D.S.W. v. J.A.K.

2012 BCSC 1977 D.S.W. v. J.A.K. IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: D.S.W. v. J.A.K., 2012 BCSC 1977 Date: 20121206 Docket: 41543 Registry: Kamloops Between: D.S.W. Claimant And J.A.K., T..., and W... Respondents Before: The Honourable Mr. Justice Barrow Oral Reasons for Judgment Counsel for Claimant: A. Dunn Counsel for Respondents: D.M. King Place and Date of Trial/Hearing: Kelowna, B.C. December 3, 2012 Place and Date of Judgment: Kelowna, B.C. December 6, 2012 [1] THE COURT: There are two forms of relief sought in the application before the court. The first relates to a charge that was registered against title to the former matrimonial home. The second relates to access. [2] As to the former matter, the application began as an application to have a charge registered under s. 26 of the Family Maintenance Enforcement Act, R.S.B.C. 1996, c. 127, discharged. [3] The property was sold subsequent to the filing of the application but before the application was heard. By agreement the charge was released on the condition that the proceeds of sale be paid into the respondent lawyer's trust account. The issue is whether those monies or any portion of them should stand as security for the respondent's child support obligation. I will deal with that issue first. Security for Child Support [4] The parties began living in a common-law relationship in or about 1996, when they were both living in Switzerland. They immigrated to Canada in 2004, the year that they married. They separated in 2006. They have two children: L, who was born October 5, 1999, and is now 13 years old; and R, who was born on April 13, 2003, and is now 9 years old. Both children are in Ms. W's care, but the parties have joint custody and joint guardianship of them. [5] The litigation began in 2006. It was hard fought and expensive. There were at least 10 contested applications prior to the matter being resolved on the eve of trial. The resolution came about during a settlement conference presided over by Madam Justice Hyslop. The settlement was incorporated into two court orders, one dated October 26, 2009, dealing primarily with custody and access, and the other dated October 28, 2009. [6] The property settlement involved Mr. K paying Ms. W $600,000 in two installments of $300,000, the first on December 31, 2009, and the second on March 31, 2010. In exchange for these payments, Ms. W conveyed her interest in the former matrimonial home at Bridge Lake to Mr. K and relinquished her claims against other real and personal property. [7] On the day the second installment was paid, Ms. W filed the consent order dealing with child support against title to the former matrimonial home pursuant to s. 26 of the Family Maintenance Enforcement Act. [8] Mr. K had moved back to Switzerland shortly after the parties separated. He lived there until recently. The Bridge Lake property was listed for sale and finally sold in November 2012. The purchase price is to be paid in two installments, one of $90,000 and a second of about $145,000. The first sum has been paid; the second will be paid shortly. In order to allow the sale to complete Ms. W agreed to discharge the support order from title on the basis that Mr. K would pay the proceeds of sale into his solicitor's trust account pending the outcome of this application. [9] The consent order, to the extent it deals with child support, is unusual. It provides that Mr. K will pay $3,000 a month in support beginning on November 1, 2009, and continuing until R, the youngest child, turns 19. He will turn 19 on April 13, 2022. The amount of child support is not reviewable. Mr. K's obligation will remain at $3,000 a month regardless of how much or how little money he earns over the course of the next 10 years. In short, he is obliged to pay a further $336,000 over the next nine and a half years. With one minor and insignificant exception, he has made all of the payments due under the order. [10] Mr. King argues that Mr. K wishes to get on with his life. He wishes to have access to the proceeds of sale of the former matrimonial home in order to do that. He notes that there has been no history of Mr. K failing to comply with his child support obligation, and absent some reason to conclude he will not continue to honour that obligation in future the money should be released. [11] Ms. Dunn notes that there was and remains significant acrimony between the parties. While it is true that Mr. K has met his obligations to this point, it is also true that Ms. W had enforceable security over the only asset he has in this jurisdiction, namely, the former matrimonial home. If that security is removed, there is reason to be concerned about whether Mr. K will continue to honour his obligations. [12] The material portions of s. 26 of the Family Maintenance Enforcement Act provide as follows: 26 (1) A maintenance order may be registered in a land title office in the same manner as a charge is registered ... Subsection 10 provides that: (10) On application by (a) the person against whose land a maintenance