Davis v. Davis

2013 BCSC 2187 Davis v. Davis

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Davis v. Davis, 2013 BCSC 2187 Date: 20131129 Docket: E039091 Registry: New Westminster Between: Amanda Jennifer Davis aka Amanda Jennifer Williams Claimant And: Stephen Michael Davis Respondent Before: The Honourable Mr. Justice Grauer Reasons for Judgment Counsel for the Claimant: Shawn Bobb Appearing on his own behalf: Stephen Michael Davis Place and Date of Trial: New Westminster, B.C. October 7-11, 2013 Place and Date of Judgment: Vancouver, B.C. November 29, 2013

INTRODUCTION [1] The principal issues in this family law proceeding concern the children of the marriage, including issues of parenting arrangements and child support, and a determination and division of family assets. The former issues are governed by the provisions of the Family Law Act, SBC 2011, c. 25 ("FLA"), while the latter issues are governed by the provisions of the Family Relations Act, RSBC 1996, c. 128 ("FRA") due to the date of the commencement of this action. The parties also seek a divorce.

BACKGROUND [2] The claimant, Amanda Davis, is 33. The respondent, Stephen Davis, is 39. After living together for a short period, they married on July 28, 2001. They have two children: a son, Hayden, who is nine, and a daughter, Hailey, who is seven. They separated on March 15, 2011. The children have been primarily resident with their mother. The matrimonial home was sold in December 2011. There was no equity in it. In the aftermath of this marriage, there are few assets and many debts. [3] Mrs. Davis currently lives in a basement suite in her parents' home. Although she does not own a car, she has virtually full use of one of several motor vehicles owned by her parents. Mr. Davis also lives in his parents' basement. He drives a 2005 Toyota Echo which he requires for his work, and for transporting the children. [4] As a result of a judicial case conference held on December 15, 2011, the court declared that there was no reasonable prospect of reconciliation (pursuant to section 57 of the FRA), provided for interim access, and ordered Mr. Davis to pay child support of $973 per month based on an annual income of $64,412.

PARENTING ARRANGEMENTS [5] The parents have had difficulty communicating on many issues, including their children. Each has shown a level of hypersensitivity towards the other which, it is hoped, will dissipate as the issues between them become resolved. I am nevertheless satisfied that Mr. Davis and Mrs. Davis are both fit and loving parents, and that it is in the best interests of the children to have the benefit of the input of both of them. In order to facilitate this and promote the best interests of the children, I direct that the sum of $2200 from the funds presently held in trust by the claimant's solicitor be used to pay for communication counselling to be undertaken jointly by Mr. and Mrs. Davis. If the parties are unable to come to an agreement on how best to effect this, they are at liberty to apply. The parties must each understand, with or without counselling, that communication between them must be conducted respectfully. [6] Pursuant to the provisions of the FLA, each parent will be a guardian of the children. Each parent may exercise all parental responsibilities with respect to each child in consultation with the other parent, unless consultation would be unreasonable or inappropriate in the circumstances. Those responsibilities will be as set out in section 41 of the FLA subject to the following. [7] In accordance with the arrangement already in existence

with the parties' consent, the children will ordinarily reside with the claimant. [8] Mr. Davis is ordered to cooperate with Mrs. Davis in obtaining passports for the children, with liberty to Mrs. Davis to apply should that cooperation not be forthcoming. Mrs. Davis will, of course, give Mr. Davis ample notice of any proposed trip with the children outside the country, including details of the proposed itinerary and contact information. [9] The children shall attend counselling as agreed and arranged between the parents. In the event that the parents are unable to agree on how this is to be carried out, Mr. Davis shall make the decision, subject to the right of Mrs. Davis to apply to court for directions pursuant to section 49 of the FLA. [10] Again subject to the right of Mrs. Davis to apply to court for directions pursuant to section 49 of the FLA, Mr. Davis shall have the final say in relation to Hayden's extracurricular sport and recreational activities. [11] Apart from those two responsibilities, if, notwithstanding consultation with respect to parental responsibilities, a significant issue arises concerning the children that cannot be resolved between the parties despite their best efforts, Mrs. Davis shall make the decision subject to the right of Mr. Davis to apply to court for directions pursuant to section 49 of the FLA. [12] In this regard, I note the particular

importance of Mr. Davis being involved in decisions concerning Hailey's medical care and treatment, including consultation with her specialists. The information provided to date has not been satisfactory, and Mr. Davis will be entitled to discuss Hailey's circumstances directly with the treating physicians. After the benefit of counselling, the parents should meet with Hailey's doctors together to ensure that both are on the same page concerning Hailey's needs. My impression is that, to date, Mr. Davis has had insufficient information, while Mrs. Davis has come to conclusions beyond what the information will support. Hailey is the one who suffers from these deficiencies. This must be rectified.

