J.Q. v. Van D. Date:, 2011 BCPC 392

Citation: J.Q. v. Van D. Date: 20111214 2011 BCPC 0392 File No: 09-23442 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY RELATIONS ACT , R.S.B.C. 1996 c. 128 BETWEEN: J.Q. APPLICANT AND: VAN D. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE M. GIARDINI Counsel for the Applicant : I. Phillips Appearing on their own behalf : M. Van D. Place of Hearing : Vancouver, B.C.

Dates of Hearing : September 22 & October 18, 2011 Date of Judgment: December 14, 2011 A corrigendum was released by the Court on January 20, 2012; the corrections have been made to the text and the Corrigendum is appended to this document.

INTRODUCTION [ 1 ] Van D., who originally was the respondent on this file, now applies to reduce the amount of arrears for child support payments and special expenses, arrears for spousal support payments, and to reduce the amount of future child support payments. [ 2 ] By way of a separation agreement dated November 3, 2008 (“the separation agreement”) Van D. agreed to pay $1,720 per month in child support for his two children. He now seeks to reduce that monthly payment to a total of $253 per month for both children.

He asserts that his income in 2010 was only $16,580 and the Federal Child Support Guidelines (“the Guidelines”) only require him to pay $253 per month for both children based on that yearly income. [ 3 ] Van D. also wants to reduce, not cancel, the outstanding child support arrears that have accumulated during the period of May 2009 to present. He asserts his income during this period was significantly less than his income at the time he entered into the separation agreement in 2008.

He wants the court to retroactively determine his income for each year following the separation agreement and vary the arrears accordingly. He wants the court to retroactively calculate the child support amount payable based on the Guidelines using the

income he claims to have actually earned in 2009 and 2010. Van D. also wants to reduce the child care expenses of $700 per month for the same period. [ 4 ] Van D. was also required to pay $1,000 in spousal support pursuant to the separation agreement. J.Q. says a total of $17,000 in spousal support is owing up to October 1, 2010 ($8,000 from 2009 and $9,000 from 2010). Van D’s obligation to pay spousal support was to end if J.Q. re-married or if she lived in a marriage-like relationship for a period of more than 90 days. J.Q. acknowledges that Van D.’s obligation to pay spousal support ended on October 1, 2010.

Van D. says that an agreement was reached in the summer of 2010 whereby J.Q. agreed to forego spousal support after July 1, 2010. [ 5 ] Van D. says he lost his work and his life changed drastically in 2009. He maintains he lost everything. Therefore, he says he cannot support the lifestyle his children enjoyed before the marital breakup. He is not refusing to pay support for his children but says the level of support payable should be calculated based on his income for 2009 and 2010 and not on the income he had when the parties separated in 2008.

BACKGROUND [ 6 ] The parties were married for approximately seven years and had two sons, who are now five and nine years old. The parties separated in early 2008 and in November 2008 entered into a separation agreement. Both parties were represented by counsel at the time. [ 7 ] Van D. is a carpenter by training. He owned a renovation business called Urban Renovations and Design. He operated that business from about 2004 to 2009. Initially, the business focused on small home renovations. Van D. was self-employed and hired sub- contractors as needed.

However, after the parties separated Van D. decided to get out of the home renovation business and started working on a commercial project. He claimed his business “failed” in 2009. By “failed” he meant he had no more work. When he was doing home renovations he had a number of projects, so one project “kind of fed the other”. However, when the commercial project ended on April 16, 2009, his work ceased. Van D. said, at that point, his life “ spiraled downhill as fast as you could possibly imagine”. He said he lost everything, his work, his car, his girlfriend. He was evicted from his apartment.

As a consequence, on June 15, 2009, he was not able to make his child support payments. [ 8 ] Van D. recounted how things went from bad to worse when someone posted a critical comment about him and his business on a website called Rip-off Report. He claimed this posting was devastating for him and his business. He said nowadays everyone does Google searches when they hire a carpenter or a contractor. He said the posting about him came up at the top of the page with red flags going off and so on. Van D. said he thought at the time no one was going to hire him and it turned out nobody did.

He attempted to find work. He put an advertisement on Craig’s list and called everyone he knew in the trades and other contacts. Van D. said he found some work here and there but not much. For about a year and a half he just scraped by with a little bit of work here and there. He then met his new wife, C.D., who is an investment counsellor at Connor, Clark & Lunn and moved in with her about 16 months ago. In May 2011 they married. Van D. said, fortunately for him, his new wife and her family have been very supportive. [ 9 ] Van D. filed financial statements for 2009 and 2010.

Those statements show he earned a gross income of $34,649 in 2009 and $16,580 in 2010. Van D. has not yet filed his 2008 tax return. He filed income tax for 2009 and 2010 because he said that was easier. He said he did not know his income for 2008.