order is registered, ... the court may make an order discharging or partially discharging the registered order or an order postponing the registered order to allow the registration of a charge. Subsection 12 provides that: (12) The court may, in an order made under subsection (10), impose any conditions as to security or otherwise it considers necessary and reasonable. [13] What is being sought by Ms. W is an order that the money in trust stand as security for the charge that was formerly registered against title. She seeks that as a term of the order releasing the charge in effect. [14] Notwithstanding that the charge has already been lifted, and notwithstanding the wording of s. 26(1) which provides that an application may be made by "the person against whose land a maintenance order is registered", and notwithstanding that there is no land owned by the applicant against which an order is registered, I am satisfied that I have the authority to make the order sought. Neither of the parties suggest otherwise. [15] The principles that are to guide an application made under s. 26(10) were set out in D.(B.) v. B. (L.D.), 2003 BCCA 189. In that case Newbury J.A. held that generally security should not be ordered, at least not in every case. If there has been either a history of deliberate refusal to honour a support obligation or if it is likely there will be a refusal to do so in the future, then alternative security under s. 26(12) may be ordered. The onus is on the applicant to show that alternate security is no longer necessary to protect the interests of the child. [16] On the facts in D.(B.), the payor father had missed only four payments, which he later voluntarily made up. The payments were missed during a particularly intense period of the litigation. He had also paid an amount in accordance with the literal reading of the court order, but which he knew to be less than that which everybody intended he pay. Again, once the order was corrected, he made up the arrears. Further, he had a connection to the province of British Columbia; in fact, he had a connection to the very community in which the recipient mother and child lived. The chambers judge ordered security, and that aspect of the order was upheld on appeal. I note this because the payor's conduct in D.(B.) was far from egregious and yet security was still ordered. One final point of note in that case is that Newbury J.A. underlined that the interest being protected by imposing alternative security is that of the child. In cases where the factors are evenly balanced, caution may be the watch word to guide the exercise of the discretion conferred by the section. [17] I turn now to the facts of this case. There are four factors which raise a concern in this case. The first is that Mr. K has no connection to this province or this country. He is a Swiss citizen. He lives part of the year in Switzerland in rental accommodation. He also has property in Germany. He is a weather forecaster by profession. He spends some time each year in the state of Oklahoma, where his company owns some property. There is no evidence as to the specifics of any of his property. The property in Germany is not identified by civic address or legal description; rather it is simply described as "farmland property in Germany." The company that owns property in Oklahoma is identified simply as property owned by W..., a company that Mr. K is said to have an interest in. What his interest is in that company and where the company was incorporated are not revealed in the materials. Ms. W does not even have an address for Mr. K or his company. Finally, Mr. K now spends at least part of each year working in the Philippines. [18] The likelihood of compliance with a court order may vary in relation to the ability of the court to enforce obedience. If the court has no ability to enforce its order or if the enforcement proceedings are known to be expensive, time-consuming, complicated and uncertain, the temptation to disregard an order may increase. Of course, many people willingly comply even in the absence of effective enforcement mechanisms. I simply observe that the risk of non-compliance increases as the effectiveness of enforcement decreases. In this case there is almost no ability to enforce compliance, save through a charge on the money that is now in trust. [19] The second relevant factor to the exercise of the discretion is the size and nature of the support obligation. In this case the obligation is substantial, in excess of $335,000, and unusual inasmuch as it will continue regardless of Mr. K's fortunes. This factor also militates in favour of making an order of the sort sought by Ms. W. [20] The third factor of note is the level of animosity. That factor was identified as important or significant in D.