PARENTING TIME [13] The present access schedule, to which the parties had consented, consists of a rotating two-week schedule. On week one, Mr. Davis takes the children from after school on Thursday until 7:30 PM on Sunday. On week two, Mr. Davis has the children from after school on Thursday until 7:30 PM on Friday. This fits with his work schedule while permitting each parent to have weekend time with their children. [14] Mr. Davis is content with this access schedule until such time as his work situation changes in a manner that would permit him to exercise greater access. [15] Although Mrs. Davis alluded in the course of her evidence to a number of difficulties with Mr. Davis's parenting, particularly of Hailey, it became clear that those difficulties had resolved to the extent that they were not illusory. The only objection she raised to the current access schedule was that she and the children enjoyed relaxing and watching movies together on Friday nights, and so she would prefer that the schedule for week one be amended so as not to include Friday nights. She was prepared to have the children spend other time with Mr. Davis instead. [16] There was no evidence at all to suggest that the current schedule is in any way inconsistent with the best interests of the children, as opposed to Mrs. Davis's preferences. As it coincides with Mr. Davis's availability, it is not feasible to schedule access for other days earlier in the week instead of Friday. To change the schedule would, in effect, reduce Mr. Davis's access, which I find would not be in the best interests of the children. [17] Parenting time will accordingly continue on the present two-week schedule as set out above.

INCOMES AND CHILD SUPPORT [18] Mr. Davis has worked for many years as a Dry Line Runner in a mill operated by Coastland Wood Industries Ltd. His present hourly rate is $26.32 plus shift premiums ($0.32), and overtime where required. Consistent with the decline in the forest industry, his income has decreased over the last few years due to shift curtailment and overtime reduction. In 2010, his taxable income was $75,332. In 2012, however, it was $62,673. [19] I am satisfied that Mr. Davis has maximized his income to the extent possible throughout the relevant time, and continues to do so. [20] On June 2013, however, Mr. Davis obtained an order from Master Keighley finding on an interim basis that his Guideline income was $59,300 per year and reducing his child support to $900 per month until further order. [21] I am satisfied that Mr. Davis made that application in good faith on the basis of the advice he had received from his employer that the result of planned curtailment in his shifts would reduce his income to that amount. That may still occur. But it has not happened yet. [22] On the evidence presently before me, I find that Mr. Davis's current Guideline income is $61,000 and accordingly order him to pay child support in the amount of $925 per month. Those payments are to be made beginning December 1, 2013. [23] I do not make any order for retroactive child support.

Although Mr. Davis has recently been paying a little less than the appropriate Guideline amount on the basis of Master Keighley's unintentionally premature order, I consider that this is more than balanced by earlier payments that were a little higher than the appropriate Guideline amount prior to Master Keighley's order. [24] Mrs. Davis is currently unemployed. When the parties married, she was working as a temporary office worker until September 2001, when she became employed full-time for CIBC National Collections as a credit counsellor. She did not return to that job after her maternity leave following the birth of Hailey in February of 2006. For a period in and around that time, she operated a small business with a friend selling spices at craft fairs. This was abandoned when it proved to be unprofitable. [25] Beginning in 2007, Mrs. Davis has worked at various positions, including assistant manager at the Hair Club for Men, odd jobs temping, and customer service and reception at Weiser Locks. Her position at Weiser Locks was terminated in the spring of 2010 after its parent company, Black & Decker, was taken over by Stanley Tools. [26] Since then, Mrs. Davis worked on a few temporary contracts, earning in the range of $13-$14/hour, and has helped her mother who operates an industrial cleaning company. She is also taking a condensed ESL course in order to become qualified