That year he was self employed and was working on a construction site. [ 10 ] In cross-examination, Van D. acknowledged: - He rented an apartment in Yaletown for $1,500 per month in Feburary 2008. - He traveled to Jamaica once. - He went out to restaurants and clubs. - He was engaged twice and bought a ring for his first fiancé Danielle that cost approximately $6,000. [ 11 ] Van D. adamantly denied he made approximately $600,000 gross in the 2007 tax year.

When a tax return for that year was put to him, he at first denied recognizing the document but later said the document indicated he personally earned $122,000. He was asked whether the document was his tax return. He said he did not know. Van D. said he did not see his name on it. He denied filling it out. He claimed not to recognize the name of the chartered accountants firm who completed it. He said he did not know if this was the firm he hired to complete his tax return that year. He claimed he hired a firm but did not have money to pay their fee so the tax return was not completed.

He was asked whether the 2007 tax return was the document he produced when he and J.Q. were discussing the separation agreement. Van D. said he would have to check his records. He was questioned extensively about the 2007 tax document but would not acknowledge that the gross amount ($603,309.01) was his gross income for 2007. Van D. maintained he never made anywhere near that amount of money. However, he acknowledged that the net amount set out in that document ($122,202.62) was the amount he made that year.

He also agreed that amount was the income he used when the separation agreement was negotiated. [ 12 ] Van D. agreed that the separation agreement required him to give J.Q. tax returns and that he had not done so until recently. He agreed he did not provide her with other income-related documents but, he said, he spoke to her on the telephone about his income. He denied that a court order was issued by Judge Romilly on April 21, 2011 which required him to provide financial documents relating to his business. It was his understanding that no such order had been made. He agreed that counsel for J.

Q had asked him to provide information regarding his bank statements, bank accounts, deposits, credit cards, supplier’s documents etc. Van D. said he did not provide that information because he did not think it was relevant. [ 13 ] Van D. was asked whether he had filed the 2009 and 2010 tax returns after this proceeding had started. He initially said he had not. He believed he had filed the 2009 and 2010 tax returns before the start of these proceedings. However, he acknowledged that he did

not recall for certain. Van D. said he went to H & R Block to have the 2009 and 2010 tax returns prepared. He said he did not supply any documents to H & R Block to support his income. He said the information he gave H & R Block was simply income he had kept track of. Van D. was asked if there was a reason why he did not have financial documents for 2009 and 2010. He said it was because he did not have a bank account, chequing account, or credit card. He was asked whether that meant he was paid in cash. He said some of the payments were cash but some people paid by cheque.

If people paid by cheque he could cash the cheques at their bank or that he could go to Money Mart. It was put to him that there was no way to trace his 2009 and 2010 income. He said he did not know. He said he declared everything he was paid in 2009 and 2010. [ 14 ] Van D. was asked if he knew he was supposed to provide his last three years of tax returns in these proceedings. He said he did and acknowledged that would include income tax returns for 2010, 2009 and 2008. He acknowledged he had not provided income tax information for 2008. Van D. said that he was doing the best he could.

He also said, however, that he did not believe 2008 was a year that was in question. At the time he was doing his tax returns he did not think it was going to be a big issue. He said 2008 was a difficult year for which to complete tax returns because he owned a business at the time. However, he lost everything, all files, all records and he was having a difficult time trying to accurately do his tax return for 2008. Van D. was cross-examined about his tax return for 2009. He confirmed that he was living on Mainland Street in Yaletown in 2009.

He was renting a place there and paying rent of $2,200 a month. [ 15 ] Van D. was asked about discussions he had with a private investigator (who was not known to him as a private investigator at the time), on February 24, 2011. Van D. acknowledged he told the investigator that his company was called [removed for posting]. However, he explained to the court that he does not have a company. It is just a business name he uses. He agreed he told the private investigator that he billed himself out at $40 - $45 per hour.

He also agreed he told the investigator that he had numerous jobs on the go. [ 16 ] Van D. testified that [removed for posting] was a name he used to make a new start. He said he did not have a business account. He did not have anything. He was trying to get back on his feet, trying to start a business. He said that when someone came to his job site he tried to sell himself. He said he did not have any employees. Van D. said he tried to make it sound like he was busy and in demand because nobody wants to hire a contractor who has no work. Mr.

Van D. characterized what he told the investigator as “selling himself”. He was doing the best he could to get a job. Van D. said at the time the investigator came to speak to him he was working on a friend’s renovation. He acknowledged that he described it as a “complete removal”. However, he said he tried to “sell it up as much as I could”. Van D. agreed he told the investigator that in the last three months his work had quadrupled. His explanation for that was: “I went from 0 jobs to 3 jobs”. He said he was trying to sell himself to a prospective customer and to make it sound like he was busy and in demand.

