Smith v. Oake, 2012 NSSC 100

SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Smith v. Oake, 2012 NSSC 100 Date: 20120305 Docket: SFHISOV-078175 Registry: Halifax Between: William Marshall Smith Petitioner v. Jennifer Laurel Oake Respondent LIBRARY HEADING Judge: The Honourable Justice Beryl A. MacDonald Heard: March 5, 2012 in Halifax, Nova Scotia Written Decision: March 12, 2012 Keywords: Family, Child maintenance, interjurisdictional support orders, rescinding arrears Legislation: Interjurisdictional Support Orders Act, SA 2002, c.1-3.5 Interjurisdictional Support Orders Act , S. N.S. 2002 c. 9 Maintenance and Custody Act, R.S.N.S. 1989, c. 160

Summary: On June 10, 1996 the Court of Queen’s Bench of Alberta issued an Order requiring the applicant to pay child maintenance in the amount of $650.00 per month. The applicant lost his employment shortly after the order was made and after that was incarcerated for a period of time. He never earned significant income after 1998. He frequently was a recipient of social assistance and now due to medical disabilities he likely will remain on social assistance into the foreseeable future. The accumulated arrears were rescinded from January 1 1998 until December 31, 2011.

On current social assistance income of $14,508.00 he is required to pay table guideline child maintenance, on the Alberta, table for one child in the amount of $127.00 per month commencing January 1, 2012.

THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Smith v. Oake, 2012 NSSC 100 Date: 20120305 Docket: SFHISOV-078175 Registry: Halifax Between: William Marshall Smith Petitioner v. Jennifer Laurel Oake Respondent Judge: The Honourable Justice Beryl A. MacDonald Heard: March 5, 2012, in Halifax, Nova Scotia Counsel: William Marshall Smith, Self-Represented Jennifer Laurel Oake, Self-Represented

By the Court: [ 1 ] On June 10, 1996 the Court of Queen’s Bench of Alberta issued an Order pursuant to the Parentage and Maintenance Act , c.P-0.7, S.A. 1990, and the Social Development Act , c. S-16, R.S.A. 1980, declaring William Marshall Smith to be the father of the child who is the subject of this proceeding. That Order requires Mr. Smith to pay Ms. Oake, the sum of $650.00 per month commencing July 1, 1996 and continuing thereafter until the child reaches 18 years of age. This maintenance payment was to be made to the office of the Director of Maintenance Enforcement.

The Order did not reflect the income amount used by the court when it made this Order. The recitals do state that, although summonsed to appear in response to the application for child support, Mr. Smith did not attend on the date of the hearing. Appearing for the applicant in that proceeding was the Director of Parentage and Maintenance. There is no indication that the mother attended this hearing. The court appeared to rely on the evidence and submissions provided by counsel for the Director. [ 2 ] Mr.

Smith has now applied through the Interjurisdictional Support Orders Act, SA 2002, c.1-3.5 and the Interjurisdictional Support Orders Act , S. N.S. 2002 c. 9 , to vary that order and to rescind, forgive, or suspend payment of the arrears that have accumulated in the amount of $121,975.00. Ms. Oake was served with all of the documents provided with Mr. Smith’s application. She was informed of the date of this hearing which was 10:00 am on Monday, March 5, 2012. I had her paged twice and I did not commence the hearing until 10:10 am.

I also requested court staff to inform me whether she had communicated by phone or e-mail to indicate an inability to attend. No such message was received by 10:10 am on March 5 th . [ 3 ] The Interjurisdictional Support Orders Act, S. N.S. 2002 c. 9 gives this court jurisdiction to vary the Order granted by the Court of Queen’s Bench of Alberta.

Section 37 provides: (

a) in determining a child’s entitlement to receive or to continue to receive support, the Nova Scotia court shall first apply the law of the jurisdiction in which the child ordinarily resides but, where the child is not entitled to support under that law, the Nova Scotia court shall apply Nova Scotia law; (

b) in determining the amount of support for a child, the Nova Scotia court shall apply the law of the jurisdiction where the person liable to pay the support ordinarily resides; [ 4 ] The child for whom support is to be paid in this proceeding resides in Nova Scotia. The Maintenance and Custody Act, R.S.N.S. 1989, c. 160 requires child support to be paid for a child who is under 19 years of age and for a child 19 and older who remains a dependent within the definition provided by that Act .