to teach students seeking TOEFL certification. [27] Her present declared income consists of child support, the Child Tax Benefit and the BC Family Bonus. She denies receiving any consideration for the cleaning assistance she provides her mother. Her mother is presently partially disabled, and requires Mrs. Davis's help in order to complete her work. It seems improbable to me that Mrs. Davis receives no benefit from assisting her mother in fulfilling her mother's contracts, but no evidence was led that would allow me to calculate the value of any such benefit. [28] Before leaving her employment with CIBC, Mrs. Davis earned an income in the range of $35,000 per year. She has held other jobs paying in the range of $30,000-$35,000 per year, but they have been temporary, and have not lasted. [29] I have no doubt that Mrs. Davis is a capable woman who has demonstrated an ability to work well for various employers. It may, however, take her some time to maximise her income earning ability given her recent history. I note the time she is able to devote to various work-like activities, including assisting her mother, and I am satisfied that she has the time to work as well as the ability. For present purposes, in all of the circumstances, I consider it appropriate to impute employment income of $20,000 to Mrs. Davis. This is based on what she could earn full-time at minimum wage, a

level of employment that I am satisfied she is capable of achieving. [30] As Mrs. Davis's life is in a state of flux at this moment, the question of her income should be reviewed in two years. [31] The parties will share, in proportion to their incomes as set out above, all special or extraordinary expenses. These will include the expenses described in subparagraphs (a) through (f) of section 7 of the Federal Child Support Guidelines. With respect to subparagraphs (d), being extraordinary expenses for primary or secondary school education or other educational programs that meet the child's particular needs, and (f), being extraordinary expenses for extracurricular activities, the educational programs or extracurricular activities must be ones to which the parties have agreed in advance or determined consistent with their parenting responsibilities, or as determined by further order of the court. [32] As before, the parties will exchange income tax returns and notices of assessment by no later than May 31 of each year for the purpose of reviewing Guideline income for child support, and proportional income for section 7 expenses.

ASSETS AND LIABILITIES [33] This is the area of greatest friction between the parties. The parties' liabilities greatly exceed their assets, and much of this trial was spent on the issue of how what meagre cash is available is to be distributed in relation to the debts. [34] Mr. Davis greatly resents this state of affairs. From his perspective, he has worked hard throughout the marriage to maximize his income and support his family, while his wife has spent profligately, incurring debt, particularly with her parents, which he disputes and believes to have been unnecessary. He has found it difficult to believe that all of this debt was incurred on behalf of the family and suspects Mrs. Davis of putting away money for her own use, rather than spending it on the family. Mr. Davis has accused Mrs. Davis and her counsel of withholding information and documentation, and of deliberately failing to make full disclosure. [35] I understand Mr. Davis's frustration. On the evidence before me, and indeed she did not deny it, Mrs. Davis spent money well beyond the family's means, running up credit card debt and bank debt that the family could not afford. But Mr. Davis seemed willing to turn a blind eye to this throughout the marriage, leaving the finances in his wife's less-than-capable hands. [36] Notwithstanding that Mrs. Davis was profligate in her spending, I am satisfied that it was

spending for family purposes, such as entertainment, furniture, clothes restaurants, and the children (or, as she put it, "spoiling the kids"). I am also satisfied that she and her counsel have met their disclosure obligations. [37] One of the principal bones of contention between the parties is the matter of what Mrs. Davis says were loans from her parents, Mr. and Mrs. Williams. [38] For the first part of their marriage, Mr. and Mrs. Davis lived in the basement of the home of Mr. and Mrs. Williams. In the latter part of 2005, Mr. and Mrs. Davis decided to move out and buy a house of their own, and found one that they could barely afford. [39] In order to qualify for the financing, Mrs. Davis testified, they had to pay down their CIBC line of credit, which was then at $30,000. Her parents agreed to give them $10,000 as a gift, to go towards the house, and to lend Mrs. Davis a further sum of $30,000 to pay down the line of credit (the "first parental loan"). To do so, Mr. and Mrs. Williams took out their own line of credit. They then wrote a cheque to Mrs. Davis for $40,000 which was deposited into Mr. and Mrs. Davis's joint account. Mrs. Davis then took $30,000 from that joint account and used it to pay down the CIBC line of credit. [40] Although the law presumes such a transfer to be a gift, I am satisfied on the evidence that the presumption of a gift is rebutted with

