Janmohamed v. Janmohamed

2020 BCSC 432 Janmohamed v. Janmohamed

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Janmohamed v. Janmohamed, 2020 BCSC 432 Date: 20200324 Docket: E111928 Registry: Vancouver Between: Nazlin Janmohamed, also known as Nazlin Sunderji Claimant And Amin Janmohamed, also known as Amin Mohamed Janmohamed Respondent In Chambers Before: The Honourable Mr. Justice Gomery Reasons for Judgment Counsel for the Claimant: P. Daltrop Counsel for the Respondent: I.B. Hayward Place and Date of Hearing: Vancouver, B.C. January 22-23, 2020 Place and Date of Judgment: Vancouver, B.C. March 24, 2020 Contents Introduction. 2 Issues. 3 Analysis. 4 Should child support for the two older children terminate on the ground that they are no longer children of the marriage?. 4 Legal framework. 4 Analysis. 7 Should Fitzpatrick J.'s order of March 23, 2016 be varied to reduce the amount of child support payable on the ground that the father's Guideline income has diminished?. 9 Overview of the issue. 9 Analysis. 10 (1) The father's actual income. 11 (2) Adequacy of the father's financial disclosure. 12 (3) Should income in excess of the father's actual income be imputed to him? 13 (4) What child support is payable?. 15 Should I direct the distribution of the remaining proceeds of sale of Pharmax?. 21 (1) Insurance premiums. 21 (2) S. 7 expenses. 22 (3) Conclusion. 24 Should I grant an injunction requiring the mother to maintain the

confidentiality of personal information received from the father in this proceeding?. 25 Disposition. 26 Introduction [1] This is a contentious family case. The parties were married for 18 years before they separated in November 2010. They have three children who are now aged 22, 20 and 13 years old. The claimant is the mother and the respondent is the father. The children reside with the mother, although the eldest now attends university in Montreal and is away eight months of the year. [2] With occasional lulls, the mother and the father have been fighting since this litigation began more than eight years ago. Reasons for judgment resulting from contested applications are reported at 2012 BCSC 611, 2012 BCSC 958, 2014 BCSC 107, 2014 BCSC 2071, 2015 BCSC 334 and 2016 BCSC 513. It has been a bitter fight. In his reasons at 2015 BCSC 334 at para. 9, Justice Macintosh observed: The parties distrust each other. It would appear from the evidence that they are unable, at present at least, to jointly conduct anything. [3] Pervasive distrust and animosity between the parties has affected their ability to parent their children well. In her reasons at 2016 BCSC 513, at para. 114, Justice Fitzpatrick observed: Raising children and being mindful of the cost of doing so requires that these parties put their animosity towards each other aside, and do what is right for their children. In

broad terms, that requires that the parties be mindful of what I describe as the "four Cs" where separated spouses are dealing with child issues, including support. These are communication, cooperation, compromise and common sense. Little of any of these is evident here. [4] The animosity between the parents has infected the father's relationship with the children. The two older children refuse to have anything to do with their father. They have not spoken with him for years. [5] Child support and the determination of the father's income pursuant to the Federal Child Support Guidelines, S.O.R./97-175 [Guidelines] have been issues from the beginning. The father applies to vary the child support payable pursuant to Fitzpatrick J.'s order in 2016. He maintains that his income is reduced and the two eldest children no longer qualify as children of the marriage. He also seeks orders addressing the final disposition of proceeds from the sale of a business that was sold four years ago, and an order for the protection of confidential information disclosed in the course of this litigation. The mother opposes all of this. Issues [6] The father's application raises the following issues: a) Should child support for the two older children terminate on the ground that they are no longer children of the marriage? b) Should Fitzpatrick J.'s order of March 23, 2016 be varied to reduce the