This child is 16 and as a result remains entitled to receive child support (or maintenance - the term used in the Maintenance and Custody Act ). [ 5 ] The request to rescind arrears may be considered to be a retroactive variation request and it is a request to determine the amount of support to be paid. As a result my determination must be guided by the law of Alberta. I am uncertain about whether an application to suspend payment of arrears is a determination about the amount of child support to be paid.

However, the law of Alberta and Nova Scotia both give the court jurisdiction to suspend payment of a support order.

[6] Section 37 (1) of the Maintenance and Custody Act provides, “The court, on application, may make and order varying,rescinding or suspending, prospectively or retroactively, a maintenance order......where there has been a change in circumstances sincethe making of the order or the last variation order.” [7] The Alberta Parentage and Maintenance Act was replaced by the Family Law Act, SA 2003, c. F-4.5 and

section 77provides:

(2) The court may, on application....... make an order varying, suspending or terminating a support order or any part of that order,prospectively or retroactively.

(4) Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that: (

a) a change of circumstances, including those provided for in the prescribed guidelines, has occurred since the making of the order orthe last variation order made in respect of that order. [8] Neither legislation specifically gives a court authority to rescind (forgive, cancel) accumulated arrears. However courts in Nova Scotia have done so and Haisman v Haisman, (1994) 1994 ABCA 249 , 7 R.F.L. (4th) 1 (Alta. C.A.) suggests a similarpractice exists in respect to orders made in Alberta.

In that case the court decided the applicant should not be allowed to shift the burdenof supporting the child to the custodial parent or to the public unless there was a clear inability to pay over a significant period of timewhich would have resulted in a suspension of child support payments or reduction if the applicant had made a timely application for thatrelief at the time the necessity for it arose.

The court also indicated, in the absence of a special circumstance, a child support ordershould not be reduced or rescinded unless it is clear the applicant cannot presently pay and will not at any time in the foreseeable futurebe able to pay the accumulated arrears. It also suggested a present inability to pay child support arrears may not justify remission of thosearrears but may instead justify a suspension of collection until some future date when the payor’s financial circumstances improve. [9] Logic would suggest there must be authority to rescind arrears ancillary (or incidental) to termination.

If an order isterminated for a past period monies owing for that past period are no longer owing and the record must be cleared (ie. arrears must berescinded). However, if money has been paid and received during that period, it may create hardship for a recipient to request that he orshe reimburse the payor for the period in question.

As a result courts do not generally discuss terminating orders for a particular period.They speak of setting an amount of arrears to be paid and that amount may be different from the amount that would have resulted from astrict mathematical calculation from a termination date. [10] In this proceeding I appear to have two options. One is to consider a retroactive variation by recalculating what child supportshould have been paid based upon Mr. Smith’s actual annual income. The other is to decide what portion of the accumulated arrears is tobe rescinded, if any.

However, a recalculation of the child support that should have been paid will influence the amount of arrears thatmay be rescinded. [11] A recent decision of this court, J.D.G. v. J.A.B., 2012 NSSC 20, appears to suggest the principles discussed in DBS v. SRG,LJW v. TAR, Henry v. Henry, Hiemstra v. Hiemstra, 2006 SCC 37 do not apply to a request to retroactively vary a child support awardthat will result in a decrease rather than an increase in child support. This proceeding involves the Maintenance and Custody Act but theprinciples of DBS have been applied to our provincial legislation.

I consider it inappropriate to have one set of factors guiding theexercise of our discretion to grant a retroactive award when it will result in a decrease that are different from those we are to apply if theretroactive award results in an increase. Both the Provincial and the Federal Child Support Guidelines direct that (and I am quoting fromthe Provincial Child Support Guidelines): 14 For the purposes of

Section 37 of the Act, any one of the following constitutes a change in circumstances that gives rise to themaking of a variation order in respect of a child maintenance order: (

a) in the case where the amount of child maintenance includes a determination made in accordance with the applicable table, anychange in circumstances that would result in a different child maintenance order or any provision thereof;.....

[ 12 ] I interpret this provision to mean that any change in a parent’s income whether upward or downward may be a change of circumstances. As a result J.D.G. v. J.A.B. is useful in analyzing the issue around income changes and whether they constitute a “change of circumstances” if they are temporary or contrived. In that case, although there were decreases in income, the factual evidence led to a conclusion those changes did not constitute the necessary “change in circumstances”. The justice in J.D.G. v. J.A.B. utilized the analysis provided in Brown v.

