C. M. v. W. M. Date:, 2012 BCPC 171

Citation: C. M. v. W. M. Date: 20120529 2012 BCPC 0171 File No: F7858 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY RELATIONS ACT , R.S.B.C. 1996 c. 128 BETWEEN: C. M. APPLICANT AND: W. M. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE C. BAIRD ELLAN Appearing in person: C. M.

Counsel for the Respondent: F. C. Lowther Place of Hearing: North Vancouver , B.C. Dates of Hearing: April 27 and May 11, 2012 Date of Judgment: May 29, 2012 [ 1 ] The applicant CM(1) and the respondent WM are the parents of CM(2), born [DOB]. They were married in February 1997 and separated in September 2009. [ 2 ] The parties entered a consent order on January 5, 2011 pursuant to which they have joint custody and guardianship of CM(2), CM(2)’s primary residence is with CM(1), and WM had specified parenting time.

During the summer following that order, WM moved to Squamish BC. [ 3 ] On December 13, 2011 I made an interim without prejudice order that WM pay to CM(1) spousal support of $550 and child support of $425 from July 1, 2011, based on an imputed income of $50,000. CM’s interim application to change the parenting

schedule due to WM’s move was dismissed. [ 4 ] The parties have a hearing date set in Supreme Court on June 5, 2012 on the issue of division of property. [ 5 ] The matter is before me for the determination of a final order pertaining to child and spousal support. CM(1) has not pursued her application to change the parenting schedule.

Based on the January 5, 2011 order, CM(2) spends approximately equal time with each parent; perhaps slightly more with CM(1). [ 6 ] CM(1), who represented herself at the hearing, seeks to have the Court impute to WM $66,000 in income, to increase both child and spousal support, and to make a final order that spousal support continue for an indefinite period. She submits, essentially, that she is disabled and cannot currently work, that at 55 and with a Grade 10 education she is less employable than she would like, and that she needs some time to retrain herself. [ 7 ] On behalf of WM, his counsel Mr.

Lowther submits that child support should be determined in accordance with

Section 9 of the Federal Child Support Guidelines and reduced accordingly, and that spousal support should be reduced and time limited. Facts [ 8 ] The parties met in a recovery program in 1995 or 1996. They were married in 1997, had CM(2) 8 years later, and separated when he was four. [ 9 ] During the marriage, CM(1) worked for several years for the YMCA, earning an income of $47,000 plus benefits the year before CM(2) was born. She took maternity leave when CM(2) was born, returned to work, then left her position permanently in January 2007.

She explained that she and WM decided together that she would quit after she was refused vacation time to take their annual trip to Hawaii. They agreed that she would stay home until CM(2) went to school. Apart from doing some work for WM’s Company, RLM, in 2008 and 2009, CM(1) has not been in the work force since 2007. [ 10 ] In November 2009, CM(1) noticed pain in her hip. She has since been diagnosed with hip dysplasia and osteoarthritis in both legs. This condition significantly limits CM(1)’s mobility.

She is currently waiting for a total hip replacement on her left side and expects to have the surgery in June. She has made an application for a disability pension through CPP and hopes to receive about $1350 or $1400 a month and possibly a retroactive award. [ 11 ] CM(1) attended a job finding program in February 2011 at the YMCA, and has sent out numerous resumes looking for work similar to that which she did in the past.

She described her skill set as “program management.” While she is hopeful and optimistic, she has found that a lot of the prior programs she had been involved in were discontinued, and many people in her former field are unemployed. [ 12 ] Currently, without knowing when she may have her surgery, CM(1) expects it will be difficult to find a position that would tolerate the necessary absence so shortly after she begins. She plans to obtain skills in social media marketing, to enhance her existing skill set.

She hopes to enrol in a part time program through UBC involving a series of “modules”, and obtain a diploma over a 6 – 7 month period, but has not yet enrolled as she has no money to do so. [ 13 ] After the separation the parties maintained a joint account for some time, with WM contributing by making deposits to cover the expenses that came out of it, including mortgage payments and CM(1) and CM(2)’s living expenses.

After that, WM paid CM(1) varying amounts voluntarily for a period of time, but ceased paying anything as of July 2011. [ 14 ] CM(1) takes the position that WM had the opportunity to expand his business while she stayed at home with CM(2). She submits that he makes tax deductions from his business income that artificially reduce it, that he is using his business account for personal expenses, and that his lifestyle has not changed since the separation.

She noted that he had paid only two months of the $975 support payments ordered in the December order, although he had admitted in his own materials that he could afford to pay $500 per month. [ 15 ] WM is currently 43. He completed Grade 6 but did not attend high school. He has an unfortunate background including a

history of child abuse, a series of foster homes and then being homeless by age 13. He is living in Squamish with a woman, T, who has three children of her own aged 9, 8 and 7. Her children are with them during the alternate weeks when CM(2) is with them. Her children have some learning disabilities. They attend school in DC. T is not employed and she takes them to school. She receives just under $2000 per month in support from her ex-husband. [ 16 ] WM moved to BC at age 15 and went into the window washing business. He has done well for himself, and has run his own business for almost 14 years, RLM.

