D.S. v. J.H. Date:, 2017 BCPC 422

Citation: D.S. v. J.H. Date: 20171208 2017 BCPC 422 File No: 6860 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: D.S. APPLICANT AND: J.H. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE G.J. BROWN Appearing in person: D.S. Counsel for the Respondent: G. Lanning

Place of Hearing: Abbotsford , B.C. Date of Hearing: January 27 and November l4, 2017 Date of Judgment: December 8, 2017 [ 1 ] THE COURT: These are my reasons in the file of D.S. versus J.H., file F6860. INTRODUCTION [ 2 ] D.S. and J.H. have two children from their relationship. Their daughter C.S. was born in 1986 and is now 31 years old. Their son Da.S. was born in 1990 and is now 27 years old. [ 3 ] The order of Judge Borowicz, granted July 20th, 1999, granted the parties joint guardianship of the then infant children, and D.S. was granted sole custody under the Family Relations Act .

By separate order on the same date, J.H. was found to have an imputed income of $27,355 per year and he was required to pay $409 per month in interim child support, commencing August 1st, 1999. [ 4 ] The subsequent consent order of Judge MacArthur, granted February 9th, 2000, found J.H. to have an income of $37,100 and he was required to pay $530 per month for the two children, commencing December 1st, 1999. [ 5 ] J.H. is now heavily in arrears of child support.

As of November 14th, 2017, his child support arrears were $26,550.03 including interest and some default fees. [ 6 ] It is important to bear in mind that FMEP reduced the maintenance obligation to $343.88 per month as of December 1st, 2006 when C.S. was no longer considered a child for child support purposes. Monthly support stopped accruing altogether after May 1, 2009, when Da.S. was no longer considered a child. [ 7 ] The principal balance is so old that a large amount of the arrears consists of interest totalling $11,745.22. [ 8 ] J.H. now seeks to reduce or cancel the child support arrears.

He says a work injury had significantly reduced his ability to earn an income. This hearing began in front of a judge who is now on leave, so I presided over the hearing mid-stream. The parties agreed that I could simply review the transcript of the proceedings held on the first day of the hearing, being January 27th, 2017, and I presided over the second day of the hearing and the closing arguments. [ 9 ] The issue here is whether or not I should reduce or cancel the child support arrears. FACTUAL BACKGROUND [ 10 ] J.H., the father of these two children, is now 67 years of age.

In 2016, he earned close to $20,000 and his income has consisted of Old Age Security pension, CPP and tax-free WCB benefits. He also had some very limited employment income. He rents an old house on the Fraser Highway and his current girlfriend assists with expenses. He owns no real estate and has little in the way of assets. [ 11 ] When the child support order was granted on February 9th, 2000, J.H. was found to have earned $37,100 and that was a consent order. J.H. could not obtain any tax records for the year 2000 and he says CRA does not have records that go back that far.

D.S. is concerned that he may have received a WCB settlement in that year. [ 12 ] J.H. had suffered a serious work injury prior to this order while the parties still lived together. In 1996, he was doing lathing work when some scaffolding gave way and he fell. His left leg and arm were shattered, and he spent many months in the hospital. When he was released from the hospital, he was wheelchair-bound for close to one year and then he was on crutches. [ 13 ] The repercussions from this serious accident only became clear years after the accident. J.H. says the injury ruined his life. He has undergone 12 operations.

He has many pins in his leg and he requires a special device in his shoe. [ 14 ] I am certainly satisfied that J.H. did suffer a serious work injury which has had a lasting impact on him. In May of 2001, the radiology report from St. Paul's Hospital describes issues with J.H.'s left ankle, foot and heel bone. He had two screws through his subtalar joint, a joint in the foot, and a single screw through his distal tibia, shin bone. Sclerosis, bone effusion and deformity were noted. [ 15 ] An operative report from April 2000, indicates that J.H. was unable to work at the time due to pain.

He received a subtalar joint injection which eased the pain by about 50 percent. [ 16 ] An earlier report from Dr. Carr in March of 1998 makes reference to the work-related accident in July of 1996. J.H. had been initially treated with open reduction and a plate fixation. In 1998, there were concerns that the plate was infected. J.H. has medical records relating to his injury including physiotherapy plans and rehabilitation reports. [ 17 ] WCB put J.H. in a job replacement program in August of 2002. One of the goals was to contact five employers per day.

