2012 BCPC 359, 2012 BCPC 359

Citation: B.L., a.k.a B.K. and K.L. Date: 20120918 2012 BCPC 0359 File No: F5589 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY RELATIONS ACT AND IN THE MATTER OF THE FAMILY MAINTENANCE ENFORCEMENT ACT , R.S.B.C. 1996, c. 46 AND B.L. a.k.a. B.K. and K.L. ORDER OF THE HONOURABLE JUDGE C.J. ROUNTHWAITE Appearing in person: B.L. a.k.a. B.K. Counsel for K.L. M. WALTERS Place of Hearing: Abbotsford , B.C. Date of Hearing: July 18, September 5, 2012

Date of Judgment: September 18, 2012 [1] THE COURT: It is not unusual for parents in support proceedings to suspect that the other side has access to undisclosedincome, as both of these parties do. People often rely on gut feelings or impressions, which do not meet the necessary standard of proofas evidence in court. What is unusual in this case is the strong evidence of undisclosed income by one parent, and deliberate intentionalbad faith. [2] These parents agreed to a consent order in 1998 that the father pay $200 a month spousal support, and $400 child support,being $100 per month per child for four children.

In 2002, the father's application to reduce or cancel arrears was dismissed. In 2007, anorder was made for monthly payments towards arrears. [3] Two applications remain outstanding. In 2008, the father applied retroactively to terminate spousal support, and reduce orcancel arrears. In 2010, the father applied to terminate child support for the one remaining child, and again, to cancel arrears. To bothapplications, the mother responded by seeking an increase in child support raising issues of undeclared income and the father quittingjobs to avoid Family Maintenance Enforcement.

She also sought contribution towards extraordinary expenses, for both underage andadult children. [4] Given the issues raised, I will start by determining each parent's income over the past decade, and whether it is appropriate toimpute income pursuant to s. 19(1) of the Child Support Guidelines. [5] A decision of Madam Justice Martinson in Hanson v. Hanson, (BC SC), [1999] BCJ No. 2532, is helpful. Iwill refer to paragraphs 8 and 9 of that decision, regarding the concept of imputing income: Parents have a joint and ongoing legal obligation to support their children.

In order to meet this legal obligation, a parent must earn whatthe parent is capable of earning. Going on to paragraph 9: Imputing income is the way in which the court gives effect to the legal requirement that a parent must earn what the parent is capable ofearning. The British Columbia Court of Appeal in Van Gool v. Van Gool (1998), (BC CA), 166 D.L.R. (4th) 528,pointed out that the income imputing provisions in the Guidelines are similar to pre-Guidelines tests based on capacity.

That is, the courtmust consider not only the amount of income a spouse actually earns, but "the amount of income a spouse could earn if working tocapacity." [6] In this case, the father is a licensed mechanic and body man. He has filed T4s and Notices of Assessment from RevenueCanada to prove rather low income throughout the decade: under $5,000 in the years 2000 and 2010; under $12,000 in 2006 and 2007;$18,000 or less from 2002 to 2004; and in the 20,000's in 2001, 2005, 2009.

Other than 2008, with a reported income of $42,500, thefather's income was always lower than $26,000, until 2011, when it jumped to a remarkable $96,980 for just 11 months of work. Extrapolated to one year, that would amount to $105,800. [7] The father explains his income over the years by referring to substance abuse issues: problems with drugs. According to thefather, he was fired from a number of different jobs and also had related difficulty finding employment. He says that he was able toachieve recovery in 2006. He moved to Yellowknife in 2009, started his own shop in 2011, with obvious remarkable success.

I am surethe father would say it is just coincidental that he had such a jump in his reported income the year his youngest child turned 19. [8] I started my decision by referring to strong evidence of undisclosed income and deliberate intentional bad faith. [9] The mother, not represented by a lawyer but very well able to present her case, called three witnesses, as well as producing e-mails that had been written by the father over time. The first witness was the father's employer from the years 2004 and 2005.

Thatemployer described the father as being "an awesome mechanic, awesome body man", in spite of his substance abuse difficulties. Theemployer said that he had hired the father at the rate of $25 per hour on a full-time basis. Had the father worked there for a year hewould have made, by my count, $52,000 for the year.

The employer testified that even though there were some difficulties regarding thefather's performance, in that he liked the nightlife and occasionally was found sleeping in cars in the morning, nevertheless it wasobvious from the employer's evidence that he would have continued to hire the father at the $50,000 a year salary. [10] The problem occurred when Family Maintenance Enforcement Program started garnishing the father's wages for supportarrears. The employer said that the father asked him to pay him in cars instead of wages.

He described this as "curbing vehicles": instead of being paid wages, the father wanted to be given cars, the cars would stay in the company name, and the father would fix thosevehicles and sell them, and pocket the cash under the table. [11] When the employer refused, believing this practice was morally wrong, the father asked to be laid off from his employment, sothat he would not have to make his support payments. The same employer gave evidence that customers were actually bypassing thecompany and going directly to the father, paying him cash under the table for the work.

