Director of Maintenance Enforcement v. J.K.P. Date:, 2011 BCPC 514

Citation: Director of Maintenance Enforcement v. J.K.P. Date: 2011 BCPC 0514 File No: F6403 Registry: Abbotsford IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY MAINTENANCE AND ENFORCEMENT ACT , R.S.B.C. 1996 c. 46 BETWEEN: DIRECTOR OF MAINTENANCE ENFORCEMENT, on behalf of L. J. P. APPLICANT AND: J. K. P. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE A.E. ROUNTHWAITE Counsel for the Director: J. Anderson Appearing in person: J. K. P.

Place of Hearing: Abbotsford , B.C. Date of Hearing: May 13, June 30, 2011 Date of Judgment: July 4, 2011 [ 1 ] The Director of Maintenance Enforcement (“the Director”) seeks an order under s. 23(4) of the Family Maintenance Enforcement Act (“the Act ”) committing JKP to jail for 90 days for defaulting on an interim order made in the Provincial Court on March 5, 2010, for payment of arrears of child support. The Director also seeks a default order under s. 21(1) that Mr.

JKP pay the arrears owing on a Supreme Court child support order made August 3, 2001, at the rate of $1.00 a month in addition to his ongoing child support payments and be jailed for any further defaults. [ 2 ] Mr. JKP seeks an order under s. 16(4) of the Act setting aside a Notice of Attachment issued by the Director to attach monies owed to Mr. JKP by the federal government, including any income tax refunds to which he is entitled, and an order under s. 29.2 directing ICBC to disregard the Director’s notice to withhold Mr.

JKP’s driver’s licence until he pays his arrears. [ 3 ] The hearing on all these applications began on May 13, 2011. Mr. JKP testified that afternoon but was not cross examined due to insufficient court time. The hearing was adjourned to June 30, 2011, at 9:30, when Mr. JKP failed to attend court. After asking the Director’s counsel to try to telephone Mr. JKP and waiting a reasonable time, I proceeded to conclude the hearing in his absence under ss. 21(5) and 23(2)(

a) of the Act for the following reasons: 1. I had heard most, if not all, of Mr. JKP’s direct evidence in support of his applications and on matters relevant to his ability to pay arrears on May 13. 2. Mr. JKP had failed to comply with an order for financial disclosure before the May 13 hearing date and had still not complied by June 30. 3. The first appearance on the summons to a committal hearing was on October 19, 2010, and this was the 18 th court appearance on these applications. [ 4 ] I was satisfied that Mr.

JKP had been given an opportunity to show cause why he should not be ordered to pay his arrears and why he should not be imprisoned for defaulting on the arrears order; he had failed to comply with a financial disclosure order; and further delay would be prejudicial to the creditor and not in the interests of justice, given the number of previous court appearances on these matters. [ 5 ] The history of relevant court orders is as follows. On August 3, 2001, B.C. Supreme Court Justice McKinnon ordered that Mr. JKP pay child support to LJP at the rate of $626.00 a month for the support of two children.

In his Reasons for Judgment in Pedersen v. Pedersen 2001 BCSC 1138 , Justice McKinnon found that Mr. JKP did not want to work full time, although he could easily do so. The Supreme Court Justice based Mr. JKP’s monthly maintenance payment on Guideline income of $44,600, determined by averaging Mr. JKP’s previous five years’ income. [ 6 ] Mr. JKP applied to the Supreme Court on June 5, 2007, for an order reducing on-going child support payments and cancelling arrears but his application was not granted. [ 7 ] In an effort to enforce arrears, the Director directed ICBC to withhold Mr. JKP’s driver’s licence.

On April 15, 2008, after Mr. JKP made a substantial payment reducing his arrears, a consent order was made in Provincial Court returning his driver’s licence, provided that it stand as security. Upon subsequent default, the Director reissued a licence hold although it did not seek seizure of the licence. [ 8 ] On March 5, 2010, an interim order was made in Provincial Court requiring Mr. JKP to pay $1.00 a month towards arrears of $26,125.74, including interest and default fees, accumulated on the Supreme Court Order, and in default of any payment to serve 7 days consecutive in jail. Mr.

