M.H. v. K.H. Date:, 2013 BCPC 255

Citation: M.H. v. K.H. Date: 20130822 2013 BCPC 0255 File No: F29398 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: M.H. APPLICANT AND: K.H. RESPONDENT ORDER OF THE HONOURABLE JUDGE D.R. GARDNER Appearing in person: M.H. Counsel for the Respondent: T. Smith Place of Hearing: Surrey , B.C.

Date of Hearing: May 29, 2013 Date of Judgment: August 22, 2013 [ 1 ] THE COURT : This case is an illustration of the unreliability of imputed income in maintenance proceedings, and the subsequent injustice that can be suffered by one of the parties as a result of that finding. [ 2 ] M.H. and K.H. separated in 2008. They have a daughter, N., born [date of birth]. She is now 17, and of course will be 18 in four months. At the time of the separation, K.H. was running a business near the Vancouver Airport that was having serious financial problems.

He was four months behind in his rent and three months behind in his lease payments for his shop. Apparently his customers were not paying their bills on time. [ 3 ] In September 2008, he received a letter from his landlord informing him that he must vacate his business premises. He and his father needed to remove his tools and other belongings from his shop. The night before the scheduled family court hearing he called M.H. and said he could not attend court. She told him that she would advise the court of this situation and have the matter postponed. I accept his version of that conversation.

But that is not exactly what happened before the Honourable Judge Raven in court on September 19th of 2008. When M.H. was asked if she knew of any reason as to why he was not present, she replied, "I did have a telephone conversation with him last night and he did say that he might not be here but I can't take what he says --" and she is then interrupted by Judge Raven. She was then asked if she wanted to proceed in his absence and she said, "Sure." She was again asked if she was confident that he knew of the hearing date and she told the court that he might not be able to make it.

When she was asked what he had said last night, she repeated that he might not be able to make it, just that he would be working all night. [ 4 ] She then gave evidence saying K.H. made roughly around $50,000 a year when she knew his company was in financial distress, basing that on cheques that she had deposited for him. That figure is not supported by any credible evidence. She also said they separated in 2006 and that he did not pay any child support since then. It is set out in the report dated May of 2009, the

Section 15 Report as it then was, that the parties separated in November 2007. [ 5 ] As to the issue of what the court can do about cancelling or reducing arrears, s. 174 of the Family Law Act states that: 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. 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 any circumstances that the court considers relevant. 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.

If a court cancels arrears under this section, the court may cancel interest that has accrued under s. 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. [ 6 ] The law in B.C. is that it would be grossly unfair to not cancel or reduce arrears of child support if no final order on the issue has been made and if a different order would have been made if a hearing had been held and all the facts been available to the court. [ 7 ] As set out in the written argument of counsel, various judges have interpreted the grossly unfair test in the case of X.(R.L.) v.

X. (J.F.) a 2002 decision of the B.C. Supreme Court, after noting that the payer of child support had legitimate reasons for bringing an application to reduce arrears after six years.

Madam Justice Martinson wrote at paragraph 86: However, the fact that there has never been a "final" order has a bearing on the question of whether it would be grossly unfair not to reduce the arrears. [ 8 ] She further wrote at paragraph 87 that: It is my view that had a hearing leading to a final order taken place within several months after the interim order, the court would likely have concluded that the father’s income earning capacity was in the area of $30,000. This would reflect the admitted fact that he lost an important contract shortly after the August 1996 hearing.

Had the table amounts applied, he would have been required to pay $266 a month. The final order would have been in place since that date. It would be grossly unfair not to reduce the arrears to reflect that change. [ 9 ] Similarly, in Girard v. Girard , a 2006 decision of our Court of Appeal, arrears of child support were reduced because it would be grossly unfair not to do so. At paragraph 30 Madam Justice Ryan wrote for a unanimous court that: Beames J. took into account that Mr. Girard revealed his financial difficulties to Ms. Girard in a timely way.