He said: “That’s what you do as a contractor, right?” [ 17 ] Van D. said he was only working on one project at the time of the hearing. He was asked what he did during the day. He said he had lunch, did the laundry, went for a walk, went for a run, advertised and tried to find work. He was asked how he was paying for his expenses such as food, clothes, toiletries, etc. He said he works. He was asked how much money he had made so far in 2011. He said he did not know that because he had not calculated it yet. He said he could not say off the top of his head, but estimated that maybe he made $25,000.

He did not want to give an exact number because he did not know. He was just guessing. [ 18 ] Van D. said he is “a guy struggling”. He said he would be living in a cardboard box if it were not for his new wife. At the time the events leading up to this court application occurred he had nothing. However, he has been very fortunate in the last few months. His circumstances changed and his new wife is helping him out. [ 19 ] Van D. testified he became engaged to C.D., his new wife, in the spring or summer of 2010. In November 2010 he went to Cabo San Lucas with her.

He acknowledged that he also went to Toronto for Christmas 2010. He acknowledged he went to Cabo San Lucas again for New Year. However, he explained that C.D’s family has a house in Cabo San Lucas and one of her siblings has a place in Toronto. Van D. said he has been very fortunate in that his wife is a very caring and giving woman. He said when he goes to Cabo San Lucas he stays at the family’s condo and they fly down on points. Those points are from his wife’s credit card. He has never bought a ticket anywhere. As for going to Toronto at Christmas, that was a gift from his wife’s family.

He said his wife works in wealth management and has a very good job. [ 20 ] Van D. acknowledged he married C.D. in 2011 and their friend Malcolm Parry put an announcement in one of his columns in the Vancouver Sun newspaper. In that column Van D. was described as a “builder”. When he was asked about that description he said he is a carpenter, someone who builds things with wood. He was asked if he builds houses as well. He said he did not. He was asked if he renovated houses and sold them for a profit. He said he did not.

He said the last house he owned was “probably in 1990, 1997 maybe was the last house I owned”. It was put to him he owned a house with J.Q. He denied that and said the house was in her name. He was never on title and never on the mortgage. Van D. said that it was C.D.’s house (referring to his new wife) or JQ.’s house (referring to his former wife). It was put to him that during his marriage to J.Q. he bought houses, renovated them, and later sold them for a profit. He said that was false. However, he quickly explained that he had renovated J.Q’s houses and she sold the houses and flipped them and made money.

It was put to him that the money was used for family purposes. He said that was not the case, instead, J.Q. bought a bigger and better house every time. [ 21 ] Van D. was asked about his wedding to C.D. He said he did not buy her an engagement ring. He did not buy a suit for his wedding. He claimed he just wore something he already had. He said that the wedding did not cost him anything. He had no idea what it had cost; he was not involved in that. C.D.’s parents paid for the whole thing. He was asked whether he had gone to Cabo San Lucas two weeks before the wedding in May 2011. He said no.

He was asked again whether he went to Cabo San Lucas prior to the wedding. He said no. Then he said they were there a week before the wedding and a week after. Van D. acknowledged that he and his new wife C.D. went to New York for a honeymoon. He also agreed he and C.D. frequently go to Salt Spring Island and to Whistler for weekends. His wife’s parents live on Salt Spring. He and C.D. also have friends both at Salt Spring and at Whistler. He was asked what kind of a car he drives. He said he drove a Ford F150 pick up truck. He was asked if he and his new wife bought a house in West Vancouver for $1.825 million.

He said no. He was asked how much the house cost. He said he did not buy a house. Following that he was asked whether his new wife had bought a house. He said she did. He agreed he lived in the house his new wife bought. Van D. said he was not part of the process of buying the house. He acknowledged the house was listed for sale for $1.6 million or something but he did not know the exact price his wife paid for it. He said it was none of his business; it was not his house so he did not get involved.

[ 22 ] Van D. said he and C.D. have a pre-nuptial agreement which was in place before they moved in together approximately 16 months ago. He was asked if the pre-nuptial agreement stated what his current income was. He said it did and it was $16,000 something. He was then asked how he knew what his income was 16 months ago when he had only filed his 2010 income tax in 2011. He said the pre-nuptial agreement was updated when they got married. [ 23 ] In re-direct Van D. told the court he met Malcolm Parry at an event and Mr. Parry placed a comment in his column about the wedding.

