R.B. v. J.B., 2021 BCPC 23

Citation: R.B. v. J.B. 2021 BCPC 23 Date: 20210209 File No: 18335 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: R.B. APPLICANT AND: J.B. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE G.J. BROWN

Counsel for the Applicant: V. Panchmatia Counsel for the Respondent: C. Ashclarke Place of Hearing: Abbotsford , B.C. Date of Hearing: February 21 - 22, October 1 - 2, December 1, 2020 Date of Judgment: February 9, 2021 INTRODUCTION [ 1 ] In this case, I must consider various child support issues for two boys, B.B. who is now 16 and T.B. who is now 14. [ 2 ] The parties have been following a Memorandum of Understanding executed November 5, 2008, which sets out a week on/week off

schedule and requires Mr. B. to pay $700 per month in child support. This is clearly a shared custody situation under s.9 of the Federal Child Support Guidelines [ Guidelines ]. Mr. B. is the owner/operator of an excavating company, and Ms. B. is a certified dental assistant. [ 3 ] In essence, Mr. B. submits that the child support has been too high and the stated income for him was not accurate. Further, the income for the mother should be imputed to be much higher. [ 4 ] Not surprisingly, Ms. B. takes the opposite position. She alleges that Mr.

B.’s self-employment income is too low. [ 5 ] There are a number of issues for me to decide: 1. Is the Memorandum of Understanding even binding? If so, should the child support provisions be set aside? 2. Should different incomes be imputed to Mr. B. and Ms. B.? 3. Should child support be varied or reduced retroactively to December 1, 2015? 4. What is the appropriate amount of child support moving forward? 5. Finally, what should be each party’s share of s.7 special or extraordinary expenses for the children? [ 6 ] I have tried my best to boil down the facts and my analysis in this case.

If I do not address every single submission set out in the large closing briefs provided by the capable counsel in this case, I can assure them that I have read all their materials. [ 7 ] With the advent of the Guidelines in 1997, many of us thought child support would become the “easy” issue to resolve when parties separated. That is not always true. In this case, we have issues about self-employment income, imputed income, shared custody, a memorandum of understanding, retroactive support and s.7 expenses.

BACKGROUND [ 8 ] The parties married on [omitted for publication] and separated around August 16, 2008. [ 9 ] The parties divorced on March 10, 2015. [ 10 ] They have two children who are now in high school. B.B. was born on [omitted for publication] and he is 16. He played ice hockey until recently. T.B. was born on [omitted for publication], and he is 14. T.B. still plays hockey. [ 11 ] Mr. B. has been living with his common law spouse, T.L., since November of 2013, and he has a third child with her named J.B. who is five. Ms.

L. is on disability, and she did receive a considerable motor vehicle accident settlement. [ 12 ] Since the parties’ separation, they have shared equal parenting time on a week on/week off basis. This parenting arrangement is set out in the Memorandum of Understanding prepared by a mediator and executed on November 5, 2008. [ 13 ] The Memorandum indicated that Mr. B. is the owner/operator of [omitted for publication], and his 2007 tax return showed a salary of $37,500. He received other benefits from the company, so his income was said to be $80,000 annually. [ 14 ] The Memorandum set out Ms.

B.’s salary as a certified dental assistant to be $25,000 annually, based on a three-day work week. Should she find two additional days of employment, she had the potential to earn another $15,000 annually. [ 15 ] In the Memorandum, it was agreed that Ms. B. should be working full time by January of 2009, so there was no claim for spousal support. The matrimonial home and other assets were divided. [ 16 ] The parties appeared on a 3-day trial before Judge MacKay in 2010. Ms. B. was seeking increased parenting time.

By an order dated May 28, 2010, Judge MacKay ordered that the parties continue with shared custody of the children on alternating weeks with certain other terms. The remaining custody and access terms in the Memorandum were to continue in effect, and the parties were at liberty to set further court time for a review of the child support obligations. Mr. B. simply continued paying $700 per month in child support. [ 17 ] In early 2018, Mr. B. went north to work on the [omitted for publication]. On July 20 th of that year, Ms.

B. brought an application to seek primary residence of the children and to address child support and allocation of s. 7 expenses. When Mr. B. returned to [omitted for publication], Ms. B. did not pursue primary residence, but she still seeks to impute Mr. B.’s income at between $100,000 and $150,000 per year, and certainly no less than $80,000.

[ 18 ] On September 18, 2018, Mr. B. filed a Reply, and on December 14, 2018, he filed his own applications to address child support and s.7 expenses. He also sought to set aside the November 5, 2008 Memorandum if it was determined to be binding. Based on the parties declared incomes since late 2015, Mr. B. submits that he has overpaid some $34,000 in child support. Going forward, he suggests that the parties can earn similar incomes with no child support payable. [ 19 ] Mr. B. has been self-employed as an excavator operator since 2002.

He solely owns [omitted for publication] and his father operates a separate excavating company. He did work as an employee on the [omitted for publication] between March and September of 2018. Based on Notices of Assessment, his personal annual income going back to 2015 is much lower than $80,000 (except for 2018). In 2015 and 2016, his assessed income was around $25,000, and his 2017 income was very meager. In 2018, he earned $86,000 (with a rental loss), and since then he has been in the $48,000 range. I will discuss the corporate tax returns below. [ 20 ] Ms.

