J.M. v. J.K., 2023 BCPC 270

Citation: J.M. v. J.K. 2023 BCPC 270 Date: 20230630 File No: 130846 Registry: Kelowna IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: J.M. APPLICANT AND: J.K. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE M. MCPARLAND Counsel for the Applicant: A. Boland Appearing on their own behalf: J. K. Place of Hearing: Kelowna , B.C.

Dates of Hearing: March 13, 14, May 23, 24 & June 13, 2023 Date of Judgment: June 30, 2023 Introduction [ 1 ] J.M. (Ms. M.) and J.K. (Mr. K.) are the biological parents to 11 year old twin girls, T.B. and K.B. born [omitted for publication]. This case is about retroactive and prospective child support and whether there should be any ancillary orders related to non-disclosure and security. The central issue is this case is the determination of Mr. K.’s income for child support purposes. Facts and Procedural History [ 2 ] Ms. M. and Mr. K. were in a very short-term dating relationship.

They never lived together and he has never met the children. When she became pregnant unexpectedly Ms. M. was only 23 years old. Mr. K. initially did not believe she was pregnant and when the pregnancy was confirmed he denied was the father. Ms. M. had a very difficult pregnancy suffering significant morning sickness and unable to afford anti-nausea medication she lost her job as a waitress. As a result she moved back in with her former social worker and then with her mother.

The twins were delivered at 8 months and both required post-partum hospitalization due to health complications. [ 3 ] After the twins were born Ms. M. continued to struggle financially. She was unable to work as she was the sole caregiver to twins and could not afford child care. She lived in her mother’s basement for a year but it was a poor environment since her mother and her boyfriend were both alcoholics. In 2012 she got some respite care and economic assistance from the Ministry of Children and Family Development and eventually began receiving social assistance. Mr.

K. did not provide any financial support or parenting support during this time. [ 4 ] In order to receive social assistance benefits the Ministry of Social Development and Poverty Reduction required Ms. M. to pursue child support from Mr. K. The original child support application was filed in June 2012. In his Reply Mr. K. denied paternity but DNA testing later confirmed he was indeed the twins’ father. On December 3, 2013 Mr. K. filed his first financial statement swearing that his income was $30,000.

On December 4, 2013, Judge De Walle issued a consent order requiring him to pay monthly child support of $473 and to annually disclose his income. Despite this order Mr. K. did not disclose his income annually and did not disclose his income information until late 2019 or early 2020 when Ms. M. retained counsel. [ 5 ] Between 2014 and 2020 Mr. K. paid Ms. M. monthly child support of $473 based on the $30,000 annual income but admits that his income was significantly higher. Between 2014 and 2017 Ms. M. had only limited contact with Mr. K.

She testified she recalled asking him for his income information but her evidence was not particularly specific or compelling regarding this time frame. By 2017 Ms. M., and her new husband B.M. (Mr. M.) were again in touch with Mr. K. and eventually his lawyer, Mr. Clarke to ask him to sign a tax paper needed to confirm the twins were in Ms. M.’s exclusive care. This contact led to a discussion about changing the twin’s last name and Mr. K. suggested that Mr. M. could adopt the twins. Mr.

K. acknowledged in cross-examination the idea of adoption was attractive to him in part because he understood it would bring an end to his child support obligation. Mr. K. knew that his income was significantly higher than disclosed in December 2013 and that he was significantly underpaying child support. Mr. K. knew he had the obligation to disclose his income and pay child support in accordance with his updated income. [ 6 ] By 2019 Mr. M. discovered, based on a google search that Mr. K. was very successful in his corporate endeavours and likely earned a very sizeable income far exceeding what he had disclosed.

Ms. M. retained counsel (as she then was) Brianna Hardwick to pursue Mr. K. for an adjustment of prospective and retroactive child support. On December 4, 2019 and March 26, 2020 Ms. Hardwick wrote to Mr. Clarke formally requesting financial disclosure in compliance with the 2013 order. The evidence was not clear as to precisely when he made disclosure. But it was not until November 26, 2020 that a new consent order was entered into based on an attributed income of $180,000 and requiring Mr.