JKP has made no payments since March 5, 2010. His arrears on the March 5, 2010, order total $8,151.00 as of June 29, 2011. The resulting default time totals 91 days, but the Act imposes a 90 day maximum default period. [ 9 ] On February 22, 2011, an order was made requiring Mr. JKP to file a sworn financial statement with filed income tax returns for the years 2007 through 2009 at least ten days before his hearing. He did not file a statement of finances and he only provided counsel for the Director with unfiled tax returns on the hearing date. [ 10 ] I will deal first with Mr.

JKP’s applications and then with those of the Director. Notice of Attachment [ 11 ] Mr. JKP’s application filed October 29, 2010, and notice of motion filed December 7, 2010, seek to set aside a notice of attachment, dated August 16, 2009, for interception of any money owed to Mr. JKP by the federal government. [ 12 ] Section 16(4) of the Act provides as follows: s.16(4) If the director refuses to withdraw a notice of attachment, on application by the attachee or the debtor in accordance with the

regulations, the court may (

a) summarily determine whether or not (

i) the attachee is liable under the notice, or (ii) the notice contains or is based on a material error, or (

b) determine that an issue or question necessary for the determination of the liability of the attachee be tried. [ 13 ] Neither the attachee, the federal government, nor Mr. JKP has disputed the attachee’s liability to Mr. JKP. When asked what material error he relied on, Mr. JKP said the Supreme Court had made an error in making an order based on an affidavit that contained an error. However, the Supreme Court’s judgment stands unless it is overturned by the Court of Appeal and the time limit for appealing is long past. The error alleged by Mr. JKP is not the type of error required by the Act .

He is bound by the Supreme Court order, and as I explained to him, I cannot look behind it. [ 14 ] I note that a potential material error in a notice of attachment does not provide sufficient grounds to set it aside. In Director of Maintenance Enforcement v.

Prins, July 25, 2005, Williams Lake Registry, file #03-2631, when a debtor said he would apply to cancel arrears accrued when the children were not living with their mother, Judge Bayliff held that the Act requires proof on the balance of probabilities that the notice of attachment is based on an actual error, one existing at the present time, rather than a potential error . [ 15 ] I therefore dismiss the motion and application to set aside the notice of attachment because Mr. JKP has not established that it contains or is based on any material error.

Direction to ICBC [ 16 ] The law I must apply to an application for an order directing ICBC to disregard the Director’s notice to withhold a driver’s licence until arrears are paid is set out in s. 29.2 of the Act : 29.2

(1) The director must direct the Insurance Corporation of British Columbia to disregard a notice given under

section 29.1 if the debtor satisfies the director that (

a) the notice is based on a material error, (

b) the lack of anything referred to in

section 29.1 (3) or (3.1) will significantly reduce the debtor's ability to pay under the maintenance order and the debtor has entered into an arrangement that is satisfactory to the director to report the debtor's financial circumstances from time to time, or (

c) the debtor has entered into a payment arrangement that is satisfactory to the director.

(2) If the director refuses to act under subsection (1), the court, on application by the debtor, may summarily determine whether the refusal was unreasonable and, if the refusal is found to be unreasonable, may order the director to act under subsection (1). [ 17 ] Mr. JKP did not establish that this notice was based on any material error, nor did he establish that the lack of a driver’s licence or vehicle number plates would significantly reduce his ability to pay child support.

He testified that lack of a driver’s licence affects all aspects of his life, making it hard to look for work and even to buy groceries, and preventing him from teaching his daughter to drive. However, as detailed below, Mr. JKP has had a poor work history for several years and the evidence does not establish that this bears any relation to his possession or lack of a licence. As described below, he has no realistic plan for employment that would require a licence.