(B.). It was one of the reasons which informed the cautious approach endorsed by the Court of Appeal. Generally the higher the level of animosity, the greater the need for caution and usually the more appropriate security might be. The level of animosity in this case is striking. Three matters illustrate this. First, during the course of litigation there were no fewer than 10 contested applications of one sort or another. Second, Mr. K sued Ms. W in Germany alleging defamation. He also instigated a criminal prosecution against her in Switzerland alleging she had forged his signature on a child support contract. The matter came before a Swiss judge who declined to continue the proceeding. Mr. K appealed that decision, insisting that the criminal investigation be continued. His efforts eventually gave rise to a request under the Mutual Legal Assistance Treaty. Ms. W had to retain counsel in both Germany and Switzerland to defend the proceedings. In addition she had to instruct counsel in this province to deal with the MLAT matter. Once the divorce trial was settled, Mr. K decided he no longer wished to have the criminal matter pursued and it was dropped. Third, Mr. K was charged with a sexual offence in Germany in the spring of 2010, some six months after the divorce was settled. He spent four months in custody before securing bail. He was eventually acquitted, but incurred substantial legal expenses, at least 250,000 Euros. According to a newspaper article, his lawyers may be seeking a further 200,000 Euros. Mr. K has deposed that Ms. W "meddled" in that proceeding by supporting the woman who had "falsely" advanced the allegation. He deposes in part that: The claimant's email to my false accuser was partially published in a European "National Enquirer"-like magazine by the false accuser. The German courts have now ordered that the woman complainant not repeat her allegations again and have ordered the magazine not to print those allegations again. The Claimant continued to try and cause damage to my relationship with the Children during my unjustified incarceration by providing them with details of the lawsuit. I digress to note that the reason these matters were deemed newsworthy in Germany is in part because the respondent is something of a celebrity there, due to his profile as a weather announcer. In sum, the animosity in this case was high, extraordinarily so. It remains high several years after the family proceedings were settled. [21] Finally, while Mr. K asserts that he will honour his obligation to his children, there is some reason to doubt his credibility. He has deposed that he "never resisted full financial disclosure". In July 2009, Harvey J. heard an application brought by Ms. W to have Mr. K held in contempt. The contempt was said to be Mr. K's failure to comply with an April 17, 2009 order of Meiklem J. That order was made on the application of Ms. W and required Mr. K to produce a long list of documents, almost all of which dealt with financial issues. The order was made after requests for the information were either ignored or responded to with promises that were never fulfilled. The application that gave rise to the Meiklem J. order followed and that order was not complied with. [22] While Harvey J. did not find that Mr. K was in contempt, he did observe at paragraph 12 of his decision of July 16, 2009: The defendant`s conduct, while not rising to the level of contempt, has been less than cooperative when it comes to the matter of disclosure. This is apparent by the position taken in respect of the production of the accounting files, which is the subject of the plaintiff`s second motion. I also reference the need for earlier orders obtained regarding document disclosure before Madam Justice Russell. The absence of a finding of contempt, at this point in time, is not to say that the defendant`s conduct is not blameworthy. Given the history of this litigation and the absence of any meaningful response to Ms. Dunn`s letter requesting advice when the documents might be forthcoming, the application before the court yesterday was likely necessary to draw out the responses To depose that he has "never resisted full financial disclosure" in the face of this history casts into serious doubt the degree to which his other assurances can be relied on. [23] The order sought in this case is discretionary. The discretion must of course be exercised judicially. It is to be exercised having regard to the interests of the children, who are the beneficiaries of the support that sought to be secured. The question is whether there is reason to be concerned about whether the payor will comply with his or her obligation. It is not necessary that there be a history of non-compliance in order to justify the order, although in many cases that will be the basis for any asserted concern. [24] While any one of the factors noted above may not be sufficient, standing alone, to give rise to a concern, in combination they do, and thus I am not prepared to discharge the security. Put another way, the proceeds of sale will stand as security for the ongoing child support obligation. They are to remain in trust until further order or until the child support obligation is retired. The parties have liberty to apply if they wish some other regime to be imposed. Access [25] The parties have