B. has worked part-time as a dental assistant at [omitted for publication] and other dental offices. She also is involved with a wellness company whereby she gets purchasing credits for beauty and health products. Based on her Notices of Assessment, her annual income going back to 2015 has been in the range of $41,000 to $44,000, with one year at $37,000. Of course, the COVID-19 pandemic greatly affected her work in 2020, but she still earned about $42,000 that year with employment insurance. [ 21 ] Mr. B. has considerably more assets than Ms. B.

He has a joint interest in recreational property in [omitted for publication] in addition to owning his own home in [omitted for publication]. He has had financial assistance from his father and his current spouse. MEMORANDUM OF UNDERSTANDING [ 22 ] A mediator drafted the Memorandum of Understanding dated November 5, 2008, and the opening clause states that it was prepared “as a result of several hours of discussion and negotiation.” The

preamble indicates that each party “may wish to obtain independent legal/accounting or any other counsel prior to signing this agreement.” There is no evidence that either party sought legal advice prior to executing the Memorandum. [ 23 ] Clause 5 of the Memorandum contains rather unusual language: Both R. and J. are aware that this memorandum is not intended to be a legally binding contract, but a statement of intention by R. and J., and can be altered/updated by mutual consent.

Both R. and J. generally agree to be bound by the terms of the agreement. [ 24 ] The Memorandum goes on to set out detailed parenting arrangements, including the week on/week of schedule. As indicated above, the Memorandum recites that Ms. B.’s income as a dental assistant “will reach approximately $40,000”, and Mr. B.’s income as an owner of an excavating company is $80,000. The Memorandum does indicate that Mr. B.’s 2007 tax return “verified that he drew a salary of $37,500.

He drew other benefits from the company e.g. fuel/repair etc., credit card, some meals, vehicle leasing, insurance etc. for a total of approximately $80,000 annually.” [ 25 ] The Memorandum stipulates that the child support amount is $610, but it goes on to say the parties agreed that Mr. B. would pay $700 per month in child support. Counsel for Mr.

B. properly points out that the child support table amount is in error; the proper set off amount should have been $576 ($1,186 – 610 = $576 using the 2006 Child Support Guidelines ). [ 26 ] Under the Memorandum, “any child tax credits, subsidiaries, extraordinary expenses (daycare), extracurricular activities will be shared by R. and J.” [ 27 ] Given that Ms.

B. “should be working full-time by January, 2009,” it was agreed “that there will be no spousal support.” Is this Memorandum of Understanding legally binding? [ 28 ] Our Court of Appeal in Berthin v Berthin , 2016 BCCA 104 reviewed the law concerning circumstances under which parties enter into enforceable contracts in family law cases. The proper test is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract.

Courts will not enforce what is effectively an agreement to agree, nor will courts enforce a list of guiding principles. [ 29 ] In this case, I appreciate that the parties followed the parenting arrangements and other provisions in the Memorandum for many years. Over ten years ago, in a Reply filed by Mr. B. on January 30, 2009, he indicated that the Memorandum was a “written agreement” which “was and continues to be in the best interests of the children.” I also note that the parties carried out all of the asset division provisions in the Memorandum. Moreover, Mr.

B. paid the child support as stipulated. [ 30 ] Ms. B. did claim all of the child tax credits in contravention of one of the clauses in the document, but that does not diminish the importance of the child support provisions. She is now required to repay the government some $12,000 in child tax credits in any event. [ 31 ] However, notwithstanding the conduct of the parties and their general adherence to the Memorandum, the document itself is called a “Memorandum of Understanding” and it clearly says it is “ not intended to be a legally binding contract ” (emphasis added).

It is plain to see that it is not in the form of a typical separation agreement with binding contractual language. [ 32 ] When Judge MacKay made his order on May 28, 2010, he set out distinct orders under the old Family Relations Act for joint custody, joint guardianship and shared custody on alternating weeks. In addition to Judge MacKay’s Order, I have reviewed his thorough Reasons for Judgment.

The most he says about the Memorandum is that his “Order will reflect the terms of the MOA with respect to custody, guardianship and access.” Notably, the issue of child support was set for further hearing if necessary. [ 33 ] When I examine the language of the Memorandum as an objective reasonable bystander, I must conclude that it is not a legally binding contract. Consequently, I am not required to consider setting aside the Memorandum under s. 148(3) of the Family Law Act . [ 34 ] That said, I consider the Memorandum to be extremely persuasive evidence of the parties’ incomes in 2008, and it provides a

strong foundation for the informal determination of child support at the time. The Memorandum sets out the parties’ understanding oftheir incomes in 2008, and there is additional evidence and admissions to support Mr. B. having almost twice the earning potential ofMs. B. In the Memorandum, Mr. B. accepted to pay more than the set off amount, and under s.9 of the Guidelines, the court is notstrictly bound by a set off formula for shared custody. [35] My reasons for considering the Memorandum to be persuasive evidence are as follows. To begin with, Mr.