He made his first application to reduce his support payments when he was not in a position to pay them. Although not explicitly stated in the reasons of [the trial judge], it seems she found that requiring Mr. Girard to pay the full arrears would

be grossly unfair because a variation of support would likely have been granted on any one of his three previous court appearances had Mr. Girard presented the court with adequate financial information. [ 10 ] I will get back to that in a moment. [ 11 ] As set out in his evidence, K.H. has had numerous health difficulties over the past several years. I accept the documents from the medical practitioners that have been filed in his support.

I have no reason to disbelieve him when he tells the court about his injuries, particularly in view of the fact it has been supported by documented evidence, and I also accept the fact that it, to a significant degree, undermined his ability to find employment. He has not made anywhere near $50,000 since 2008 and the onset of his health difficulties.

It has been complicated by depression which can be attributed to the breakdown of his marriage, the failure of his business and his medical disabilities, forcing him to earn much less of an income that he had previously been able to earn. [ 12 ] I say this because I accept the calculations that have been set out by his counsel in his written argument, that in 2008 and 2010 he earned no income. In 2009 his income was $20,113, which would require a monthly support payment of $174.93. In 2011 he earned $23,546, which would require him to pay monthly support of $202.59.

In 2012 he earned $38,656, requiring monthly support in the amount of $352.04, and his projected income, which I accept to be accurate, is $36,112.50, requiring monthly support of $328.10. [ 13 ] I find that he has overpaid significantly since the original order which imputed his income of $50,000. Having heard all of the evidence during these proceedings, I have concluded that there was no evidentiary foundation for such an imputed income, looking at this retroactively. He has paid over $11,000, and what he should have paid during that time was $11,379.52.

His counsel says there has been a slight overpayment of $159.75. [ 14 ] Accordingly, I have found, in view of his overpayment as set out in the submissions of counsel, that the arrears in this matter shall be cancelled, and although he has overpaid $159.75 against that, I have the evidence that the orthodontic expense, which I have concluded he should pay at least half of, is $2,790. I have concluded what he shall now pay to M.H. is $2,680.25. [ 15 ] The fees claimed by the FMEP are hereby cancelled. [ 16 ] As to the guardianship, I have not lost sight of the fact that N. will be 18 in December.

Far be it for me to tell a 17-year old how she is supposed to conduct her life, and particularly her evenings and weekends. I will make an order that the parents have joint guardianship of N. with primary residence with M.H. I specifically decline to make an order for parenting time. Quite simply, if N. wishes to see her father, she can pick up the phone and call him. [ 17 ] I also leave it to you to draft that order. I will dispense with M.H.'s signature. [ 18 ] MR. SMITH: Thank you, Your Honour. Can you repeat the amount that -- the offset amount after the half of the orthodontics and the overpayment?

It was 2,000 -- [ 19 ] THE COURT: -- $680.25. [ 20 ] MR. SMITH: Thank you, Your Honour. [ 21 ] THE COURT: Any reason your client cannot pay that by mid-October? [ 22 ] MR. SMITH: I don't know the answer to that question. [ 23 ] THE COURT: Oh, I'm sorry, the other thing I forgot is, obviously, he still has to pay monthly support in the amount of $328. That will commence on September 1st of this year and continue until such time as she has the status of an adult. [ 24 ] Given the monthly payments, did you want to suggest a monthly amount over and above that to pay off the outstanding amount? [ 25 ] MR.

SMITH: Yes, Your Honour, I think that would probably be much -- much easier for K.H., given his expenses. I'm just trying to do the math, 26 -- $2700, I don't know. [ 26 ] THE COURT: Would one year be reasonable? [ 27 ] MR. SMITH: I think that -- [ 28 ] THE COURT: Commencing September 15th, 1/12th of that amount each month until the amount is paid in full. [ 29 ] MR. SMITH: I think K.H.'s indicating that he can do that. [ 30 ] THE COURT: All right. That is my order, thank you. I should add, the previous orders are rescinded. [ 31 ] MR. SMITH: Thank you, Your Honour. (ORDER CONCLUDED)