amount of child support payable on the ground that the father's Guideline income has diminished? c) Should I direct the distribution of the remaining proceeds of sale of Pharmax Health Inc. ("Pharmax")? d) Should I grant an injunction requiring the mother to maintain the confidentiality of personal information received from the father in this proceeding? Analysis Should child support for the two older children terminate on the ground that they are no longer children of the marriage? [7] Paragraph 1 of Fitzpatrick J.'s order of March 23, 2016, requires the father to pay child support "for so long as the Children remain children of the marriage as defined by the Divorce Act (Canada)". The order accordingly requires that the child support payable by the father terminate in respect of children who cease to be children of the marriage. In her reasons (2016 BCSC 513), at para. 137, Fitzpatrick J. stated: I would also note that the eldest daughter turns 19 years of age in October 2016. At that time, it will be necessary to consider whether she remains a child of the marriage and if so, what level of support is appropriate. The court will be required to consider the factors set out in Farden v. Farden (1993), 48 R.F.L. (3d) 60 (B.C.S.C.) at that time. Legal framework [8] The term, a "child of the marriage", is defined in s. 2(1) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). It

applies to a child who has attained the age of majority - 19 years old in British Columbia - and is under the charge of one or both parents but is unable, "by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life". It is settled that post-secondary studies may constitute an "other cause". Accordingly, an adult child may continue to be a child of the marriage if she is unable to withdraw from her parent's charge because she is pursuing post-secondary studies. [9] Farden v. Farden (1993), 48 R.F.L. (3d) 60 (B.C. Master) [Farden] is a leading case setting out factors to be considered in assessing whether an adult child remains a child of the marriage while pursuing post-secondary studies. They are not a set of minimum criteria all of which must be satisfied; Neufeld v. Neufeld, 2005 BCCA 7 at para.

22. The Farden factors are (at 64-65): (1) whether the child is in fact enrolled in a course of studies and whether it is a full time or part time course of studies; (2) whether or not the child has applied for, or is eligible for, student loans or other financial assistance; (3) the career plans of the child, i.e., whether the child has some reasonable and appropriate plan or is simply going to college because there is nothing better to do; (4) the ability of the child to contribute to his own support through part-time employment; (5) the age of the child; (6) the child's past academic performance, whether the child is demonstrating success in the chosen course of studies; (7) what plans the parents made for the education of their children, particularly where those plans were made during cohabitation; (8) at least in the case of a mature child who has reached the age of majority, whether or not the child has unilaterally terminated a relationship from the parent from whom support is sought. [10] The father relies entirely on the eighth factor. He says that his two eldest children have unilaterally terminated their relationship with him such that he should no longer be required to support them. [11] The father relies on the following trial court decisions: Law v. Law (1986), 2 R.F.L. (3d) 458 (Ont. S.C.) at 462; Marsland v. Gibb, 2000 BCSC 471 at para. 34; Webb v. Strople, 2006

BCSC 294 at paras. 23-24; Jalil v. Jalil, 2015 BCSC 567 at paras. 29-31; Oleksiewicz v. Oleksiewicz, 2017 BCSC 228 at paras. 35-38 [Oleksiewicz]; and Kirkwood v. Kirkwood, 2018 BCSC 1540 at para. 14 [Kirkwood]. All but two of these cases precede an important decision of the Court of Appeal in Shaw v. Arndt, 2016 BCCA 78 [Shaw] and the two that post-date Shaw (Oleksiewicz and Kirkwood) do not reference Shaw. Shaw is a considered decision addressing the proper approach to parent-child estrangement as a factor in determining whether an adult child has ceased to be a child of the marriage. I am required to apply its reasoning. [12] In Shaw, a father paying child support sought a determination that his estranged adult son was no longer a child of the marriage. Justice Newbury gave judgment for the Court. She rejected the father's argument and, in doing so, considered the eighth Farden factor in the light of jurisprudence from other provinces. She particularly relied on A.C. v. M.Z., 2010 ONSC 6473 [A.C.] and a paper written by Justice David Corbett of the Ontario Superior Court in 2010. At para. 26, she noted that A.C. identifies " strong public policy reasons why 'conduct' is generally not determinative of, or relevant to, spousal support. " and that "those reasons also resonate with respect to child support". At para. 29, she stated that the following conclusions from Justice

