M.G.V. v. C.R.M., 2020 BCPC 95

Citation: M.G.V. v. C.R.M. 2020 BCPC 95 Date: 20200429 File No: 17653 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: M.G.V. APPLICANT AND: C.R.M. RESPONDENT AND: [OMITTED FOR PUBLICATION] THIRD PARTY REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S.D. FRAME

Appearing on her own behalf and appearing as Counsel: M.G.V. /S. Walter Appearing on his own behalf: C.R.M. Appearing for the Third Party: B.M. Place of Hearing: Kamloops , B.C. Date of Hearing: March 13, 2020 Date of Judgment: April 29, 2020 [ 1 ] This is an application by M.G.V. for corporate records related to a company [omitted for publication] owned by C.R.M.’s father, B.M. Both the company and C.R.M. are opposed to the disclosure of the company records.

C.R.M. says that he is a T4 employee. [Omitted for publication] concurs. [ 2 ] Simon Walter appeared on behalf of M.G.V. for the limited purposes of introducing the application and to provide the court with some cases related to the issue. [ 3 ] M.G.V. believes, based on her experience of living with C.R.M., that he would have improved the state of [omitted for publication] to the point that he would be able to earn more than he says he is paid, and would have bought an interest in the company. [ 4 ] M.G.V. testified that she was in a 10 year relationship with C.R.M.

She says that he has a university degree in chemistry, has never taken a pay cut in any employment that he has had, and has always received raises and promotions. [ 5 ] The last place of employment he had was at [omitted for publication]. He earned $122,000 a year in that employment. While they were still in the relationship, M.G.V. and C.R.M. had discussions around him being tired of the night shift at [omitted for publication]. He saw big potential at his father’s company, [omitted for publication]. He saw the potential to earn more in that employment and he wanted to become a part owner of the company.

The only other employee at [omitted for publication] at the time was B.M., who is the sole owner and B.M.’s spouse, B.M.(2), who is the bookkeeper. B.M. was also employed full time at [omitted for publication]. [ 6 ] Wages were discussed before C.R.M. left [omitted for publication]. They appreciated he would be earning less but the benefits outweighed the loss of income. It was certainly not his long term plan to stay at that wage.

He agrees they did discuss him gaining ownership in the company but he would need money first to do that. [ 7 ] C.R.M. said that the wage was determined by what [omitted for publication] could afford and the industry norm. The industry norm, which was not disputed by M.G.V., is $25 per hour. [Omitted for publication] pays C.R.M. $29 per hour. [ 8 ] M.G.V. and C.R.M. agreed that he would leave [omitted for publication] in May 2017. The day after he left [omitted for publication], he began working at [omitted for publication].

M.G.V. testified that C.R.M. worked many hours and performed many of the duties of the company including manufacturing, deliveries, sales and marketing. [ 9 ] M.G.V. also conceded in cross examination that the lack of opportunity for promotion at [omitted for publication] was not the only reason C.R.M. and she agreed he would leave that company. She acknowledged that it was because he was tired of the night shift, he was missing out on things in their relationship, and he was bored. She denied that there was flexibility in the work

schedule because she believes he worked more once he went to [omitted for publication]. She denied it provided the quality of life they had discussed. [ 10 ] C.R.M. testified that they were dealing with a lot of issues in their relationship in May 2017. Working on the family property for [omitted for publication] where he would have flexibility in hours would lessen the strain on their relationship. However, they separated a year and a half later. [ 11 ] At that point, C.R.M. was working full time at [omitted for publication] and B.M. was working there part time.

B.M. was still employed at [omitted for publication]. [ 12 ] [Omitted for publication] is located on family property. The family apparently has separate homes for each of them on the property. C.R.M. lives in the house that the parties shared while they were together. [ 13 ] M.G.V. said that when they were together, they built the house on the family property using a loan that B.M. had taken in his name. Because the property was in B.M.’s name, M.G.V. and C.R.M. could not get their own mortgage. In addition, M.G.V. said that the internet enjoyed at the family home was also used by the company.

She believed they were paying for the internet but did not know if C.R.M. was getting reimbursed by the company. [ 14 ] C.R.M. said the company does not pay for the mortgage used to build the house, nor does it pay for the internet. While [omitted for publication] uses the internet, it is his sister who pays for it. C.R.M. pays his father for the mortgage against the land and it is a matter entirely independent of his income with [omitted for publication]. She believes that C.R.M. pays B.M. back for that mortgage.

There is no connection between the debt owed by the parties to B.M. and any income or benefit C.R.M. receives from [omitted for publication]. B.M. and [omitted for publication] are separate entities. [ 15 ] M.G.V. believes that C.R.M. receives certain perquisites and expenses which are not obvious from a T4 slip. For instance, she said that C.R.M. has the use of the company credit card for company expenses. She did not know if he used it for household expenses. However, when points accumulated, the family were able to use them for travel.

C.R.M. agreed that the company credit card points were used to send M.G.V. to see her family. The card is otherwise used to fuel his company vehicle. He uses the credit card for meals if he is out on a delivery. It cannot be said that it is a perquisite for C.R.M. if he uses the company credit card to make purchases for [omitted for publication] or to meet his expenses while on company business. The points were not used for his benefit, but for the benefit of M.G.V. [ 16 ] M.G.V. said that when they were discussing C.R.M. working for [omitted for publication], they talked about him buying 50% of the company.

She recalls that during the first year C.R.M. worked for the company it owed a loan for machinery which was paid off

in that year. This made C.R.M. more ambitious about investing in the company. [17] M.G.V. believed that C.R.M. was buying into the company by taking a reduction in salary. She believed the structure was thathe would earn $2,500 per month, but only receive $2,000. She never saw the documents nor any proof of this arrangement. However, shesupported the arrangement because C.R.M. has an ambitious work ethic. [18] When asked about the conversations related to the purchase of the company, M.G.V. replied that C.R.M. said the company waslucrative because it paid off the machinery loan in that first year.