With all of that in mind, the employer thenagreed to the father's request that he be laid off. [12] Similar kind of evidence was given by the parents' oldest son. He testified that his father asked him to put cars in the son'sname, to which the son refused. [13] If that is not enough, another witness was called by the mother, this person being a friend and support person for the father backin 2003. They met at a divorce support group. The father told that witness, as far back as 2003, that he was doing different types ofwork under the table because his ex was coming after him for child support.

The father also said, as far back as 2003, that he kept

quitting work in order to avoid having to pay Family Maintenance Enforcement and the mother. [ 14 ] That kind of evidence was also confirmed by an e-mail purportedly written by the father in 2009: "I will rather go off E.I. and starve than to give her any support ever again." The father denies writing that e-mail; however, he does acknowledge writing all of the other e-mail from the same e-mail address over that same period which contained the same flavour of content.

I reject the father's denial; it is clear he is the one who wrote that particular e-mail as well as the others. [ 15 ] When I look at the whole of the evidence, the various witnesses coupled with the $100,000 of net business income in 2011, the court is more than satisfied that the father had the skills and ability to earn employment income of at least $50,000, I am going to say since 2004, but the evidence would certainly support going back further. I am also satisfied that the father did in fact earn more than the income that was reported to Revenue Canada, by doing work under the table for cash.

I am also satisfied that the father had a pattern and a long history of quitting work, of asking to be laid off in order to avoid enforcement proceedings. [ 16 ] I am satisfied on the whole of the evidence that it is more than appropriate to impute income to the father of $50,000, and I am going to make it from 2004 on, with child support reflecting that amount. [ 17 ] I turn now to the mother and her income, because that relates to the issue of spousal support as well as a claim for extraordinary expenses. [ 18 ] This mother had sole custodial responsibility for four children.

At the time the order was made back in 1998, the youngest child, P.L., was six, two twin girls both ten, and J.L., the oldest, was 15. The evidence is that both parents at some point agreed on home-schooling, so in addition to looking after these four children, the mother was also responsible for their schooling for most of the time. [ 19 ] The mother was on social assistance until 2003, when her children were 11, two at the age of 15, and one was 20. For the next three years she received social assistance and employment income; in 2007 she obtained full-time work, for an annual income of $13,500.

In 2008 her income increased to $27,600. At that time the youngest boy was 16, with the girls both 20 and in university, and J.L. being in his early 20's. [ 20 ] In 2009, the mother had a reduction in income. At first she was laid off, then, as she put it, she became preoccupied with her mother's illness and subsequent death. Following that, the mother travelled to Australia for an extended family visit, that being over several months from 2011 to 2012. While the mother may have had good reasons for doing so, there is no doubt that she removed herself from employment opportunities.

The father is not responsible for that period when the mother was not available to work. The father's obligation to pay spousal support will end as of 2008, that being a ten-year period of being required to pay spousal support, with the obligation ending when the mother had obtained full-time employment and the children were of sufficient age. [ 21 ] I will deal briefly with certain concerns that the father raised in relation to the mother's case, but note that these concerns were of the impression, rumour, gut feeling sort, not corroborated by good evidence.

The father believed that the mother had a boyfriend on and off for four years. I gather the implication of that was that the boyfriend was a live-in partner, with concerns about the mother's continued eligibility for spousal support during that period. I did not hear when that four-year period was, whether it was within the ten- year period that I have deemed was appropriate for spousal support, but in any event, people are entitled to have boyfriends.

The mother denies living with this person. [ 22 ] The adult son J.L. was not asked about whether or not there was any period of time that another paying adult ever lived with the family; in other words, there is no evidence before the court that the mother was receiving support from anyone else. [ 23 ] The father also raises concerns that possibly one or more children may have left home before their 19th birthday. Again, this evidence was in the nature of impression or hearsay.

The father has acknowledged, however, that he did not in fact know what was actually going on with the family during any of this time period. The mother and J.L. have both given evidence that the children have stayed at home long after they turned 19 and have continued to be dependent. So for example, J.L. talks about not receiving full-time employment until he was, I think 21 or 22, that he continued to live with his mother after that period, and did not contribute to the family finances until a year after he got employment.

According to J.L., since he was 17, while there were times that he would stay away from home during the week if he was working elsewhere, he always returned home on the weekends; that that indeed was his home. [ 24 ] When I look at the whole of the evidence, I am satisfied that the father's obligation to pay child support will continue for each child until that child turned 19. [ 25 ] Finally, I turn to the issue of extraordinary expenses. There is evidence before the court that J.L. attended two years of private school. The agreement between the parties was that they would each pay for half.