Corbett paper provide "a useful description of the current law concerning the estrangement of adult children from their parents": (a) Contrary to certain recent literature, there has not been "growing judicial recognition" that the quality of the relationship should have a bearing on child support. (b) Courts have been willing to impose a few specific responsibilities on adult support recipients, and may properly do so, but not conditions that include maintaining a social relationship with a parent. (c) The statutory basis for taking the quality of the child-parent relationship into account is dubious. (d) There is appellant authority permitting the court to place some weight on the parent-child relationship, but that authority is more ambiguous than trial and motions court decisions suggest. (e) On the current state of the law, there seems to be a discretion to take this factor into account, though few courts do, and fewer have found it a significant factor in a support decision. (f) The better view is that if conduct is ever relevant, it should only be in truly egregious cases of misconduct by a child against a parent. [Emphasis added by Newbury J.A.] [13] Newbury J.A. concluded, at para. 31: Many parents or stepparents have troubled relationships with their children, but by virtue of their youth, children still have to be supported, in whole or in part, in obtaining training

or degrees that will allow them to become self sufficient. The final 'Farden factor' may justify the cessation of support in rare cases, but this case does not begin to approach the egregious circumstances in which a cut-off of support would be justified. [14] To summarize, I must bear in mind that the estrangement between the father and his two eldest daughters is only one of many considerations. It is a consideration that will justify the cessation of support that would otherwise be payable only in rare circumstances involving egregious misconduct by the child against the parent. This is in part because, as a general proposition, public policy does not support an enquiry into who is at fault in the breakdown of the relationship between parent and child for the purpose of determining whether support is payable. [15] On the question of public policy, I might add that delving into the breakdown of the parent-child relationship is all too likely to deepen the rift and make the prospect of future reconciliation even more remote than it already seems. In this case, matters cannot have been improved by the father having brought this application and the daughters having sworn affidavits blaming their father for the present unhappy state of affairs. Analysis [16] In these reasons, I refer to the two eldest children as JA and JE respectively. As Fitzpatrick J. noted, JA turned 19 years

old in October 2016. JE turned 19 years old in September 2018. [17] JA is now 22 years old. She is studying engineering in a university co-op program in Montreal. She entered the final year of the program in January 2020. [18] JE is now 20 years old. She is studying health sciences in the second year of a university program. She studied in Alberta for the first year and returned to Vancouver for her second year. She is currently living at home with her mother while attending a local university. [19] Both JA and JE have held summer jobs in the service sector when they were not at university or taking summer courses. As one would expect, their earnings have been modest. [20] During the marriage, the father was a high-income earner. He discussed with JE the possibility that she would become a pharmacist like him. The parents set aside substantial funds for post-secondary education for their children in an RESP. [21] Transcripts of JA and JE's academic performance are not in evidence. There is no suggestion that they are failing any of their courses, or taking longer than expected to graduate. [22] In these circumstances, Farden factors one to seven strongly favour a finding that JA and JE remain children of the marriage. They are pursuing undergraduate post-secondary education as their parents anticipated they would. They are working when they can but are unable to support

themselves while they continue their schooling. These are common circumstances in which children are ordinarily found to be children of the marriage. The father did not suggest otherwise. [23] I turn to the issue of the estrangement. The father's relationship with JA and JE broke down about eight years ago. JE says that she has not spoken with her father since she was 12 years old. JA and her father have not spoken since a few short walks together in 2013. She would have been 15 or 16 years old at the time. [24] JA and JE blame their father for the estrangement. They say that he showed little interest in them after he left the family home, and that he was erratic, inconsistent, and often unavailable. Each says that she has suffered psychological difficulties because of their father's departure and a consequent lack of security and stability. It is clear from their affidavits that they have been drawn into taking their mother's side in her fight with their father. For example, they blame their father for the sale of the family home and for living, as they perceive it, a globe-trotting lifestyle after the divorce. The mother confirms the daughters' evidence. [25] The father's perspective is, of course, very different. He blames the mother for alienating his daughters. He says that he has reached out to them repeatedly and been rebuffed. He says that he continues to wish for a