However, he and his wife did not have to pay to have their wedding mentioned in the newspaper. With respect to the trips he has taken with his wife, Van D. said it has not cost him any money. His parent’s-in-law have a place in Cabo San Lucas, so it does not cost him anything to stay there. His wife books the tickets on her Air Miles. He has never once had to pay for an airline ticket. The trip to Toronto was paid for by his wife’s family who gave them tickets as a gift. They stayed at her sister’s house which cost them nothing.

As for visits to Salt Spring, he said they visit his wife’s parents and stay with them. C.D.’s parents gave them gift cards so it did not cost them a dime to go there. With respect to Whistler, he explained C.D. lived in Whistler for seven years when she was a professional snow boarder. One of her friends has an enormous house there so, when they go to Whistler, they stay at the friend’s house at no cost. With respect to the purchase of the house in West Vancouver, he said he has not purchased a house in the last 10 years. The house in West Vancouver belongs to his wife.

She had an even more expensive house before he knew her. [ 24 ] J.Q. also gave evidence in these proceedings. She acknowledged that she and Van D. separated in 2008. The separation agreement provided for the payment of $1,000 in spousal support which was to end if J.Q. married or lived with someone for more than 90 days. Spousal support came to an end on October 1, 2010, which was 90 days after J.Q. started living with someone, although she is not living with anyone now.

She acknowledged that, pursuant to the separation agreement, spousal support should have ended at that time. [ 25 ] J.Q. said she and Van D. have joint custody and guardianship of their two sons. The boys live with her but Van D. has regular access. At the moment he sees them every other Friday for the weekend. Access has changed as the boys grew up and as Van D. expressed an interest in having more access. [ 26 ] The separation agreement provided that, as of November 1, 2008, Van D. would pay $1, 700 in basic child support for both of the children.

It also provided he would pay a further $700 for child care expenses, except for July and August when she is not working as a teacher. The separation agreement provided they would share other special expenses on a 50/ 50 basis. The separation agreement provided for the exchange of financial information. Van D. has not complied with that part of the agreement, even once.

J.Q. asked him about financial information but she never received a straight answer from him and she never received any T4 slips, tax returns or the like. [ 27 ] At the time she and Van D. were married, he had a construction company and worked on renovating homes. He worked long hours and always had two or three projects on the go. Usually he had one carpenter as an employee. He used sub-trades and others as needed. He did this over and over again. Van D. had a work area at home in the garage where he stored his tools and truck and so on.

Van D.’s business was generated mostly by word of mouth but he also had a website. [ 28 ] J.Q. said Van D. initially started his working career as a carpenter and eventually had his own framing company. When she first met him he worked as a project manager for Kenorah (phonetic) Construction, a very reputable construction firm. She said Van D. could do all kinds of work including tiling, drywall, painting and landscaping. Van D. was well known for his finishing carpentry.

The quality of his work was very good and he was hired on referrals on the basis of his finishing carpentry work. [ 29 ] J.Q. said two of their homes were renovated by Van D. while they lived in them. They lived in the houses for one year, sold them and made money on them. They were living in their third house when they separated but that renovation had not been completed. The intention had been that, once the renovation was completed, they would sell that third house. J.Q. said they made approximately $100,000 on the first and second house. She acknowledged the third house was in her name.

Van D. was not on title because he had a poor credit rating. She said the house was clearly a family asset and when they separated he was entitled to half the proceeds. [ 30 ] J.Q. said before their second son was born she was earning $35,000 a year. However, in 2005 she and Van D. made the decision together that she should stay at home given the cost of child care. Van D. took care of the business and she took care of the children. While she and Van D. were together they went away on holidays to different places including Whistler and Las Vegas.

On one occasion he sent her and one of the boys on a shopping trip to Dallas. Van D. had two leased vehicles, one was a truck and the other was a BMW SUV which was used as the family car. Van D. purchased things for the home and for her, such as jewelry . Not long before the separation Van D. gave her a new diamond for her engagement ring. [ 31 ] J.Q. testified that when they separated Van D. was project manager on a project at the Sun Tower, a heritage building which was undergoing a large renovation. He worked on that project for over a year.

She said that in the summer of 2009 he lost that job and has since begun working as a contractor again. She has heard through different contacts that Van D. is again doing many residential renovations. Often times, when she asked Van D. to do things (or change things) with the children, Van D. told he was busy working. She said, while talking to him on the telephone, she could hear hammering. It is her understanding he is renovating the West Vancouver house he lives in with his new wife. [ 32 ] Recently, J.Q. found a blueprint in one of the boys’ bags after they had returned from being with Van D.

On that blueprint there was a sketch for changes and other writing that J.Q. recognized as that of Van D. As well there was also a hand written budget with the blueprint which showed that $200,000 had been budgeted for renovations. That item was not in his hand writing.

