E.S. v. T.J. Date:, 2016 BCPC 218

Citation: E.S. v. T.J. Date: 20160706 2016 BCPC 0218 File No: F76475 Registry: Nanaimo IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: E.S. APPLICANT AND: T.J. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE COWLING Appearing in person: E.S.

Appearing in person: T.J. Place of Hearing: Nanaimo , B.C. Date of Hearing: June 17, 2016 Date of Judgment: July 6, 2016 [ 1 ] This is an application by T.J. (hereinafter referred to as “T.J.”) to vary retroactively his child support obligation for his child, N.S.J., born [omitted for publication]. There is also an issue as to determination of extraordinary expenses for the child, primarily as to day-care costs. As of June 5, 2016, T.J. is approximately $13,000 in arrears. BACKGROUND [ 2 ] T.J. and E.S. have no other children.

They were in a relationship for about 10 months and separated shortly before the birth of N.S.J. [ 3 ] T.J. is 37 and rents an apartment in Kitsilano while working as a self-employed landscaper. This has been his project for about 5 - 6 years. He receives some financial support and business guidance from his father who lives in North Vancouver. [ 4 ] E.S. (hereinafter referred to as “E.S.”) is 39 and is a university graduate now working as a disability case manager. She has had basically the sole care of N.S.J. since his birth. She has the logistical support of her mother who lives near Nanaimo.

E.S. is able to do her work from her rental accommodation in Nanaimo where she has lived since August of 2015. [ 5 ] E.S. has been diagnosed with ulcerative colitis since 2000 and this is a chronic condition which can be debilitating at times. This can contribute to fluctuations in her income if she has to go on disability leave. Her work

schedule is from 9:00 am - 4:30 pm weekdays. Although she is able to work from her home, the nature of her work, involving a great deal of communication and conferencing with others, means day-care is still necessary. FINANCIAL BACKGROUND [ 6 ] T.J. completed high school and has taken some post-secondary courses. He has worked as a bartender and in restaurants. At one point he went travelling for 2 years picking up work as he could. Around 2008 he worked in the oil industry earning a net income of $4,500 per month. He has also worked as a ski instructor.

He is an avid skier, mountain biker and snowboarder. [ 7 ] E.S. spent 8 years in university and recently paid off the last of her student loans. She has had steady employment in recent years including two jobs in 2013. [ 8 ] T.J. says that in his present work he might be considered more of a “hardscaper” than a landscaper in the sense that most of his work is construction oriented - decks, retaining walls, etc.

He also does some pruning and hedge trimming. [ 9 ] T.J. says that most of his jobs involve a high “materials” factor such that where he has a $1,000 job for example, typically $500 of that will be for material costs. Most of his work is in the North Vancouver area and primarily residential. [ 10 ] T.J.’s main business asset is a 2010 GMC ¾ ton Sierra that his father loaned him the money to buy. He says he repays his father $500 per month when he can. [ 11 ] He maintains an apartment in Kitsilano. His evidence was unclear as to some aspects of his living situation.

He has sometimes sublet the apartment in the past. At present he appears to be splitting the rent of about $1,000 per month with a friend. [ 12 ] He maintains a personal credit card and a business credit card. His father, who has business and financial expertise, has been trying to assist him in keeping better records and books.

This has never been a priority in T.J.’s life prior to the birth of his son and it presents that he has a steep learning curve ahead of him. [ 13 ] T.J. reports the following guideline incomes: 2012 $14,009 2013 $13,224 2014 $17,618 2015 $28,912 [ 14 ] This compares with E.S.’s numbers of: 2012 $65,027 2013 $76,927* 2014 $60,595

2015 $47,145 *working two jobs. [ 15 ] Her 2015 income was reduced due to maternity leave. She estimates her 2016 income will be $65,000-$68,000. The second job she had in 2013 is not available to her in Nanaimo nor would it be expected given her child care obligations. [ 16 ] T.J. says his work is somewhat seasonal with a slower period from mid-November to mid-February. He says he works 10 hours a day, 6 days a week when busy. He often has one or two employees/sub-contractors who work with him on jobs.

ADDITIONAL ISSUES [ 17 ] This hearing is specific to financial issues between the parties and a separate hearing before another judge is set with respect to visitation issues. [ 18 ] It presents that the parties were not very compatible from the outset and sharing a child has not improved this situation.

