Willms v. Willms

2018 BCSC 2231 Willms v. Willms IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Willms v. Willms, 2018 BCSC 2231 Date: 20181214 Docket: E033084 Registry: New Westminster Between: Patricia Eileen Willms Claimant And Arnold Willms Respondent Before: The Honourable Mr. Justice Ball Reasons for Judgment Counsel for the Claimant: J. Dreyer Counsel for the Respondent: A. Oberoi P. Malli Place and Date of Hearing: New Westminster, B.C. September 7, 2018 Place and Date of Judgment: New Westminster, B.C. December 14, 2018 Introduction [1] These reasons respond to cross-applications to vary the respondent's spousal support obligation as set out in the order of Mr. Justice Truscott made June 9, 2010 (the "Order"). The claimant seeks to increase spousal support retroactive to August 5, 2016, the date the respondent ceased to pay child support to the claimant. The respondent seeks a "step-down" of his spousal support obligation. Background [2] The parties commenced cohabitation in 1988 or 1989 and married on July 20, 1991. The claimant was primarily a "stay at home" mother and the respondent was the primary income earner for the family. The parties separated on May 22, 2009 and were divorced on June 2, 2010. [3] Two children were born during the marriage in 1995 and 1997. D.C.W. was born September 20, 1995. A.M.W. was born August 5, 1997. The children are now 20 and 22 years of age. Both children continued to reside with the claimant until 2014, when one child began to live with the respondent. In 2016, the second child went to live with the respondent. Any further reference to the children individually will be with initials only. This is to protect their privacy and not a sign of disrespect. [4] On June 2, 2010, when the parties divorced, the claimant was 41 years of age and the respondent was 48 years of age. [5] At the date of divorce, the annual income of the claimant as a receptionist was $31,200 before taxes, at an hourly rate of approximately $15 per hour. The respondent's annual income was $139,000. The claimant began to work outside the family home starting on January 25, 2010, after the separation of the parties. The respondent worked at a firm where he had worked previously for 23 years. [6] The Order provided for the respondent to pay child support in the amount of $1,927 per month and spousal support in the amount of $2,100 per month. There is no specific reference to the basis for the award but it is obvious that the basis for the award was compensatory. The claimant had not worked for 23 years while in the marital relationship and therefore suffered an economic disadvantage from the marriage. The Order specifically provided that the award of spousal support was for an indefinite period of time subject to variation on the basis of a material change in circumstances. Another feature of the Order was that the child and spousal support obligations were binding on the estate of the respondent. Otherwise, the Order divided the family assets in a substantially equal fashion. [7] Following the sale of the family home, the claimant received proceeds in the amount of $65,180.44 after adjustments. She used the proceeds to purchase a condominium which of necessity would have required a significant mortgage. At the time immediately prior to the separation, the claimant also withdrew $20,000 from a joint line of credit to give her some financial stability because she had no other income at that time. The $20,000 was accounted for when the proceeds of sale of the home were divided. [8] Given the limited salary that the claimant earned following the divorce, and the significant expenses she incurred to provide shelter for her children, including mortgage payments, strata fees and the like, the claimant found she could not keep up financially and she gradually had to liquidate her assets. Eventually, in an effort to become financially independent, the claimant borrowed funds through the student loan program and took a six-month training course to become a nursing unit assistant. As the training course was offered during the daytime, the claimant was not able to maintain her former employment. The training course cost approximately $7,500. [9] The claimant continued to struggle to pay her debts, and maintain the expenses of her home. A loan of $24,000 was arranged by the claimant to allow her to purchase a newer used vehicle, a 2008 Honda Ridgeline, to commute to work and transport children to school and other activities. The prior vehicle was a 2001 PT Cruiser, which was valued at $5,000 when it was retained by the claimant in 2010 following the divorce proceedings. [10] In the summer of 2014, the pressure of financial obligations required the complainant to make a consumer debt proposal. In order to qualify for the proposal, the complainant found she had to reduce her income by arranging for D.C.W. to live with the respondent. The respondent then reduced child support from $1,927 per month to $1,000 per month. D.C.W. began to live with the respondent full-time in or around June 2014. [11] Shortly thereafter, the respondent concluded that she had to sell her home and move closer to her permanent employment. She originally planned to move to Grand Forks but employment was not available there. In December of 2015, the claimant sold her townhouse and moved into premises nearer to Peace Arch Memorial Hospital in White Rock to reduce her commuting time and related costs. This plan caused some difficulty with A.M.W. who did not want to leave her friends. At this time, A.M.W. was not attending school and abusing drugs. A.M.W. had a period of several years where she lived in Grand Forks, Hope and with both of her parents from time to time. Her schooling has been sporadic and high school graduation has proven elusive. [12] After both of the children moved to live with the respondent, he ceased to pay child support to the claimant. [13] At the time of the hearing of this application, the claimant was working on a permanent part-time basis (3/4 time) at Peace Arch Hospital. The claimant's assignment for working hours is a minimum of 52 hours bi-weekly at $22.23 per hour. The claimant earns additional income by working premium shifts on weekends and nights as well as overtime hours, which are paid at up to two times regular pay per hour. She earned $48,379.67 as Line 101 employment income in 