relationship with them. [26] Neither counsel suggested that the disputes in the evidence as to the reasons for the estrangement give rise to a triable issue, as occurred in C.M.R. v. L.F.R., 2019 BCCA 371. [27] I lack objective evidence and am unable to say whose perspective on the causes of the estrangement between the father and the daughters is most accurate. I think it likely that the father and the mother share responsibility for the initial breakdown. In the end, it does not matter. The estrangement cannot be viewed in isolation from the acrimony between the mother and the father. JA and JE are now of age, but it is too much to expect that, as young adults, they might now transcend the conflict that dominated their teen years and has made them terribly unhappy. [28] Taking all the Farden factors into account, I conclude that JA and JE remain children of the marriage. This is not one of those rare cases involving egregious misconduct on the part of the children justifying a cessation of child support. Should Fitzpatrick J.'s order of March 23, 2016 be varied to reduce the amount of child support payable on the ground that the father's Guideline income has diminished? Overview of the issue [29] Child support was originally determined in a consent order made by Justice Silverman on March 11, 2014. While this was a final order, it was subject to variation pursuant to s. 17(4)

of the Divorce Act and s. 14 of the Guidelines. Justice Fitzpatrick accordingly varied the child support payable on the basis of changes in the father's and mother's incomes after March 2014. [30] Justice Fitzpatrick's order recites her findings as to the Guideline income of the father and the mother through various periods ending in May 2016. In the months leading to May 2016, an annual income of $210,000 is imputed to the father, and $30,000 to the mother. The support payable under the order is based on the father's imputed income. Pursuant to s. 14(a) of the Guidelines, a further variation in the support payable may be justified by "any change in circumstances that would result in a different child support order". In the language of the cases, what is required is a material change of circumstance. [31] The father maintains that his income has dropped precipitously since Fitzpatrick J., made her order in March 2016. Having filed his notice of application in July 2019, he seeks a further variation effective August 1, 2019. [32] There is abundant evidence that the father's financial circumstances have changed. At the time of the hearing before Fitzpatrick J., he was earning income as the 70% shareholder of a new company, BIXA Therapeutics Inc. ("Bixa"). Bixa had a contract with Providence Health Care to provide prescriptions to participants of a program relating to addiction

and mental health. Effective April 1, 2018, Providence Health Care terminated the contract with Bixa. The father's attempts to find new work for Bixa in British Columbia were unsuccessful. The father decided to close the business. He bought out his partners, leaving himself as Bixa's sole shareholder. In August 2018, the father invested Bixa's funds in a new venture in Colombia through a newly incorporated subsidiary. The father says that the new venture is not yet generating revenue. [33] The father says that the reason for the collapse of Bixa's business in British Columbia appears to be a defamatory campaign undertaken by the mother against him, featuring poison pen letters sent anonymously to many of his former business associates. He has adduced expert evidence from a handwriting analyst that links the mother to the letter writing campaign. The mother asks me not to make any findings concerning these letters, in order not to prejudge the outcome of a defamation action the father has commenced against the mother. While the letters are plainly defamatory and the mother has not explained her apparent involvement with them, I will only address them to the extent that I must. It is not clear that these letters prompted the cancellation of Bixa's contract with Providence Health Care. [34] The mother maintains that the father has not made full disclosure of his and Bixa's

financial circumstances and that I should decline to make any order in his favour until he does. Alternatively, the mother says that the father is trained and qualified as a pharmacist in British Columbia, and he could be earning a good living here. She asks me to impute income to him on that footing. Analysis [35] The parties' contentions require me to address the following questions: a) On the evidence, what was the father's actual income in 2019 and what is his expected income in 2020? b) Has the father made adequate financial disclosure and, if he has not, what should I do about that? c) Should income in excess of the father's actual income be imputed to him? d) What child support is payable? (1) The father's actual income [36] The father's income has been a topic of controversy between the parties since the commencement of this action. Justice Fitzpatrick based the income figures attributed to the father in her order on his income tax filings. At paras. 102-103 of her reasons for judgment (2016 BCSC 513), she noted the mother's argument that some part or all of Bixa's income and retained earnings should be attributed to the father. She viewed that argument as premature and said it was a matter to be addressed in 2016 or subsequently, following further financial disclosure of Bixa's financial circumstances. [37] The father's line 150 income in his 2018 tax return was