There was also a notation for $10,000 for a honeymoon in New York, $5,000 shopping allowance, $7,000 for surgery, $20,000 towards a new Range Rover, $40,000 for shares and $25,000 for furniture. (It should be noted that when some of this was put to Van D. in cross-examination he denied it was his budget.) J.Q. said, on the occasions she has seen Van D., he is always clean shaven and well dressed not like what he was in court during these proceedings. He drives a Range Rover and wears an expensive watch.

On one occasion, at Christmas, he was wearing a Burberry shirt. [ 33 ] J.Q. said Van D. initially made the payments required under the separation agreement. Once the separation agreement was finalized she began the process of enrolling in the Family Maintenance Enforcement Program (FMEP). That was in early 2009. When

Van D. found out about this he was very angry. He told her she was going to be sorry, she had ruined a good thing and it was game on now. Shortly after she enrolled in FMEP, in May 2009, he stopped paying child support for the boys. [ 34 ] J.Q. agreed that in July 2010 she had a discussion with Van D. Prior to July 2010 he had not paid any support for over one year. In July 2010 Van D. told her he would pay her $1,000 for child support, nothing else, provided she asked the FMEP to only enforce the $1,000.

J.Q. said at the time she was only working sporadically and she was having trouble supporting the boys without the child support, so she agreed. J.Q. wrote a letter to the FMEP saying she was not claiming any spousal support and the extra ordinary expenses. As of July 1, 2010, she only claimed regular child maintenance of $1,000. [ 35 ] In September 2010, Van D. wanted to travel to Cabo San Lucas to look at wedding venues.

J.Q. said Van D. told her he would pay her an extra $300 per month, which was to go toward paying the support arrears, if she contacted the FMEP and had the passport restriction on his passport removed. J.Q. said she did not want to do this but Van D. telephoned her repeatedly. He said he was going to go down to the boys’ school and cause a scene. J.Q. said Van D. basically harassed her until she agreed to do so. She wrote to the FMEP in September 2010 and asked that his passport restriction be removed. That was done so he was free to travel.

In January 2011, Van D. stopped paying the $1300 payments he had agreed to pay. J.Q. contacted the FMEP but by that time Van D. had made an application to the court so the FMEP said it could take no action. [ 36 ] In cross-examination Van D. established that J.Q. and her former fiancé bought a house together. That house sold for $1.4 million and upon completion of the sale the proceeds will be divided between J.Q. and her former fiancé. However, J.Q. said there was a mortgage on that house of about $800,000.

She has now bought a very modest house with the financial help of her parents, close to the boys’ school and in a neighbourhood where they have some friends. [ 37 ] Van D. asked J.Q. a number of questions about the division of assets from their matrimonial home. The point he made through those questions was that he only received about $200,000 from the division of assets. From that he had to pay a number of business debts including a line of credit. Van D. also raised the issue that J.Q. had made a substantial profit on that house when she finally sold it.

J.Q. said after they separated the parties eventually agreed on an appraised value for the matrimonial home and the parties were paid equally based on that value. J.Q. remained in the home for several years after the divorce. When she sold the home it had appreciated and she made money on it. [ 38 ] In cross-examination Van D. also suggested to J.Q. that the date of the first posting in the online Rip-Off Report (July 27, 2009) and his last full support payment on June 15, 2009, were suspiciously co-incidental.

J.Q. said she did not post the comments in that online report. [ 39 ] Van D. confirmed with J.Q. that she had signed a typed document dated June 28, 2010, which appears to have been prepared for the FMEP.

That document states: - Van D. told J.Q. his income had dropped significantly and he could not make the payments under the separation agreement. - Van D. proposed to pay $1,000 per month in child support plus 50% of extra expenses beginning July 1, 2010. - J.Q. would not ask for additional money for spousal support or child care “during this period”. - This was to be reviewed March 31, 2011, upon Van D. producing a T-4 slip as proof of income. - The $1,000 was not to be decreased but may be restored to previous amount if warranted. - The arrears were to be frozen unless the new amount of $1,000 per month was not paid. [ 40 ] In cross-examination of J.Q.