B. agreed that hissalary was $80,000 not only in the Memorandum in 2008 but also in an affidavit he swore on March 5, 2015 in a divorce proceeding. Iappreciate that Mr. B. may not be terribly sophisticated in financial matters, but he had seven years to consider his income, and he sworethat his Guideline income was $80,000 in 2015. His divorce lawyer prepared that affidavit. He paid the $700 per month apparentlywithout any objection until December of 2018 when his court applications were filed.

I do agree that his business appeared to falter inthe years prior to 2018. [36] Secondly, the memorandum very clearly set out Mr. B.’s line 150 personal income in 2007 to be $37,500. Nevertheless, heagreed that he could earn $80,000, and the Memorandum spoke of benefits he received from his company. Mr. B.’s counsel aptly pointsout that the benefits from his company would probably only amount to some $3,640, increasing his income to $41,140.

These personalbenefits are $1,840 in vehicle expenses, $800 in personal meals, and $1000 in personal credit card expenses. [37] However, it is important to compare the corporate tax return with the personal return, although the year end for the company is September 30th. In 2007, the total revenue for the company to September 30th was $190,889 less cost of sales of $49,055, leaving a grossprofit of $141,834. After operating expenses of $74,248, the net income is $67,586. This figure is much better than the year before whenthere was a loss. [38] Of significance, Mr.

B.’s company grossed about $190,000 in 2007 and there was over $67,000 left over after cost of sales andoperating expenses. It is true that the net corporate income for tax purposes is grossed up by $836 in non-deductible meals, and thenreduced by $28,925 in capital cost allowance, leaving a net income for tax purposes of $39,497. I appreciate the company needsexcavators and equipment, but it is very difficult to analyze this capital cost allowance 13 years later. As well, I noticed that amortizationis dealt with differently in more recent corporate returns.

Certain expenses such as capital cost allowance are not automatically fullydeducted for Guideline purposes simply because they are permitted under the Income Tax Act (A.A. v. C.A., 2012 BCSC 1419). [39] In my view, the bigger point here is that Mr. B. agreed to $80,000, likely as either a predicted or imputed income for hisexcavating business. In his evidence, Mr. B. at one point said that a machine operator in town could possibly earn $80,000 as anemployee.

He later clarified that a machine operator employee in the Lower Mainland realistically earns between $50,000 and $60,000.He chose to follow his father’s footsteps to be an owner operator instead. He said he likes working for himself and he has more time withthe children. Of importance, Judge MacKay in his Reasons in 2010 indicated “the flexibility that Mr. B enjoys with respect to work ispossible because he is self-employed…” I will say more about imputed income below, but it is clear that in 2009-2010, Mr.

B. madecertain choices about his vocation to accommodate his time with his children and to have a certain lifestyle. As I comment below, Mr. B.has managed to prosper financially, whereas Ms. B. has struggled. [40] Thirdly, although the Memorandum does not state the rationale for Mr. B. paying $700 per month rather than a lesser set-offfigure, he clearly agreed to and paid the higher sum. It is true that the Memorandum incorrectly states the set-off child support to be$610 instead of $576 per month, but regardless, Mr. B. had to be aware he was paying more than a set-off table amount.

That point isplainly set out in the Memorandum. There could be many reasons for the increased child support, and it would be unwise to speculate.Obviously, s.9 of the Guidelines provides some discretion, and I analyze that further below. [41] Finally, I appreciate that Ms. B. did not provide specific tax information for her income in the Memorandum. The Memorandumdid say that she worked three days a week as a dental assistant, earning approximately $25,000 annually. Should she find two additionaldays of employment, she has the potential to earn another $15,000 annually. This calculation is roughly correct.

From my review of theexhibits filed before Judge MacKay, Ms. B. only earned $22,432.22 in 2008, and that included a $4,374.82 RRSP withdrawal. I note thatin recent years, Ms. B. has earned as much as $44,569 (2019) and as low as $37,294 (2016). [42] To conclude this issue, I find that the Memorandum of Understanding is not a legally binding agreement, but it is persuasiveevidence of the parties’ incomes in 2008 and their earning potential. THE PARTIES’ INCOMES [43] Each parent is asking me to impute an income to the other parent higher than declared on tax returns.

Fortunately, there appearsto be a consensus that I examine the parties’ incomes only back to December 1, 2015, three years prior to Mr. B.’s application.Retroactive applications are usually limited to three years from notice of the application, unless there is blameworthy conduct (D.B.S. v.S.R.G., 2006 SCC 37 , 2006 SCJ No. 37). [44] Ms. B. submits that Mr. B. can earn between $100,000 and $150,000 - and certainly no less than $80,000 - as an excavatorowner/operator. His lower declared income is as a result of the corporate structure and choices he has made. He owns two pieces of realestate. [45] Mr.

B. submits that his declared income is accurate, and he has overpaid child support since late 2015 to the tune of $34,000. Ms.B. is underemployed because of the shifts she chooses, and she has side income. He seeks to impute an income of at least $60,000 to Ms.B. Mr.