J.H. says he tried work or applied for work at a couple of hundred places. J.H. has been able to work part-time but he ultimately received a lifetime WCB pension. [ 18 ] I should point out that J.H. also suffered an injury whereby he lost a finger and much earlier in his life, around 1986, he suffered another fall. [ 19 ] Exhibit 27 sets out, in considerable detail, J.H.'s job search efforts at least for the year 2002.

[ 20 ] Since the last child support order granted in 2000, J.H.'s income is as follows. As I said earlier, I have no tax records for J.H. for the year 2000 and he did believe he received some WCB settlement that year. [ 21 ] In 2001, J.H. received $25,272 in WCB compensation benefits. As will be explained in more detail later, WCB benefits are tax- free and should be grossed up. In this case, the grossed-up figure is $28,656 using current DivorceMate software.

No party provided me with any grossed-up calculations for the WCB benefits, so I have used a current DivorceMate program which does not address taxation years earlier than 2010. In any event, I believe my calculations provide a very good approximation of the grossed-up value for the WCB benefits. [ 22 ] In 2002, J.H. received a total of $27,340 but $21,040 of that total came from WCB benefits. The remainder of $6,300 was net business income. The total income should be grossed up to $31,284 using current DivorceMate software. [ 23 ] In 2003, J.H. received a line 150 business income of $20,727.

There is no reference to WCB benefits. [ 24 ] In 2004, J.H. received net business income of $1,471 and WCB benefits of $34,247, totalling $35,718. Using current DivorceMate software, that total should be grossed up to $41,952. [ 25 ] In 2005, J.H. received net business income of $4,578 and WCB benefits of $8,442, totalling $13,020. Using current DivorceMate software, that total should be grossed up to $13,246. [ 26 ] In 2006, J.H. received $8,580 in WCB benefits.

That total does not increase even when using the auto gross-up function of DivorceMate. [ 27 ] In 2007, J.H. again received $8,580 in WCB benefits and that figure does not increase when using the auto gross-up function. [ 28 ] In 2008, J.H. earned $26,220 by way of a T4, plus $8,699 in WCB benefits, totalling $34,919. Using current DivorceMate software, the total should be grossed up to $37,338. [ 29 ] I have no tax information for J.H. for the years 2009 and 2010. He says these CRA records are no longer available and he has no paperwork at home relating to those years. He only has a Grade 8 education.

I would note that FMEP received $7,100 on August 3rd, 2010 indicating that J.H. received some large sum at that time, likely a WCB settlement amount. [ 30 ] The income tax years 2011 and following may not be directly relevant as the two children were no longer eligible for child support. J.H. received $8,965 in WCB benefits in 2011 and $9,135 in WCB benefits in 2012. These figures do not increase using the auto gross-up function in DivorceMate. [ 31 ] In 2013, J.H. received $1,420 in CPP and $9,150 in WCB, for a total of $10,570.

This total does not increase using the auto gross-up function. [ 32 ] In 2014, J.H. received $8,815 by way of a T4, $5,573 in Old Age Security, $2,150 in CPP and $9,150 in WCB, for a total of $25,688.

Again, there would be a modest gross up, but precise calculations are not required for these later years. [ 33 ] In 2015, J.H. had a total income of $22,202 including $3,896 in T4 earnings; $6,786 in Old Age Security; $2,246 in CPP and $9,274 in tax-free benefits. [ 34 ] As I discussed earlier, his 2016 total income is a little less at $19,595. [ 35 ] The FMEP records, provided by D.S. in Exhibit 28, cover the greatest time span or this file. The child support arrears at enrolment on September 20th, 2000, were $3,633.

Ongoing support is calculated at a rate of $530 per month until December 1st, 2006 when it is reduced to $343.88 per month because C.S. is no longer considered eligible for child support. The $343.88 per month stops being calculated after May 1, 2009, presumably when Da.S. was no longer considered eligible. [ 36 ] The FMEP account also shows J.H.'s record of payments.

