reason to cancel or reduce arrears.

They will only be cancelled if the person isunable to pay now and will be unable to pay in the future. b. “I could not pay when I was supposed to because my financial circumstances changed” [27] People making this argument have a heavy onus. It is not good enough just to say that they could not pay because they earned less.

They can only get a reduction or a cancellation of arrears if they present detailed and full financial disclosure, under oath (usually in theform of an affidavit) that: i. the change was significant and long lasting and ii. the change was real and not one of choice and iii every effort was made to earn money (or more money) during the time in question, and those efforts were not successful. [Emphasis in original.] [39] In L.B. v.

J.K., 2012 BCPC 231 , 2012 BCPC 231, Hamilton P.C.J. outlined some of the principles to consider indetermining the meaning of “grossly unfair”: [50] What is clear from these cases is that a determination of gross unfairness is a factual determination. As well, it is clear that thegross unfairness test applies to applications to reduce or cancel arrears of both child and spousal maintenance. [51] So, what does “grossly unfair” mean? [52] I was unable to find any helpful authority that sets out what the phrase “grossly unfair” means.

Obviously to meet the grosslyunfair test the applicant must establish more than it would be unfair to maintain the maintenance arrears. Establishing gross unfair isclearly a more onerous test that proving simple unfairness. [53] I am of the view that gross unfairness means more than something that is a significant financial burden. [54] In order to meet the gross unfairness test, I am of the opinion that the applicant must establish that maintaining the maintenance

arrears is so unfair that to enforce payment of the arrears would serve an injustice on the payor that the court cannot countenance.

Ifenforcing payment of the arrears leaves a payor in strained financial circumstances that is not enough. [55] Circumstances in which a court might conclude that an applicant has met the gross unfairness test might include situations wherechild maintenance arrears have accumulated during a time when the child was living with the payor and not the recipient, or where thechild was removed from the recipient’s care by child welfare authorities, or was living with other extended family members.

Grossunfairness might be established in circumstances where enforcing the payment of the maintenance arrears would force the payor intobankruptcy. A determination of gross unfairness in these examples would depend on the facts of each individual case. However, what isclear from the authorities is that cases in which maintenance arrears will be reduced or cancelled are rare: see [Luney v. Luney, 2007BCCA 567 , 2007 BCCA 567] at para. 43. [56] There is a reason for the test being as onerous as it is.

The test is onerous because parents have a duty to their children to financiallysupport those children throughout their childhood. This duty imposes an obligation on both parents to financially support their childrencommensurate with the parents’ financial circumstances – Earle, supra, at para. 16. This duty exists whether or not a court order is inplace. [57] When a parent fails to fulfil their duty, the children are deprived of the financial support they are entitled to receive, but which theycannot enforce. The children cannot go to court to secure the payment of the support they are due.

The children suffer a deprivation, aninjustice. [58] When the parent’s duty is secured by a court order, the failure to fulfil that duty not only serves an injustice to the child, but theparent is disobeying a court order.

Our courts cannot, and will not, tolerate such conduct except in the rarest of cases. [59] So, when a parent comes to court having failed in their duty to their child, deprived the child of that which the child is entitled toreceive but cannot enforce, and disobeyed a court order, our courts will not condone that parent’s behaviour unless, and only unless, toinsist that the parent fulfil his or her duty would be grossly unfair. For these reasons, the grossly unfair test is not an easy test to meet. [Emphasis added.] [40] In Longstaff v.

Longstaff ( (BC CA), (1993), 86 B.C.L.R. (2d) 1 (C.A.), Rowles J.A., writing for the Court ofAppeal, said: [54] In Victory v. Victory [[1988] B.C.J. No. 564 (C.A.)], this Court quoted with approval a passage from the judgment of HuddartCo. Ct. J. (as she then was) in Barton v. Barton, [[1985] B.C.J. No. 776 (Co.

Ct)], at p. 10: To cancel arrears on a child maintenance order merely because that order, never sought to be varied, cannot at a moment in time beenforced, encourages a lack of diligent effort to pay in the hope that the more diligent parent will give up any attempt to enforce theorder at whatever cost in lost savings and extra effort.

