A.V. v. Y.V. Date:, 2017 BCPC 206

Citation: A.V. v. Y.V. Date: 20170301 2017 BCPC 206 File No: F7790 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: A.V. APPLICANT AND: Y.V. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J. CHALLENGER Counsel for the Applicant: P. Reimer

Counsel for the Respondent: D. Goodwin Place of Hearing: North Vancouver , B.C. Dates of Hearing: April 19, June 29, November 17, 2016 Date of Judgment: March 1, 2017 [ 1 ] Mr. V. (Father) is applying to vary the Order of Judge Rodgers dated August 9 th , 2011 requiring him to pay child support for two children in the amount of $378.00 monthly and spousal support in the amount of $222.00 monthly. At that time, Father’s income was found by the Court to be $24,000. A previous Order had imputed his income to be $44,400.

He says there was a change in his circumstances as of October 2013 at which time he filed for personal bankruptcy. He was discharged on June 22 nd , 2015. [ 2 ] Father has been paying various amounts since the time of the Order. As of February 24 th , 2015 there were arrears outstanding in the amount of $12,645.19. [ 3 ] Mr. V. is 41. Mrs. V. (Mother) is 46. The children are 12 and 9. Their parents married in October of 2002 and separated in September of 2010. Father has had little involvement with the children since separation. They live with Mother. [ 4 ] Father is from Russia.

He obtained a high school education and completed 2 years of technical training in his homeland. He then lived in Israel from 1992 to 2002. He was in the army for two years and then trained as a security guard. He owned and operated a computer store in Haifa for three years prior to coming to Canada in 2002. He is now a Canadian citizen. [ 5 ] Since the time of the marriage, Father has had a number of jobs including recycling, construction, and retail. He has either been fired or has quit these jobs. He has not taken any formal steps to improve his English, but was able to testify in English.

For the last 8 years he has been delivering real estate magazines and does so through a corporation he established for that purpose. He works 4 days per week and makes 50 to 70 stops for deliveries over those days. He said he likes this work and has no plans to change his job to make more money or to take other work to augment what he currently earns. He has made desultory efforts to earn other income over the years.

He testified that his current employment income was not diminishing as real estate magazines were still in demand. [ 6 ] Overall, the substance of Father’s testimony was consistent with someone who simply does not like to work and is content to subsist on a below poverty line income. [ 7 ] He reported his total annual incomes as: 2011 - $10,322 2012 - $24,000 2013 - $ 3,872 ($11,624 pre-bankruptcy) 2014 - $18,440 2015 - $18,000 [ 8 ] As to the determination of his income, the information from his corporate tax returns and his personal tax returns is difficult to reconcile with the nature of what he does.

The agreement for services his business entered into requires him to pick up and deliver magazines, set up and maintain the magazine displays, and return unsold items. (I note that only certain schedules to that agreement were disclosed and not the one setting out remuneration for services.) Father does not run an office. From time to time he might be required to pay a replacement driver if he is unable to make his deliveries. He uses his personal vehicle for the deliveries. [ 9 ] He testified that in 2012 he engaged in some food distribution to stores in addition to delivering magazines.

According to the corporate return for 2012 he sold $120,228 in products with a cost of materials of $41,076.00. He deducted just under $5,000 for duty and trades/subcontractors. He also deducted $17,570 for “overhead allocated to cost of sales” and another $16,551 for meals, bad debt, amortization of tangible assets, and rental costs (which he said was for storage of magazines). A management salary, being what he paid himself as an employee, was $25,015.

The net income to the company was approximately $9,000. [ 10 ] The only other corporate return is for September 2014 to September 2015 which shows sales of $35,346.00 with no item for cost of materials. He deducted “overhead allocated to cost of sales” in the amount of $12,080 and further amounts related to meals and entertainment, amortization of tangible assets, for rental costs and storage. The total expenses claimed exceeded his revenue for both 2014 and 2015. [ 11 ] Father purchased a condominium in 2011 with a $20,000 down payment which he said he received from his parents.

He qualified for a mortgage but was unable to explain how this came about given what he says his annual income was. His monthly mortgage payments were $1,500 which alone exceeded his declared annual income by nearly $8,000. He declared personal bankruptcy in October of 2013 and the property was liquidated. Since 2013 he has travelled to Mexico on a holiday and has a number of expenses which are inconsistent with a below poverty line existence. [ 12 ] Deposits to his business account from August 25, 2014 to September 25, 2015 total $35,174.