Van D. also established that: (

a) In 2009 he was driving a leased truck. (

b) For a short time he did not have a vehicle. (

c) There was a period of time when he was not working. (

d) Most things were not in his name because he had a bad credit rating and usually were placed in his wife’s name or girlfriend’s name. (

e) It would be difficult for him to earn money as he had before if he did not have a truck. (

f) He did not have his own place for a while and lived with friends. (

g) At one point the power to his apartment was shut off. (

h) He asked her to lend him $500. (

i) In December 2009 she provided him with a gift card for food and had to provide transportation so he could see the boys. (

j) For a period of 8 months in 2009 he was in bad shape financially. ANALYSIS Reduction of arrears

[41] I will first review the legal principles that govern an application to vary or cancel arrears of maintenance. Section 96(2) and96(3) of the Family Relations Act sets out the test a court must apply where an application to cancel or reduce arrears of maintenance ismade. Section 96(2) provides that if an application is made to reduce or cancel arrears under a maintenance order, the court may reduceor cancel the arrears but only if it is satisfied that it would be grossly unfair not to do so. [42] In deciding whether it is appropriate to cancel or reduce arrears a court may take into consideration: (

a) the efforts an applicant has made to comply with the maintenance order, (

b) an applicant’s explanation for any delay in applying for variation of the maintenance order, and (

c) any special circumstances that the court considers relevant. [43] Reduction of arrears is a form of variation. In Earle v. Earle, (BC SC), [1999] B.C.J. No. 383 (B.C.S.C.),(recently followed in D.S. v. E.P.S., [2011] B.C.J. No. 155) Martinson J. undertook a thorough review of the principles that apply to thereduction and cancellation of arrears: Maintenance Generally a. Parents have a joint and ongoing legal obligation to support their children. b. It is the child, not the other parent, who has the right to maintenance. c.

The payment of maintenance is based on not just what a parent does earn but what a parent can earn. Variation a. There has to be a material change of circumstances, a change that is significant and long lasting. b. A change to the Guideline amount is not automatic. Arrears Basic Principles a. There is a heavy duty on the person asking for a reduction or a cancellation of arrears to show that there has been a significant andlong lasting change in circumstances. Arrears will not be reduced or cancelled unless it is grossly unfair not to do so. b.

If arrears are not reduced or cancelled, the court can order a payment plan over time if convinced the arrears cannot be paid rightaway. Examples a. Arrears will only be cancelled if the person is unable to pay now and will be unable to pay in the future. b.

A reduction or a cancellation requires detailed and full financial disclosure, under oath (usually in the form of an affidavit) that atthe time the payments were to be made: 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. [44] There is a heavy onus on an applicant to establish a material change of circumstances that is significant and long lasting to reducearrears. Arrears will not be reduced unless it is grossly unfair not to do so.

Longstaff v. Longstaff (1993), (BC CA), 49R.F.L. (3d) 1 (B.C.C.A.); Earle v. Earle. [45] An agreement that maintenance need not be paid or that it be paid in a lower amount is not a reason to reduce or to cancel arrears. Child support is the right of the child and cannot be bargained away or waived by the recipient parent: Earle v. Earle. [46] Van D. in this case maintains his financial circumstances changed after he entered into the separation agreement. He furthermaintains he has not been able to find work and his earning capacity is nowhere near what it was when he and J.Q. separated.

Accordingly, he asks this court to relieve him of the obligation to pay the full outstanding arrears and to calculate the amount of hischildren’s future support payments based on his current income for 2010. [47] Van D.’s application to reduce the arrears for child and spousal support is denied for the following reasons:

a) I do not accept Van D.’s testimony that he has been unable to find work and that his earning capacity has changed to the extent heclaims. I did not find his evidence credible or reliable. It is simply not believable given his age, his considerable experience, his skilllevel, and his extensive prior work history that he was not able to find work in construction that would pay more than he claims to haveearned in 2009 and 2010.

b) The evidence Van D. gave about his efforts to find work is totally unsatisfactory. He simply asked the court to accept hisunsupported assertions. He provided no documentary or other evidence to support the efforts he claims to have made to look for work in

2009 and 2010. His evidence about his current efforts to find work is telling. He said he had only one project on the go. When he wasasked what he did with his time Van D. said: he had lunch, did the laundry, went for a walk, went for a run, advertised, and tried to findwork. My conclusion, on the evidence, is that Van D. either is not trying very hard to find work or he is not being truthful about what hedoes with his time. The evidence adduced in the hearing clearly illustrates that Van D. is not averse to stretching the truth when it suitshis purpose.

c) The evidence that was elicited about Van D.’s post-divorce lifestyle in 2009 and 2010, e.g. his activities, where he lived, the amountof rent he paid and so on, belies his claim that he was barely getting by. If he truly was in straightened circumstances that entire time, ashe claimed, how was he able to afford to pay for a $6,000 diamond ring for his first fiancé or to pay $1,500 initially and later $2,200 torent a condo in Yaletown?

d) I am not satisfied that Van D. has provided full financial disclosure. The information he provided in that regard left me in someuncertainty about his current and past (2009 and 2010) income. Van D. did not provide any financial information at all for the 2008 taxyear. Furthermore, the information he provided for 2009 and 2010 can be given very little weight as it was not supported bydocumentation of any kind. In this regard he testified that he simply went to H & R Block and gave them the income numbers withoutsupplying any supporting documents.