B. also seeks a credit against any child support obligations going forward. [46] Section 19(1) of the Guidelines provides a list of factors the court can consider in determining whether to impute an income,including being intentionally under-employed, not utilizing property to generate income, failing to disclose income, and unreasonablydeducting expenses. [47] Our Court of Appeal in cases such as McCaffrey v. Paleolog, 2011 BCCA 378 cite with approval the principles to apply whendetermining to impute income as set out in Donovan v. Donovan, 2000 MBCA 80 at para. 21:

1. There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parent cannot work. It is "noanswer for a person liable to support a child to say he is unemployed and does not intend to seek work or that his potential to earn incomeis an irrelevant factor" (Van Gool v. Van Gool (1998), (BC CA), 166 D.L.R. (4th) 528 (B.C.C.A.)). 2. When imputing income on the basis of intentional under-employment, a court must consider what is reasonable under thecircumstances.

The age, education, experience, skills and health of the parent are factors to be considered in addition to such matters asavailability of work, freedom to relocate and other obligations. 3. A parent's limited work experience and job skills do not justify a failure to pursue employment that does not require significant skills,or employment in which the necessary skills can be learned on the job.

While this may mean that job availability will be at the lower endof the wage scale, courts have never sanctioned the refusal of a parent to take reasonable steps to support his or her children simplybecause the parent cannot obtain interesting or highly paid employment. 4. Persistence in unremunerative employment may entitle the court to impute income. 5. A parent cannot be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations. 6. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income. Mr.

B.’s Income [48] Mr. B. is a self-employed excavator operator. Due to a very low income for 2017, he did work up at the [omitted for publication]as an employee in 2018. Mr. B.’s reported personal income and the corporate income for [omitted for publication] (year-end September 30th) are as follows: 1. December 2015: Personal income for theyear: $ 24,032 Corporate return: Gross sales $121,164 Cost of sales $ 71,915 Gross profit $ 49,249 Operating expenses $ 41,510 Net income (with adjustments) $ 7,737 Non deductible expenses (added) Net taxable income $ 24,878 2.

January to December 2016: Personal income: (claimed a rental loss of $4536) $ 25,293Corporate return: Gross sales $ 73,257 Cost of sales $ 80,609 Gross profit ($7,352) Operating expenses $ 10,440 Net loss ($17,792) Non deductible expenses ? Net taxable loss ($17,792) 3. January to December 2017: Personal income: (This is after claiming a rental loss of$3,730; Mr.

B.’s counsel is willing toaccept an imputed income of $25,000,although this was a very low incomeyear) $ 4,270 Corporate return: Gross sales $ 88,194 Cost of sales $ 85,119 Gross profit $ 3,075 Operating expenses $ 39,569 Net loss ($36,494) Non deductible expenses $ 14,875 Net taxable loss ($22,619) 4. January to December 2018:

Personal income: Personal income $86,018 (Mr. B. went up to [omitted for publication] as an employee between March and September, and he earned $94,252 and claimed a $7648 rental loss) $86,018 Corporate return: Gross sales $43,320 Cost of sales $50,020 Gross loss ($6,700) Operating expenses $10,102 Net loss ($16,802) Non deductible expenses $59 Net taxable loss (The corporate return is somewhat irrelevant this year due to employment at S [omitted for publication].) ($16,743) 5.

January to December 2019 : Personal income: (Before applying a rental loss of $14,956 and some RRSP income) $ 48,210 Corporate return: Gross sales $305,713 Cost of sales $203,349 Gross profit $102,364 Operating expenses $ 40,973 Net income $ 61,391 Non deductible expenses $ 22,009 Net taxable income $ 83,603 (with adjustments) 6.

January to December 2020 : Personal income estimate: $48,000 Corporate Interim Financials to August 30,2020: Gross sales $316,360 Cost of sales $121,935 Payroll $57,454 Operating expenses $109,557 Net income $27,412 Non deductible expenses not known Net taxable income not known [ 49 ] For 2015, I am not prepared to impute an income to Mr. B. lower than the $80,000 set out in the 2008 Memorandum. I appreciate that his actual 2015 personal income was just over $24,000 rather than the $37,500 set out in the 2008 Memorandum, and the gross sales for the company were considerably lower than in 2007.

However, in support of a divorce, Mr. B. swore a child support affidavit in 2015 that his annual Guideline income was $80,000 and that he was paying $700 per month in child support in accordance with the Guidelines . I outline below other reasons why his income should not be simply the amount set out in his tax returns. [ 50 ] For 2016 and 2017, Mr. B.’s company suffered losses due to very poor gross sales, just over $73,000 and $88,000 respectively. He did lose a major client in 2016.

His 2016 personal income was about $25,300 and his 2017 income was about $4,300, which his counsel concedes could be imputed at $25,000. Although these were obviously more difficult years, I make the following general comments about Mr. B.’s lean earnings in recent years: 1. Overall, my impression is that Mr. B. chose to follow his father’s footsteps to become an owner/ operator, even though he was aware that excavator employees could earn between $50,000 and $60,000 per year, and even as much as $80,000. He later clarified that owner operators of excavators likely could earn $58,800.

His father testified that his son would be lucky if he earned $50,000-$55,000. 2. Mr. B. persisted in this business despite several low earning years. As Judge MacKay noted in 2010, Mr. B. made his choices

partly because of the flexibility it provided. But in my view, his persistence in this sometimes unremunerative business allows me to impute a higher income. I acknowledge that by 2018 he is pursuing a different line of work for one year, but again, the earlier Memorandum and the 2015 divorce documents contain his own admission that he could earn the equivalent of $80,000. 3. Mr. B. purchased a second property in [omitted for publication] in 2011 for $561,000.

