B.M.W. v. C.P.T., 2019 BCPC 387

Citation: B.M.W. v. C.P.T. 2019 BCPC 387 Date: 20190426 File No: 1444523 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: B.M.W. APPLICANT AND: C.P.T. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S.K. KEYES RE: CHILD SUPPORT

Counsel for the Applicant: C. Hutchinson Appearing on their own behalf: C.P.T. Place of Hearing: Prince George , B.C. Date of Hearing: July 19, 2018 Date of Judgment: April 26 2019 [ 1 ] Ms. W. and Mr. T. are the parents of D.G.T., born [omitted for publication]. The parties separated in April 2014. They drafted up a separation agreement between themselves without the benefit of legal advice, which provided that D.G.T. would reside with his mother and Mr. T. would have parenting time every other weekend and visits other evenings during the week. They agreed that Mr.

T. would pay child support in the amount of $550 per month inclusive of daycare costs. In July 2014, the parties revised the agreement to provide that D.G.T. would spend Thursday night to Wednesday morning every other week with his father and Mr. T. would pay $700 per month including childcare. Again, the parties did not have the benefit of legal advice, but after looking at the child support tables in the federal Child Support Guidelines , they thought the agreement was fair. [ 2 ] The parties had a brief reconciliation in June 2017. Then they had a fight and separated in July 2017. There were bad feelings.

In July 2017, Ms. W. applied to court for a variety of relief, and Mr. T. replied seeking a variety of relief. Mr. T. also stopped paying child support altogether, causing Ms. W. considerable hardship. She has gone into debt to support D.G.T. as a result of Mr. T.’s refusal to meet his obligations toward his son. [ 3 ] At the hearing before me, all issues except the issue of child support had been resolved. At a Family Case Conference on December 1, 2017, with respect to child support, Judge Bowry made an interim, without prejudice Order which provided that Mr.

T. was a BC resident with an income of $59,500 and Ms. W. was a BC resident with an income of $35,900, resulting in a set off child support order in the amount of $225.00 per month and that Mr. T. pay $311 per month towards the child care costs incurred by Ms. W. so that she can attend work. She also ordered that Mr. T. make financial disclosure of his income from all sources by January 25, 2018, and the issue of child support was set for trial. Mr. T. complied with the child support portions of the order for a short time, and then stopped paying again.

He complied only partially with the disclosure portions of the order. [ 4 ] On March 16, 2018, Mr. T. filed an application seeking retroactive variation of the child support he had been paying, on the basis that he had been paying more than the guidelines required, because the parenting time regime was in fact close to equal. That day, Judge Weatherly made a further Order for financial disclosure for 2015, 2016, and 2017. Although Mr.

T.’s application filed March 16, 2018, did not specify how far back he was seeking to go, the understanding of the parties when the matter came before me was that he was seeking to go back to 2014. Although the application for retroactive variation was among the applications set for hearing before me, it was no surprise to anyone, so I ruled that the application could proceed. Position of the parties: [ 5 ] Ms.

W. conceded that there should be some adjustment of child support to reflect the parties’ incomes and the reality of shared parenting, but that any variation should commence no earlier than July 2017, when Ms. W.’s application was filed. She argued that both parties believed the child support paid by Mr. T. was fair throughout the time period with full knowledge of the shared parenting arrangement, which developed. Ms. W. argued that it would cause her enormous hardship if she were ordered to pay back child support received over the years back to 2014. [ 6 ] Mr.

T. began the hearing before me vehemently seeking “Back payment” of amounts of child support he believed was owing to him. However, by the end of the hearing Mr. T. modified his position, informing the Court that indicating he wasn’t seeking to inflict hardship on Ms. W. by seeking payments. While I accept that Mr. T. has abandoned his claim for retroactive variation prior to June 2017, to be fair to all concerned and to assist the parties to avoid harbouring notions that one or the other has been hard done by, I intend to address the merits of that claim, even though it has been abandoned.