2017. She has no savings and as at March 6, 2018, paid $1,350 for rent. She has not re-partnered. [14] The respondent continued at the same firm. In 2015, his line 150 income was $165,637.57. In 2016, the respondent's line 150 income was $187,897.92 and in 2017, the line 150 income was $163,543.37. The respondent declared that as at April 3, 2018, his residence in Langley had an assessed value of $895,000, he had savings of $88,070 and had an RRSP valued at $242,000. The only liability declared was a line of credit with a balance owing of $37,399 as at March 23, 2018. The respondent owns a 2003 Mazda 3 of unknown value, but regularly drives a company vehicle. The respondent has re-partnered and his new partner's income is listed in his 2017 tax return as $44,187.40. In July 2012, the parties agreed that child support would be payable to the claimant by the respondent in the amount of $1,661 monthly, upon the respondent agreeing to pay $150 per month separately to each of the children to develop their money management skills. [15] In July 2013, the child support paid by the respondent was increased to $1,751 due to an increase in the respondent's income. [16] In June 2014, D.C.W., who was then 18 years old, began to live with the respondent. The respondent's child support obligation was reduced by consent to $1,000 per month. After his graduation from high school in June 2013, D.C.W. began working full-time with his father's company. In September 2013, D.C.W. started working full-time with the building maintenance contractor for the Royal Centre complex in downtown Vancouver. [17] For the period from September 2014 until April or May 2015, A.M.W. was living in Hope, B.C. The claimant maintains that during that period, the $1,000 in child support was used to pay A.M.W.'s expenses. There is a dispute in the evidence about where A.M.W. was living at various times between 2015 and early 2018. However, there is no doubt that the respondent ceased paying any child support to the claimant in April of 2015, which is when A.M.W started to live with the respondent full-time. Positions of the Parties [18] It is the position of the respondent, on his application, that spousal support payable by him to the claimant should be time-limited. The respondent asserts that he paid child support as ordered faithfully and well after both of the children had come to live with him. The respondent has continued to pay spousal support to the claimant at the rate of $2,100 per month since the Order was made in 2010. [19] According to the respondent, the claimant is now continuing to work part-time when she could work full-time. The respondent submits that the claimant is intentionally under-employed and that income should be imputed to her. The respondent argues that it is the claimant's choice to work part-time; there is no barrier to the claimant working full-time. Accordingly, the respondent submits that the amount of spousal support payable by him to the claimant should be reduced. [20] The claimant disputes the respondent's characterization of her circumstances on the basis that she works near her place of employment to reduce her commuting and housing costs, but also regularly works shifts paid on a premium or overtime basis which may approximate full-time employment. She asserts that if she worked full-time, it would amount to a cut in pay. [21] In the claimant's application, she seeks an increase in the spousal support payable to her retroactive to August 5, 2016, which is the date on which the youngest child of the marriage turned 19 and no longer required child support. The claimant submits that, as of August 5, 2016, the respondent had more money to pay in spousal support because he was no longer required to pay child support. The claimant argues that the respondent's spousal support obligation should reflect this. Legal Framework [22] Both applications seek to vary the Order. Accordingly, s. 17(1)(a) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), applies. That section provides: 17 (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively, (a) a support order or any provision thereof on application by either or both former spouses; or (b) a custody order or any provision thereof on application by either or both former spouses or by any other person. [23] Section 17(4.1) of the Divorce Act provides factors to be considered when a variation order is sought: (4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. [24] A material change in circumstances as required by s. 17(4.1) of the Divorce Act is a change that, if known at the time of the initial order, "would likely have resulted in different terms": L.M.P. v. L.S., 2011 SCC 64 at para. 32 citing Willick v. Willick, [1994] 3 S.C.R. 670 at 688. [25] In addition, s. 17(7) of the Divorce Act provides that a variation order varying a spousal support order should: (a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown; (b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and (d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time. Analysis [26] An issue, which occupied substantial time in argument before the court, was whether the cessation of child support obligations of the respondent constituted a "material change in circumstances" for the purposes of varying a spousal support order. The respondent argued that because the "aging out" of children of the marriage was always anticipated by the Order, the end of child support obligations did not constitute a material change in circumstances. The claimant argued, to the contrary, that the end of child support obligations is a material change in circumstances. [27] The above submission by the respondent is not supported by the authorities. Further, while it was not entirely clear, counsel for the respondent agreed with the court that there would have been a different initial support order if there had been no children of the marriage or a different number of children. This is consistent with the end of a child support obligation being a material change of circumstances. [28] The case law cited by the claimant included Wooldridge v. Wooldridge, 1999 ABCA 124, a unanimous judgment of the Alberta Court of Appeal, concerning an order terminating spousal support and reducing child support. There the court pointed out, following Moge v. Moge, [1992] 3 S.C.R. 813 at 848, that "the purpose of spousal