They have never been involved in raising the child together and E.S. has no confidence that T.J. has the ability to properly care for a very young child without the support and supervision of an experienced caregiver. [ 19 ] In July of 2014 she served T.J. with process for child support which eventually led to a consent agreement between them dated September 11, 2014 whereby he committed to paying $700 per month child support.

The agreement does not deal specifically with the issue of special expenses but does recite that “the parties acknowledge their continuing parental responsibility to provide financially” for the child. E.S. said that T.J. was working in his present job while they were together and told her he was making more than $80,000 a year.

He made other remarks to her which led her to believe that his business was quite lucrative and that he had the opportunity for additional seasonal employment. [ 20 ] She had initially requested support of $748 per month based on that expressed income but accepted T.J.’s offer of $700 per month rather than proceed with a contested hearing. She had prepared the agreement from information available on the internet and other legal advice sources. T.J. says that he felt like he was “pressured into signing” and that he was “not thinking straight” at the time.

He says that only later did he come to understand that the $700 figure was related to an income of $80,000. He says that his actual income is far from that amount. [ 21 ] E.S. believes that T.J. under reports his income and enjoys a lifestyle inconsistent with his reported income. [ 22 ] In any event for about 10 months after the agreement in September T.J. did maintain his payments.

Subsequently day care payments became an issue when E.S.’s maternity leave expired and the relocation of E.S. to Nanaimo made T.J.’s already limited contact with N.S.J. even more problematical. [ 23 ] In June of 2015 T.J. unilaterally reduced his child support payment to $269 per month apparently based on the amount set by the tables for what he considered his guideline income to be. In this case that would be $30,000.

He declined to pay anything towards day care expenses unless he received “original” invoices. [ 24 ] E.S. had filed her agreement in this Court for enforcement and registered it with the Family Maintenance Enforcement Program. Their efforts have been largely unsuccessful to date because T.J. is self-employed and has no assets.

This impasse could potentially lead to a suspension of his licence and/or a warrant of committal. [ 25 ] E.S. has provided employment ads (Exhibit 2, Tab 9) indicating that T.J. could earn $35 - $40 per hour in his line of work in support of her contention that his claimed income is incorrect. [ 26 ] T.J. says he could afford to pay more than $269 per month and it presents that he took that action as an effort to re-negotiate the September agreement to something that he would consider more fair. E.S. says the reduction in support and uncertainty as to its payment has left her very financially constrained.

SPECIAL EXPENSES [ 27 ] E.S. has their child in a registered full-time day care and her expenses are documented in Exhibit 3. This presents as a necessary and inevitable expense. It is not as if she could be expected to give up her career and depend upon T.J. for spousal support. E.S. does not qualify for subsidized day care. [ 28 ] E.S. is also claiming for approximately $500 per year in naturopath expenses for N.S.J.

In the absence of a conventional medical opinion saying that this is necessary or recommended for the child I do not consider that this can qualify as a proper special expense. [ 29 ] Her other claim is for $475 which her employer has indicated as the additional annual cost to her of having her son on her medical/dental plan. This is set out in a letter dated November 6, 2015 from the Generation Flex Benefit Centre. This is approximately $40 per month and in the case of this employer, is not covered through automatic payroll deduction.

In the absence of any specific authority on this point, I consider that this does not present as an extraordinary expense as defined by the guidelines. LEGAL CONSIDERATIONS [ 30 ] The written agreement between the parties as filed is by virtue of s. 148(2) of the Family Law Act to be treated as an order of this Court. The duty to provide support arises under s.147 and the requirements for change are set forth in s.152 of the FLA.

[31] This statutory regime has been considered in cases such as Jensen v. Jensen, 2013 BCSC 1373, Master Young where thefollowing was said: [27] The statutory authority for reducing or cancellation of arrears is contained in s. 174 of the Family Law Act, S.B.C. 2011, c. 25,which says: Reducing or cancelling arrears 174

(1) On application, a court may reduce or cancel arrears owing under an agreement or order respecting child support or spousalsupport if satisfied that it would be grossly unfair not to reduce or cancel the arrears.

(2) 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 (

c) any circumstances that the court considers relevant.

(3) If a court reduces arrears under this section, the court may order that interest does not accrue on the reduced arrears if satisfied that itwould be grossly unfair not to make such an order.