Child Care expenses, Guidelines S. 7 : [ 7 ] Ms. W. is also seeking contribution from Mr. T. towards her childcare costs while she is working, pursuant to S. 7 of the Guidelines . S. 7 of the Guidelines provides that the Court may provide for an amount cover all or a portion of childcare expenses if they are incurred in order to enable the parent to work. In this case, that is clearly the case – Ms. W. works full time in order to support herself and D.G.T. Mr. T. took the position that he should not be obliged to contribute towards any more than one half of Ms.

W.’s childcare expenses, because he does not make use of the childcare when he is exercising parenting time with D.G.T., despite the fact that in order to maintain D.G.T.’s spot at daycare, Ms. W. must pay for a full time spot regardless of how much use is made of it. [ 8 ] I find that since it is necessary for Ms.

W. to pay for a full time spot in order to maintain a place for D.G.T. at daycare, it is the whole amount that the court must make provision for. (If it were possible to obtain suitable daycare for D.G.T. on a half time basis, then that amount would be proportionately shared between the parties.) Section 7(2) of the Guidelines provides that the guiding principle for the sharing of such expenses is that they be shared proportionate to income. Section 7(3) of the Guidelines provides that the court should also take into account any income tax deductions available to the person claiming the expense.

Calculation of income: [ 9 ] The first issue in any assessment of child support obligations is to establish the income of the parties under the Guidelines. The Guideline table amounts are based upon the presumption that the line 150 income shown on the party’s income tax return and notice of assessment is fully taxable. Ms. W.’s income is earned from her employment and is fully taxable. She earned $44,397 in 2017, $35,964 in 2016, $31,974 in 2015 and $31,041 in 2014. [ 10 ] Mr. T. has income from two sources: Worker’s compensation benefits and Canada Pension disability pension. Mr.

T.’s financial statement filed March 7, 2018, indicated that his annual income was $56,675 and that he did not expect it to change. However, in April

2018, he provided his notice of assessment showing his total income for 2017, was $57,061 from CPP and WCB sources. For 2016, hisincome was $56,675, for 2015, it was $56,520 and for 2014, it was $55,768. [11] Mr. T.’s income includes both taxable and non-taxable income. For him, only the benefits he receives from Canada Pension Planare taxable. The vast majority of his income is derived from Workers compensation benefits, which is not taxable. The parties did notprovide any submissions to me with respect to how to treat Mr. T.’s non-taxable income for child support purposes. [12] I am governed in this respect by S.19(1)9(

b) of the Guidelines, which provides: 19(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstancesinclude the following: …. (

b) the spouse is exempt from paying federal or provincial income tax; [13] I have also considered Mckenzie v. Perestrelo 2014 BCCA 161, a decision which is binding upon me, in which the BC Court ofAppeal stated: [90]

Section 19 of the CSG states that where a person is exempt from income tax a court may impute additional income to reflectwhat that person would have otherwise earned through employment. In S.C.E. v. W.C.K., 2010 BCSC 1592 , Joyce J. consideredwhether a party’s non-taxable disability benefits should be grossed-up for the purpose of calculating support. Justice Joyce, relying on anAlberta Court of Appeal decision, Dahlgren v. Hodgson, 1999 ABCA 23 , said the following: [28] Section 19(1)(

b) of the Guidelines permits the court to impute income to the paying spouse where he or she is exempt frompaying federal or provincial income tax. The authorities hold the court may exercise its discretion under this

section in the case ofpension benefits which are received free of income tax and impute additional income to bring the pension amounts up to the equivalentgross taxable amount: see Dedosenco; Peterson; and Dahlgren. [29] The rationale for grossing up tax-exempt income was stated by Fraser C.J. in Dahlgren at para. 5 in the following way: 5 ... when dealing with any form of benefits or attributed benefits received by a parent that are not taxable for income tax purposes, itis essential that any such amount be grossed-up to take into account what it would have been had it been taxed.

The purpose in doing sois to ensure that the apportionment of responsibility between the parents for child support is based on the same approach for both parents.The guidelines are premised on division of financial responsibility based on gross before tax income. Therefore, to properly apportionthat responsibility for child support between the parents, the same foundation must be used. In this regard, it would be wrong to equatenon-taxable income in the hands of one parent with taxable income in the hands of the other without the appropriate gross-up. [14] Thus, I find that it is my obligation to gross up Mr.