K. to pay $2,513 per month in child support. [ 7 ] On October 4, 2021, an order was made for the parties to jointly select and retain an expert to prepare a valuation report to determine Mr. K.’s guideline income for child support purposes. This report was necessary because Mr. K. is a shareholder, director and officer of several interrelated companies. Mr. K. assembled a large volume of documents and provided them to Ms. Jiang as set out in the “scope”

section of her report. Mr. K. acknowledged that those documents were true and accurate. The report was filed in the court file and formed part of the evidence before me. Positions of the Parties [ 8 ] Ms. M. seeks retroactive adjustment of child support to 2014 relying on the available income report for quantum, an order fixing prospective support, a fine for non-disclosure and various forms of security for child support payments. Mr. K. concedes he owes Ms. M. a significant amount of retroactive support dating back to 2014.

He admits he did not disclose his income and that the income he earned far exceeded the 2013 order. However, Mr. K. says I should base the retroactive award exclusively on his line 150 income. Mr. K. says his income has now decreased significantly. Mr. K. agrees there should be a fine and some form of security. Issues 1) What is the appropriate quantum of retroactive child support? 2) On what income should I base prospective child support? 3) What quantum of fine should be imposed for financial non-disclosure? 4) How should the child support obligation be secured?

1. What is the appropriate quantum of retroactive support? [9] Section 147(1) of the Family Law Act (FLA) states that “each parent of a child has a duty to provide support for the child”. In thecase of Earle v. Earle, (BCSC) the Honourable Madam Justice Martinson of the Supreme Court of British Columbiawrote the following: [16] Parents have a joint and ongoing legal obligation to support their children.

It is considered such an important obligation that adivorce cannot be granted until parents make satisfactory arrangements for the care of their children. [17] It is the right of the child, not the parent with custody, who has the right to maintenance. This has long been the case and hasbeen confirmed in the Federal Child Support Guidelines. The first objective of the Guidelines is to establish a fair standard of supportfor children that ensures that they continue to benefit from the financial means of both spouses after separation. [18] The payment of maintenance is based on ability to pay.

That means that it is based not only on what the parent does earn but alsowhat the parent can earn. The result is that parents have a legal obligation to earn as much as they are capable of earning. [10]

Section 150 of the FLA states the following: 1) If a court makes an order respecting child support, the amount of child support must be determined in accordance with the childsupport guidelines. … Child Support Guidelines [11] The starting point of income determination is in s. 16 of the Federal Child Support Guidelines (Guidelines) which states that,subject to imputation of income under ss. 17 through 20, a spouse’s annual income is determined using the sources of income set outunder the heading “Total Income” in the T1 General Form (Lines 150/15000) and adjusted with

Schedule III. [12] However, s. 16 must be read together with s. 18 of the Guidelines which states that where a spouse is a shareholder, director orofficer of a corporation and the court is of the opinion that the spouse’s Line 150 income does not fairly reflect the money available topay support, the court may determine a spouse’s income to include all or part of the pre-tax income of the corporation, and of anycorporation that is related to that corporation. In Quinton v.

Kehler, 2020 BCCA 254, the court summarized the law regarding s. 18 of theGuidelines as follows: [85] […] I extract the following principles applicable to this case. First, the Guidelines should be interpreted in light of their statedobjectives, including the ability to calculate child support in an objective manner that ensures consistent treatment of spouses andchildren who are in similar circumstances. Second, under a s. 18 approach, the corporate income method is likely to be the fairer methodof determining income of an individual who wholly controls a corporation.

This method allows a court to include all income available forchild support an intact family would utilize. Third, where that approach is appropriate, pre-tax corporate earnings, not retained earningsor earnings after payment of taxes, are the starting point for an assessment of Guidelines income. Fourth, where a company is whollyowned by the payor, the onus is on the payor to provide evidence that his pre-tax corporate earnings are not available to him. Quinton v.Kehler, 2020 BCCA 254 at para. 85. [13] Mr. K. argues against the conclusions drawn by Ms. Jiang in her Guideline Income report.