One of the most common arguments made in favour of reducing arrears is that an applicant’sfinancial circumstances deteriorated. In those circumstances, as was noted in Earle v. Earle: [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. [48] On the evidence before the court, I conclude that Van D. has good long-term prospects for remunerative employment if hechooses to apply himself.

To the extent that there were changes in his work situation following the divorce from J.Q., I find thosechanges occurred in the large measure because of the deliberate and conscious choices Van D. made. [49] I do not accept that Van D. will not have the means to pay the arrears in the future. In fact, he himself indicated that hisprospects have much improved in the recent past. As he noted, Van D. is now is the beneficiary of the kindness and generous support ofhis new wife and her family.

That should allow him to focus all his efforts, skills and energy toward finding employment commensuratewith his training and work experience. Further, I do not accept that the statements he made to the private investigator about hiswork/business were all bluster designed to attract a new customer. [50] Van D. has not met the applicable test to have the maintenance arrears reduced. Accordingly his application to reduce the arrearsfor spousal support and child support is dismissed. In particular, any agreement J.Q. made relating to child support is void.

As notedchild support is the right of the child and cannot be bargained away or waived by the recipient parent. With respect to arrears of spousalsupport, I appreciate that J.Q. signed a typed document dated June 28, 2010, which, among other things, stated that in exchange for thepayment of $1,000 per month child support she would not ask for additional spousal support beyond July 1, 2010. She later madeanother agreement to accept $1300 per month, with $300 going toward payment of the arrears.

However, Van D. himself breached theterms set out in the June 28, 2010, document, when he unilaterally changed the chiId support amount payable and reduced it to $253 forboth children. I conclude it would be unfair to enforce the terms of that “agreement” only on J.Q. That agreement clearly provided thatthe $1000 for child support would not be decreased. Van D. resiled from that agreement. Accordingly, the arrears of spousal supportshall be paid up to October 1, 2010. Imputing Income -

Section 19 Guidelines [51] The Guidelines provide that the court may impute income. Section 19(1) outlines some of the circumstances in which the courtmay do so. The list is not exhaustive. In Murphy v. Murphy 2000 BCSC 974 , [2000] B.C.J. No. 1253, Martinson J. outlinedfour steps to consider when deciding whether income should be imputed: 1. Assess the parent's earning capacity; (e.g. is the parent unemployed or underemployed or not using property to generate income?)Does income received fairly reflect all money available for payment of child support? 2.

Does the parent have tax or trust benefits? (e.g. income from capital gains or other sources which are taxed at a lower rate thanemployment or business income.) 3. Is a parent trying to avoid paying support? (e.g. has income been diverted or financial information not disclosed?) 4. Should income be added for other reasons? [52] In Nahu v. Chertkow 2003 BCSC 1285 , [2003] B.C.J. No. 1940, Preston J. noted that the burden of proof is on theparty seeking to impute income to the other spouse. A court must be satisfied on a balance of probabilities that the income reduction wasbrought on intentionally.

An imputation of income must be grounded in evidence. However, the burden of adducing evidence about thereasonableness of the actions of a self-employed person must fall, at least in part, on that person who has unique knowledge of therelevant facts. An adverse inference may be drawn from the failure to produce documentation or answer relevant questions on discoveryand income may be imputed accordingly: see s. 19(1)(

f) and s. 23 of the Guidelines and Nahu v. Chertkow.

[ 53 ] Preston J. also noted that the Courts have considered the following factors when determining the issue of whether a person is intentionally unemployed or under-employed: (

a) educational or vocational training and work experience; (

b) previous earnings and borrowings to fund periods of unemployment; (

c) history of employment; (

d) patterns of expenditure and the lifestyle of the payor parent; however, the court should decline to attribute income to a payor on the basis of his or her lifestyle to the extent that lifestyle is enhanced by the independent income of his or her spouse: (

e) attempts to upgrade educational or vocational qualifications; (

f) the nature and quality of attempts to obtain employment: applications, interviews; and (

g) the history of the relationship between the spouses, which may indicate that the payor spouse is motivated to remain unemployed or underemployed by animosity towards the payee spouse. I have considered these factors in reaching my decision on whether to impute income. [ 54 ] It is trite law that parents have a joint and ongoing obligation to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning. A healthy and able bodied parent has a duty to seek employment commensurate with his training and work experience.

As noted above in my analysis regarding the reduction of arrears, I do not accept Van D.’s evidence that he has not been able to find work and that his earning capacity has changed to the extent he claims, given his experience and prior work history. I find that Van D. has either not made the necessary effort to find employment commensurate with his training and experience or he has not been truthful about the nature of the work he has done/ is doing and his income.

