S.L.M. v. D.R.M. Date:, 2011 BCPC 149

Citation: S.L.M. v. D.R.M. Date: 20110208 2011 BCPC 0149 File No: F12190 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY RELATIONS ACT , R.S.B.C. 1996 c. 128 BETWEEN: S.L.M APPLICANT AND: D.R.M. RESPONDENT RULING OF THE HONOURABLE JUDGE C.J. ROUNTHWAITE Counsel for the Applicant: J. Anderson Counsel for the Respondents: R. Krentz Place of Hearing: Abbotsford , B.C.

Date of Hearing: October 12, November 25, December 17, 2010 Date of Judgment: February 8, 2011 [ 1 ] THE COURT : This is a default hearing for $300,000, being child support arrears, spousal support arrears, interest and penalties. Notwithstanding payments over the years totalling $350,000, D.R.M. still owes his former spouse just under $300,000. This all stems from a variety of Supreme Court orders under the Divorce Act , with the ongoing obligation for spousal support ending in 1997, and child support ending in 2006, when the youngest child was 24.

The complicated court history is set out in Madam Justice Saunders' Reasons for Judgment, dated October 21st, 1998, and I rely on that history. [ 2 ] Two issues are raised in this default hearing. Number one: is the application for enforcement of spousal support arrears statute barred by the Limitation Act ? Number two: taking into account all of the circumstances, how much can D.R.M. afford to pay towards the arrears?

As these were orders of the Supreme Court, and indeed, one from the Court of Appeal, I have no jurisdiction to vary or cancel any of the arrears, but only to deal with enforcement. [ 3 ] Turning first to the limitation issue. The order to pay spousal support was terminated as of January, 1997. Section 3(3)(

f) of the Limitation Act establishes a ten year limitation period to apply for enforcement, subject to any payments being made, which confirm the cause of action and postpone the running of the limitation period, s. 5(2)(a)(ii). The question then is whether the debtor made any payments towards spousal support arrears during the relevant ten-year period, which would postpone the running of time? [ 4 ] Counsel for the debtor frames the argument as follows. He says s. 15.3 of the Divorce Act , as well as 93.2 of the Family Relations Act , both give priority to child support payments.

Therefore, payments received should go first to ongoing child support, then to child support arrears, before anything is attributed as payment of spousal support arrears. From the date the spousal support ended in 1997, the total amount of arrears have continued to increase. In other words, the payments that have been received were not sufficient to meet the full child support obligation, so that no payments should be attributed to spousal support. If no payments were made, then the

creditor's entitlement to enforce payment of spousal support ended in January 2007, pursuant to the Limitation Act . [ 5 ] The argument goes further. The application to enforce was not filed until November 2007, after the ten-year limitation period had expired. As set out in Duke v. Duke , 1998 BCSC 1029, the creditor is statute barred from enforcing the arrears of spousal support.

The court can only make an order fixing arrears of child support, and the payments to be made towards those arrears. [ 6 ] I cannot agree with the basic prerequisite of that argument, that there is a priority given to child support when it comes to the payment of arrears. I say so for a number of reasons. Number one: the last order for periodic payment of arrears in this case was made January 27, 1997, simply $200 per month towards arrears.

The Supreme Court did not set out any priority for payment as between child or spousal, but simply lumped the payment towards arrears as a whole. [ 7 ] Number two: the sections referred to by counsel, 15.3 of the Divorce Act and 93.2 of the Family Relations Act , do not set out any priority regarding payments or arrears.

Rather, they establish a priority for the court making orders. 15.3(1) of the Divorce Act reads: Where a court is considering an application for a child support order and an application for a spousal support order, the court shall give priority to child support in determining the applications. [ 8 ] In other words, the priority is with respect to the court making the order, not with respect to what happens to payments once those have been received. [ 9 ] Number three: nor is the creditor assisted by s. 32 of the Family Maintenance Enforcement Act, which sets out the allocation for payments received by the program, first to ongoing periodic monthly payments, then to arrears due and owing.

There is no differentiation made between child and spousal arrears. [ 10 ] In short, there is no legislation, nor have I been provided with any case law, which supports priority to child support over spousal when it comes to the payment of arrears. [ 11 ] In this case, the Director's counsel points to the year 2003 as an example. The ongoing order for child support required close to $16,000. By notice of attachment, almost $26,000 was collected, $10,000 more than the ongoing order required.

That excess amount was paid towards the balance of arrears owing, the totality of arrears, not limited to just child arrears. [ 12 ] Throughout the ten-year period there is ample evidence that the creditor actively has proceeded with efforts to enforce ongoing support and arrears: garnishing wages, enrolling with the FMEP in 2002, numerous notices of attachment, notices of federal interception, and suspension of driver's licence and passport rights. This is not a case of an inordinate delay in enforcing arrears of maintenance, as was the case with Shaw v. Van Louie , 1998 BCSC 1544.