$107,355.50. This covers a period preceding the collapse of Bixa's business. [38] The father has not yet filed his 2019 tax return. In his F8 financial disclosure statement (his "F8"), sworn on July 10, 2019, he anticipates an income of $69,232 in 2019. This is a theoretical figure based on the father's calculation of an anticipated annual return on the money invested in Colombia ($47,232, based on a net return of of 4.8% on $984,000) together with an amount he expects to receive on the sale of shares in a publicly traded company in which he invested ($22,000). [39] The father does not update these anticipated amounts in later affidavits sworn for this application in October 2019 and January 2020. In his affidavit made on October 9, 2019, he does say that "my income currently is essentially zero". [40] Apart from a note in Bixa's financial statement, the father has not produced documents evidencing Bixa's investment in Colombia. The terms and nature of the investment are unclear. It appears to be an illiquid investment in "land projects". Notwithstanding its importance to the father - the $984,000 represents almost all his capital - the father seems to have embarked upon it informally through acquaintances he met while travelling in Colombia. In his affidavit made on July 5, 2019, the father states: 17. The funds in [Bixa] were divided between the shareholders in proportion to

their ownership. After much research, I decided to invest my 70% share of funds in a property development opportunity in Columbia and live there as the cost of living is much lower. I had travelled to Columbia and met people who I got to know. As the friendship grew, I was offered the opportunity to invest with them in their land projects. I did my research and felt confident that, if the monies were invested I would retain control of the funds and make money. Unfortunately, I had miscalculated some things. I have since found out that I cannot sell a property when I wish and must wait for the group as a whole to sell. This has made things more difficult than anticipated and has left me with no income over the past year and I have resorted to borrowing from friends and family to pay for personal expenses.

18. In or about August 2018, Bixa therapeutics incorporated a subsidiary, Bixa Columbia SAS, to operate this project ("Bixa Columbia"). Bixa Therapeutics provided a capital funding of approximately $984,000 by way of direct foreign investment in Columbia.

19. At this present time, this project is expected to start generating revenues in approximately 12 months. As there is currently no income generated by Bixa Therapeutics or Bixa Columbia, I have not been drawing any funds from the companies. 20 The return on investment is expected to be 5-6% per year on the investment and payment of return on investment will be realized randomly through the year in 2020 depending on sales. The 6% will be realized as capital gains. This will provide approximately $60,000 Canadian dollar per year in capital gains. [41] The mother did not seek to cross-examine the father on his affidavit. There is no evidence to call into question the father's evidence that he is presently unemployed and hoping to earn a relatively modest capital gains from the passive investment of Bixa's funds in Colombia. I accept the father's evidence that he has, at present, no actual income. (2) Adequacy of the father's financial disclosure [42] Section 21 of the Guidelines and R. 5-1 of the Supreme Court Family Rules both require the father to make financial disclosure that must include, for the three most recent years, tax returns, notices of tax assessment or reassessment and financial statements of corporations controlled by the father. The father has provided his 2018 personal tax return without its schedules and has not provided the notices of assessment or

reassessment associated with that return. Most important, he has not provided financial statements for Bixa's Colombian subsidiary. Rule 5-1(1)(i) requires him to provide for both Bixa and its subsidiary "a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation and every related corporation does not deal at arm's length". This material is missing. [43] In these circumstances, s. 23 of the Guidelines authorizes me to draw an adverse inference against the father and to impute income to him in such amount as I consider appropriate. Instead, the mother asks me to refrain from ordering any change to the child support payable until all the missing information is provided. [44] I am not persuaded that refusing the father's variation application simply on the ground of his failure to fully comply with his disclosure obligations is the appropriate course in this case. The father's failure to make full disclosure is inappropriate but there is a great deal of material he has produced. The tax returns, notices of assessment, and financial statements he has produced fill a large 3-ring binder. It is clear that the father's financial circumstances have changed for the worse. Sections 19 and 23 of the Guidelines prescribe a remedy of imputing income to the father that is