He says I should find his income to besimply what he declared on his personal tax returns without any reference to any retained income, arguing that all the excess monies needto be retained for ongoing operations in the corporations rather than paid out to him as shareholder. Mr. K. as a director and payor ofchild support has the burden of proof. I agree with Mr. Boland’s submission that the court and the recipient should not have to ferret outthe necessary information from inadequate or incomplete financial disclosure by Mr. K. See Hausmann v. Klukas, 2009 BCCA 32 atparas. 51 and 52, leave to app’l ref’d, (SCC).

As will be discussed in further detail below Mr. K. has simply notdischarged his burden of proof. Jointly Retained Guideline Income Report [14] The parties jointly retained an expert Ms. Jiang to prepare a guideline income report covering the years 2014 to 2021. The reportrequired Ms. Jiang to review several hundreds of pages of corporate and financial documents that were supplied by Mr. K. This was avery detailed and complex project. The report took almost a year to complete and cost the parties over $60,000. There was significantback and forth between Ms. Jiang and Mr. K. wherein Ms.

Jiang made several additional document requests of Mr. K. There wereseveral orders directing Mr. K. to comply with the requests in a timely manner. [15] Ms. Jiang’s report was prepared in draft form by the end of 2022 and circulated by January 2023. Both sides had the opportunityto review and comment on it, identify any errors and submit any proposed corrections. Mr. K. did not raise any questions or concernswhatsoever despite having this opportunity. Ms. Jiang’s report was filed in the court file. Although he had the opportunity Mr. K. did notcall Ms. Jiang to testify or be cross examined. Mr.

K. did not call any other expert witness on this topic. At the start of the case theparties confirmed their agreement that the report would be filed as an expert report admissible for the truth of its contents. Mr. K. alsoreconfirmed to me that he was not planning to call Ms. Jiang or any other expert witness. [16] However during his viva voce evidence and in his written closing submissions Mr. K. attempted to undermine Ms. Jiang’s reportwithout actually challenging her evidence directly. Throughout his testimony Mr. K. made several generalized comments that he “wasnot sure” that some of the facts Ms.

Jiang relied on were accurate, but when cross-examined he did confirm the documents and businessrecords that he personally sent to Ms. Jiang were accurate. Except for a few discrete points discussed further below he did not point toany specific errors, he just made generalized assertions that not all of the income Ms. Jiang concluded was available to him was actuallyavailable. He made broad sweeping statements without any concrete facts to support those statements.

He generally disagreed with someof the income attributable to him because he said some of the transactions were necessary to buy his business partner out and to

reorganize his companies. However this was a conscious decision he and his business partner made after lengthy negotiations and discussions. Mr. K. agreed he was under no obligation to buy the partner out and he received consideration for the transaction by virtue of the fact that he acquired his business partner’s shares. He also stated generally that the companies were relatively new and risky due to customer concentration that this meant he “needed” to leave all the money in the company that he did but he provided no concrete or specific details to support his conclusion.

Further, he concluded that when he and his business partner chose to declare a certain amount of dividends and leave the remainder in the companies it was a prudent business decision but he did not provide evidence to support that conclusion. [ 17 ] Mr. K. pointed out one specific “error” in Ms. Jiang’s report was that he said his 2021 available income of $589,506 is wrong. He says this figure is wrong because although he acknowledges dividends were declared by his company [omitted for publication] he says he never actually received the funds. Mr. K. said the accountants must have made an error.

He agreed that he was the one who authorized the dividends and he was the one who sent the records to Ms. Jiang. He also admitted he previously endorsed the records as accurate. He said he noticed this error when he read the report but he took no action to correct it. He did not address it with his corporate accountant or raise it with Ms. Jiang. [ 18 ] Mr. K. had no corroboration to his various challenges to Ms. Jiang’s report and conclusions. He did not produce document to substantiate his position nor did he bring any other witnesses. I find Mr. K.’s evidence challenge to Ms.

Jiang’s reports unreliable and unpersuasive for several reasons: 1) Ms. Jiang was jointly selected and retained as an expert based on her unique skills and expertise. This was a large and very complex project requiring her to review and analyze literally hundreds of pages of corporate and financial records for several companies over 8 years. 2) Ms. Jiang relied exclusively on the documents provided to her by Mr. K. endorsed by him to be accurate. Many of the key documents relied on by Ms. Jiang in reaching her conclusions were also filed as exhibits on this trial and again Mr.

