Hu v. Hu

2001BCSC1280 Citation: Hu v. Hu Date: 20010910 2001 BCSC 1280 Docket: D090483 Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: MARIA JUN-HEN HU

PETITIONER AND:

BONBON DENNIS HU

RESPONDENT

REASONS FOR JUDGMENT

OF THE HONOURABLE MR. JUSTICE HUNTER (IN CHAMBERS) Maria Jun-Jen Hu appearing on her own behalf. Counsel for Respondent M.L. Leslie Date and Place of Hearing: August 30, 2001 Vancouver, BC [1] The respondent ("Dr. Hu") seeks the following: (a) An order discharging the maintenance order of April 13, 1995 which was registered against that property by the petitioner, ("Ms. Hu") on February 11, 1997 under number BL049779. (b) An order varying the maintenance provisions of the order of March 16, 1998. (c) An order pursuant to the Child Support Guidelines that Dr. Hu pay child support only for the benefit of the child Caroline who resides with Ms. Hu. (d) An order pursuant to the Child Support Guidelines that Ms. Hu pay child support for the benefit of the child Candace who resides with Dr. Hu. [2] Ms. Hu, by notice of motion filed on July 20, 2001 seeks: (a) An order that Dr. Hu pay arrears forthwith on the order of this court of March 16, 1998. (b) That Dr. Hu pay his share of the special or extraordinary expenses associated with their son Cedric's post secondary education in accordance with the order of March 16, 1998. (c) Ms. Hu seeks a determination that the amount of her obligation to pay child maintenance for Candace should be reduced as constituting an undue hardship under s. 10 of the Guidelines. [3] Ms. Hu in her notice of motion also sought an order for production of

certain documents of Dr. Hu but she did not press that demand at the hearing and I am assuming that she has received the documents or that that issue has been resolved between the parties. [4] The parties were married on July 4, 1971 at Vancouver. They separated in September 1993 and were divorced on November 10, 1994. [5] Ms. Hu is a real estate agent and is the principal, if not only, shareholder in a company which owns assets and trades in the stock market. [6] Dr. Hu is a dentist with a practice in Ladner. They have three children: Cedric, who is 25 years of age and obtained a Bachelor of Arts degree from U.B.C. as a result of completing courses in May 2000, Candace, who is 23 years of age, and Caroline, who is 20. [7] Cedric has always lived with his mother. At one point the daughters lived with the father following separation, but then they moved back with their mother. In September 2000 Candace moved back with her father and remains with him. Caroline continues to live with her mother. [8] In July of this year Cedric moved to Los Angeles and enrolled in the law school at Southwestern University. His tuition, residence and book expenses are expected to approximate $32,000 (U.S.) a year, which has a Canadian equivalent approximating $54,000. Apparently Cedric had tried unsuccessfully to be admitted into a Canadian law school. [9] Dr. Hu submits that Cedric is no longer a

child of the marriage. Cedric has his Bachelor of Arts degree from U.B.C. and has chosen to attend a United States university at high cost, which Dr. Hu says should be Cedric's responsibility. The mother claims that Candace should have graduated from U.B.C. in June of this year but did not do so because she either quit before the academic term was finished, or failed. Ms. Hu claims there is no evidence before the court that Candace is attending university this fall and therefore Dr. Hu should receive no child support for her. Dr. Hu claims child support from Ms. Hu for Candace but makes no claim for payment of special expenses. [10] In March 1998 this court made a finding that Dr. Hu's annual income was $250,000 and Ms. Hu's was $200,000. The three children were then living with their mother and the court ordered Dr. Hu to pay $3,498 a month child maintenance plus $830 as his share of the children's special expenses. [11] In January 2001 Dr. Hu reduced his child maintenance payments to $1,995.66 per month claiming that Cedric had ceased to be a child of the marriage upon graduation from university in May 2000. The monthly payments of $1,995.66 are for child maintenance for Caroline who continues to live with her mother and attend U.B.C. [12] Alternately, it is submitted on behalf of Dr. Hu that the table amounts under the guidelines are not appropriate for Cedric and no part of

his special expenses should be paid by Dr. Hu. [13] I turn to an examination of the annual incomes of the parties. Dr. Hu's income based on his personal tax returns was $210,464 for the year 2000. His three-year average income, 1998 through 2000, was $200,400. His company which operates his dental practice, Dr. BonBon Hu Inc., has in two of the last three fiscal years shown an operating loss before payment of dividends. In addition to the salary to Dr. Hu, that company has also been paying dividends to Dr. Hu and the family trust. If one combines his corporate and personal income, his three-year average income is $187,627 per year. I have concluded that his annual income for Guideline purposes is $200,400. [14] In commenting on Dr. Hu's income from the company, the business evaluator, Mr. W.A. McMann of Price Waterhouse Coopers, said on p.4 of a letter to Dr. Hu's counsel dated July 4, 2001: Given that all expenses are business related, and that only Dr. Hu's salary is discretionary as to amount, it is clear that the salary taken and reported on the personal tax return, plus the dividends have exceeded the income of the company and that the excess is being funded by an increasing debt level. In fiscal 2001, debt also increased to finance leasehold improvements. [15] As to Ms. Hu's income one must look to her two companies, namely, M.E.T. Enterprises Ltd. and 422538 B.C. Ltd.