support is to relieve economic hardship that results from 'marriage or its breakdown'" (emphasis in original). The court went on to note the disparity between the standards of living of the parties, where the husband and his new spouse were living on a monthly budget of $9,000 and the former wife and the children were living on a monthly budget of $4,000. The former wife was receiving $1,762 per month in child support for two younger children and was also receiving some income as a part-time retail clerk. Finally, and germane to the present issue of termination of child support as a change in circumstance, the court stated as follows at para. 28: As that obligation [to pay child support] is reduced, and if the wife's circumstances have not allowed her to attain any real economic self-sufficiency, she may be eligible for a more substantial increase. In that regard, the cessation of child support in any amount would ordinarily be a sufficient change in circumstance to allow a variation. [29] In the case of McIntosh v. McIntosh, 2007 BCSC 1331 at para. 58, Mr. Justice Chamberlist recorded the following comments: Another complication is the fact that the Spousal Support Advisory Guidelines "with child formula" determines ranges for spousal support based on 41% to 46% of individual net disposable income of each of the parties, taking into account the amount of child support paid. If the child support is lower, i.e., as a result of fewer children qualifying for child support, the spousal support would be higher. As indicated previously in these reasons the parties' third child, Keedra, is in her final year of high school and she may or may not qualify for child support after her graduation from high school. The Divorce Act clearly gives priority to child support and indicates in s. 15.3 that, if spousal support is less than it would otherwise had been as a result of the child support, then when the child support terminates, it is a change of circumstances which allows for a variation in the spousal support order. [30] Further, in the case of Goodkey v. Goodkey, 2015 ABCA 394, the court stated at para. 21 that "it is clear that the termination of child support would have constituted a change of circumstance in this case." [31] These authorities support the conclusion that the cessation of the respondent's child support obligations constitutes a material change of circumstances for the purposes of an application to vary spousal support. [32] The next question is what is the appropriate spousal support order given the material change in circumstances and the objectives of a variation order as set out in s. 17(7) of the Divorce Act. [33] I have reviewed the submission of the respondent where it is argued that additional income should be imputed to the claimant, whom is alleged to the underemployed. The evidence presented by affidavit is disputed and no finding can be made thereon by a justice sitting in chambers. Further, evidence as presented does not contain a basis in fact to calculate an imputed income in addition to the claimant's present salary, which includes both premium and overtime shift payments. The claim that additional income should be imputed to the claimant is therefore dismissed. [34] "The purpose of compensatory support is to share the economic advantages and disadvantages that accrued because of the marriage and its subsequent breakdown": Gray v. Gray, 2014 ONCA 659 at para. 38). In the present case, the claimant was occupied during the years of the marriage providing child care. As a result, the claimant had no career development during the marriage and left the marriage without much by way of marketable skills. Following separation, child support took priority over available funds until August 2016. [35] The order now sought by the claimant would improve her lifestyle to a standard closer to the standard of the lifestyle of the respondent. There is at present a wide gulf between the lifestyles of the parties. At para. 24 of Wooldridge, the court stated that "[s]uch disparity should not exist between two people who were married for over 20 years " (citing Moge at 870). [36] The Order in this case followed a 21-year relationship between the parties. The ability of the wife to work had been seriously restricted by childcare requirements during the marriage while the husband was developing a career which included extensive travel away from the family home. The Order did not fix a review date and, as noted, the spousal support obligation was binding upon the estate of the respondent. Entitlement to spousal support was clearly canvassed and determined by Mr. Justice Truscott, who decided that the claimant was entitled to support in the mid-range of the table amounts provided by the Spousal Support Advisory Guidelines. This finding provides some guidance in regards to the use of the ranges in this case. [37] By virtue of the respondent's child support obligations ceasing in April 2015 and A.M.W.'s 19th birthday occurring on August 5, 2016, the respondent has more money available than he did while he was paying child support. [38] Entitlement to spousal support was determined by Mr. Justice Truscott in the Order. At that time, the available pool of income was assigned first to the priority of the needs of children. Those needs now being satisfied, there is now a pool of income available to address the spousal support needs of the claimant. [39] Pursuant to the provisions of the Divorce Act, noted above, the court is obliged to take that change into consideration, but not undertake a wholesale review de novo of the circumstances of the parties. [40] "DIVORCEMATE" calculations were submitted by counsel on the basis that the current incomes of the parties should be used to reflect the reality of the parties' current situations. The current income of the respondent is $163,543 and the current income of the claimant is $47,382. Using the "without child support formula", and using the mid-range of the Spousal Support Advisory Guidelines (as used by Mr. Justice Truscott in the Order) the monthly amount of spousal support shall be fixed at $3,727 effective and payable as of August 5, 2016. Any arrears shall be payable forthwith. [41] The claimant is entitled to her costs payable by the respondent forthwith after assessment pursuant to Appendix "B" as a matter of ordinary difficulty. "Ball J."