I understand he needed both a first and second mortgage to complete the purchase, but the mere fact that he qualified for such mortgages causes me to ponder the true state of his financial affairs. He also said that he did some excavator work for the seller in return for a reduced sale price. This property has provided him with good write-offs in subsequent years. It was concerning that he pursued no rent from Mr. W., who used a garage to grow medicinal marihuana from 2016 to 2018. I also note he pays a lot in mortgage payments for the two properties.

I do acknowledge that he has had financial assistance from his father and, later, Ms. L. [ 51 ] Based on all the evidence, I would impute to Mr. B. an annual income of $60,000 for the leaner years of 2016 and 2017. [ 52 ] For 2018, Mr. B.’s income should be the $86,018 shown on his tax return, although I have some reservations about his rental loss. I note that he operated a crane that year, but he is not a ticketed crane operator. [ 53 ] For 2019, I would return Mr. B.’s income to the $80,000 imputed in the Memorandum notwithstanding his reported income of just over $48,000.

I rely on my analysis above regarding the Memorandum and Mr. B.’s own words about what an excavator employee could earn. As well, I note that the company had gross sales of $305,000 and a net income over $61,000. Although the net corporate income is not much different than the net income in 2007, just before the Memorandum was executed, the gross income now is much higher. The gross income may be somewhat inflated because there is nearly $65,000 in equipment rental expense for work done by his father’s excavators.

I realize we could not hear from the bookkeeper because she was ill, but even without accounting evidence, 2019 is clearly a much better year than the three prior years. The company has an employee who is paid $30 per hour, and there is over $23,000 in the business chequing account at one point. [ 54 ] In 2020, I again impute an income of $80,000 notwithstanding the reported income of $48,000. I do so for many of the reasons outlined above. Interim financials for 2020 show a gross corporate income of about $316,000 but a net income of $27,400. Those figures do not include September of 2020.

When I examine all the evidence, I am again struck by the fact that Mr. B. owns two properties and other assets, while Ms. B. is now a renter with few assets. I realize Mr. B.’s father assisted in paying off $30,000 in corporate debt after the separation, and his present spouse assisted with personal debt using her ICBC settlement. [ 55 ] I do not accept Ms. B.’s contention that Mr. B. could earn between $100,000 and $150,000 annually. She is focussed on his 2018 year. While it is true that Mr. B. earned $94,252 for some six months in 2018, that work was seasonal. Moreover, the case law is clear that Mr.

B. cannot be expected to pursue employment out of town, especially in a shared parenting regime. He also cannot be expected to regularly work the arduous hours he did in [omitted for publication], which included much overtime. Mr. B. also had to maintain a second household in [omitted for publication] for part of the time he worked there. Ms. B.’s Income [ 56 ] Ms. B. works part-time as a certified dental assistant at [omitted for publication] and certain other dental offices.

Her reported personal income is as follows: December 2015: Personal income for the year $ 44,030 January to December 2016: Personal income $ 37,924 January to December 2017: Personal income $ 41,883 January to December 2018: Personal income $ 41,687 January to December 2019: Personal income $ 44,569 January to December 2020: (Ms. B. estimated $30,000 but see below) $ 42,000 [ 57 ] Mr. B. is seeking to impute an income to Ms. B. of $60,000. He says she is under employed and not declaring all her income. Ms. B. currently works three days a week at [omitted for publication] and she mainly assists one dentist.

She does pick up additional shifts with the other dentists in the office, and she works at other offices through a temp agency. She earns $27 per hour at [omitted for publication] and $30 per hour at her temporary positions. [ 58 ] Ms. B. did earn $50,000 per year between 2000 and 2003 working for a prosthodontist. She asserts that she could no longer work for that prosthodontist because his office was in downtown Vancouver and she moved to the Fraser Valley. In my view, the three hour daily commute is a valid consideration.

However, my general sense of her evidence is that she is very content with her current arrangement at [omitted for publication], and she has not actively pursued other dental employers. She does sometimes use the temp agency. [ 59 ] It is correct that If Ms. B. earned $30 per hour working eight hours per day for a five day week in a 50 week year, she could earn $60,000. But that has never been the case, and the Memorandum, although 12 years old now, only projected her income to be $40,000. [ 60 ] Moreover, Ms.

B. has suffered some financial setbacks, and I hardly think she would deliberately be underemployed when faced with such adversity. She is now a renter because she lost her townhome in a foreclosure in 2014. She also had to file a consumer proposal in 2016. [ 61 ] I am prepared to rely on Ms. B.’s tax returns as filed between 2016 and 2019. Her 2020 employment income was lower because of the COVID-19 pandemic and the temporary shut-down of dental offices between March and May. Her primary dentist also worked fewer days. Nevertheless, Ms.

B. appears to have earned more than her estimate of $30,000 for 2020, as her [omitted for publication]

income to November 10 th was $27,315.99 and she earned $3,962.07 from other dental offices. She also received employment insurance of $8,784.71, so in my view, her total 2020 income was closer to $42,000. [ 62 ] Going, forward I am prepared to impute some modest additional income to Ms. B., as dental offices are now open but with reduced patient loads due to COVID-19 protocols. For 2021, I expect that Ms. B. could earn $44,000, especially if she were more actively seeking additional shifts. [ 63 ] I am not prepared to impute any additional income to Ms.