K. endorsed those documents as accurate. I must and do consider the report filed and all the exhibits filed by consent to be admissible for the truth of their contents. 3) Mr. K. had ample opportunity to address any factual errors, ask questions and make any corrections with her. Mr. K. chose not to do so. The report was filed as expert evidence in this proceeding without any objection by Mr. K. 4) If he thought any portion of her report or any of her conclusions were inaccurate he could also have had her attend trial for cross examination and clarification but he did not do so.

He did not do so at the start of the trial or during the trial continuation. His failure to raise any of these issues with Ms. Jiang is problematic. Mr. K. cannot on the one hand say the report goes in and then attempt to poke holes in it without challenging its author or giving Ms. Jiang the chance to respond. 5) Mr. K. acknowledges he himself does not hold any specialized legal, accounting or income tax training or skills.

At several points when he was pressed to further explain his concerns he distanced himself and said he was unsure how or why the bookkeeper accountants and lawyers structured the corporate efforts. [ 19 ] For all of these reasons I accept Ms. Jiang’s report in its entirety as accurate and reliable. I accept her findings regarding what income was available to Mr. K. in each of the years 2014 to 2022. Conclusion on Quantum of Retroactive Support [ 20 ] As articulated above Mr.

K. in his written closing submissions conceded that he failed to disclose his income annually between 2014 and 2019 and that during this time his income rose exponentially. Mr. K. has also conceded that he owes Ms. M. significant retroactive support which should go back to 2014. Because of these concessions, it is unnecessary for me to review the law and conduct the detailed analysis on these points. However, I conducted the analysis and I record my findings here because the issues are complex and Mr.

K. represented himself at trial. [ 21 ] The leading case for retroactive child support is the Supreme Court of Canada’s decision of D.B.S. v. S.R.G ., 2006 SCC 37 ( D.B.S.) .

In determining whether retroactive child support should be awarded, a court must consider the following test established in D.B.S. at paras. 94 - 116 : 1) Whether there is any reasonable explanation for delay in seeking retroactive support; 2) Whether the payor engaged in any blameworthy conduct; 3) The circumstances of the children including whether the children have suffered financially; 4) Whether a retroactive award will cause the payor hardship. [ 22 ] Beginning at para. 95 of D.B.S ., Bastarache J. comments as follows: [95] It will not always be appropriate for a retroactive award to be ordered.

Retroactive awards will not always resonate with the purposes behind the child support regime; this will be so where the child would get no discernible benefit from the award. Retroactive awards may also cause hardship to a payor parent in ways that a prospective award would not.

In short, while a free-standing obligation to support one’s children must be recognized, it will not always be appropriate for a court to enforce this obligation once the relevant time period has passed. [96] Unlike prospective awards, retroactive awards can impair the delicate balance between certainty and flexibility in this area of the law. As situations evolve, fairness demands that obligations change to meet them. Yet, when obligations appear to be settled, fairness also demands that they not be gratuitously disrupted. Prospective and retroactive awards are thus very different in this regard.

Prospective awards serve to define a new and predictable status quo; retroactive awards serve to supplant it.

[97] Lest I be interpreted as discouraging retroactive awards, I also want to emphasize that they need not be seen as exceptional. It cannot only be exceptional that children are returned the support they were rightly due. Retroactive awards may result in unpredictability, but this unpredictability is often justified by the fact that the payor parent chose to bring that unpredictability upon him/herself.

A retroactive award can always be avoided by appropriate action at the time the obligation to pay the increased amounts of support first arose. . . . [99] I will now proceed to discuss the factors that a court should consider before awarding retroactive child support. None of these factors is decisive. For instance, it is entirely conceivable that retroactive support could be ordered where a payor parent engages in no blameworthy conduct.

Thus, the British Columbia Court of Appeal has ordered retroactive support where an interim support award was based on incorrect financial information, even though the initial underestimate was honestly made: see Tedham v. Tedham (2003), 20 B.C.L.R. (4th) 56, 2003 BCCA 600 . At all times, a court should strive for a holistic view of the matter and decide each case on the basis of its particular factual matrix. . . . [117] Once a court determines that a retroactive child support award should be ordered, it must decide the amount of that award.

