T.M.T. v. J.P.T. Date:, 2013 BCPC 352

Citation: T.M.T. v. J.P.T. Date: 20131223 2013 BCPC 0352 File No: F10965 Registry: Duncan IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: T.M.T. APPLICANT AND: J.P.T. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J.P. MacCARTHY

Counsel for the Respondent: R.W. Nelford Place of Hearing: Duncan , B.C. Date of Judgment: December 23, 2013 [ 1 ] THE COURT (orally): J.P.T. (the "Father") seeks a final order for child support from T.M.T. (the "Mother") for the support of six natural or adopted children. At issue before me is the following: (

a) the amount of the Mother's income and whether that amount should be grossed up since her earnings are on a tax-free basis; (

b) what is the appropriate amount of the gross up of her income?; (

c) what should be the effective date from which child support should be paid?; (

d) whether the Mother should be subject to a penalty under s. 213(d)(iii) of the Family Law Act for failure to comply with previous consent orders. [ 2 ] This matter has been the subject of several court hearings. It is useful to review the orders that have been made to this date. [ 3 ] The first order made was on February 15, 2013. That was a consent order pursuant to a consent signed by the Mother and the Father and filed with the court.

Pursuant to the terms of that order, specific arrangements were made with respect to the following six children: B.G., birth date [Month, day 1995]; M.T., birth date [Month, day 1995]; A.T.1, birth date [Month, day 2010]; T.T.1, birth date [Month, day 2000]; T.T.2, birth date [Month, day 2003]; and A.T.2, birth date [Month, day 1997]. [ 4 ] The order made February 15, 2013, provided that the Mother and the Father would have joint custody and joint guardianship of those children. The order also provided that the children were to stay with each parent two weeks on and two weeks off.

There was also a provision concerning the children continuing at the same school that they were currently enrolled in at that time, and there was a requirement that if a parent wanted to travel with the children, that each parent was to notify the other parent with times and dates of that travel. [ 5 ] The next order again is a consent order made on April 10, 2013. The purpose of that order appears to modify the arrangements concerning the parenting time for each of the parents.

The order specifically provided that the Mother would have parenting time with A,T.1 and T.T.1 from Wednesday, April 10, at 5 p.m., picking up from a location in Duncan and returning to the same location on April 23 at 5 p.m. That order remained in force until a further order was entered into on May 15, 2013.

Again, that was an order by consent, and the form of the order designates it as an interim order. [ 6 ] The parenting time of the Mother was further amended in the May 15, 2013 order such that she was to have parenting time on an alternating weekly basis starting on May 17 with the location for the pick-up and delivery specified in the terms of the order and facilitation through a third party. [ 7 ] The second provision of the order is argued to be material to the matters before me since it is alleged the Mother breached it.

It reads as follows: THIS COURT FURTHER ORDERS that during [the Mother's] parenting time, as above, she shall not take the children to the residence of J.P and L. P. [ 8 ] There is a further provision within that order that requires that the parties complete and file, with the attachments, a Form 4 financial statement and to provide the same to the opposing party by June 12, 2013. [ 9 ] The next order was made on June 19, 2013. That order again was an interim order and by consent.

It adjusted the parenting time of the Mother such that it was then on an alternating weekend basis commencing as at June 28 at 5 p.m. and with a provision for pick-up and delivery, and the return of the children on June 30 at 5 p.m. [ 10 ] The order further provides that the Mother was to prepare, complete, and file with attachments a Form 4 financial statement and provide the same to opposing counsel by June 24, 2013. [ 11 ] The issue of child maintenance was then adjourned over to June 26, 2013. [ 12 ] On June 26, 2013, a further interim order was made.

That specifically directed the Mother to prepare, complete, and file with attachments a Form 4 financial statement and provide the same to opposing counsel by June 26, 2013. It adjourned the issue of child maintenance over to July 23, 2013. [ 13 ] It is clear that the Mother had failed to comply with the previous orders for financial disclosure. [ 14 ] On July 3, 2013, an interim order without a hearing was granted. At that point, the Father was represented by legal counsel, as he had been in the previous matters except for the consent order of February 15, 2013.

The order made on that date reads as follows: THIS COURT ORDERS that [the Mother], having been found to be a resident of British Columbia, and, on an interim basis, to have an

income of $65,000 based upon her pay stub dated June 5, 2013 showing a year-to-date income of $31,121.87, shall pay for child support of [and then the following five children are listed] B.G., A.T.2, T.T.1, T.T.2, A.T.1[and then continuing on] the sum of $1,680 per month to [the Father], commencing July 15, 2013 and each an[d] every month thereafter on the 15th of each month until further order of the court. [ 15 ] The July 3, 2013 order also provided that the issue of interim child support was to be adjourned to the judicial case manager to fix a date for hearing. [ 16 ] The next order on file was made November 27, 2013.