Brown , 2010 NBCA 5 to confirm that relief should not be given when there has been a decrease in income unless that decrease was significant and long-lasting, real and not chosen. [ 13 ] I have considered and accept Judge Dyer’s analysis, in D.M. v. S.A., 2008 NSFC 15 , about how the principles of DBS can be applied to a request for a retroactive downward variation. [ 14 ] The Order I am asked to vary was issued just prior to the implementation of the child support guidelines.

It is interesting to note that a child support payment in the amount of $650.00 per month would have required a total income of approximately $80,000.00 per year under the May 1 st 1997 Alberta child support guideline table. Of course at the time these awards were tax deductible and that may have been a consideration contributing to the quantum of this award. [ 15 ] The affidavit provided by Mr. Smith indicates he lost his employment in Calgary in 1996. He had been working as a driver at a recycling depot earning approximately $10.00 per hour. He does not explain how many hours he worked per week.

Shortly thereafter he was incarcerated for cultivation and he served a 10 month sentence. He alleges he resided with Ms. Oake for approximately 6 months in the year 2000 after which she moved to Nova Scotia. He also had a period of incarceration in 2006 and 2007 for approximately 9 months. He has had periods of time since 1998 when he was on social assistance and he has been approved for an income assistance program in Alberta known as the “Assured Income for the Severely Handicapped” since mid-2008.

There are a series of reports from this program approving him for funding to which is attached information from a physician confirming Mr. Smith is disabled as a result of 3 primary causes those being hepatitis C, a recurring dislocating shoulder (despite 3 surgical repairs), depression and mild anxiety. Mr. Smith’s physician did note he also had difficulties with substance abuse and was on a methadone program. The conditions from which Mr. Smith suffered were considered to be permanent. The physician stated Mr. Smith suffers from low energy and becomes exhausted quickly.

He has reoccurring nausea and although he was independent in areas of personal care and for some easier household chores he does not drive and he still suffers frequent shoulder dislocations. [ 16 ] The support provided under the “Assured Income for the Severely Handicapped” defines a “severe handicap” as follows, “an impairment of mental or physical functioning or both that, in the directors opinion, after considering any relevant medical or psychological reports, causes substantial limitation in the person’s ability to earn a livelihood and is likely to continue to affect that person permanently because no remedial therapy is available that would materially improve the person’s ability to earn a livelihood.” [ 17 ] The records provided confirm that those who provide Social Assistance under various government programs in Alberta considered his circumstances justified social assistance payments since 1999.

Whatever Mr. Smith earned in 1996, his information is that shortly after the Order was made he was incarcerated. There have been decisions suggesting that incarceration does not constitute an appropriate change of circumstances upon which to justify a reduction of child support. I am directed to accept the Order as accurate on the date it was issued. [ 18 ] Mr.

Smith has provided Notices of Assessment from the Canada Revenue Agency disclosing line 150 income as follows: 1998 $8,520.00 the source was employment 1999 $6,116.00 the source was employment and Social Assistance payments 2000 $8,068.00 the source was employment and Social Assistance payments 2001 $3,670.00 the source was Social Assistance payments 2002 $2,717.00 the source was Social Assistance payments 2004 $7,591.00 the source was Social Assistance payments 2006 $3,030.00 the source was Social Assistance payments

2007 $3,067.00 the source was Social Assistance payments [ 19 ] Mr. Smith has provided copies of his statement of benefits received on two “ Benefit Statements” (T- 5007) for the year 2003 which show income from Social Assistance payments in the total amount of $9,227.00 on one document and $922.00 on the other. [ 20 ] For the year 2005 Mr. Smith has provided a “Benefit Statement” (T- 5007) confirming his receipt of Social Assistance payments in the amount of $5,783.00. [ 21 ] To confirm 2008 and 2009 income Mr. Smith has provided copies of reports from the “Alberta Employment and Immigration Payment History,

Summary of Needs and Incomes”. These appear to be reports summarizing how the quantum of Social Assistance payments was determined during those years. The total income amounts provided appear to be $7,083.00 in 2008 and $13,956.00 in 2009. [ 22 ] Mr. Smith did not file income tax returns in 2008 and 2009. He did provide a completed Income Tax Return for 2010 in which discloses a line 150 income in the amount of $13,906.00 from Social Assistance payments. [ 23 ] Mr. Smith declares that his income in 2011 was $14,508.00. He expects to continue to receive the sum of $14,508.00 in 2012.

These are payments from the “Assured Income for the Severely Handicapped” program (ie. Social Assistance payments). [ 24 ] A recalculation of child support since 1998 provides the following results based upon the table amounts from the Alberta Child Sport Guidelines. These calculations take into consideration the changes in the table from time to time.