His failure to seek employment commensurate with his training and experience is depriving his sons of the financial support to which they are entitled. [ 55 ] Van D. has not provided detailed financial information, therefore, I must do the best I can on the evidence available. First, I draw an adverse inference from his failure to produce adequate financial documentation to J.Q. and in these court proceedings. Second, considering all of the circumstances, I am satisfied that Van D. is able to work in various capacities in the construction industry.

He is a skilled, experienced tradesperson who has demonstrated in the past that he can operate a successful business and earn a very good income. I am satisfied that with willingness, diligence and effort on his part he is capable of earning the salary he paid himself in 2007; namely, $122, 202. Accordingly, that is the amount of income I impute to Van D. for the purpose of calculating the arrears of child support for his children and the spousal support for J.Q., as well as the child support payable to his children for 2011. CONCLUSION 1.

Van D.’s application to reduce arrears of spousal and child support is denied. 2. Van D. could have earned more than he claims he earned in 2009 and 2010. 3. Income of $122, 202 (his income in 2007) is imputed to him for the purpose of calculating child support and spousal support. 4. Child support arrears in 2009 and 2010 are outstanding and shall be calculated on the basis of the imputed income minus any payments he has made for those arrears. The child support payable for 2009 and 2010 is $1720 per month to cover both children.

As well, $700 per month for daycare must be paid except for the months of July and August. Interest based on FMEP calculations must also be paid on any child support arrears for this period. 5. Child support arrears in 2011 are outstanding and shall be calculated based on the imputed income minus any payments he has made for those arrears. The child support payable for 2011 is $1720 per month to cover both children. As well, $700 per month for daycare must be paid except for the months of July and August 2011. As of September 1, 2011, child care is $660 per month.

Interest based on FMEP calculations must also be paid on any child support arrears for this period. 6. Van D. must pay the children’s special and extraordinary expenses on a 50/50 basis for 2009, 2010 and 2011 minus any payments he has made for arrears for any of those three years. Interest based on FMEP calculations must also be paid on any special and extraordinary child expense arrears for this period. 7. Spousal support arrears for 2009 and 2010 (up to October 1, 2010) are outstanding and must be paid in the amount of $1000 per month minus any payments he has made for those arrears.

Interest based on FMEP calculations must also be paid on any spousal support arrears for this period of time. The Honourable Judge M. F. Giardini Provincial Court of British Columbia

CORRIGENDUM – Released January 20, 2012 [1] In my Reasons for Judgment dated December 14, 2012, the follow changes have been made: In the 1 st sentence of paragraph [1], a comma is inserted after Van D. The sentence should now read: Van D., who originally was the respondent on this file, now applies to reduce the amount of arrears for child support payments and special expenses, arrears for spousal support payments, and to reduce the amount of future child support payments. [2] In the 2 nd sentence of paragraph 10 the date of the month should be spelled out.

The sentence should now read: - He rented an apartment in Yaletown for $1,500 per month in February 2008 . [3] In the last sentence of paragraph 24 a comma is inserted after the word “ someone”. The sentence should now read: Spousal support came to an end on October 1, 2010, which was 90 days after J.Q. started living with someone, although she is not living with anyone now. [4] In the 2 nd sentence of paragraph 32 the letter “V” was omitted from the name Van D.

The sentence should now read: On that blueprint there was a sketch for changes and other writing that J.Q. recognized as that of Van D. [5] In paragraph 40 (d), the comma is deleted after the word “bad”. The sentence should now read: Most things were not in his name because he had a bad credit rating and usually were placed in his wife’s name or girlfriend’s name. [6] In paragraph 47 (

c) the word “that” had been added. The sentence should now read: The evidence that was elicited about Van D.’s post-divorce lifestyle in 2009 and 2010, e.g. his activities, where he lived, the amount of rent he paid and so on, belies his claim that he was barely getting by. [7] In the 5 th sentence of paragraph 47 (

d) the first letter of the name “block” is now capitalized. The sentence should now read: In this regard he testified that he simply went to H & R Block and gave them the income numbers without supplying any supporting documents. [8] In the 4 th sentence of paragraph 55, a comma is inserted after the word “skilled”. The sentence should now read: He is a skilled, experienced tradesperson who has demonstrated in the past that he can operate a successful business and earn a very good income. [9] In the 5 th sentence of paragraph 55, the date has been changed to 2007.

The sentence should now read: I am satisfied that with willingness, diligence and effort on his part he is capable of earning the salary he paid himself in 2007; namely, $122, 202. [10] In number 3 of the Conclusion, the date has been changed to 2007. The sentence should now read: Income of $122, 202 (his income in 2007) is imputed to him for the purpose of calculating child support and spousal support.