T.’s non-taxable income to arrive at a fair comparison of the parties’ incomesfor the purpose of fixing child support obligations. Mr. T.’s additional sources of income: Undeclared work: [15] I heard evidence that Mr. T. has used his trailers (he has two) to work occasionally for father’s delivery company. Mr. T. testifiedthat he did not receive any payment from them for this work in 2017, but was instead doing this work in order to “get his parents toforgive a debt of $3000 for money they loaned him for his lawyer’s bills.” Mr.

T. also testified that he no longer owes that money – inother words, his work has paid that debt. Normally people have to pay their debts with earnings, which are declared as income and taxed.Mr. T. did work for his stepfather and paid this debt, but did not declare this as income – on his taxes or on his financial statement. I seeno reason to treat this benefit of $3000, which he earned by working, any differently than any other earned income. I therefore impute$3000 of undeclared income to Mr.

T. for 2017. [16] I also infer from his evidence (of the work he admits he did for his stepfather,) that he is, obviously, capable of earning income inaddition to his Disability pensions. I therefore impute income to him in the amount of $3000 (untaxed and undeclared) per year in thefuture, which will be grossed up accordingly. CPP dependent benefit: [17] Mr. T. provided a T4A for 2016, with respect to his CPP benefits in the amount of $11,764, which is exactly the amount of CPPBenefit declared on his 2016 Notice of Assessment. That is his income and he has declared it properly. [18] Also attached to Mr.

T.’s materials are a 2016 T4A for received CPP benefits (CPP Child Benefit) payable to D.G.T., in theamount of $2852.28 and a 2015 T4A for D.G.T. in the amount of $2818.44. These payments have not been accounted for in Mr. T.’sfinancial statement, nor in the submissions before me and I do not know what has been done with this income. Such pension benefits areincome of the child, but paid to a custodial parent for the benefit of a dependent child. The T4A is provided in the name of D.G.T., andtherefore officially D.G.T.’s income. However this money is available to Mr.

T. to be used for D.G.T.’s benefit. [19] How is this benefit to be construed? In Wadden v. Wadden 2000 BCSC 960, the court considered an argument made by a fatherthat his child support obligations should be reduced by the amount of the CPP child benefit received by the child (who was in that case inthe custody of the mother). The Court held that such benefits are benefits belonging to the child and as such are not a relevantconsideration in determining the table amount of child support – that is, they are not to be included as income in the hands of thereceiving parent.

[20] However, the Wadden decision did not consider how such benefits are relevant to the determination of means under S. 9 of theGuidelines. S. 9(

c) of the Guidelines provides that in a shared parenting arrangement, the court must take into account the conditions,means, needs and other circumstances of each spouse and of any child for whom support is sought. A person’s means include not onlyincome, but other benefits or resources available to him that improve or enhance his quality of life. [21] Under S. 9 of the Guidelines, I am obliged to consider the means and needs of the parents and the child in order to avoid asignificantly different standard of living for the child in each household: Contino v. Leonelli-Contino 2005 SCC 63.

While the analysismay start with a calculation of table child support for each party and a set-off of the difference, (if any,) that is not the end of theanalysis. I have broad discretion to analyze the resources and needs of both parents and the child or children and to increase or reducesupport above or below the table calculations of child support. [22] In M.L. v.

S.P., 2015 NBQB 249, Mr Justice Landry held that although CPP child benefits cannot be included as income in thehands of the parent receiving the benefit for the purpose of determining table child support, the Court must take such benefits intoaccount, as the child’s income, in assessing the means of the child in shared parenting situations under S. 9 of the Guidelines. [23] In Ladisa v. Ladisa, (ON SC) , Madam Justice Linhares de Sousa considered the receipt of the CPP ChildBenefit by one parent or the other in a shared parenting arrangement in the context of S.9(

c) of the Guidelines. She ordered that theparents must share equally any benefit received for any child in the shared parenting arrangement, and moreover that any parentreceiving that benefit for a shared child must be accountable to the other for one half of that benefit. In my view, that is a sensibleapproach. In a shared parenting arrangement, the child’s income should benefit him in both homes in which he resides - not just in onehome. [24] Accordingly, I will take into account that the CPP Child Benefit payable to Mr.