There are two elements to this decision: first, the court must decide the date to which the award should be retroactive, and second, the court must decide the amount of support that would adequately quantify the payor parent’s deficient obligations during that time. Reason for Delay [ 23 ] Ms. M. had a difficulty pregnancy and the first few years of the twin’s life were difficult on her. She was young, the sole caregiver and struggled financially. Mr. K. denied paternity and was not involved in the children’s life. Ms.

M. testified that she has anxiety and depression and has a lot of historical trauma so she sometimes avoids addressing problems head on. The December 2013 Order required Mr. K. to give her his annual financial disclosure. Ms. M. knew he was not in compliance of his disclosure obligation but was uncertain whether it was her responsibility to chase him since Income Assistance took the lead initially. [ 24 ] Between 2014 and 2017, Ms. M. had only limited contact with Mr. K.

She testified she recalled asking him for his income information on two or three occasions but her evidence was fairly tentative and she conceded she was unsure of the dates. Ms. M. said that Mr. K. told her he would make things difficult for her if she pursued him for higher support. Ms. M. had no funds to be able to pay a lawyer. Ms. M. was occupied getting back on her feet and she had started a relationship with B.M. (Mr. M.). By 2017, Ms. M. and Mr. M. were in touch with Mr. K. and eventually his lawyer, Mr. Clarke to get him for his “tax information” and to ask him to sign a document Mr.

M. needed for his accountant confirming the twins were in Ms. M.’s exclusive care. However, by 2019 the M.s suspected Mr. K. was hiding his true income and retained counsel to pursue Mr. K. for a prospective and retroactive child support. On December 4, 2019, Ms. Hardwick wrote to Mr. Clarke putting Mr. K. on formal notice of claim for retroactive child support and requesting financial disclosure. I find that once she was aware Mr. K.’s income significantly increased Ms. M. acted relatively promptly to pursue Mr. K. Blameworthy conduct by payor [ 25 ] I find that Mr. K.’s conduct was blameworthy in several ways:

a) I find he misled Ms. M. and the court by significantly underreporting his income on his December 2013 financial statement.

b) I find he actively disobeyed the De Walle Order by failing to annually disclose his income. I conclude this was a conscious decision not an inadvertent one. Mr. K. claimed he was unaware of the term requiring annual disclosure however, in cross he conceded that he “always knew” child support adjusted over time and with income, but did not address this issue until Ms. M. retained counsel. Back on May 25, 2017 when texting with Ms. M. he said he had “looked through the Order dated December 4, 2013 and you’re totally right it doesn’t say anything about custody”.

The De Walle Order is only two paragraphs long so it is impossible to believe he missed the disclosure term. Despite knowing this, he failed to provide disclosure in 2015, 2016, 2017, 2018, 2019 and 2020. I was not provided evidence regarding when Ms. M. received all of the required and missing disclosure but it was at some point after February 2020.

c) Mr. K. admitted that one of the reasons adoption was attractive to him was he knew it would relieve him of his child support obligation.

d) Mr. K. had family law counsel throughout, from the initial consent order up until the eve of this trial. The court presumes counsel exercised their professional duties to advise their clients of their legal obligations.

e) Mr. K. knew full well that his income was significantly higher than the $30,000 income on which the December 2013 order was based. His income grew exponentially and he must have known his child support arrears would be significant. Circumstances of the Children [ 26 ] Ms. M. and the children were in significant financial difficulty especially in the early years. She was on income assistance and had to resort to the foodbank and purchasing toys and children’s effects from Value Village. She could not really work because she had no childcare. Ms.

M.’s financial circumstances only improved when she re-partnered with B.M. This new relationship is the only thing that has kept Ms. M. out of poverty. Ms. M. and Mr. M. spent in excess of $75,000 in legal and professional fees attempting to get child support for the twins. Hardship to Payor [ 27 ] Hardship to the payor has a reduced role when the retroactive award is a product of blameworthy conduct. As set out above, I find Mr. K.’s conduct is highly blameworthy. Mr. K. provided scant evidence that a retroactive award would cause him hardship. He

made generalized statements that his companies are not doing well and he is living off his line of credit. Of course I am cognizant that the sheer quantum of a very large retroactive award would likely make it difficult for him to pay a large award immediately. However Mr. K. has made several decisions recently which taken have contributed to his financial difficulty. In 2021 Mr. K. chose to buy out his business partner which he agreed he was not required to do. In the summer of 2022 he chose to obtain a second mortgage thereby reducing the equity in his home.