B. for her involvement with [omitted for publication], a wellness company. By referring clients to the company, she gets a credit for the purchase of beauty and household products and nutritional foods. While she did earn close to $7000 in credits between 2016 and 2019, these credits simply allow her to purchase products at a discount. According to Ms. B., she earns credits of $40 - 60 per month, and she spends considerably more than that on their products. [ 64 ] I also do not see any evidence of a viable income from her advertisements to sell cannabis oil products and shakra cleansing.

However, I will also add that I see no medical evidence suggesting that Ms. B. has a disability limiting her employment. RETROACTIVE CHILD SUPPORT [ 65 ] Based on the tax returns and a set off calculation, Mr. B. submits that he has overpaid child support by some $34,000 between December of 2015 and December of 2020. He always paid the $700 per month as outlined in the Memorandum, but he would like a massive credit moving forward. Conversely, Ms. B. argues that Mr.

B. has been underpaying child support for that same period. [ 66 ] Before addressing the issue of retroactive child support calculations, I must first determine the approach to be used to calculate child support in a shared custody situation. [ 67 ] Child support in an equal parenting time arrangement is governed by s.9 of the Guidelines which states: 9. Where a spouse exercises a right of access to, or has physical custody of, a child for no less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account (

a) the amounts set out in the applicable tables for each of the spouses; (

b) the increased costs of shared custody arrangements; and (

c) the conditions, means, needs, and other circumstances of each spouse and of any child for whom support is sought. [ 68 ] The Supreme Court of Canada case of Contino v. Leonelli-Contino , 2005 SCC 63 outlined the approach to be taken when applying s.9 of the Guidelines . There is a two part test: firstly, whether the payor has the child at least 40% of the time, and secondly, what is the appropriate amount of child support? [ 69 ] Obviously, Mr. B. has the boys an equal amount of time, so he meets the first test. The real issue here is the appropriate amount of child support.

It was decided in Contino that there is no presumptive rule in favour of reducing the amount of child support payable by one parent to another, although a set-off calculation was considered a useful starting point. The court is required to review the three factors listed in s.9; no one factor is determinative, and the court must exercise its discretion. [ 70 ] I will analyze the first s.9 factor, the applicable table amounts.

If I simply use a set-off calculation using the imputed incomes for the parties between December of 2015 to December of 2020, the math is as follows: 2015 (using December 31, 2011 tables): Mr. B.’s imputed income of $80,000: $1209 monthly support Ms. B.’s income of $44,030: $670 monthly support Set off: $539 Actual payment: $700 Possible overpayment: $161(for one month) 2016 (using December 31, 2011 tables): Mr.B.’s imputed income of $60,000: $910 monthly support Ms.

B.’s income of $37,924: $581 monthly support Set off: $329 Actual payment: $700 Possible overpayment: $371 ($4,452 for the year) 2017 (using December 31, 2011 tables): Mr. B.’s imputed income of $60,000: $910 monthly support Ms. B.’s income of $41,883: $639 monthly support Set off: $271 Actual payment: $700 Possible overpayment: $429 ($5,148 for the year) 2018 (using November 22, 2017 tables):

Mr. B.’s income of $86,018 $1,329 monthly support Ms. B.’s income of $41,687 $660 monthly support Set off $669 Actual payment $700 Possible overpayment $31 ($372 for the year) 2019 (using November 22, 2017 tables): Mr.B.’s imputed income of $80,000 $1239 monthly support Ms. B.’s income of $44,569 $702 monthly support Set off $537 Actual payment $700 Possible overpayment $163 ($1,956 for the year) 2020 (using November 22, 2017 tables): B.’s imputed income of $80,000 $1239 monthly support Ms.

B.’s income of $42,000 $664 monthly support Set off $575 Actual payment $700 Possible overpayment $125 ($1500 for the year) [ 71 ] Based on this analysis of the first factor in s.9 of the Guidelines , one could argue that Mr. B. substantially overpaid child support in 2016 and 2017. These were his leanest years. The total overpayment to 2020 exceeds $13,000. [ 72 ] However, I must also consider the other s.9 factors. The second factor of s.9 necessitates a consideration of whether the shared custody has increased each family’s overall costs. I accept Ms.

A.’s submission that each of the parties have secured larger residences to accommodate two teenage boys. They both also drive large vehicles to carry hockey bags and the like. Although there is some dispute about each parent’s budgeted expenses, those expenses do seem to outstrip their incomes. [ 73 ] In my view, the more important factor in this case is the third one in s.9: the conditions, means and needs of both the parties and the children.

The court is to ensure that the standard of living in one household does not widely vary from the other and that each parent is capable of absorbing the costs required to maintain such a standard for each child ( J.W. v. M.H.W., 2007 BCSC 1075 ). [ 74 ] I must again say that the 2008 Memorandum is persuasive evidence of the parties’ earning capacity and the child support arrangement for their shared custody arrangement. Even though Mr.

B.’s taxable income was then $37,500, he accepted that he could earn considerably more, and more to the point, he accepted paying child support at a rate of $700 per month, well above a table set off. He confirmed this child support in an affidavit in 2015. By implication, he accepted to some degree that he had better conditions and greater means than his former spouse. [ 75 ] The facts in this case bear this out. Mr. B. does not have a lavish lifestyle, and he now has a third child to support.