Deposits to his personal account from August 22, 2014 to September 24, 2015 total $32,982. This means that all of his costs of doing business could not amount to more than $2,192 over that period of time. Just over $8,000 was deposited to his personal account from sources other than his business account and were unexplained. He also expended approximately $1,200 toward “Q Trade” which he testified was a “pyramid scheme”.

[ 13 ] He claims approximately $12,000 annually for vehicle expenses according to the 2015 profit and loss statement for his company. The banking records for both his personal and corporate accounts referred to above reflect repair expenses of $508.03, a single payment to ICBC of $884 and $280 in purchases at gas stations. No records were produced for his MasterCard or National Money Card.

One payment of $250 was made toward the MasterCard and $818 was transferred to the National Money Card and do not support the amount deducted for automobile expenses. [ 14 ] For 2015 Father claimed personal annual expenses of $17,813. This amount does not include any amounts for his vehicle, phone or utilities other than electricity. Neither does it include the $3,000 he paid in support. Father’s Financial Statement reflects total debt in the amount of $400. [ 15 ] I do not accept Father’s evidence as to his income and financial circumstances.

As a result of the inconsistencies and unexplained matters referred to above, I find that Father must have another source of income that he has not disclosed. I further find that the deductions from his income, both corporate and personal, are excessive and could be properly added to his declared line 150 income. [ 16 ] In the alternative, had I found Father’s evidence as to his income and financial circumstances was accurate, I would have also found that Father is chronically under-employed and currently under-employed as a magazine delivery person.

He is 41, in good health, and fully capable of earning substantially more income in another occupation. He also has the option of obtaining another form of employment to supplement his current income. [ 17 ] In addition to the matters I have already addressed concerning Father’s financial means and under-employment, there were a number of issues raised in cross-examination which negatively impacted the credibility and reliability of Father’s testimony. His explanation for why he claimed refugee status, although he had come to Canada for a holiday, was implausible.

He said that he did not know how his wife supported them when she was in college and never thought about it. I find he prevaricated when asked to explain how he qualified for a mortgage. [ 18 ] Based on these findings, I find I must impute Father’s income and I find he has a net income of $40,000 as that is the total amount of monies deposited to his personal account in 2014/2015. That amount must be grossed up to $50,000 to reflect an appropriate line 150 income amount. I find that income should be imputed from January 1, 2014 to date. [ 19 ] Mother testified. I accept her evidence.

She is clearly in need of support for the children and for herself. She came to Canada as a refugee in 1992. Since being in Canada she has trained for and worked at various jobs in an effort to improve her standard of living and support her family. [ 20 ] Mother receives social assistance disability. Her annual income is $18,444. She says her expenses for herself and the two girls are nearly $30,000. Some years ago, she was in a car accident and developed chronic pain due to fibromyalgia. More recently she was diagnosed with a tissue disorder which has required a number of surgeries and chemotherapy.

Her prognosis is now more positive and she hopes to be able to return to work although she is only expected to survive to her mid-50’s. She supplements her disability income working part time as a barber earning another $100 to $200 per weekend. [ 21 ] She confirmed that Father has had a sporadic employment history primarily due to a lack of motivation to work and general dissatisfaction with any job he undertook. Mother also testified that Father was content to receive social assistance or Employment Insurance. [ 22 ] Father has not been supportive of Mother in his role as a parent.

To summarize her evidence, Father has demonstrated a callous disregard for the financial and emotional well-being of his children and their mother. [ 23 ] I find the evidence establishes to the balance of probability that there has been a significant change in Father’s circumstances. I find that he is earning considerably more than when the Order of Judge Rodgers was made in 2011. I find he has been earning an imputed line 150 income of $50,000 since January 1, 2014.

It follows that I find that Father has not met the onus upon him to show that there has been a change in circumstances under s. 152 or 167 of the Family Law Act justifying a retroactive or prospective reduction in the amount of child and spousal support he is required to pay.

I further find the arrears of child support should not be reduced or cancelled pursuant to s. 174 of the FLA as he has failed to establish it would be grossly unfair not to do so. [ 24 ] I dismiss Father’s application. [ 25 ] Mother did not seek a variation either retrospectively or prospectively with respect to child support or spousal support. I grant her leave to amend her application filed May 7, 2014 to permit her to seek that relief. ______________________________ The Honourable Judge J. Challenger Provincial Court of British Columbia