YEAR INCOME MONTHLY TABLE AMOUNT TOTAL YEARLY 1998 $ 8,520.00 $ 52.00 $ 624.00 1999 $ 6,116.00 $ 0.00 $ 0.00 2000 $ 8,068.00 $ 37.00 $ 444.00 2001 $ 3,670.00 $ 0.00 $ 0.00 2002 $ 2,717.00 $ 0.00 $ 0.00 2003 $10,149.00 $102.00 $1,224.00 2004 $ 7,591.00 $ 22.00 $ 264.00 2005 $ 5,783.00 $ 0.00 $ 0.00 2006 $ 3,030.00 $ 0.00 $ 0.00 2007 $ 3,067.00 $ 0.00 $ 0.00 2008 $ 7,083.00 $ 0.00 $ 0.00 2009 $13,956.00 $116.00 $1,392.00 2010 $13,906.00 $114.00 $1,368.00 2011 $14,508.00 $127.00 $1,524.00

Total $6,840.00 [ 25 ] The record of payments indicates that in 2007 and 2008 Mr. Smith had “shelter with family” and required prescription drugs averaging approximately $1,200.00 per month. His prescription drug costs appear to have decreased in 2009 and 2010 and no mention is made about any “shelter cost”. Mr. Smith’s statement of expenses does disclose a present $650.00 per month rent payment. His income just covers his basic living expenses. [ 26 ] The information provided by Mr. Smith suggests he has never had an ability to pay much by way of child support.

In this proceeding I can vary the amounts he was to pay downward based upon his total yearly incomes (a retroactive recalculation ) or I can set the amount of the “arrears” and provide a prospective child support payment amount. [ 27 ] Granting or declining to grant a retroactive variation is an exercise of my discretion. The provisions of the Provincial and Federal Child Support Guidelines have not been interpreted by the Supreme Court of Canada to require that I increase a child support award even when a payor has not paid the correct amount based on his or her income.

Therefore it must also be correct that I am not required to decrease the amounts to be paid in such circumstances. [ 28 ] Given the length of time during which the “arrears” accumulated, and Mr. Smith’s present and future financial condition, I have decided to consider his request to rescind arrears rather than require him to pay a recalculated award. However, I do consider the factors discussed in DBS are useful to consider when a court is asked to rescind arrears. [ 29 ] I am satisfied, based on the material I have reviewed in this proceeding, and having received no contrary evidence from Ms. Oake, Mr.

Smith did have a decrease in his income since 1998 that was significant, long-lasting, real and not chosen. [ 30 ] It is unlikely Mr. Smith will become employable in the future. Because of his medical conditions, he may require social assistance for his lifetime. As a result there is no realistic indication he will be able to pay the accumulated arrears calculated originally or the arrears remaining based upon his actual yearly incomes at any time since 1998. [ 31 ] Mr.

Smith’s incarceration, his poverty, and his medical conditions all contributed to his delay in commencing an application to vary the child support order. While his incarceration may not constitute an excuse for delay, it, in combination with the other factors, does help to explain the position in which he found himself. However, there is some element of blameworthy conduct that must rest with Mr. Smith because it is clear he to some extent ignored this order and likely believed there was no necessity for him to comply with its terms given his economic situation. [ 32 ] Ms.

Oake has received insignificant child support since this order was originally instituted and therefore there would be no requirement for her to pay any money back to Mr. Smith if a retroactive variation was ordered. No hardship would be imposed upon her. [ 33 ] If Mr. Smith was ordered to pay any amount toward the arrears that would compromise his ability to pay a prospective award. [ 34 ] I will rescind all arrears accumulated for the period from January 1, 1998 until December 31, 2011. This decision will leave some “arrears” on Mr. Smith’s account.

Payment on these arrears will be suspended until he has an income greater than $20,000.00 at which time the amount to be paid on those arrears is to be determined according to relevant Alberta maintenance enforcement legislation. [ 35 ] On Mr. Smith’s present income he is required by the Alberta guideline table to pay $127.00 per month for child support. This will be difficult for him given his expenses.

However, until the undue hardship provisions of the child support guidelines are amended to provide a practical accessible process for parents to request and receive reductions, or increases, to the table amounts based on obvious financial hardship, I have no discretion to deviate from the guideline. Mr. Smith shall pay child support in the amount of $127.00 per month on the first day of every month commencing January 1 st , 2012.

[ 36 ] Unless the Order is varied, Mr. Smith’s obligation to pay prospective child support will terminate on June 24, 2013. __________________________ Beryl MacDonald, J.S.C.