It is not a pretty picture as time moves on. [ 37 ] In 2001, J.H. paid a total of $8,109.20 in child support and he earned $28,656 grossed up in that year. [ 38 ] In 2002, he paid a total of $6,561.08 in child support and he earned a grossed-up income of $31,284 for that year. After that, the payments are either non-existent or minimal for some time. [ 39 ] In 2003, J.H. paid nothing, yet he had a business income of $20,727. [ 40 ] In 2004, he paid nothing to at least March 31 of that year when, it appears, FMEP ceased involvement for a time.

J.H. earned a grossed-up income of $41,952 in 2004. [ 41 ] No child support is paid in 2005 and J.H. only earned $13,246 grossed up that year. [ 42 ] I now turn to the Exhibit 13 FMEP account. [ 43 ] In 2006, J.H. paid a total of $114.75 in child support and he earned $8,580 that year. [ 44 ] In 2007, he paid a total of $203 and again, earned $8,580. [ 45 ] In 2008, he paid a total of $153, yet he grossed $37,338 in income. [ 46 ] In 2009, he paid $2,997.79 and his earnings were unknown.

[47] In 2010, he paid $8,546.64 and, as stated earlier, he likely received a WCB settlement that year, although there is no taxinformation. [48] In 2011, he paid $153 and he earned $8,965. [49] In 2012, he paid $303 and earned $9,135. [50] In 2013, he paid $613.80 and earned $10,570. [51] In 2014, he paid $2,661.57 and had earnings of $25,688 not grossed up. [52] In 2015, he paid $3,351.91 and had an income of $22,202 not grossed up. [53] I do not have a full accounting for 2016 or for 2017. [54] I do know that the current arrears as of November 14th, 2017, total $26,550.03, including $11,745.22 of interest and $343.88,apparently, in default fees. [55] D.S. is concerned that J.H. may be earning money under the table.

His brother has a plastering company and may pay him incash.

J.H. denies this assertion and relies on his tax information. [56] D.S. is also concerned about the missing tax information for the years 2000, 2009 and 2010. [57] D.S. explained that C.S. did attend CDI College in 2006 but I note that child support is being calculated for C.S. in that year inany event. [58] D.S. also explained that Da.S. went to the Industry Training Authority (ITA) in 2010 but it is unclear from the documents howlong he attended there and whether it was entirely full time. [59] D.S. testified, and I accept, that she was primarily responsible for C.S. and Da.S.'s housing, food and clothing while they weredependants.

She struggled financially because J.H. did not make the court-ordered payments. D.S. also paid for the children's schoolsupplies and extracurricular activities when she could. J.H. did not regularly give even Christmas presents to the children. Although thechildren are now adults, they have debts. C.S. has a student loan in excess of $11,000 and Da.S. has a car loan. SHOULD THE CHILD SUPPORT ARREARS BE REDUCED OR CANCELLED? 1. Preliminary Remarks [60] Before I address that main issue, I want to make a few preliminary observations.

First, I have grossed up J.H.'s WorkerCompensation Benefits for the relevant years because he receives those benefits on a tax-free basis. On the Notices of Assessment, theWorkers' Compensation Benefits are shown as income, but they are deducted at line 250 for income tax purposes. Such benefits shouldbe grossed up pursuant to s. 19 of the Child Support Guidelines and as outlined in the case of E (S.C.) v.

K (W.C.), 2010 BCSC 1592. [61] My use of the auto gross-up function from DivorceMate provides a good approximation for the true value of the WCB benefits. [62] Secondly, D.S. expressed concern that the FMEP account statements did not allow for the fact that her children completed somepost-secondary education. In my view, the post-secondary education issue will not materially affect my calculations.

I accept that C.S.took a Legal Administrative Assistant course at CDI between August of 2005 and May of 2006; however, the FMEP account shows C.S.as being eligible for child support until December of 2006. [63] D.S. asserts that Da.S. attended ITA starting sometime in 2010. The documents she provided are less than clear as to whetherDa.S. attended the program and whether it was full time.

The diploma she provided was for a high school apprenticeship. [64] The FMEP account stops calculating child support for Da.S. as of May 1, 2009 and it appears FMEP did not treat Da.S. as achild thereafter, notwithstanding D.S.'s submission at the time. Moreover, D.S. never made a court application at the time to reinstateDa.S.'s status as a child under the old Family Relations Act. [65] I commend D.S. for assisting and supporting her children well after their 19th birthdays but I cannot rule that the FMEP accountis in error.