more likely to result in a just determination of the child support currently payable than simple adherence to the status quo established in 2016 by Fitzpatrick J.'s order. (3) Should income in excess of the father's actual income be imputed to him? [45] The short answer to this question is yes. The father is intentionally under-employed and his children should not suffer the financial consequences. Pursuant to s. 19(1) of the Guidelines, I may impute income to him on the basis of intentional underemployment, taking into account what he ought to be earning. Pursuant to s. 19(f), I may also draw an adverse inference from his failure to disclose details of the Colombian investment in determining the amount of income to be imputed to him. [46] I conclude that the father is intentionally under-employed for the following reasons. [47] The father is approximately 50 years old. He is trained and qualified in British Columbia as a pharmacist. He had a successful career in British Columbia as a research pharmacist between 2002 and 2018, earning a high income. He has experience in the administration of contracts with health care authorities. He has extensive experience in the field of opioid addiction and pharmaceutical treatments for opioid addiction. [48] The father's course of conduct since April 2018 has been quixotic. He abandoned his profession to pursue a poorly conceived - as he

puts it, "miscalculated" - investment opportunity in a foreign country. The capital gains he expects to achieve in Colombia are a small fraction of the income he earned in British Columbia as a pharmacist. [49] The mother says that the father should find work in British Columbia as a retail pharmacist and puts forward job postings. The father responds that he only worked as a retail pharmacist for a few months following his graduation. He says, in effect, that all of his experience has left him as a narrow specialist who "would not be qualified, nor an attractive candidate for employment as a retail pharmacist or clinical pharmacist other than addiction in Vancouver or anywhere else for that matter". He adds: 17. Additionally, my reputation in Vancouver has been destroyed. I cannot get work anywhere as a pharmacist. Following the claimant's defamation of me, I did seek employment with the following organizations: Providence Health Care, Vancouver Coastal Health, North Shore Addictions Team and the Centre for Health Evaluation Outcome Sciences (CHEOS). None of them would either employ me or associate with me or with my company. Simply put, I cannot get employment as a pharmacist in Vancouver. [50] The father does not say that he would be unable to find work as an addiction specialist outside Vancouver. He does not say that he has made job applications other than to the four

organizations he names. He filed his 2018 tax return as a resident of Ontario, with a residential address in Toronto. It would seem likely that there is a need for pharmacists specializing in addiction in Toronto. [51] The father does not explain why he would be less qualified than a recent graduate in pharmaceutical science to find an entry-level position in Vancouver. [52] I conclude that I should impute to the father income from employment as a pharmacist and a reasonable level of investment income from his $984,000 investment in Bixa. Counsel for the mother suggests that, based on job postings in Vancouver, the father could earn $45 to $55 per hour as a retail pharmacist, or $85,000 per year. Counsel suggests that, together with investment income, it is conservative to expect that the father could earn a Guideline income of $120,000 per year. Taking into account the possibility that the father might find suitable work in Toronto or elsewhere outside Vancouver, I find that this calculation is reasonable and probably conservative. I impute income to the father accordingly. [53] The father's frustration that he can no longer find work in his field in Vancouver is understandable. Whether the mother is responsible for this, and the possible financial consequences if she is, will be addressed in the defamation action. While it is remarkable that the mother would attack the

livelihood of the person paying her child support by seeking to persuade his business associates that he is disreputable, on this application, I cannot determine whether her activities have caused or contributed to the father's current plight. In any event, child support is the right of the children and I should not take the mother's conduct into account in determining what is payable. (4) What child support is payable? [54] The Guidelines provide for the payment of support based on tables compiled according to a formula, but the application of the formula is not automatic in the case of children over the age of majority. Section 3(2) of the Guidelines states: (2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is (a) the amount determined by applying these Guidelines as if the child were under the age of majority; or (b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child. [55] In McClement v. McClement, 2017 BCCA 416, Harris J.A. examined the jurisprudence considering and applying s. 3(2) and concluded: 12. In sum, the choice between the two