T. for D.G.T.’s benefit should have been appliedfor his benefit in both of the homes in which he resides – that is, it should have been shared equally between the parents throughout theentirety of the period since the parties began to share their parenting time with D.G.T. more or less equally, regardless of the table childsupport calculations. I take that into account in my considerations, both with respect to retroactive recalculation and with respect to futureadjustments of child support.

Retroactive calculations of Table child support based on income: [25] I have made use of the Divorcemate software in order to establish Mr. T.’s income for child support calculation purposes. TheDivorcemate Software program automatically grosses up Mr. T.’s untaxed income according to his marginal tax rate in order to produceits equivalent as if it were employment income. According to those calculations, which I have attached as a

Schedule to these reasons,the Child support payable by Mr. T. should be based upon a grossed up income of $69,194 for 2014, $70,231 for 2015 $70,437 for 2016.Including the income I have imputed for 2017, Mr. T.’s grossed up income for 2017 was $75,142. Ms. W. earned $31,041 in 2014,$31,974 in 2015, $35,964 in 2016 and $44,397 in 2017. [26] Based on a comparison of the parties’ incomes using the grossed up figures, Mr. T. should have been paying to Ms.

W., as tablechild support, $369 per month for 2014, $369 per month for 2015, $332 per month for 2016 and $299 per month for 2017. [27] The retroactive considerations do not end with table support, however. The agreement between the parties was that the supportpaid by Mr. T. included his contribution towards childcare for D.G.T. I was not provided with information regarding childcare expensesfor years prior to 2017, but the childcare expenses to be paid by Ms. W. for 2017, were estimated at $6000 in her financial statementfiled in November 2017, or $500 per month. Ms.

W. testified that her childcare expenses increased, in September 2017, to $650 permonth during the school year and $450 per month (depending on use) in the summer. [28] I was not provided with any evidence regarding any tax deductions for childcare nor whether one or both parties claimed any taxdeduction for the childcare expenses, so I will base my remarks on the figures that I have. [29] Assuming the childcare expense of $500 per month were constant from 2014-August 2017, based on their relative incomes ineach of those years, Mr.

T.’s proportionate share of the childcare expenses would have been as follows: 2014: 69% of $500 = $345 permonth; 2015: 68% of $500 = $340 per month; and 2016: 66% of $500 per month = $330 per month. [30] In 2017, Mr. T.’s proportionate share of child support expenses was $63%. Ms. W. paid $500 per month for childcare untilSeptember, when the cost increased to $650 per month. Thus, the annual total was $6,600. Mr.

T.’s share of the average childcareexpense for 2017 was 63% of $6600, or $4,158 annually, or $346.50 per month. [31] From January 2018 onwards, the cost of childcare is $650 per month during the school year and $450 per month in July andAugust. Thus, for 2018, I estimate the cost of childcare would be $7400. Mr. T.’s share of the average childcare expense would be 63%of $7400, or $ $4,622 annually, which works out to $388.50 per month for 2018. [32] When Mr. T.’s proportionate share of childcare expenses is added to the table child support for each month, the total amountsowing to Ms.

W. would have been $714 per month in 2014, $709 per month in 2015, $662 per month in 2016, and $645.50 per month in2017. Thus, it is apparent that Mr. T. was not overpaying Ms. W. in 2014 and 2015; rather, he was slightly underpaying her. For 2016,and 2017, Mr. T.’s payment of $700 per month was a slight overpayment. [33] However, when I factor into my considerations that Mr. T. was receiving D.G.T.’s CPP Child benefit all that time and not sharingit with Ms. W., (in 2016, the payment worked out to approximately $238 per month, so Ms.