He said he got a second private mortgage of $600,000 from “the Bs.”. He did not provide any bank records or corroboration to show this transaction. He did not set any of this money aside to repay any retroactive child support or his current child support obligations in 2023. Instead, he chose to reinvest that money in his companies. [ 28 ] The financial statements and Ms. Jiang’s reports show that Mr.

K.’s companies recently had cash and cash equivalents available for distribution: a) [omitted for publication] had cash of $129,050 as of July 2021; b) [omitted for publication] had cash and cash equivalents of $611,629 as of July 2021; c) [omitted for publication] had $390,476 in cash and cash equivalents as of July 2021. [ 29 ] These three sources amount to $1,131,155 available at least as of the summer of 2021. It is unclear whether those monies still exist now or have been spent because Mr. K. did not put that information before the court.

Summary of retroactive child support . [ 30 ] I find that Ms. M. was initially unaware that Mr. K. had misled her with respect to his income going into the first court order. I find that Ms. M. was also unaware of Mr. K.’s significant increase in income for several years. When she became aware she acted fairly quickly to pursue her application. I find Mr. K.’s conduct to be highly blameworthy and I find the lack of proper child support did have a negative impact on the children. Although a large retroactive award of this magnitude will undoubtedly have a negative impact on Mr. K. However because Mr.

K.’s conduct was so blameworthy the impact on him becomes less persuasive in my analysis. [ 31 ] Therefore I find that Mr. K. owes Ms. M. retroactive support from 2014 to December 31, 2022 of $919,422.00. I make this finding based on the income available to him from all his sources of income as set out in the detailed calculations prepared by Ms. Jiang and reproduced here: 2. On what income should I base prospective child support? [ 32 ] Mr. K. submits I should find his income to be $80,000 based on his own rough “guess” for what he is likely to earn in 2023. Mr. Boland, on behalf of Ms.

M. argues that on a prospective basis I should find his income to be $770,000 which is the eight year average of Mr. K.’s available income as it was calculated by Ms. Jiang in the guideline income report. In response to Mr. K.’s viva voce evidence that his income is significantly less now than it was in years past Mr. Boland argues that Mr. K.’s own actions have compromised the court’s ability to assess the accuracy of that statement. I agree with this submission. [ 33 ] Mr.

K. has not filed his personal or corporate taxes in 2021 or 2022 citing his inability to afford the professional or accounting fees yet his own evidence is that he had access to a line of credit that would have enabled him to do so. He has exercised his discretion on when and how much to draw out of his line of credit. He filed a Financial Statement including internally prepared balance sheets and income statements for his companies but when questioned about them he back tracked and said he was not sure about their accuracy.

He says his business has not been doing well and to date in 2023 he has not drawn any salary. He thinks things are turning around and asks the court to accept his “guess” that his income for 2023 will be $80,000 however he did not provide any explanation or documents to corroborate or explain this figure. [ 34 ] Mr. K. has a history of failing to provide Ms. M. and this court his accurate financial disclosure in a timely manner. He significantly under reported his income in his very first financial statement. Despite the December 4, 2019 Court Order Mr. K. did not disclose his annual income information to Ms.

M. in any of the years 2014, 2015, 2016, 2017, or 2018. It is not clear exactly at which point in 2019 or 2020 he provided the disclosure. He has not corroborated his “guess” of $80,000 annual income with any independent documents. Considering his past failure to disclose his income in a timely manner, his underreporting of his income on his first financial statement the court is simply unwilling to rely on his “guess”. Based on the foregoing I will not accept Mr. K. at his word.

Section 4 of the Guidelines

[35]

Section 4 of the Guidelines states that where a spouse’s income is over $150,000, the amount of child support may be thestandard table amount, or, in respect of the amount of the spouse’s income that is over $150,000, may be an amount that the courtconsiders appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to supportand the financial ability of each spouse to contribute to the support of the children.