sections is discretionary and determined by the particular circumstances of each case and there is no specific requirement formally to challenge relying on s. 3(2)(a) before a judge can consider whether it is inappropriate to apply that subsection rather than s. 3(2)(b) and or vice versa. The view taken by this Court is that the burden of proof rests with each party in the ordinary manner to persuade the court which of the two sections is the appropriate one to apply in the particular circumstances before the court. There are of course factors that tend to support the appropriateness of relying on one section rather than another and which guide the exercise of a judge's discretion. For example, the more closely the circumstances of the adult child resemble those of a minor child living at home, the less likely it is that the approach found in s. 3(2)(a) will be determined to be inappropriate. Each case will depend on its facts . [Emphasis added.] [56] In Tome v. Furtado, 2018 BCSC 2280, Madam Justice Dardi elaborated on the considerations to be taken into account in the exercise of my discretion: 65. The focus of s. 3(2) is whether, having regard to its underlying assumptions, the usual Guidelines approach is inappropriate. Section 3 of the Guidelines expressly stipulates that it is the approach to support, and not the amount of support that the court must consider "inappropriate". The underlying assumptions that typically apply to a child under the age of majority include: the child resides with one or both parents, the child is not earning income, and the child is dependent on his or her parents: Schreiber v. Schreiber, 2009 BCSC 366 at paras. 11-13; Hausmann v. Klukas, 2016 BCSC 853 at para.

63. The more closely the circumstances of an adult child resemble those of a minor child living at home, the less likely it is that the approach found in s. 3(2) will be found to be inappropriate: McClement v. McClement, 2017 BCCA 416 at para.12. [57] Both JA and JE have attained the age of majority. As I have mentioned, JE is living at home with her mother while in the second year of an undergraduate program at a local university. So far as the evidence discloses, her circumstances closely resemble those of a minor child living at home. [58] JA has been living away from home during the school year for several years. She recently finished a co-op term during which she was working. She is now in her fourth year. While she remains financially dependent, so far as the evidence discloses, her living circumstances resemble those of an independent adult during the eight months of the year she is away at school. It seems likely that she will complete the transition to independent adult at the end of 2020. [59] In the exercise of my discretion pursuant to s. 3(2), I find that child support for JE should be determined under s. 3(2)(a) according to the Guideline formulas. [60] I find that child support for JA should be determined under s. 3(2)(b) based on the Guideline formula for one third of the year, that is, the four-month university vacation. For the balance of the year,

consideration must be given to the mother's income, the father's imputed income, JA's income, JA's expenses at university, and the availability of the RESP funds administered by the mother. I did not receive submissions from the parties as to how this component of a support order should be framed. Justice Fitzpatrick ordered the father to pay JA's university expenses pursuant to s. 7 of the Guidelines, taking RESP withdrawals into account. It may be that nothing more is required. I leave it to parties to agree on this, if they can, and grant them leave to make further submissions addressing this particular point, if they cannot. [61] Accordingly, the father must pay child support for two and one-third children based on his imputed annual income of $120,000, and he must also contribute his share of JA's expenses while she is away at university in an amount to be agreed or determined following further submissions. [62] The father seeks to make this change in the support payable by him retroactive to August 1, 2019. The effect of a retroactive reduction in the amount of child support payable is to eliminate arrears, but the test is less onerous than on an application to eliminate arrears. In M.E.L. v. S.D.L., 2018 BCPC 156, Judge Gouge addressed the circumstances governing which test is more appropriate, stating: [17] The primary objective of the Federal Child Support Guidelines

SOR/97-175 is to ensure that each parent pays neither less nor more child support than the amount mandated by the Guidelines. For that reason, I think that an application to retroactively vary child support is appropriate where the applicant contends that: (i) the figure established (by agreement or court order) for monthly child support ceased to reflect the principles set out in the Guidelines by reason of some event or events which occurred after the agreement or order was made; and (ii) the arrears (or part of them) accrued after that event or those events. By contrast, an application to reduce or cancel arrears is appropriate where: (i) the figure established by the agreement or order properly reflected the principles set out in the Guidelines throughout the period during which the arrears accrued; but (ii) the applicant contends that, by reason of his present circumstances, it would be grossly unfair to require him to pay the arrears in full. [63] Because the father's application is grounded in a change of circumstances after Fitzpatrick J.'s order was made and the arrears that will be eliminated by a retroactive order accrued after the reduction in the father's income triggering the application, applying Judge Gouge J.'s reasoning, the application is more in the nature of a retroactive application to vary than an application to cancel arrears. [64] The leading case