respect to the $30,000 that was transferred on October 7, 2005, and that it constituted a loan from Mr. and Mrs. Williams to Mrs. Davis which was used for family purposes. For a considerable period of time, Mrs. Davis made monthly payments to her mother towards that loan. She testified that she left it to her mother to take care of the accounting. Her husband did not participate in this process. [41] According to Mrs. Williams' accounting, the amount that remains outstanding is $23,698.00. Mr. Davis takes exception to the accounting, and I agree that it is unsatisfactory. It seems to include the cost of life insurance that Mr. and Mrs. Williams obtained through their bank to insure the line of credit they took out, so that it would be paid off in the event of their death. I say "seems", because the evidence was very unclear. As it was, given the age of Mr. and Mrs. Williams (they are both in their 60s), the premiums appear to have been very high, at least as Mrs. Williams purports to have calculated them in her accounting. [42] On the evidence before me, I find that Mr. and Mrs. Williams lent the sum of $30,000 to their daughter, for family purposes, on October 7, 2005, on the understanding that they would be paid back the principal amount together with interest at the rate charged by the bank on Mr. and Mrs. Williams' line of credit (of which rate there is no direct evidence).

Notwithstanding Mrs. Davis's evidence that she agreed, in essence, to pay back whatever the loan cost her parents, it is not clear to me that this was intended to include the insurance premiums or that they have been accounted for properly. Moreover, although the evidence shows that a good deal of money was paid back, there has not been a complete accounting of this, and I find I am unable to rely on what Mrs. Williams has put forward. [43] Consequently, I am unable to conclude on the evidence before me just what amount, if any, remains owing on the first parental loan. As between Mrs. Williams and Mrs. Davis, I expect that that issue can safely be left in their hands. For present purposes, I will assume that some amount remains outstanding, but I find it probable that the amount is considerably less than $23,698.00. [44] Unfortunately, although the Davis line of credit was paid down, it was quickly run up again. [45] Then, in December of 2011, when Mr. and Mrs. Davis were obliged to sell their house, they found themselves short by $11,092 of the amount necessary to discharge the mortgage on the residence upon completion. Part of this was made up by Mrs. Davis through the sale of her car to the purchaser of the property. The balance of $5,000 was made up by Mr. and Mrs. Williams who advanced the funds to the notary acting for Mr. and Mrs. Davis in the transaction. Unlike the

loan of $30,000, this one was documented with signatures by Mr. and Mrs. Williams and Mrs. Davis. That evidence establishes to my satisfaction that this transfer, too, was a genuine loan, and not a gift. Part of it has been paid back, leaving an amount outstanding of $1,269.15 (the "second parental loan"). [46] This too was a loan to Mrs. Davis, although used for family purposes. Mr. Davis did not have anything to do with this transaction. It took place after their separation. He did, however, benefit from it as the transaction was able to close. Mrs. Davis was critical of him for refusing to take steps such as selling his car or cashing in RSPs to avoid the need for the loan. But it seems evident that there was really nothing practical that he could do. [47] After separation, Mr. Davis cashed in three RSPs that were family assets. He used the proceeds to pay down family debt. He need not account for them further. [48] The remaining assets presently in the name of Mr. Davis, and their values are: Description Amount (a) TD Value Plus chequing $2,172.59 (b) Coast Capital Savings $5.00 (c) RBC Savings $14.17 (d) TD Canada Trust (Value) $4.63 (e) TD Chequing 6321189 $7.64 (f) TD GIC 8069697-02 $560.59 (g) TD GIC 8043469-09 $1,975.76 (h) TD GIC 8043469-10 $1,681.72 Total $6,442.10 [49] In addition, Mr. Davis owns a 2005 Toyota Echo, the value of which is disputed. Neither side

adduced proper evidence to establish a value. On behalf of Mrs. Davis, information concerning asking prices was adduced from AutoTrader, but is of no value. It is evidence only of what some people are asking for superficially similar vehicles, and does not establish the price for which similar vehicles are selling. That evidence, I am satisfied, grossly overstates the current market value of the car. Mr. Davis reported what he was told about car's trade-in value by the Canadian Black Book online, but that, too, is of no assistance, being pure hearsay and quite different from market value. Doing the best I can with what little I have, taking into account its age and use, I value the 2005 Toyota Echo at $3,000. [50] Finally, and most importantly, Mr. Davis cashed out part of his pension from which the sum of $30,000 is available. [51] Assets in the name of Mrs. Davis, and their values, are: Description Amount (a)