W.’s share would have been approximately$118 per month) it becomes clear that Mr. T. was not overpaying Ms. W., but in fact was slightly underpaying all of the time. [34] It may be that the childcare expenses were somewhat different than I have assumed for these calculations, but my essential pointis that, in arriving at the figure of $700 per month, the parties had actually come up with a fair estimate of what a court would haveimposed. Both parties relied on those numbers to organize their affairs. Mr. T. was well aware of Ms.

W.’s circumstances including thefact that she paid for childcare for D.G.T. in order to work. He was also aware that he was receiving CPP benefit for D.G.T. but did not

disclose that to Ms. W. He could have applied to vary the child support amounts and chose not to do so. Had he done so, with full disclosure, he would very likely have been paying more than $700, most of that time. In these circumstances, it is just as well for Mr. T. that he graciously abandoned his claim for retroactive variation, because a recalculation would not have had the results he obviously expected. [ 35 ] When Ms. W. filed her application in July 2017, she sought Guidelines child support and contribution towards childcare expenses and other special or extraordinary expenses.

She did not seek retroactive variation, which is just as well, because, as I have found, the parties had arrived at a more or less appropriate amount of child support for that period. It is appropriate, however, to revise the child support and special or extraordinary expenses in accordance with the Guidelines , including S. 9 of the Guidelines , from July 2017 onward. [ 36 ] I have already stated the results of my findings, but for ease of reference, I will repeat them here. Including imputed income, Mr. T.’s grossed up income for 2017 was $75,142. Ms.

W. earned $44,397 in 2017. [ 37 ] Based on a comparison of the parties’ incomes using the grossed up figures, Mr. T. should have been paying to Ms. W., as table child support, $299 per month for 2017. However, as I found earlier, S.9 of the Guidelines obliges me to take into account, in my considerations, the fact that Mr. T. receives the CPP child benefit for D.G.T., and make adjustments to table child support accordingly. I note that Mr. T. did not disclose the T4A’s for CPP benefits (for himself of D.G.T.) for 2017, but based upon the 2016 T4A he disclosed, Mr.

T. received $238 per month CPP Benefit for D.G.T. that should be used for D.G.T.’s benefit in both of his homes, not just one. I find that Mr. T. must account to Ms. W. for one-half of the CPP Child Benefit he has received for D.G.T. from August 1, 2017, to the present. Accordingly, I am increasing the table child support payable by Mr. T. to Ms. W. by $118 per month as the share of D.G.T.’s income she should receive to administer for his benefit in her home.

The total child support for 2017 will therefore be $417 per month, commencing August 1, 2017, and continuing as long as D.G.T. is entitled to receive child support or until further Court Order. [ 38 ] I further order that Mr. T. must pay $346.50 per month for childcare expenses commencing August 1, 2017, until December 31, 2017. As of January 2018, Mr. T. will pay $388.50 per month for childcare expenses, until further Order of this court. Paragraphs 8 and 9 of the Order of Judge Bowry made December 1, 2017, are varied accordingly. [ 39 ] Mr.

T. did not disclose the amounts he received for CPP Child benefit in 2017, although this document must have been provided to him prior to the hearing of this matter. He also provided only Notice of Assessments or summaries, not actual copies of his tax returns. This information is important for the calculation of child support obligations in the future, and must be provided as a matter of course. I therefore order that, f or as long as the child is eligible to receive child support , both parties must exchange: (

a) copies of their respective income tax returns for the previous year, including all attachments, not later than June 1 each year; and (

b) copies of any Notice of Assessment or Reassessment provided to them by Canada Revenue Agency, immediately upon receipt, commencing June 1 2019. Mr. T.’s disclosure must include the T4A for CPP child benefit for D.G.T. for the preceding year and details of any other earned income from any source. [ 40 ] Mr. T. commented to the Court in his closing submissions that Ms. W. is an amazing mother and that he is a good dad. I am sure that both Ms. W. and Mr. T. love their son. I urge both of them to remember that child support is the right of D.G.T. to receive.

It is not a weapon to be used in a battle between his parents. I hope that both parents will remember these remarks and will chose to work cooperatively in future, perhaps with the assistance of Family Justice Counsellors, to recalculate child support as changes in circumstances arise. ____________________ S. K. Keyes Provincial Court Judge Province of British Columbia