The British Columbia Court of Appeal in Metzner v.Metzner 2000 BCCA 474 at para. 30 summarized the principles to be applied to an application under s. 4, which are as follows: 1) It was Parliament's intention that there be a presumption in favour of the Table amounts in all cases; 2) The Guidelines figures can only be increased or reduced under s. 4 if the party seeking such a deviation has rebutted the presumptionthat the applicable Table amount is appropriate; 3) There must be clear and compelling evidence for departing from the Guidelines figures; 4) Parliament expressly listed in s. 4(b)(ii) the factors relevant to determining both appropriateness and inappropriateness of the Tableamounts or any deviation therefrom; 5) Courts should determine Table amounts to be inappropriate and so create more suitable awards only after examining allcircumstances including the factors expressly set out in s.4(b)(ii); 6)

Section 4(b)(ii) emphasizes the "centrality" of the actual situation of the children. The actual circumstances of the children are atleast as important as any single element of the legislative purpose underlying the section.

A proper construction of s.4 requires that theobjectives of predictability, consistency and efficiency on the one hand, be balanced with those of fairness, flexibility and recognition ofthe actual "condition, means, needs and other circumstances of the children" on the other. 7) While child support payments unquestionably result in some kind of wealth transfer to the children which results in an indirectbenefit to the non-paying parent, the objectives of child support payments must be kept in mind.

The Guidelines have not displaced theDivorce Act which has as its objective the maintenance of children rather than household equalization or spousal support. 8) The court must have all necessary information before it in order to determine inappropriateness under s. 4.

If the evidence providedis a child expense budget, then "the unique economic situation of high income earners" must be considered. 9) The test for reasonableness of expenses will be a demonstration by the paying parent that the budgeted expense is so high “as toexceed the generous ambit within which reasonable disagreement is possible”:.. [36] I have considered s. 4 of the Guidelines and concluded that it is not realistically in play in the present case since I heard little ifany evidence on this point. The only evidence that I heard was that Ms.

M. and the girls had significant financial hardship while she waspregnant and for the first several years after the twins were born. Ms. M. did not receive any financial or parenting support initially andwhen she did receive support it was lower than it should have been based on Mr. K.’s income. Ms. M. testified that she relied on socialassistance, the food bank and Value Village. I also heard that their situation got better after Ms. M. married Mr. M. There was noevidence from Mr.

K. to rebut the presumption that the Guidelines amount is applicable, and certainly not “clear and compelling”evidence as required by Metzner. [37] I conclude that the most appropriate and sensible approach based on the facts before me is to use the 8 year average to set hisprospective child support obligation. Therefore I find that Mr. K.’s income for prospective child support purposes is $770,000 per yearand his support obligation is $9,475 per month. 3. What quantum of fine should be imposed for financial non-disclosure? [38] Ms. M. asks me to impose a $5000 fine pursuant to s. 213 of the FLA for Mr.

K.’s failure to disclose. Mr. K. concedes a fine isappropriate but submits the fine should be $2,500. Mr. K. has repeatedly breached his obligation to provide accurate financial disclosurein a timely manner. He underreported his income in the December 2013 financial statement which led to him underpaying child supportfor a significant period of time. He did not provide any disclosure between 2014 and 2019 despite the court order clearly requiring him todo so. Even after Ms. M. retained counsel who demanded disclosure there was a significant delay before he provided full some financialdisclosure.

During the present matter he did not provide his Financial Statement until the day before the trial. He did not provide his trialbook until the day before the continuation despite a court order. Mr. K.’s conduct in failing to fulfill his disclosure obligations isaggravating. For all of these reasons I impose a $5000 fine under s. 213 of the FLA. 4. How should the child support obligation be secured? [39] Ms. M. asks me to order that Mr. K.’s child support obligation be secured by registering a charge against his home and againstthe shares in his corporation, that Mr. K. make Ms.