It is a sole proprietorship. He employs subcontractors to do maintenance on strata complexes. [ 17 ] WM has had Hepatitis C for many years, and has more recently developed and issue with his wrists and hands which he believes to be carpal tunnel syndrome or arthritis. In September 2011 he tore 2 ligaments in his right shoulder and detached his bicep, and is currently recuperating from that.

He is struggling with stress, depression and anxiety arising from the litigation and financial pressures. [ 18 ] WM filed financial statements showing his 2008 gross business income to be $172,490.50, with a net income for tax purposes of $32,540.46. For 2009 his business income was $198,511.76 with a net of $62,482.00. Those two years included business losses related to a boat charter business that he no longer conducts, having sold the boat in August 2011. [ 19 ] WM’s gross business income for 2010 was $99,611.32 which included the loss on the boat charter. For 2011 his gross income was $129,555.

His subcontractors were paid $30,208, leaving a net business income of $99,347. He says his gross revenues are dropping in due to the economic downturn, since strata complexes cut back on windows first, and it is necessary for him to rebid on the jobs each year. He is competing with newer or younger businesses and his own physical capabilities have waned. [ 20 ] WM is carrying a number of debts, some of which arose from joint credit accounts with CM(1) while they were together. He stopped servicing these debts in 2010.

He also owes $29,000 to CRA for past taxes and will owe an additional $11,000 for 2011. [ 21 ] CRA has disallowed WM’s deduction of his support payments as he did not provide a copy of the court order. There had been some difficulty in getting the correct order entered. [ 22 ] For tax purposes, WM declared $53,197.07 income for 2011 and $47,000 for 2010. He expects his financial situation for 2012 to be approximately the same. [ 23 ] WM says the only impact of his move to Squamish is fuel, and that when he lived in North Vancouver he was driving more regularly to Surrey, Langley, and Richmond.

He now confines his travel to North Vancouver or downtown, instead. He is mainly bidding on jobs in Squamish. He maintains however that it is his physical limitations and the economy and not the move that have affected the amount of work he is able to do. [ 24 ] WM has sold some of the family assets he says, not to pay down family debt but to just get by. As noted he has not been paying down debt since 2010 and he is not making his income tax instalments. [ 25 ] In calculating his income for tax purposes, WM uses standard accounting deductions including capital cost allowance and business use of his home.

For 2011 those amounted to $7900. He also deducted the loss on the charter business from his business income, an amount of $5800. When he sold the boat he made $9000 which he used to pay the moorage bill and personal expenses but not family debt. Analysis

Section 9 [ 26 ] I agree with Mr. Lowther’s submission that the parenting

schedule set out in the order of January 5, 2011 places CM(2) with WM in the range of 46 – 48% of the year.

Section 9 of the Guidelines therefore has application, and there is discretion to offset the respective child support obligations of the parents. [ 27 ] For the benefit of CM(1), I will set out the text of

Section 9 here: 9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account (

a) the amounts set out in the applicable tables for each of the spouses; (

b) the increased costs of shared custody arrangements; and (

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought. [ 28 ] The respondent suggests he should pay a reduced or proportionate rate of child support based on the case of Green v. Green , 2000 BCCA 310 . I prefer the more recent approach outlined in the case law, as noted by Gropper J. in Garm v. Straker , 2011 BCSC 1104 at paragraph 9 : Both parties rely on the Supreme Court of Canada decision in Contino , which has been conveniently summarized by Mr. Justice Armstrong in Flick v.Flick , 2011 BCSC 264 at para. 64 :

The factors to be considered in determining the amount of support to be paid in a shared parenting situation under s. 9 were outlined by the Supreme Court of Canada in Contino v. Leonelli-Contino, 2005 SCC 63 .

They include: ▪ the court must acknowledge the overall situation of the parents and the needs of the child ▪ the weight of each factor under s. 9 varies with the particulars of the case ▪ the court must take into account the financial situations of both parents ▪ a set-off amount is a starting point but is not the end of the enquiry ▪ the set-off approach does not take into account actual spending patterns and that the fixed costs of the recipient parent are not reduced by the increased spending of the payor ▪ the court retains the discretion to modify a set-off where it may lead to a significant variation in the standard of living experienced by the child as he or she moves from one household to the other ▪ one of the overall objectives is to avoid great disparities between the households ▪ the court must examine budgets and actual expenses of both parties ▪ there will be increased costs which will normally result from a duplication and the child having effectively two homes ▪ expenses are to be apportioned in accordance with the parents' income ▪ the analysis should be contextual and remain focused on the particular facts of the case ▪ the court has a full discretion to consider other circumstances in accordance with s. 9(c) ▪ the court, if it does not have sufficient evidence, should demand further information relating to s. 9(

b) and (

c) of the Guidelines. [ 29 ] Looking at the situation between these parties in light of the above factors, I agree firstly that there will be an increased cost of maintaining two households arising from the shared parenting situation, but here, where the respondent has elected to reduce his costs by moving to another community and sharing expenses with another partner, there should be less emphasis on this factor.