In addition, his failure to file income tax returns because he does not want any refunds going to his former spouse under the notice of attachment indicates that willingness to pay is a factor in Mr. JKP’s case. The evidence therefore fails to establish that lack of a licence is a significant factor affecting his ability to pay. Furthermore, he has not entered into a reporting arrangement satisfactory to the Director; instead he has failed to comply with a Court Order for financial disclosure. Finally, he has not entered into a payment arrangement that is satisfactory to the Director.

The Director’s refusal to direct ICBC to disregard the notice concerning Mr. JKP’s driver’s licence is eminently reasonable. [ 18 ] I therefore dismiss the motion filed December 3, 2010, to direct ICBC to disregard the Director’s notice not to issue or renew Mr. JKP’s driver’s licence.

Default Hearing [ 19 ] The following portions of s. 21 of the Act are relevant to the Director’s application for a default order: s. 21 (1) Unless the court is satisfied at a default hearing that there are no arrears owing under the maintenance order or that the debtor is unable for valid reasons to pay the arrears in full, the court may make one or more of the following orders:

...... (

d) that the debtor discharge the arrears (

i) in one payment by a date the court specifies, or (ii) by periodic payments in the amounts and on the dates the court specifies; (

e) that, despite

section 82 of the Offence Act but subject to

section 23 of this Act , the debtor be imprisoned for a period of up to 30 days each time the debtor fails to pay, by a date specified in an order under paragraph (

d) or subsection (11) (a), (

i) the amount due on that date under the order under paragraph (

d) or subsection (11) (a), and (ii) the amount due by that date under the order being enforced under paragraph (

d) or subsection (11) (a); ......

(2) If an order is made under subsection (1) (

d) and a previous order has been made under that subsection against the debtor, the court must also make an order under subsection (1) (

e) unless it is satisfied that the debtor could not have avoided defaulting again in a payment required under the maintenance order.

(3) If the court is satisfied at a default hearing that the debtor is, for valid reasons, unable to pay the arrears in full or to make subsequent payments under the maintenance order, the court may (

a) order the debtor to make periodic payments under the maintenance order in a reduced amount and for a term specified by the court, with the amount by which the payments are reduced being added to the arrears, and (

b) make one or more of the orders described in subsection (1) (a), (

b) or (

d) to (f).

(5) The court may make an order under subsection (1), (2) or (11) in the absence of the debtor if he or she was served with a summons issued under

section 19 or was apprehended under a warrant issued under

section 20.

(6) Imprisonment of a debtor under this

section does not discharge arrears owing under a maintenance order. [ 20 ] On May 5, 2010, Judge Gardner made an interim order requiring Mr. JKP to pay arrears of $26,125.74 including interest and default fees at the rate of $1.00 a month in addition to his regular maintenance payment of $626, and in default of any one payment to serve 7 days in jail consecutive for each default unless he shows cause why he should not be imprisoned. He has made no payments at all in 2010 and 2011. [ 21 ] Mr. JKP has not established any reason why he should not be imprisoned. His testimony was as follows.

He resigned from work as a nurse in 2004 when his hours of work were changed. As a result, he received an award for wrongful dismissal. He can no longer work as a nurse because one loses skills and current knowledge when not using them regularly. In 2008 he obtained work with a housing construction company but was laid off late that year due to the economy. He then received Employment Insurance and did odd jobs. He looked for construction work but there were no construction jobs available. He also tried to run his own construction and odd job company but was unsuccessful.

When EI said he was entitled to job retraining, he attended some places to discuss retraining as a nurse but has not pursued that. There weren’t many odd jobs available through Labour Unlimited and similar organizations this winter. He has been in “every job programme in the city” but they really didn’t lead to work. The week before the hearing began in May 2011, he investigated training as a paralegal and he now thinks he’d like to pursue that. He would have to attend a 6 month legal secretaries’ course, as a pre-requisite to admission to a paralegal course at the University of the Fraser Valley. [ 22 ] Mr.