Nor can it be said that the debtor was ever unaware of his obligation for payment of the arrears, as was the case in Duke v. Duke , that I have already referred to. The enforcement of the spousal support arrears is not statute barred. The entire amount is enforceable. [ 13 ] I will say I have considerable sympathy for D.R.M. regarding his frustration over the spousal support. Back in 1995 there was a reference to the registrar in which the creditor, through her counsel, acknowledged that her entitlement to spousal support likely had ended in 1988, and had not been reactivated in subsequent years.

In spite of that, spousal support was not actually terminated until 1997. Sympathy notwithstanding these were Supreme Court orders. I have no jurisdiction other than to deal with enforcement of the entire amount of arrears. [ 14 ] I turn now to s. 21 of the Family Maintenance Enforcement Act and the required analysis of the debtor's current ability to pay. Pursuant to 21(4), I take into account all of the debtor's circumstances, including the income and assets of the debtor's spouse, in this case, Ms. V., who, while they may be officially separated, they still live together and clearly are not at arm's length.

I am mindful of the presumptions of s. 36, that the debtor is presumed to have the ability to pay unless the contrary is proven, and adverse inferences may be drawn on failure to file prescribed documents. [ 15 ] Here, the debtor has continued an unfortunately longstanding pattern, referred to by courts in the 1990s, of efforts either to mislead or to escape enforcement. For example, he has not held a bank account in approximately seven years, choosing instead to put all of his income in his wife's sole name.

He was ordered to provide documentary proof of loans which he says were his sole income throughout 2010, yet he has failed to do so. [ 16 ] The debtor has provided unreliable evidence with respect to his 2010 income. He says there was no employment income in 2010, and yet Ms. V.'s bank account shows deposits of $67,500 up to August of 2010. There is some evidence before the court that $24,000 of that was family loans, but it still leaves $43,500 entirely accounted for, by either the debtor or Ms.

V. [ 17 ] Turning to an assessment of all of D.R.M.'s circumstances, he is, as I understand it, an engineer of some unique abilities, and has had the ability over the years to earn in the range of $100,000 to $150,000. Still, he is 68 years old. He has had considerable medical difficulties within the last decade. He was diagnosed with cancer in 2002 when he had his kidney removed. He has had hip and knee surgery. He had a stroke, I think it was in 2008, a return of cancer in 2010, metastic renal cell carcinoma, requiring the upper lobe of his lung to be removed.

Back in 2008, I think, his doctor recommended that he reduce stress, physical labour and hours of work, although I understand that he has now been cleared to go back to work. Still, he has been hit with economic problems stemming from the recession.

I understand that both of his most likely employers, one in Australia and one in Alberta, from whom he had the possibility of continued employment at $108,000 per year, have had problems obtaining funding. [ 18 ] So with all of that in mind, notwithstanding the past ability to earn income, I have to find, and I am indeed satisfied pursuant to 21(1) of the FMEP, that D.R.M. is unable to pay the arrears in full for valid reasons. In that regard, I note that the total of the arrears are about $300,000. As I will say in a moment, the Director is seeking periodic payments of $2,500 per month.

Not allowing any increase for interest and penalties, at $2,500 per month it would take him ten years to pay the full amount of the arrears. Given his age, his medical difficulties, the problems with respect to employment, et cetera, I cannot find that he will be able to pay the arrears in full.

[ 19 ] Still, that does not end the matter. I look at 21(3) of the Act, which allows for an order for periodic payments. In other words, while the full amount may never be able to be paid, still, some payments are required pursuant to 21(3). The question is how much. Looking at his 2010 income, bank statements show deposits averaging $8,430 per month, as I say, up to August of 2010. The Director seeks periodic payments of $2,500 towards the arrears. While the loan payments were not verified as they were ordered to be, I still accept the evidence of D.R.M. and Ms.

V. that the $24,000 deposited from a Sidney account were loans from family. That would reduce D.R.M.’s average monthly income to $5,400 per month, and I understand that that is the income for two people, for him and Ms. Verchere. [ 20 ] Looking at all of the circumstances, I find that periodic payments of $1,250 per month are appropriate. I note D.R.M.’s counsel was seeking payments of $1,000 per month, but given the adverse inference in terms of this unaccounted-for income, I prefer $1,250 per month.

I will accede to D.R.M.’s counsel that the default period be five days consecutive in jail. [ 21 ] So the arrears will be fixed as of October 8th, 2010. The amount that I have is $295,939.09, although I will ask that counsel review their records in order to ensure that the agreed amount of $17,600 has been deducted. [ 22 ] That amount includes interest at 79,581.17, and default fees of $2,000. Without reviewing all of the details of the form order, I would just fill in a requirement that he pay $1,250 per month towards the arrears, in default five days jail consecutive. _____________________ C.J.

Rounthwaite Provincial Court Judge