agreed on most of the access issues. As to the summer access, they have agreed to split the school summer holidays. The only issue is whether they should alternate who gets the first half and who gets the second half with the children. [26] Ms. W will have the children during the second half of the summer holidays unless she agrees otherwise in writing. She has to get them ready for school, and in addition one of the boys at least participates in hockey and there are tryouts and other commitments associated with that activity in August, and thus it is in the child's best interest that he be at home, where he can participate in those activities as necessary. [27] The pick-up and drop-off for summer access will be at the Vancouver Airport. Mr. K is to provide Ms. W with the time he wishes to pick up the children and the time he wishes to drop them off, by email at least 30 days in advance of the start of his summer access. [28] There was a disagreement about whether the pick-up and drop-off should be in connection with Christmas access. For this Christmas, Mr. K will pick the children up at the Kamloops Airport beginning at noon on December 29 and return them to the Kamloops Airport at 3:00 p.m. on January 6, 2013. Ms. W will have the children with her during the spring break 2013. Mr. K will have the children over the Easter holiday. The parties tell me they will agree on the times. The pick-up and drop-off for the Easter holiday will be at the Kamloops Airport. [29] There is an issue as to the quality of Skype access that Mr. K has been able to have with the children. I understand that Ms. W has now secured a new internet connection and this one, through Telus, ought to be fast enough to allow meaningful video visits over the web. I make no further order in connection with that matter as a result. [30] Each of the parties will bear their own costs in relation to these applications. [31] From your perspective, Ms. Dunn, are there any questions? [32] MS. DUNN: I had just one question with respect to the Christmas access. I thought that by consent we had said to leave the particular time to the agreement of the parties and just arrange that she would bring them to Kamloops and pick them up from the Kamloops Airport but because we don't know when the flight will be that we leave the time blank. [33] THE COURT: Mr. King, from your perspective? [34] MR. KING: Yes, that's agreeable. I suspect the parties can fine tune the times. [35] THE COURT: Okay. Anything else? [36] MS. DUNN: No, My Lord. [37] MR. KING: There is a matter, My Lord, with respect to the security. There will come a time assuming there's no further applications made, when the amount of the security will exceed the remainder of the obligation. [38] THE COURT: Yes. [39] MR. KING: So some of the cases allow for a payout of the money when the security becomes excessive. [40] THE COURT: Yes. That is what I had in mind when I said you can apply. It seems to me sensible that the security never exceed the remaining obligation under the support order. I do not know what the arithmetic is. It will be a few years before that time is reached, but I encourage you - [41] MR. KING: That's right. So I can incorporate that process in the order? [42] THE COURT: Yes, I would encourage Ms. Dunn to agree - I am sure she will. There is no reason not to. So please by all means consider that. Ms. Dunn, there is no reason for an order not to go in that sense, is there? [43] MS. DUNN: No, that is agreeable. We only want to be secured. [44] THE COURT: Yes. So please incorporate a term to that effect Mr. King. [45] MR. KING: And the other thing I would ask Your Lordship to consider here. Obviously what Mr. K was hoping was that he could have some monies freed up so he could put them into a home. What the cases contemplate is security for future compliance, and in the event that Mr. K can come forward with alternate security so that the intention of the order is [indiscernible] liquidity, can I set out in the order that he has liberty to come forward with alternate security proposals if he is able to muster those? [46] THE COURT: Yes. And I am sure Ms. Dunn would happily consider them, but yes, absolutely. [47] MR. KING: So on some future date he is not seen to be estopped from bringing those applications arising from this order? [48] THE COURT: No, he is not. [49] MR. KING: Okay. Thank you, My Lord. [50] MS. DUNN: My only concern would be if those alternate securities would be like a title in a foreign jurisdiction. [51] MR. KING: Just leave for an application where it could be thrashed out as -- [52] THE COURT: Whether the alternate security meets with the court's approval will be a matter for the court to decide, but you are quite right, Ms. Dunn, but that is going to depend on what is offered. So Mr. King wants to simply reserve the right to have that litigated if there is no agreement, and the order will grant him liberty to apply to do that. [53] MR. KING: Thank you, My Lord. [54] THE COURT: Thank you, Ms. Dunn. Thank you, Mr. King. [55] MS. DUNN: Thank you. Barrow J.