Again, it is an interim order and by consent. The matter was unable to proceed on November 27, 2013, and was accordingly adjourned over to the judicial case manager to fix a trial date. There is a further provision that the Mother was to provide her updated paystubs to opposing counsel two weeks before the day set for trial in this matter. [ 17 ] This hearing date was assigned by the judicial case manager.

It has been indicated by legal counsel for the Father that the matter was unable to proceed on December 17, 2013, at which point he and the Mother attended before the judicial case manager in order to fix today's date. Accordingly, it is indicated by Father's counsel that the Mother was aware of this date. The matter was called this morning. She was not present. The matter has proceeded in her absence. [ 18 ] The Father testified. I also heard submissions from Father's counsel. It is noted that the issue of child support was raised in the Father's Reply filed April 10, 2013.

At that point, the parties had not addressed or brought forward any applications relating to child support. Evidence [ 19 ] Based on the evidence before me, I have heard that the Mother is a 39-year-old child safety social worker who is employed by [ name of Aboriginal Band deleted for publication ]. Her earnings are not subject to income tax, relying on her aboriginal status and her employer. I understand from the evidence that she has the opportunity of earning overtime.

I also note that when she filed her financial statement on June 26, 2013, that she failed to provide a copy of her income tax return or income tax filings for the year 2012. Accordingly, the only information as to her recent earnings is as set out and in what I understand to have been attached to her financial statement; that is, a series of copies of electronic deposit advice forms of which the most recent was one for the 7th of June 2013. That particular deposit advice indicated that her earnings to date totalled $31,121.87.

It also appears that there were amounts for CPP and EI that have been deducted. [ 20 ] Based on an extrapolation of the income being earned by the Mother founded on the electronic deposit advice form as at June 7, 2013, the submission I have heard is that the Mother's income should be determined by taking the monthly earned income to that date and dividing it by the number of weeks from the commencement of the calendar year. That works out to 22 weeks, which means that as at the June 7 payslip, that the number of weeks totalled 22, resulting in a weekly income of $1,414.90.

It is further submitted that if I take that amount on a weekly basis and multiply it by 52 weeks, that the annual income being earned by the Mother is $73,575. [ 21 ] The Father is 62 years of age and is of first nations heritage. He presently works for Vancouver Island University and a local school district in the trades programs. He also engages in part-time work in the summer as a park warden. Although he lives on reserve lands, his earnings are subject to income tax.

He also has a job as a city councillor for the [ name of municipal entity deleted for publication ]. [ 22 ] Based on the Father's financial statements that have been filed in this matter, he has an income for the year 2012. It was $30,276.59. [ 23 ] The parties separated at the end of December of 2011 or the early party of January of 2012. Based on the evidence that I have heard, I have concluded as follows -- [ 24 ] MR. NELFORD: I'm sorry, Your Honour. Were those dates off by a year? [ 25 ] THE COURT: December of 2011? [ 26 ] MR. NELFORD: It would have been 2012. [ 27 ] THE COURT: Oh, I'm sorry.

I apologize. [ 28 ] MR. NELFORD: Yes, sorry. I -- [ 29 ] THE COURT: December 2012/January 2013. I apologize. [ 30 ] Based on the evidence, I have also concluded that the children have been residing primarily with the Father and have done so since the separation notwithstanding the terms of the order made February 15, 2013. [ 31 ] I have also concluded that the Mother does exercise parenting time with three of the children, but that is often less than is provided for in the various orders that have been granted subsequent to February 15, 2013.

It is clear that the present parenting arrangement is not either a split or a shared parenting arrangement. [ 32 ] It is also clear on the evidence before me that the child M.T. earned a small amount of income between June 30 and July 13 of 2013. I am given to understand that he was unable to successfully perform the duties that were expected of him from that particular employment and he parted from employment with both the approval and the encouragement of his employer. [ 33 ] When the order of July 3, 2013, was made, that child M.T. was not included as being one of the children for whom child

support was to be paid. Based on the evidence I heard, at the time that the submissions were made to the presiding judge, legal counselfor the Father was unaware of the true state of affairs about M.T. Neither was the absent Father insofar as he was unaware that asubmission would be made by the Mother concerning the fact that M.T. was supposed to be self-supporting.