JKP expressed frustration at having his evidence confined to the narrow issues relevant to the current applications. It appears that he does not agree with the custody and maintenance orders made in the Supreme Court, and believes the children have been alienated from him. (I note that some of Mr. JKP’s behaviour as outlined in Justice McKinnon’s 2001 judgment might be expected to cause problems in his relationship with his children without anyone else intervening.) However, as I explained to Mr.

JKP, my legal authority is limited to deciding the particular Provincial Court maintenance enforcement applications that are the subject of this hearing, and only evidence relevant to those applications is admissible in this hearing. [ 23 ] Mr. JKP’s explanations for not having worked at anything except odd jobs since he was laid off on November 14, 2008, were not satisfactory: he provided no evidence to corroborate his testimony that he has diligently sought employment.

Except for a document headed “Return to Work Action Plan, December 9, 2008“ but referring only to a meeting, he provided no details of the job programmes he said he had attended or where he had applied for work. He provided no evidence of the income he has earned from odd jobs. Although unemployed for two and a half years, he has made no real effort to retrain. The idea of becoming a paralegal is not a serious plan: it arose conveniently the week before the hearing, and Mr.

JKP did not even know the total length of the training programme. [ 24 ] Moreover, he did not file a financial statement, in breach of a Court Order. As I warned Mr. JKP, the law permits a judge to draw an adverse inference against a person who fails to file a financial statement after being ordered to do so. In other words, a judge may infer that the person is attempting to hide their true financial circumstances by not filing their financial statement. I draw an adverse inference against Mr.

JKP from his failure to provide a financial statement outlining his income expenses, assets and debts as ordered, or within the six weeks after this hearing commenced. [ 25 ] In addition to there being no corroborative evidence that he could not have obtained more work, there is a possibility that Mr. JKP is entitled to income tax credits or refunds once he has filed his tax returns for 2007, 2008, 2009, and 2010. He has refused to do this, in order to avoid having monies due to him attached by the Director and used to pay child support arrears.

[ 26 ] On the evidence, I am satisfied that there are significant arrears owing under the maintenance order: $37,188.07 including statutory interest and default fees. Mr. JKP has not established any valid reasons for his failure to pay. I find that Mr. JKP is able to pay the arrears in full by obtaining employment, and if given time to pay. [ 27 ] Mr. JKP has previously been subject to a default order: the interim order made May 5, 2010. The evidence does not establish that Mr. JKP could not have avoided defaulting again.

As a result, s. 21(2) of the Act requires me to make an order of imprisonment in default of payment. Even if it were not mandatory, such an order is justified by Mr. JKP’s continuing failure to make child support payments. [ 28 ] I therefore make the following orders: I FIND THAT the arrears owing from JKP to LJP as of June 29, 2011 are $37,188.07, and that this sum includes statutory interest in the amount of $4,385.55 and default fees in the amount of $3,200.00.

I ORDER THAT JKP pay a minimum of $1.00 per month, in addition to regular monthly maintenance payments, to LJP towards the arrears of maintenance, interest and default fees payable to the Director, commencing on July 1, 2011, and continuing on the 1st day of each month thereafter until the arrears are paid in full or until further Court Order. I FURTHER ORDER THAT in default of any one payment required by this Order, JKP shall be imprisoned in a British Columbia Correctional Centre for a period of seven days consecutive for each default of payment, unless he shows cause why he should not be so imprisoned.

I FURTHER ORDER THAT all payments shall be made by cheque or money order payable to LJP , and be sent to the Director of Maintenance Enforcement at Payment Services, Box 5599, Victoria, British Columbia, V8R 6T7.

I FURTHER ORDER THAT within 7 days of any change in his residential address or place of employment or business JKP shall report in writing to the Director of Maintenance Enforcement at Box 80449, Burnaby, B.C., V5X 3X9, or by fax at (604) 678-5680, the particulars of the change, including the street address and telephone number of each new place of residence, and the name, address and telephone number of each new place of employment or business, including any business to which JKP provides services by contract, whether in person or through any company in JKP’s control.