(4) If a court cancels arrears under this section, the court may cancel interest that has accrued, under

section 11.1 of the FamilyMaintenance Enforcement Act, on the cancelled arrears if satisfied that it would be grossly unfair not to cancel the accrued interest. [28] This

section is virtually the same as the former s. 96(2) of the Family Relations Act. The requirements of s.96(2) have been reviewed extensively in the following decision of Madam Justice Martinson: Earle v. Earle (BC SC), [1999] BCJ 383, New West. Reg. A881580 1. CHILD SUPPORT - BASIC PRINCIPLES 15 Three fundamental principles apply to all child support applications, including the first decision about what payments should bemade, applications to vary or change that amount, and applications to cancel or reduce arrears. a.

Joint Legal Obligation 16 Parents have a joint and ongoing legal obligation to support their children. It is considered such an important obligation that adivorce cannot be granted until parents make satisfactory arrangements for the care of their children. b. Right of the Child 17 It is the child, not the parent with custody, who has the right to maintenance. This has long been the case and has been confirmed inthe Federal Child Support Guidelines.

The first objective of the Guidelines is to establish a fair standard of support for children thatensures that they continue to benefit from the financial means of both spouses after separation. c. Ability to Pay 18 The payment of maintenance is based on ability to pay. That means that it is based not only on what the parent does earn, but alsowhat the parent can earn. The result is that parents have a legal obligation to earn as much as they are capable of earning to meet theirobligation to support their children. 2.

VARIATION - BASIC PRINCIPLES 19 Before a judge can change a maintenance order that has already been made, there has to be a material change of circumstances sincethe original order was made. That is, the change must be of the kind that, if known by the judge when the last order was made, wouldhave resulted in a different order. The change must be significant and long lasting. Otherwise, there will be uncertainty, which is not inthe best interests of children. 3. ARREARS - BASIC PRINCIPLES 21 The cancellation or reduction of arrears of maintenance is a form of variation.

There are two points that have to do with arrears thatshould be kept in mind. a. Significant Change 22 Because cancellation or reduction of arrears is a form of variation, there is a substantial onus (a heavy duty) on the person asking fora reduction or a cancellation of arrears to show that there has been a significant and long lasting change in circumstances. 23 The courts are generally reluctant to reduce or to cancel arrears. Under the Family Relations Act arrears will not be reduced orcancelled unless it is grossly unfair not to do so.

This principle is similar to the one applied to the Divorce Act, which requires a materialand long lasting change.

b. Postponement of Payment or Payment over Time 24 The second important point is that just because the arrears are not cancelled does not mean that they have to be paid right away. The court has the right to postpone payment for a reasonable period of time or make reasonable terms for payment, if it seems appropriate, taking into account all the circumstances of a case, including the present financial circumstances of the person required to pay. This would only be done when there has been a complete disclosure of the financial situation of the person asking for a postponement of payment or to pay over time. 4.

COMMON ARGUMENTS MADE TO CANCEL OR REDUCE ARREARS 25 I will now consider a number of specific arguments that are often made to the courts on applications to cancel or reduce arrears and give the legal rules that apply to those arguments. a. “I cannot afford to pay now" 26 Not being able to pay now is not a valid legal reason to cancel or reduce arrears. They will only be cancelled if the person is unable to pay now and will be unable to pay in the future. b. “I could not pay when I was supposed to because my financial circumstances changed” 27 People making this argument have a heavy onus.

It is not good enough just to say that they could not pay because they earned less. They can only get a reduction or a cancellation of arrears if they present detailed and full financial disclosure, under oath (usually in the form of an affidavit) that: i. the change was significant and long lasting and ii the change was real and not one of choice and iii every effort was made to earn money (or more money) during the time in question, and those efforts were not successful. 28 The requirement that the information be under oath is an important one.

A decision to cancel or reduce arrears can only be made on reliable, accurate and complete information. The Rules of the Supreme Court say that this can only be made based on sworn evidence unless a judge says otherwise. No judge will allow evidence that is not reliable and accurate. … a. Arrears will only be cancelled if the person is unable to pay now and will be unable to pay in the future. b.