If the Courts are to respect the principle that parents share equally the responsibility for the care of their children, no result should bepermitted that gives any appearance of favouring a parent whose efforts to fulfil that responsibility have been less than those of the otherwho shoulders it by dint of energetic and sustained application of his or her resources. [41] The Court of Appeal in Longstaff also addressed the “grossly unfair test”: [45] The onus was on the respondent to show that it would be “grossly unfair” not to reduce or cancel the arrears.

If that onus was notmet, the arrears could not be cancelled. [42] The following factors are generally not relevant in deciding whether to reduce or cancel child support arrears: • delay in coming to court to enforce payment (Earle at para. 34); • the children have not suffered because others provided assistance (Earle at para. 38); • the children do not need the money now (Earle at para. 39); and • even though it is less than the full amount, payments were made that contributed to the children’s expenses (Earle at para. 42). [40] If the court decides that it would be grossly unfair not to reduce the arrears, the court can consider what the child supportamount should have been in the applicable time periods according to the information now before the court, but it is improper torecalculate the arrears on the basis of the amounts that would have been owing had the application to vary been made in a timely fashion,and then proceed to cancel or reduce the amount arrived at: Beavis v.

Beavis 2014 BCSC 422, at para 41. The same point was also madeby Mr. Justice Romilly in Holmstrom v. Holmstrom 2014 BCSC 545 : [43] A trial judge can assess the appropriate magnitude of any reduction in arrears by considering the difference between the incomeon which the order or agreement is based and the payor’s actual income during the same period.

However, it is important to note thatrecalculating arrears is not appropriate until after it has been determined that a cancellation or reduction of child support arrears has metthe two-part test, i.e. a material change in circumstances and that it would be grossly unfair not to cancel or reduce the arrears. This istrue even where the court order pursuant to which arrears have accumulated provides for a review of the parties’ respective incomes.See: L.B. at para. 42; P.L. at paras. 41-42; and Beavis at paras. 40-45.

[ 41 ] Applying the foregoing to the particular circumstances of Mr. R., I note the following: 1. Mr. R. made no effort whatsoever to pay any child support voluntarily - the only payments over the years have been those obtained through FMEP; significantly, Mr. R. failed to pay child support as required by the agreement even when there were no changes to his employment. 2. Mr. R.’s change in employment and income during the period in which the arrears accumulated was entirely self-inflicted - the product of his own choice to indulge his habit for drugs and alcohol, rather than support himself or his child.

His circumstances since then have improved significantly and he earns more now than he ever did; thus, the change in his income, even if it were not by choice, has not been ongoing. 3. I am not satisfied that Mr. R. tried diligently to obtain employment during his periods of unemployment - making 10 or 15 applications ‘on line’ in a year is not diligent, in my view. Also, making applications for jobs that he is clearly not qualified for is not a genuine effort to obtain employment, it is a sham. 4. Mr.

R. does have the present ability to work, as he now earns more than he ever has, and has good employment - there is nothing preventing Mr. R. from paying down the arrears over time. 5. The only hardship pointed to by Mr. R. is that he drives an older vehicle and cannot finance the purchase of a new one due to the FMEP garnishing order in place. I do not consider driving an older vehicle to be a hardship.

Neither do I consider that a poor credit rating, caused by his failure to pay his debts, in particular his child support, (thus making obtaining financing for the purchase of a new vehicle more difficult to obtain) to be a hardship. 6. In answer to counsel’s submission that a lack of discussion between Ms. A. and Mr. R. created an implied understanding that child support was not required, the simple answer is that nothing comes from nothing. Child support is the right of the child. No waiver of child support can be “implied” from a lack of discussion between Mr. R. and Ms.

A., or indeed from a lack of enforcement. Unless Mr. R. takes active steps to vary his Agreement, his obligations under it persist. His failure or refusal to fulfill his obligations cannot be grounds to relieve him of them. [ 42 ] As a result of the foregoing, I find that Mr. R. has not met the “gross unfairness” test under s. 174 of the FLA . In view of that finding, it is unnecessary for me to address the question of whether he can seek retroactive relief back to 2008. [ 43 ] Mr. R.’s Application to Reduce or Cancel Arrears is dismissed. ________________________ S. K.

Keyes Provincial Court Judge Province of British Columbia