She acknowledged, though, that never in her presence did C.R.M. sayhe had any shares or other interest in [omitted for publication]. [19] C.R.M. said he has not paid [omitted for publication] anything to acquire an interest in it nor taken a wage reduction to do so.He agreed he wants to save money to purchase an interest in the company. [20] B.M. testified that the equipment loan that [omitted for publication] had was paid off in the first year of C.R.M.’s employmentbut the company had been running for four years at that time.

He said that neither he nor his wife have ever taken a wage from [omittedfor publication]. It is a small operation, which is why C.R.M. has to do all of the work related to it. [21] C.R.M. believes that there is an agreement in place that the parties will base child support on his T4 income. He refers to an e-mail dated November 6, 2019. That e-mail, though, is not a finalized agreement. It bases his monthly child support on M.G.V.’s incomeof $40,000 per annum and his of $60,000 per annum.

Indeed, there are certain items in that e-mail that are agreed, such as how to setchild support as of May 2020 and how they would claim the child as a dependent in each tax year. They did not agree on the amount ofincome for child support purposes from November 2019 to April 2020; they did not agree to share the day-care and extraordinaryexpenses 50/50; and they did not agree that there would be no spousal support or retroactive payments made. M.G.V. replied to thatemail agreeing to some terms and not agreeing to others.

In that reply, she does not mention anything about C.R.M.’s interest in [omittedfor publication], but does refer to matters being “addressed at the hearing on the court”. The agreement, if it had been made, would onlybe applicable to the relevance piece of this application. There is no such agreement. [22] In her cross examination, M.G.V. attempted to challenge the rationale behind C.R.M. taking employment with [omitted forpublication]. However, this is not the appropriate time or place to challenge this decision.

It is one that they made together in the courseof their relationship weighing all of the risks of a lower income, as well as of being employed by a small company. This is a matter forthe trial judge. [23] There are also questions about why C.R.M.’s income went down from 2017 to 2018, but that is obviously related to the changeof employment mid-year in 2017. Again, it does not go to the issue on this application. [24] In 2019, C.R.M. said that he was on employment income insurance for part of the year because the shop was not running. Thisemployment income insurance is not listed in his financial statement.

He was unable to determine whether that was merely an error. Thatis a matter that can be easily sorted through proper production of the records that are supposed to be attached to his financial statement.Those records would be ones that relate entirely to him as an individual, and not to [omitted for publication]. [25] In the end result, the evidence is clear. C.R.M. and M.G.V. agreed that C.R.M. would leave his employment at [omitted forpublication] to take a far lower paying position with more flexibility at his father’s small company, [omitted for publication].

Thatcompany pays C.R.M. a salary that is slightly above the industry average. The income is entirely T4. There is no evidence that C.R.M.has any interest in the company other than as a T4 employee who hopes to one day acquire shares in it. [26] I have reviewed the decisions provided to me by Mr. Walter on behalf of M.G.V.: C.E.L. v. D.C.A., 2016 BCPC 147 ,2016 B.C.P.C. 0147; M.A. v. F.H.A., 2011 BCSC 1047 , 2011 B.C.S.C. 1047; N.B. v. S.B., 2010 BCSC 1487 , 2010B.C.S.C. 1487; and S.R.M. v. N.G.T.M., 2013 BCSC 719 , 2013 B.C.S.C. 719. [27] Mr.

Walter also provided excerpts from the British Columbia Family Practice Manual relating to Attacking the Adequacy of theOpposing Party’s Disclosure of Documents; Disclosure under the Supreme Court Family Rule 5-1; and Conflict Between Supreme CourtFamily Rule 5-1 Requirements and the Child Support Guidelines. [28] Essentially, the Family Practice Manual addresses the need for broader disclosure in order to meet the best interests of the child.What remains, though, is that a company with a T4 employee should not be required to disclose its financial information in a privatefamily proceeding.

This is not absolute. [29] C.E.L. is not a particularly helpful decision in that it was dealing with interconnected sexual abuse issues and credibility of thecomplainant. No similarity can be drawn to these circumstances. I do not find the guidance in N.B. or S.R.M. to be of assistance either. [30] In M.A., the court declined to disclose the corporate records also finding that Mr. A. was not a controlling shareholder of thecompany. There was evidence of the deteriorating financial condition of Mr. A.’s father’s company more than a year prior to a consentorder fixing Mr.

A.’s income higher than he was actually earning. These are not the circumstances I have before me but the courtconcluded she had no reason to believe the income amounts disclosed on Mr. A.’s T4 did not reflect his actual income. [31] I appreciate that there are a number of circumstances where it would be appropriate to order the disclosure of the financialrecords of a company owned entirely by an employee’s family.

Certainly disclosure may be ordered where the income is tied to theactual fluctuations in the profits of the company, or the company itself is held in trust, or where the company is paying dividends toshareholders including to the person subject to the inquiry. These are more obvious circumstances. [32] This is not one of those cases. C.R.M. is a T4 employee of [omitted for publication]. His T4 and his income tax assessment willdisclose any income or perquisites he receives.

Certainly he has an obligation to disclose in his financial statement if he receives anyincome from any source above and beyond his T4 income from [omitted for publication]. [Omitted for publication], on the other hand,has no obligation to disclose its financial records in circumstances where it is purely the employer and the subject of the disclosure

application is purely an employee. [ 33 ] I dismiss M.G.V.’s application for disclosure of [omitted for publication] records. ________________________ S.D. Frame Provincial Court Judge