Nevertheless, he has been able to hold on to the matrimonial home in [omitted for publication] which now has over $400,000 in equity. He also has a Harley Davidson motorcycle and a jet boat in addition to his vehicles. Perhaps most significantly, he and his present spouse own a recreational property in [omitted for publication] with about $300,000 in equity. The [omitted for publication] property earns no income now and is being held for investment and recreational purposes.

The recent mortgages on the [omitted for publication] property do not allow for a tenant, so the property is a very valuable asset earning no income while greatly appreciating in value. [ 76 ] As I have said, Mr. B. has had financial assistance from his father and his present spouse, but nevertheless, he has been able to make substantial mortgage payments on both properties. The monthly mortgage payment for the [omitted for publication] property is $2,451.97 (this is a joint obligation with Ms. L.), and the monthly mortgage payment for the family home is $1,870.94 (Ms.

L. assists with this payment as well). [ 77 ] In comparison, Ms. B. has been renting and she lost her townhouse in a foreclosure. She has been through a consumer proposal and has few assets. There can be little doubt that, overall, Ms. B. is in a significantly worse financial position than Mr. B., and a simple set-off using the tables will not bridge the gap between the standard of living in the two households. [ 78 ] Having considered all the evidence and the s.9 factors, I have concluded that Mr. B. has a claim for a retroactive adjustment in child support, but only for his lean years of 2016 and 2017.

Although the set off calculations using imputed incomes for those two years would exceed $9,000, I am reducing that figure to $3000. Again, Mr. B. had always been paying more than a simple set-off because of his earning potential. To give him a credit of anything larger than $3000 would be to work a hardship on Ms. B. In a retroactive calculation, hardship on the “payor” parent is something I must consider under paragraph 95 of the D.B.S. case, and I must avoid too large an imbalance between the two households. [ 79 ] In conclusion, based on retroactive calculations and s.9 of the Guidelines , Mr.

B. will have a credit of $3000 for the period December 1, 2015, to present, to be applied against future child support obligations. FUTURE CHILD SUPPORT [ 80 ] In my analysis of the parties’ incomes, I have imputed an income to Ms. B. of $44,000 for 2021. Dental offices have returned to work but not with normal patient loads. If unforeseen issues arise during the pandemic, she can always seek to vary my order. However, I expect she can earn a higher figure as a dental assistant when the pandemic is over.

[ 81 ] Mr. B.’s imputed income for 2021 is somewhat more vexing. I have found the 2008 Memorandum to be persuasive, and Mr. B. then agreed his excavator business should earn him $80,000 annually. He claims the mediator came up with this number and he was unaware of the calculations, but he confirmed that income again in 2015 in divorce documents. [ 82 ] Nevertheless, I now have the test of time, some 12 years since the Memorandum was written. Although Mr. B. had a very strong year in 2018, that income was not earned through his business.

I must consider the corporate returns since 2016 which disclose weaker incomes, and as importantly, I must remember Mr. B.’s own words that an average excavator employee earns between $50,000 and $60,000. Based on all the evidence, I am imputing to Mr. B. an income of $60,000 going forward. I find that to be a realistic future income for him considering all the evidence. [ 83 ] Again, I must engage in the s.9 analysis to determine the appropriate amount of child support where there is shared parenting time. The set-off amount would be $238 (Mr. B.’s monthly obligation is $931 and Ms.

B.’s monthly obligation is $693). Again, when I consider the third factor of s.9, including the conditions, means and needs of the parties and the children, a further adjustment is necessary to provide some balance between the two households. As discussed above, Mr. B. has considerably more assets and resources than Ms. B. [ 84 ] Based on the evidence and the s.9 factors, Mr. B. should pay to Ms. B. child support of $400 per month going forward. From that amount, the sum of $100 per month should be deducted until Ms. B. has satisfied the $3000 credit owing to Mr. B. for retroactive support.

SPECIAL AND EXTRAORDINARY EXPENSES [ 85 ] Both Mr. B. and Ms. B. are seeking a division of s. 7 expenses for the boys, specifically net medical and dental expenses, hockey and equipment, and certain other fees. The 2008 Memorandum, which I found not to be binding, provided that such expenses are to be shared equally.

Normally, such expenses are to be shared in proportion to the parties’ incomes (see s. 7(2) of the Guidelines ). [ 86 ] It is important to remember that s.7 provides that the assessment of special or extraordinary expenses must take into account the necessity of the expense in relation to the child’s best interests, and the reasonableness of the expense in relation to the means of the parties and the child and to the family’s spending pattern prior to separation.

The list of expenses in s.7 does include medical and dental premiums attributable to the child and health-related expenses. [ 87 ] The list of expenses also includes extraordinary expenses for extracurricular activities. Section 7(1.1) provides guidance as to what an extraordinary expenses means, and the court under s.7(1.1)(

b) must take into account: (

i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, (ii) the nature and number of the educational programs and extracurricular activities, (iii) any special needs and talents of the child or children, (iv) the overall cost of the programs and activities, and (

v) any other similar factor that the court considers relevant. [ 88 ] Judge Doulis recently discussed the case law relevant to s.7 expenses, and particularly extraordinary expenses, in M.M.L. v. J.K.S., 2021 BCPC 18 . Recreational sports and other similar extracurricular activities, such as dance lessons, community sports leagues, ski trips etc. are generally considered ordinary. The question is whether the participation goes beyond that of the ordinary child. [ 89 ] In so far as hockey is concerned, I think it is wonderful that both boys have been able to play the game.