K.L. in fact acknowledges that he paid for two months of the child going to private school, that the mother continued to ask him to make payments, but he was unable to do so. I am satisfied, based on the parents' agreement that K.L. owes for his share, that only being one-half, not payment in the proportional share but rather a 50/50 split. K.L. owes for eight months of J.L.'s private school. [ 26 ] The twin girls both went to college when they were 20 years old. The mother has given evidence that while they paid many of their expenses, she paid the full cost of either some tuition and/or books.

I am going to adopt the parties' agreement regarding a 50/50 split, of such that the father owes one-half of those tuition costs. [ 27 ] As well, in 2009 when P.L. was 17, he had orthodontic bills. Those orthodontic bills will be divided on a 50/50 basis. [ 28 ] With those reasons in mind, I turn to the order which I am making today.

I am varying the order made March 3rd, 1998 as follows: The father's obligation to pay spousal support will terminate as of April 1st, 2008. [ 29 ] Based on imputed income of $50,000, the father shall pay the mother child support for three children, those being P.L. and the twins, A.L. and S.L., of $994 per month, commencing January 1st, 2004, and continuing on the first day of each month thereafter, up to

and including March 1st, 2007. (That is the time when the twin girls turned 19.) [ 30 ] Based on imputed income of $50,000, the father will pay child support for one child, being P.L., in the amount of $465 per month commencing April 1st, 2007, and continuing on the first day of each month thereafter, up to and including December the 1st, 2010. [ 31 ] Based on 2011 Guideline income of $105,796 the father will pay child support for P.L. of $953 per month on January 1st, February 1st, and March 1st, 2011. (At that point P.L. turned 19, and even though he was continuing to reside at home, child support is no longer payable.) [ 32 ] In terms of the extraordinary expenses, the father shall pay the mother the following towards extraordinary expenses: $2,728 being the father's share of J.L.'s private school expenses; $547.32 being the father's share of P.L.'s orthodontic expenses; and $1,792.23 is the father's share of the twins' college expenses. [ 33 ] The father may feel that he is being hit and being hit hard with this particular variation of the order, a significant retroactive variation.

However, I have specifically found that the father deliberately failed to declare all of the income he received, and made deliberate efforts to be under-employed in order to avoid enforcement proceedings. I could, on the evidence, have gone further; in other words, the evidence before me goes back to 2003 regarding this kind of behaviour. As well, it seems there was nothing preventing the father from starting the business up in Yellowknife earlier.

I considered imputing more income to the father, but I have chosen not to do so. [ 34 ] At this point, I am concerned about the father being in Yellowknife and taking further steps to avoid enforcement, so what I am going to do is adjourn proceedings over to another date. I will direct that Family Maintenance Enforcement revise their records in accordance with the order that I have made today, and once we have a new statement of arrears, then the court will deal with the issue of arrears. [ 35 ] Ms. Walters, any idea of how long it might take Family Maintenance Enforcement to adjust records? [ 36 ] MS.

WALTERS: Sorry, I really don't. I wouldn't think it would be too long. I think they would probably want to have an entered order. [ 37 ] THE COURT: Yes. [ 38 ] MS. WALTERS: If Your Honour would dispense with B.L. a.k.a. B.K.’s signature on the order, I can expedite that -- [ 39 ] THE COURT: I will do that. [ 40 ] MS. WALTERS: -- and get that entered as quickly as possible, and once they have it I know they'll -- they'll make the calculations. [ 41 ] THE COURT: Okay. So, Madam Clerk, B.L. a.k.a. B.K.’s approval as to the form of the order will be dispensed with.

Counsel will prepare the order, it will come to me, I will confirm that it is the order that I have just made, so we will get the order entered as soon as possible. [ 42 ] I will expect that Family Maintenance Enforcement can adjust their records in a speedy fashion, so I will get you to go to the case manager in order to fix a return date; I'm going to suggest two months away, in order to deal with fixing of the arrears and payment of those arrears. [ 43 ] MS. WALTERS: Would it be possible for K.L. to attend again by conference phone -- [ 44 ] THE COURT: Yes. [ 45 ] MS.

WALTERS: -- because I'm sure that with this kind of an order he's going to want to save some money. [ 46 ] THE COURT: Absolutely. He is not required to appear in person; however, unless there is an agreement with respect to payment of the arrears, and I imagine that counsel for Family Maintenance Enforcement could assist with respect to that, unless there is an agreement, then the court will have to do an inquiry regarding payment. So K.L. may need an updated financial statement, but only in the event that anything has changed from the date when he gave his evidence. [ 47 ] MS.

WALTERS: So, Your Honour, you're saying that if he can make an agreement with Family Maintenance Enforcement on the payment on the arrears, that it would just be basically just -- [ 48 ] THE COURT: It could be a consent order, but it does not just involve Family Maintenance Enforcement. B.L. a.k.a. B.K. is also going to have to agree, and because of being seized with this matter, it needs to come to me and I will have to approve it. Given my knowledge of K.L.’s financial circumstances, I would expect payment to be made in a speedy and appropriate fashion. C.J. ROUNTHWAITE Provincial Court Judge