M.E.T. Enterprises Ltd. is her real estate business. In the years 1989 through 1993 her realty business prospered reflecting the Asian interest in the British Columbia real estate market. She says that commission income in the last three to four years has dwindled to between $20,000 and $40,000 a year. [16] Her other company, 422538 B.C. Ltd., at the time the family assets were divided by the court in 1994, owned real property and term certificates. In 1998 Ms. Hu changed the focus of that company, investing heavily in the stock market. That company then enjoyed good years financially, but in the first eight months of the last fiscal year of the company, that is until April 2001, it suffered significant losses. For reasons which are not clear, she now seeks to average her income over the last two years, eight months, which shows a significant loss in contrast with her average income over the last three years. In 2001 this company lost $362,000. In 1999 it traded 1,742,000 shares. In the year 2000 it traded 3,348,000 shares, and in the first eight months of its last fiscal year it traded 2,543,300 shares. [17] Ms. Hu seeks to restrict her average income calculation to two years, eight months, and thus take advantage of the loss on stock trading of $366,000 in determining her income. I have concluded that her Guideline income should reflect the years 1998 through 2000 which

results in an annual average income of $172,960. [18] I am satisfied that both Caroline (who lives with Ms. Hu) and Candace (who lives with Dr. Hu) are children of the marriage. Both have been attending university. Candace, while she did not do well in the school year ending April 30, 2001, is returning to university this month. Dr. Hu's table obligation under the Child Support Guidelines is $1,079, (on his income up to $150,000), plus $322.56 (that is, plus .64 of the balance of his income) for a total obligation of $1,401.56 per month. Ms. Hu's table figure is $1,079 (on income up to $150,000) and $146.94 on the balance of her average income over three years of $172,960, for a total of $1,225.94. The difference is $175.52 per month. [19] I note that Dr. Hu has been paying child maintenance for Caroline all along and that while Candace has resided with her father since September 2000 Ms. Hu has made no child maintenance payments concerning Candace. [20] It follows from my conclusion that Ms. Hu's Guideline income is $172,960 that she must fail on her claim that her child maintenance obligations concerning Candace be reduced because of undue hardship. [21] As to Cedric, I am troubled by the failure of Ms. Hu to disclose the real property registered in Cedric's name, located at 7011 Montgomery Street in Vancouver. It was registered in his name on February 26, 1999. There was a

mortgage securing a line of credit of $310,000 and registered against the property describing Cedric as the principal borrower and Ms. Hu as the guarantor. In April 2001 the mortgage was refinanced with another lender and that mortgage document shows an increase in the line of credit of $147,000. [22] The father's motion, in the matter before me, was filed on May 29, 2001, and yet Ms. Hu does not describe this real property in her Property and Financial Statement sworn July 3, 2001. She states in court that the property belongs to her but that because of her poor health she had put it in the name of her son. There is no affidavit from Cedric explaining ownership, nor is there any material describing the extent to which the line of credit has been drawn down, nor as to what uses were made of the monies drawn down on the letter of credit. [23] In the circumstances of Cedric's decision to go outside Canada to continue his education, he having already obtained one post-secondary degree at the age of 25, I have concluded that he is no longer a child of the marriage. Even if I had concluded otherwise, I am not satisfied that the court has been told the full story on Cedric's ability and opportunity to contribute to his own education. As the courts have said, post-secondary education is a privilege, not a right. Children have an obligation to make a reasonable contribution to their

education. The evidence shows that Cedric declared income for the years 1998, 1999 and 2000 of $20,626, $12,085, and $29,800 respectively. [24] In summary: (a) The parties shall pay child maintenance to each other for the children Candace and Caroline which will be in the form of the net difference of $175.52 which Dr. Hu will pay to Ms. Hu to commence September 1, 2001. (b) Ms. Hu's claim for arrears of child maintenance concerning their son Cedric is dismissed on my finding that he is no longer a child of the marriage as is her claim for maintenance for Cedric. (c) The maintenance order of April 13, 1995 registered in the Land Titles Office against Lot 24 on February 11, 1997 under number BL049779 is discharged. [25] In the circumstances I make no order as to costs. "R.B. Hunter" HUNTER J.