Accordingly, the order thatwent on July 5, 2013, did not make adequate provision for M.T. [34] Based on the evidence, I have also concluded that the six children, who I described at the outset are children within the meaningof the Family Law Act and are dependent upon their parents for support. The evidence does indicate that the two eldest children arepresently engaged in taking trades training. [35] Notwithstanding the order made on July 3, 2013, the Mother has not made any payments for child support. That is confirmedby the filing of the Family Maintenance Enforcement Program

summary which indicates that based on the order made on July 3, 2013,the amount owing as at December 23 totals $10,127.79. [36] I have also had the opportunity of reviewing the Mother's financial statement. I have concluded that that financial statementsworn June 26, 2013, is deficient. Firstly, it shows an income of $54,018.

However, that number appears to be inconsistent with theelectronic deposit advice forms that have been filed and, in particular, the electronic deposit advice form for the deposit made to heraccount on June 7, 2013. [37] The Mother's financial statement also fails to disclose any assets, notwithstanding the fact that it does indicate that there is a carpayment being made with respect to a vehicle.

However, no vehicle is disclosed, although I have heard evidence that at the time ofseparation, the Mother did have a vehicle and most recently appears to have obtained a new vehicle. [38] There is an itemizing of some expenses, but there is nothing to disclose debts or assets. As I previously indicated, there isnothing to show what her income for 2012 was since the income tax return for that date is missing. [39] I accept counsel's submission that the up-dated paystubs required to have been delivered pursuant to the November 27, 2013,order have not been made available.

I am satisfied on my review of the evidence that there is nothing that leads me to conclude that theMother has made any contribution for the support of her children since the date of separation. Review of the Mother's Income and the Gross Up [40] The calculation of the Mother’s income that has been made by counsel for the Father has a basis which I find to be acceptable. It is based primarily on the electronic deposit advice forms that have been presented to the court.

The calculation made by counsel andhis determination that the period of time elapsed, that is, 22 weeks, to the date of the most recent electronic deposit advice form for theperiod disclosed as at June 7, 2013, is, in my view, satisfactory.

I accept that the weekly income of the Mother does work out to$1,414.90, and I accept that given the fact that she has not made proper disclosure of her income, that it is reasonable to extrapolate herincome by multiplying the weekly amount by 52 weeks to come up with $73,575 per annum. [41] That raises the issue as to whether or not, given the fact that the Mother is earning her income on a tax-free basis, that the grossup provisions must apply. [42] Section 19(1) of the Federal Child Support Guidelines reads as follows, in part: 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 . . . [43] The Child Support Guidelines are based on a spouse's pre-tax income. The mathematical formula used to determine the tableamounts takes into account the payment of income tax: see Belisle v. Belisle, (ON SC), [2000] O.J. No. 4744 atparagraph 167. That particular case determined that the proper practice is to gross up the income of an individual who is not subject toincome tax. In that regard, two authorities were cited by the court in Belisle. They are as follows: Ninham v. Ninham (1997), (ON SC), 29 R.F.L. (4th) 41, and V.W. v.

R.N.S., [1998] O.J. No. 4889. [44] The Belisle decision also makes reference to the decision in Dahlgren v. Hodgson. That is a decision of the Alberta Court ofAppeal indexed at 1999 ABCA 23. That decision stands for the proposition that when dealing with any form of benefits or attributedbenefits received by a parent that are not taxable for income tax purposes, then it is essential that any such amounts are to be grossed upto take into account what those benefits or income would have been had they been taxed.

The court said specifically at paragraph 5 asfollows: The purpose in doing so is to ensure that the apportionment of responsibility between the parents for child support is based on the sameapproach for both parents. The guidelines are premised on division of financial responsibility based on gross before tax income.Therefore, to properly apportion that responsibility for child support between the parents, the same foundation must be used. In thisregard, it would be wrong to equate non-taxable income in the hands of one parent with taxable income in the hands of the other withoutthe appropriate gross-up.

Analysis [45] The submission I heard from Father's counsel is that an appropriate way of completing the gross up would be to take theMother's yearly income based on my findings at $73,575 and to take into account what the usual taxes and deductions would be and to

add that portion on. It is not clear from what has been filed by way of the Mother's electronic deposit advice as to what the total annual amount may be for her CPP and EI. I can extrapolate that the CPP deductions shown in her electronic deposit advice totalled as of that date, being June 7, 2013, $1,461.10, and the EI payments totalled $585. [ 46 ] Counsel has referred me to the DIVORCEmate software calculation. It shows that the total taxes and deductions at the high end would be $17,432. It is suggested that such an amount should be added on to the employment income of $73,575.

What concerns me is that by doing so, it may very well be that I am not taking into account that she already has had certain deductions made for her employment insurance and her Canada pension. [ 47 ] The form presented to me by counsel indicates two other separate calculations of the taxes and deductions, those being $16,955 and $16,476. [ 48 ] I am of the view that a more appropriate calculation by way of a gross up would be to take the amount of $73,575 and adding to it the lower amount of $16,476. That would produce an annual grossed up income of . . . [ 49 ] MR.