The applicant here has remained in the matrimonial home and until it is sold and the assets divided, her expenses will not have significantly changed. [ 30 ] The significant factor in this case is that the applicant is not working and has been unable to obtain work to date. She is compromised by her pending surgery and likely will not be able to obtain work for some time after she has it. She reasonably intends to upgrade her skills in a course of training that will take some months.

These are factors relevant to the issue of spousal support but they also have relevance to whether there should be a reduction of the respondent’s child care obligation under

section 9. [ 31 ] In my view there should be no reduction. CM(1)’s current income level is effectively nil for Guideline purposes. If this changes, and she obtains a disability pension, for instance, or obtains employment,

section 9 may then come into play. Parties’ Incomes [ 32 ] Turning to the issue of WM’s income, I agree with CM(1)’s submission that the accounting expenses should not be deducted for the purpose of calculating his Guideline income. The respondent’s only response to this proposition was that he is not expending business funds on personal expenses, but he did not address the argument that accounting expenses are generally or frequently not considered reasonable for the purpose of calculating Guideline income.

The onus is on the respondent to establish that these deductions represent true expenses and that has not been met here: Egan v. Egan , 2002 BCCA 275 . [ 33 ] Adding back into WM’s 2011 taxable income the amounts deducted for capital cost allowance, the loss on the boat charter, and business use of his home yields a total income of $66,987. CM(1)’s submission is that WM’s income should be imputed at a minimum of $66,000.

Allowing for some imprecision and a possible slight reduction in his earnings for 2012, I therefore do impute to WM an income of $66,000. [ 34 ] Turning to CM(1)’s income, I have already looked at the issue to some extent in considering the application of

section 9. She has declared no appreciable income for the past three taxation years. She has not been working. Her only source of income appears to have been what WM decided to pay her from time to time. [ 35 ] I do not disagree with Mr. Lowther’s submission that in due course, if CM(1) does not obtain employment, a court may deem it appropriate to impute income to her. I would think a period of just over a year from now would be appropriate for a review of that issue, after she has had her surgery, completed her retraining, and had an opportunity to look for an appropriate position.

The issue of her disability pension will then also have been determined. [ 36 ] At this time there is no basis for imputing income to CM(1), in my view. Child Support

[ 37 ] Child support under the Guidelines for an income of $66,000 is $618 per month. I have determined that there is no current justification for reducing that amount under

section 9. Spousal Support [ 38 ] In my view CM(1) has established a current case for spousal support based on an income of $66,000 for WM and zero for herself. The calculations accompanying her submission have been done on the assumption that child support of $615 is being paid. I agree with Mr. Lowther’s submission that there should be a reduction where child support is being paid; however, that has already been taken into account by the calculations CM(1) has provided.

I am prepared to set spousal support at the low range with a slight adjustment to allow for contingencies such as a decrease in 2012 income and the increase in transportation expenses attributable to WM’s move, which he has justified as being in CM(2)’s best interests. [ 39 ] Spousal support will be set in accordance with the Spousal Support Advisory Guidelines at $1282 per month, to be reviewed on or before September 1, 2013. [ 40 ] The total monthly amount of support currently payable is therefore $1900. The Interim Order [ 41 ] Mr.

Lowther has sought that payments WM has made in the past be deemed by an order to be spousal support as was agreed between the parties. The parties agreed until approximately May 2011 that WM’s $1200 per month payments would be $400 child support and $800 spousal support. My order will retroactive such that those interim payments shall be characterized in that fashion. That aspect of this order will be retroactive to October 2009 and be effective until May 31, 2011. [ 42 ] In the interim order I provided that the interim support payments would take effect July 1, 2011, the month after CM(1) filed her application.

In the respondent’s submissions he essentially concedes that no support was paid after May 31, 2011. [ 43 ] This order will therefore be retroactive to June 1, 2011, and will supersede the interim order of December 13, 2011. I will leave it to the parties, or the Family Maintenance Enforcement authorities, to calculate the balance outstanding for retroactive amounts.

Order [ 44 ] WM is imputed an income of $66,000. [ 45 ] WM will pay to CM(1) for the benefit of the child CM(2), born August 19, 2005, child support in the amount of $400 per month, effective October 1, 2009. [ 46 ] WM will pay to CM(1) for the benefit of the child CM(2), born August 19, 2005, child support in the amount of $618 per month, effective June 1, 2011. [ 47 ] WM will pay to CM(1) spousal support in the amount of $800 per month effective October 1, 2009. [ 48 ] WM will pay to CM(1) spousal support in the amount of $1282 per month effective June 1, 2011. [ 49 ] Mr.

Lowther will prepare the order in this matter; however if it has not been entered by June 30, 2012, I direct that it be prepared by the registry and that the parties` signatures be dispensed with. ________________________________ The Honourable Carol Baird Ellan Provincial Court Judge