CIBC RSP $1,874.17 (b) Scotia McLeod Group RSP $2,497.00 (c) TD savings RSP $658.44 Total $5,029.61 [52] The combined total value of the family assets comes to $44,471.71. The amount available for distribution, after deducting the amount I have ordered to be set aside for counselling, comes to $42,271.71. [53] Aside from the parental loans discussed above, the parties' liabilities consist of the following unsecured debts: Description Amount (a) CIBC Chequing overdraft $5,426.76 (b) CIBC line of credit $35,402.81 (c) CIBC Visa $5,445.83 (d) Costco AmEx $1,170.00 (e) Sears Canada $1,508.00 (f) TD Visa $5,099.22 (g) HBC MasterCard $1,000.00 [54] The first three, totalling $46,275.40, are joint liabilities. The last four, totalling $8,777.22, relate to accounts that are solely in the name of Mrs. Davis. [55] To Mrs. Davis's liabilities must be added the two parental loans. [56] In the result, the parties have joint liabilities of $46,275.40, while Mrs. Davis has liabilities of $10,046.37 plus whatever amount is found to be properly owing on the first parental loan. I find that all but approximately $1,800.00 of the debt in Mrs. Davis's name was incurred for family purposes. [57] Mrs. Davis submits that the assets should be apportioned in her favour, rather than equally, and further submits that the amount held in trust should be used to pay off the parental loans before being

distributed. [58] I am not sitting as a bankruptcy court, but it is painfully obvious that the financial position of both Mr. and Mrs. Davis is precarious. In these circumstances, it would be quite wrong for the court to make any order concerning the payment of debts. It is not for me to assist Mrs. Davis in preferring her parents to her other unsecured creditors. Neither am I in a position to tell creditors where to look for the payment of joint liabilities. [59] In all of these circumstances, I conclude that an equal division of the assets would be unfair given the parties' joint and individual liabilities for family debt, as contemplated in section 65(f) of the FRA. I do not find any of the other subparagraphs of section 65 to be engaged. The unfairness arises from the fact that, in addition to being equally liable with her husband for those liabilities in their joint name, Mrs. Davis is solely liable for those accounts in her own name, including the parental loans, notwithstanding that they were for the most part incurred for family purposes. [60] Balancing as best I can their relative liabilities proportionally with the assets, I direct that the available asset amount as calculated above of $42,271.71 be divided as follows: Ÿ to Mrs. Davis: $27,116.51 (64.15%) Ÿ to Mr. Davis: $15,155.20 (inclusive of his Toyota) (35.85%)

SPOUSAL SUPPORT [61] I am satisfied that Mrs. Davis is entitled to some spousal support while she re-enters the workforce. [62] Given the parties' ages, the ages of their children, the length of their marriage, their relative incomes as I have found them, and the child support I have found payable by Mr. Davis in the amount of $925 per month, the Spousal Support Advisory Guidelines indicate that the range of spousal support is between $0 at the low end, and $350 per month at the high-end. [63] Taking into account the parties' liabilities and the apportionment of assets, I conclude that it is appropriate to award spousal support to Mrs. Davis in the amount of $100 per month, leaving her with a little over 53% of the combined net disposable income of the parties. This, too, should be reviewed in two years.

DIVORCE [64] The parties have satisfied the requirements for a divorce, and reasonable arrangements have been made for the support of the children. Accordingly, I grant an order for their divorce, such divorce to take effect on the 31st day after the date of this judgment, subject to section 12 of the Divorce Act, RSC 1985, c 3 (2nd Supp).

COSTS [65] I consider that success in this matter was divided, and that each party contributed unnecessarily to the need for litigation. Each party will bear his or her own costs. "GRAUER, J."