NELFORD: I've just calculated it, Your Honour -- [ 50 ] THE COURT: Ninety thousand -- [ 51 ] MR. NELFORD: $90,051. [ 52 ] THE COURT: -- and fifty-one dollars, yes. That is the figure I get, $90,051. [ 53 ] MR. NELFORD: May I assist, Your Honour? I -- [ 54 ] THE COURT: I am looking for the tables -- [ 55 ] MR. NELFORD: The table amount, I presume. [ 56 ] THE COURT: Yes. [ 57 ] MR. NELFORD: Yes. [ 58 ] THE COURT: If you have that in -- [ 59 ] MR.

NELFORD: I do, and I assume since we are $1 over the fifty, that we are going to the ninety thousand one hundred, and for six kids, the figure is twenty-six-oh-one. [ 60 ] THE COURT: So rounding it to the $90,100, the monthly amount is -- [ 61 ] MR. NELFORD: Two six zero one, for six or more. [ 62 ] THE COURT: $2,601. [ 63 ] MR.

NELFORD: Mmhmm, that's correct. [ 64 ] THE COURT: Per month. [ 65 ] Therefore, based on the grossed up income and using the table calculation as indicated, I will order that the Mother pay to the Father the amount of $2,601 per month for the support of the six children so long as the children remain children under the Family Law Act . [ 66 ] I will make it clear that this particular figure should be subject to an annual review, given the specific ages of the children.

It may very well be that as the two older children progress through their trades training, they will no longer meet the qualifications under the Family Law Act as children and therefore no longer be subject to support. Therefore, the amount of the monthly payments will be reviewed commencing one year's time on December 15, 2014. [ 67 ] That then raises the next question as to the effective date. The submissions I have heard from counsel is that I should be calculating the child support from the date of separation in early January of 2013.

As has been conceded by the Father's counsel, the issue was not before the courts until April 10, 2013. It is clear that as at that date, any notion of a shared parenting arrangement had floundered and that the Father was providing the primary care for the children. Accordingly, I am going to make the order effective from April 15, 2013. [ 68 ] Therefore, the arrears that are owed as at the present time can be derived by taking the monthly figure of $2,601 times nine months. [ 69 ] MR. NELFORD: I get twenty-three four-oh-nine. I'm not sure if that accords with Your Honour's -- [ 70 ] THE COURT: Yes, $23,409.

I am going to require that in addition to the payments due for child support, that the Mother will commence payments in the amount of $700 per month to be applied as against these arrears. The first payment on arrears will be made January 15, 2014, and she will continue to make payments of arrears each month thereafter until the entire portion of arrears has been discharged. [ 71 ] Turning to the next issue: whether or not the Mother should be subject to a penalty under s. 213(2)(d)(iii) of the Family Law Act . It reads as follows:

(2) In the circumstances set out in subsection (1), the court may do one or more of the following: . . . (

d) make an order requiring the person described in subsection (1) to pay (

i) a party for all or part of the expenses reasonably and necessarily incurred as a result of the non-disclosure of information or the incomplete, false or misleading disclosure, including fees and expenses related to family dispute resolution, (ii) an amount not exceeding $5 000 to or for the benefit of a party, or a spouse or child whose interests were affected by the non- disclosure of information or the incomplete, false or misleading disclosure, or (iii) a fine not exceeding $5 000. [ 72 ] The submission I have heard in this regard is that the Mother has failed to make disclosure on at least three separate occasions, and when she finally made disclosure in her financial statements, that such disclosure was incomplete and that she has failed to comply with the order made on November 27, 2013, to provide updated paystubs. [ 73 ] Counsel for the Father concedes that the issue of a penalty was not raised at any of the previous hearings.

This is a fact that I am taking into consideration. There is no doubt in my mind that the Mother has been less than forthcoming with respect to her financial position. However, as a result, she has become subject to an inference that is contemplated by s. 213(2)(

b) that is adverse in nature, insofar as I have calculated her income based on available information and made what I think is an appropriate gross up allowance, to ensure that she is adequat ely paying for the support of her children. [ 74 ] In the absence of any prior notice to her of an intention to seek the penalty, which would have been more appropriately available in an application before the judges who were dealing with the disclosure issues, I am going to reject the submission that a penalty should be imposed upon her. [ 75 ] There will be, therefore, an order accordingly, as I have outlined.

I will have Father's counsel prepare the form of that order. It will not require any approval as to the form of order by the Mother. [ 76 ] I am going to ask that Madam Clerk order a transcript of my reasons in order that it will be available for any judge that may have to deal with this matter in the future, including any enforcement of the provisions for child support or arrears. [ 77 ] That concludes my reasons. (REASONS CONCLUDED)