I will take into account the fact that both these children now have debts and they would have been better served if J.H. hadpaid the child support on time and in the court-ordered amount. [66] Thirdly, I want to make this general comment for the father to hear. When I look at an application to reduce or cancel childsupport arrears or even a retroactive variation, I must remember that the child support is the right of the children, not the right of D.S. See Earle v.

Earle, (BC SC), 1999 BCJ 383. [67] In the present case, Da.S. and C.S. had a right to child support when they were youngsters and if it had been paid morepromptly and in higher amounts, I am sure the financial pressures on the family would have eased. I appreciate D.S. was on IncomeAssistance and she was only entitled to a limited benefit based on Ministry policy at the time. 2. Retroactive Variation [68] Now I turn to the father's application. He seeks to have the child support arrears reduced or cancelled under s. 174 of the FamilyLaw Act.

His counsel and his former counsel did not refer to another possible alternative, a retroactive variation pursuant to s. 152(1) ofthe Family Law Act. An application to retroactively vary an order focusses on "correcting" a support order, whereas a s. 174 applicationis more akin to debt relief and the test there is a more onerous one.

[ 69 ] It may be that the father's present or past counsel considered a retroactive variation application and realized it would be fraught with problems. I would agree. As enunciated in G.M.W. v. D.P.W ., 2014 BCCA 282 , the analysis from the Supreme Court of Canada in the D.B.S. v. S.R.G. et al , 2006 SCC 37 , applies where a payor seeks to retroactively reduce support. [ 70 ] The first factor is to consider the circumstances surrounding the delay in bringing the variation application. Here, the father applied in January of 2016 to vary an order made in 2000.

I appreciate J.H. is unsophisticated but he was aware of FMEP enforcement since 2000 or 2001 and he chose to do nothing for 16 years or so. [ 71 ] The second factor in a retroactive variation application is the payor's conduct. Again, J.H. does not fare well under this factor because he has years such as 2003, 2004 and 2008 when he paid little or nothing, yet his income in those years was considerable. [ 72 ] The third factor is the children's circumstances.

When the child support order was in force, D.S. and her children were struggling financially, and child support would have greatly assisted them. [ 73 ] The final factor is the hardship caused by a retroactive variation and I must say that the hardship works both ways. I have little doubt that J.H. is burdened by these child support arrears in circumstances where he, himself, was injured at his workplace. However, his two children, even now, are in financial need due to student debt and other circumstances. [ 74 ] Overall, I would not make a retroactive variation of the child support especially given the delay.

Ordinarily, a court would only go back three years in any event, and that is of no assistance to J.H. 3. Cancellation or Reduction of the Arrears [ 75 ] That leaves the issue of a reduction of the child support arrears using s. 174 as sought in this case.

Section 174 reads as follows:

(1) On application, a court may reduce or cancel arrears owing under an agreement or order respecting child support or spousal support if satisfied that it would be grossly unfair not to reduce or cancel the arrears. I underline the words "grossly unfair".

(2) For the purposes of this section, the court may consider (

a) the efforts of the person responsible for paying support to comply with the agreement or order respecting support, (

b) the reasons why the person responsible for paying support cannot pay the arrears owing, and (

c) any circumstances that the court considers relevant.

(3) If a court reduces arrears under this section, the court may order that interest does not accrue on the reduced arrears if satisfied that it would be grossly unfair not to make such an order.

(4) If a court cancels arrears under this section, the court may cancel interest that has accrued, under

section 11.1 of the Family Maintenance Enforcement Act , on the cancelled arrears if satisfied that it would be grossly unfair not to cancel the accrued interest. [ 76 ] It should be remembered that the gross unfairness test is an onerous one. The payor must show not only that he cannot pay the arrears now, but that he has no future ability to pay such arrears. See again the Earle case above. [ 77 ] As I stated, I am not pleased with J.H.'s efforts to comply with the child support order. In 2004, he grossed almost $42,000, yet he paid no support. In 2008, he grossed $37,338, yet he paid only $153.