A reduction or a cancellation requires detailed and full financial disclosure, under oath (usually in the form of an affidavit) that at the time the payments were to be made. i. the change was significant and long lasting and ii. the change was real and not one of choice and iii. every effort was made to earn money (or more money) during the time in question, and those efforts were not successful. … i. Lack of access between a parent and child is not a legal reason to reduce or cancel arrears. j. Judges will not reduce or cancel arrears because other money has been spent to buy things for the children. k.

The fact that a person did not have legal advice when the order was made or during the time when the arrears added up, is not, by itself, a reason to reduce or cancel arrears. [ 32 ] In this case, the evidence of T.J. as to his income is not of sufficient reliability to support any variation. This arises in part from the lack of proper records for his business and secondly from issues as to the accuracy and reliability of his personal financial information. There is a sense that T.J. has lived a somewhat “hand-to-mouth” lifestyle that has not disposed him to such things as budgets and record keeping.

He has never been responsible for the support of anyone other than himself and other than his apartment rent does not seem to have a history of meeting ongoing financial commitments of a meaningful nature. His offered support in September of 2014 that was accepted by E.S. (although she believed he was under-paying) was $700 per month. This equates to a guideline income of approximately $75,000 per year. This is in the range of what he would earn if he was working year round for $35 - $40 per hour.

T.J. may in fact earn more or less than this amount; it is possible that he does not in fact have an accurate record or grasp as to his actual income. [ 33 ] T.J. presents as selective in the financial information he provided and there was a lack of attention to detail where information was provided that called into question the reliability of his evidence in general. [ 34 ] As E.S. pointed out in her submission the income figures that T.J. does provide are for the most part below poverty-level and are inconsistent with his lifestyle.

They equate to below minimum wage earning levels with the exception of that reported for 2015. This

again suggests under reporting of income or poor career planning or both.

SUMMARY [ 35 ] T.J.’s application is denied for some or all of the following reasons: 1. failure to provide “detailed and full financial disclosure”; 2. failure to show any change in financial circumstances from the time of the original order or agreement; 3. failure to establish an inability to pay now or in the future; 4. failure to establish that it would be “grossly unfair not to reduce or cancel the arrears”; [ 36 ] With regard to item (2) on paper the income of T.J. has approximately doubled since the time of the September 2014 agreement. T.J. does not actually claim that his income has changed since 2014.

His claim is that he over-estimated his ability to pay support and was pressured into a bad bargain. Whatever “pressure” he may have felt was subjective to him and did not prevent him from negotiating a reduced figure from E.S. from what she had wanted.

His evidence does not establish any form of legal duress. [ 37 ] It is also to be noted that he had better access to his financial information than did she and that the end result of their 2014 agreement represents an approximately equal sharing of the financial costs of raising their child (as derived from similar estimated guideline incomes) while E.S. assumes all of the non-financial “costs” for the child as virtually the sole caregiver. [ 38 ] It may be that due to the disorganized and possibly mismanaged state of T.J.’s financial affairs, he will need some time to arrange for the payment in full of his support obligations but that is primarily a matter between he, E.S. and FMEP.

All families, whether together or separated, find that life with children is more expensive than without and typically make sacrifices and cut costs to get by. When one parent does not contribute their fair share either the child suffers or the other parent is additionally disadvantaged or both. [ 39 ] Where child support is set at an inadequate level or where arrears are cancelled without good reason, that benefit for the child is never recoverable.

SPECIAL EXPENSES [ 40 ] I consider that T.J. and E.S. have approximately equal incomes or ability to earn income and that rather than enter into an annual review of their finances it is preferable to direct that they share these expenses on a 50/50 basis. [ 41 ] E.S. has provided receipts for N.S.J.’s day care costs from November 1, 2015 onwards varying between $840 - $880 per month. These will be averaged at $860 per month until further order of the Court.

T.J. is directed to pay $430 per month to E.S. for special expenses for their child commencing the 15 th day of November 2015 and continuing on the 15 th day of every month thereafter until further order of the Court. I consider that an order in this form is necessary for FMEP enforcement purposes. [ 42 ] It is further ordered that E.S. will provide copies of all child care receipts for N.S.J. to T.J. every 6 months commencing December 15, 2016 and on the 15 th of every June and December thereafter.

If, as might be the case, E.S. has receipts for similar day care expenses prior to November 1, 2015, she is at liberty to apply for an order fixing that amount at the hearing set for visitation issues this fall or in such other manner as she may see fit. BY THE COURT _____________________________ The Honourable Judge Cowling, PCJ