Committal Hearing [ 29 ] The Director is also seeking an order that Mr. JKP be imprisoned for failing to pay the arrears as ordered on May 5, 2010. The law I must apply to this application is found in s. 23 of the Act : 23

(1) If a debtor against whom an order is made under section 21 (1) (

e) fails to pay by a date specified in an order under section 21 (1) (

d) or (11) (

a) the full amount required by the order under section 21 (1) (e), on application by (

a) the director, if the maintenance order is filed with the director, or (

b) the creditor, if the maintenance order is not filed with the director, the clerk of the court that made those orders must issue a summons requiring the debtor to appear at a committal hearing before the court at a time and place indicated on the summons.

(2) If a debtor fails to appear before the court at the time and place indicated on a summons issued under subsection (1), the court may (

a) proceed with the committal hearing in the absence of the debtor and make an order under subsection (4), or (

b) issue a warrant for the arrest of the debtor for the purpose of bringing the debtor before the court for a committal hearing. .....

(4) Unless the court is satisfied at a committal hearing that (

a) the debtor has paid the full amount required under section 21 (1) (e), (

b) there has been a change in the circumstances of the debtor since the order was made under section 21 (1) (

e) and the change has resulted in the debtor's inability to pay the full amount required under that section, or (

c) it would be a grave injustice to order the imprisonment of the debtor, subject to subsection (5), the court must order the debtor to be imprisoned in accordance with the terms of the order made under section 21 (1) (e).

(5) No debtor may be imprisoned for consecutive periods that in total exceed 90 days.

(6) A debtor who is imprisoned under this

section must be released on payment of the full amount required by the order under section 21 (1) (e).

(7) If the court is satisfied at a committal hearing that (

a) there has been a change in the circumstances of the debtor since the order was made under section 21 (1) (

e) and that the change has resulted in the debtor's inability to pay the full amount required under that section, or

(

b) it would be a grave injustice to order the imprisonment of the debtor, the court may (

c) vary the order made under section 21 (1) (

d) or (11) (

a) without reducing or cancelling the aggregate of arrears required to be paid under that order, or (

d) set a date for hearing an application to vary, in accordance with paragraph (c), the order under section 21 (1) (

d) or to vary the order under section 21 (11) (a).

(7.1) On application by a debtor who was ordered to be imprisoned at a hearing held in the debtor's absence under subsection (2) (a), the court may suspend, change or cancel the order if (

a) the application is made within a reasonable time after the order was made, (

b) the application is accompanied by the debtor's affidavit setting out the reasons why the debtor did not appear in accordance with the summons issued under subsection (1) and why the debtor did not pay the amount specified in an order made under section 21 (1) (

d) or (11) (a), and (

c) the court is satisfied that there is a good reason for cancelling the order.

(7.2) If the court suspends or cancels an order under subsection (7.1), the court must set a new date for a committal hearing.

(7.3) On application by the director in relation to a debtor who was ordered to be imprisoned at a hearing held in the debtor's absence under subsection (2) (a), the court may suspend, change or cancel the order.

(7.4) An application under subsection (7.3) may be heard without notice to the debtor. ..... [ 30 ] As indicated above, there have been no payments at all on the order of May 5, 2010. The evidence does not establish any change in Mr. JKP’s circumstances since that order was made, and he has not provided an adequate explanation for his failure to work at anything but odd jobs during that period. The date of the continuation of this hearing was chosen to provide sufficient time for Mr.

JKP to file his tax returns for the last four years in anticipation of a refund that would be applied to pay down his arrears, but the Director has received no such funds and no copies of filed tax returns. Given Mr. JKP’s continuing failure or refusal to contribute to the financial support of his children, it is not at all unjust to order his imprisonment. [ 31 ] Mr. JKP’s default periods would total 98 days, but there is a statutory maximum term of 90 days. I therefore order that Mr. JKP be imprisoned for a period of 90 days unless he pays $8,788.00. The Honourable Judge A.E.

Rounthwaite Provincial Court of British Columbia