That being said, there were years when he made considerable payments notwithstanding his ongoing difficulties with his leg and foot injury. [ 78 ] The years of 2001, 2002, 2009, 2010, 2014 and 2015 produced some substantial payments but that does not make up for the gap between 2003 and 2008 when child support was very much needed. [ 79 ] As for the reasons why J.H. could not pay the court-ordered amount of child support, I accept that he was injured and that the repercussions of that injury were not known until well after the last court order in February of 2000.

He faced many surgeries and he appears to have followed the job search requirements of WCB. However, he also received WCB settlements and found periods of work, notwithstanding his limitations. He just did not make child support a priority. [ 80 ] Given my findings, and the onerous standard here, I am not going to simply recalculate J.H.'s child support obligations using the Child Support Guidelines . That would be akin to granting him the retroactive variation which I just denied.

Instead, I am prepared to give him a reduction of arrears relating to those years he seemed most affected by his injury or where WCB did not provide him with significant benefits. It would be grossly unfair not to reduce the arrears for those years in which he struggled the most with his injury and his low income. [ 81 ] I also find that he has very limited capacity, now or in the future, to pay the total arrears. He is 67 years old with fixed pensions and WCB benefits and some employment income. [ 82 ] The benchmark income here is the $37,100 income referred to in the February 9th, 2000 order.

I must examine the years 2000 to 2009 with reference to that benchmark. [ 83 ] As a result, J.H. will receive no reduction in arrears for the years 2001, 2002, 2004 and 2008. He earned $28,656, $31,284, $41,952 and $37,338 in those respective years. There are some highs and lows, but the income in those years is not drastically different than the benchmark of $37,100.

[ 84 ] J.H. will also receive no reduction in arrears for the years 2000 and 2009. For 2000, the court order was just made and, moreover, no tax information has been disclosed. He may have received a WCB settlement that year. For 2009, no tax information was disclosed. It is clear that he received some form of WCB settlement in 2010 after the child support obligation had expired. [ 85 ] Consequently, J.H. is to only receive a child support arrears reduction for the years 2003, 2005, 2006 and 2007.

In 2003, he still managed to earn $20,727 which results in a child support obligation of $326 per month for two children using the 2006 Child Support Guidelines . I should say the 2006 Guidelines were the oldest guidelines I could locate, and they provide a good approximation of what the child support obligation would be for the years for which I am considering a reduction. [ 86 ] The court ordered obligation in 2003 was $530 per month, so the difference is $204 per month or $2,448 for the year.

J.H. paid no child support that year, so taking into account all the circumstances, including delay, I am prepared to allow a reduction of $1,200 for 2003. [ 87 ] In 2005, J.H. grossed $13,246 which results in a child support obligation of $191 per month for two children using the 2006 Child Support Guidelines . The difference between that sum and the court-ordered obligation of $530 per month is $339 per month or $4,068 for the year.

Again, J.H. paid no child support for 2005, so I am prepared to allow for a reduction of $2,200 for 2005. [ 88 ] For the years 2006 and 2007, J.H. only received $8,580 in WCB benefits. That low income produces virtually no child support obligation for those two years. J.H. only paid about $115 in child support in 2006 and $203 in 2007. The court ordered support obligation of $530 per month produces a yearly obligation of $6,360. I am not prepared to reduce that obligation to zero in these circumstances.

Taking into account all of the s. 174 factors, I will reduce the arrears for 2006 and 2007 by $3,000 per year or $6,000 for the two years. [ 89 ] In conclusion, I have found that it would be grossly unfair not to reduce the child support arrears for the years 2003, 2005, 2006 and 2007.

I am of the view that the total reduction of $9,400 in principal is fair and appropriate, taking into account the s. 174 factors. [ 90 ] The current interest is $11,745.22 and although it would be grossly unfair not to allow for some reduction in interest, I am not prepared to reduce the interest in proportion to my reduction of the principal. J.H. waited far too long to bring his application and his payment record is poor.

I will allow a $1,000 reduction in the interest. [ 91 ] I will cancel the default fees of $343.88. [ 92 ] Accordingly, the total child support arrears, interest and default fees, totalling $26,550.03 are reduced by $9,400 in principal, $1,000 in interest and $343.88 in default fees, leaving a balance owing of $15,806.15. [ 93 ] My order is as follows: All child support arrears and interest are reduced to $15,806.15. Any default fees are cancelled. G.J. BROWN Provincial Court Judge