M. the irrevocable beneficiary of his life insurance policy and that the child supportobligation should be made binding on his estate. [40] Ordering security is not a routine order, however the court has the power to do so where it is appropriate as set out in s. 170 ofthe FLA. Further s. 12 of the Guidelines sets out that where the court is satisfied that, based on the payor’s past performance and historyof arrears there is a real possibility that the recipient of the child support will not receive the amount in an order, security may beordered.

The test under s. 170 of the FLA and s. 12 of the Guidelines are similar to the test under s. 26 of the Family MaintenanceEnforcement Act (FMEA). I instruct myself that I must consider the following:

a) Likelihood of compliance: If the court has no ability to enforce its order, or if the enforcement proceedings are known to beexpensive, time consuming, complicated and uncertain, the temptation to disregard an order may increase.

b) Size and nature of the support obligation: where the obligation is substantial and will continue regardless of the payor’s fortunes, thisfactor militates in favour of an order for security;

c) Animosity: A case with high level of animosity favours an order for security.

d) Credibility of the payor: Where a payor has a history of non-disclosure or failure to pay, an order for security may be required. [ 41 ] Pursuant to s. 26.1 of the FMEA , a support obligation may be registered in the Personal Property Registry as a lien against the personal property of the debtor which would include a charge registered against the shares held by J.K. in [omitted for publication]. [ 42 ] I find that security is warranted and required in this case because Mr.

K. has a demonstrated pattern on noncompliance with court orders, the retroactive support obligation is very large and ongoing support will also be significant. Mr. K. is not currently voluntarily paying child support and has not done so in 2023 despite having access to a line of credit to enable him to pay. [ 43 ] Therefore, I order that a charge will be registered against title to Mr. K.’s home. Although title is in the name of [omitted for publication], Mr. K. acknowledged he is the beneficial owner of the home, pursuant to a bare trust agreement.

I also order a charge will be registered against [omitted for publication]. I also order Mr. K. to make Ms. M. the irrevocable beneficiary under his life insurance policy. Finally, Mr. K.’s obligation to pay child support, retroactively and prospectively, will be also binding on his estate. ____________________________ The Honourable M. McParland Provincial Court Judge Order AND UPON THE COURT BEING ADVISED that the names and birthdates of the parties’ children are as follows: T.M., born [omitted for publication]; and K.M., born [omitted for publication] Hereinafter, the “ Children ”; THIS COURT ORDERS that: 1.

The Respondent is found to be a resident of British Columbia and is found to have a gross annual income of $770,000. 2. The Respondent will pay to the Applicant the sum of $9,475 per month for the support of the Children, commencing on January 1, 2023, and continuing on the 1st day of each and every month thereafter, for as long as the Children are eligible for support under the Family Law Act or until further agreement or court Order (the “ Prospective Support ”). 3.

For as long as the Children are eligible to receive support, the Respondent will provide to the Applicant the following documents on or before June 1 of each year, commencing June 1, 2023: a. The Respondent’s most recent tax return and notice of assessment; b. For any corporations owned or controlled by the Respondent, the most recent tax return, financial statement, and notice of assessment; and c. The Respondent’s three most recent paystubs. 4. The parties will review child support annually, with payments to be adjusted as necessary by July 1 of each year. 5.

The additional arrears owing from the Respondent to the Applicant as of December 31, 2023, are $919,422 (the “ Retroactive Support ”). 6. Pursuant to

section 213 of the Family Law Act , the Respondent will pay to the Claimant the sum of $5000. 7. Pursuant to

section 170 of the Family Law Act and

section 12 of the Federal Child Support Guidelines , the Respondent’s obligation to pay the Prospective Support and the Retroactive Support will be secured as follows: a. The Respondent will forthwith designate the claimant as the irrevocable beneficiary of any life insurance contract held by him and forthwith will provide confirmation of same; b. The Respondent’s obligation to pay Prospective and Retroactive Support will continue after the death of the Respondent, and will be

a debt of his or her estate; c. A charge in favor of the applicant will be registered against the following specific property: i. The property located at [omitted for publication] ii. The Respondent’s shares in [omitted for publication] (the “ Security ”) 8. The Respondent may apply to vary or cancel the security if the Retroactive Support is paid in full and there are no outstanding arrears of Prospective Support (as reviewed and varied from time to time). 9. All prior orders in this family law case are of no further force or effect.