B.B. played until recently, and T.B. still plays, subject to the COVID-19 restrictions. Until about 2016, Mr. B. paid for all the hockey expenses, but since then, Ms. B. usually paid for the hockey expense (not tournaments) for one of the two boys. Mr. B. is seeking a retroactive and future contribution for money he has spent on hockey equipment, hockey fees and B.B.’s recent gym membership. These total over $2,600 and go back as far as 2016. [ 90 ] I recognize that Mr. B. has trimmed down his claim regarding extraordinary expenses, but in my view, these expenses are not extraordinary as defined under s.7.

These are ordinary sports activities, and there is no evidence of special talent here. In fact, B.B. stopped playing organized hockey. As well, even though Ms. B. has been contributing when she could, she really does not and did not have the means to be required to pay this expense. Gym fees are also not extraordinary. I would also note that at least one of the boys had part time work fixing cell phones, and it may be necessary to have the boys contribute to their own activities as they get older. [ 91 ] In so far as the health related expenses and premiums are concerned, Mr.

B.’s spouse has been paying MSP premiums and dental premiums for the two boys since 2016. Of course, MSP premiums were eliminated on January 1, 2020. Most of the premiums cover Mr. B., his spouse, the two boys, and his youngest son, J., when he was added in 2018. Concerning dental premiums, Mr. B. is seeking contribution for two fifths of the premium paid for a family of five, and one half of the premium paid for a family of four.

This rough calculation may be appropriate, although I have been provided no evidence about the precise cost for adding dependents to the dental plan. [ 92 ] However, those rough calculations do not apply to the MSP premiums. In 2016, the BC MSP premiums for couples with a net income over $30,000 was $1632 for a family of two and $1800 for a family of three or more. The annual difference is only $168. For 2017 onwards, children under 19 were made exempt from MSP premiums. So there can be no s.7 claim for the boys for MSP premiums after 2016.

[ 93 ] For simplicity, I am assessing Ms. B. a proportionate share of 40% for any historical premium or health related claims. [ 94 ] Ms. B. is required to share 40% of the following expenses relating to the boys’ medical and dental coverage: $111.50 for half the 2017 dental premium of $223; $168 towards the 2016 MSP of $1800; $89.57 for two fifths of the 2018 dental insurance of $223.92; $89.57 for two fifths of the 2019 dental premium of $223.92; $89.57 for two fifths of the 2020 dental premium of $223.92; and $200 for B.’s physiotherapy.

These expenses relating to the health expenses for the two boys total $748.21 and Ms. B.’s 40% share is rounded to $300. This is a small fraction of Mr. B.’s claim for hockey and health related s.7 expenses. [ 95 ] I realize Ms. B. could offer the boys some free dental care at her clinic, but I do not consider the dental premiums paid by Mr. B.’s spouse to be redundant. [ 96 ] Mr. B. will therefore receive a credit of $300 towards the boy’s historical s. 7 expenses, at a rate of $50 per month until it the credit is satisfied.

Going forward, the parties will share the dental premiums and health related expenses for the children in proportion to their current imputed incomes, currently 42% for Ms. B. and 58% for Mr. B.

ORDERS [ 97 ] Upon the court being advised that the names and the birthdates of the children are as follows: B.W.B., born [omitted for publication], and T.H.B., born [omitted for publication]; [ 98 ] J.B. is found to be a resident of British Columbia and to have an imputed income of $60,000; [ 99 ] R.B. is found to be a resident of British Columbia and to have an imputed income of $44,000; [ 100 ] The parties have shared custody of the children under s.9 of the Child Support Guidelines ; [ 101 ] J.B. will pay to R.B. $931 per month and R.B. will pay to J.B. $531 per month (reduced under s.9, leaving a set-off of $400) for the support of the children, commencing March 1, 2021, and continuing on the first day of each month thereafter, for so long as the children are eligible for support under the Family Law Act or until further court order; [ 102 ] J.B. shall receive a credit of $3000 for retroactive child support covering the period December 1, 2015 to present.

This $3000 credit shall be credited at the rate of $100 per month as against J.B.’s future child support obligations, commencing March 1, 2021, until the credit is satisfied or child support ceases; [ 103 ] J.B. shall receive a credit of $300 for retroactive special expenses covering the period December 1, 2015 to present.

This $300 credit shall be credited at the rate of $50 per month as against J.B.’s future child support obligations, commencing March 1, 2021, until the credit is satisfied or child support ceases; [ 104 ] Each party will pay their proportionate share of special and extraordinary expenses for the children, and those expenses will only be dental premiums attributable to the children, health related expenses that exceed insurance reimbursement, and other expenses as agreed in writing. The parties’ respective proportionate shares are R.B. 42% and J.B. 58%. ______________________________ The Honourable Judge G.J.

Brown Provincial Court of British Columbia