addressing the matters to be determined in deciding whether a variation in child support should be retroactive is D.B.S. v. S.R.G., 2006 SCC 37 [D.B.S.]. D.B.S. addressed retroactivity in the context of an increase in the payor's income, but the considerations are the same where the payor's income has decreased; G.M.W. v. D.P.W., 2014 BCCA 282 at paras. 41-49. The considerations are: (i) the circumstances surrounding the delay in bringing the application; (ii) the payor parent's conduct; (iii) the children's circumstances; and (iv) any hardship caused by a retroactive child support order. Generally speaking, the effective date of a retroactive award should be the date when effective notice was given to the opposing parent, but where the opposing parent engaged in blameworthy conduct, the date of a material change in circumstance will be the presumptive date; D.B.S. at para. 134. [65] I turn to the four considerations under D.B.S. As to delay in bringing the application, while the father has not addressed why he brought this application when he did, it significantly trails the actual decline in his income, bearing in mind that Bixa lost its contract with Providence Health Care and essentially went out of business in April 2018. Certainly, the father did not jump at an opportunity to attempt to reduce his obligation to pay child support. His delay in bringing the application

speaks more in his favour than against him. It is at least neutral. [66] As to the payor party's conduct, the mother maintains that the father has not been paying child support and his conduct is blameworthy. Some details of the history are important. [67] Justice Silverman's consent order provided for the sale of the matrimonial home. Payment to the father of his 50% share of the net proceeds of sale was subject to certain adjustments, including the following: The sum of $90,000.00 shall be paid into the trust account of [the mother's lawyers] as security for the periodic spousal support payments payable by the Respondent to the Claimant for the period commencing July 1, 2014 to and including December 31, 2015; [68] The order further provided that $137,000 of the father's share of the cash surrender value realised from insurance policies would be held by the mother's lawyers as security for future child support payable by the father to the mother and: In the event that the Respondent does not pay the child support as set out in this Agreement by the end of the second day of each month, the Claimant shall be at liberty to encroach upon the said sum of $137,000.00 described above as security for child support to the extent necessary to satisfy unpaid child support and no more. [69] The father did not make payments, leaving his child and spousal support obligations to be

satisfied from the $137,000 and $90,000 held in trust until those funds were exhausted. The mother submits that the father was in default of his obligation to pay child support during this period. I do not think that is correct. The funds in trust were money that belonged to the father. The support obligations were satisfied from the father's funds. It appears that this was contemplated at the time of the consent order. In my view, the father was not in default. [70] When the $137,000 was exhausted, the father made a further arrangement for the payment of child support from his share of the net proceeds of the sale of Pharmax, which was formerly owned jointly by the father and the mother. His evidence is that he only defaulted in September 2019 on his obligation to pay the child support now payable pursuant to the order of Fitzpatrick J. He addresses the circumstances in his affidavit made on October 9, 2019, in which he states: 4. Once the trust funds were exhausted on child support, I arranged to have funds of mine held in trust by another lawyer, Mr. John Brown, paid out to the claimant to cover ongoing child support. Although I am in arrears of support under the existing order for September and October, 2019, my application has been in the claimant's hands since July of this year and my income currently is essentially zero. Notwithstanding this state of affairs, I borrowed

money from friends and family and I recently made a payment of $800 to FMEP on behalf of my child support obligation for September and October. [71] The mother further contends that the father has failed to pay his share of special and extraordinary expenditures required by s. 7 of the Guidelines. He responds in an affidavit that he has not been presented with bills or payables in excess of amounts withdrawn by the mother from the RESP. This is not entirely cogent because, pursuant to Fitzpatrick J.'s order, 10% of the funds withdrawn from the RESP are to be credited to the mother. However, the mother has not pursued a claim to be paid fresh s. 7 expenses since Fitzpatrick J. made her order. Whatever claim there may be, it is unproven. I am satisfied, for reasons that I will develop in the next section of these reasons, that the claim to be paid s. 7 expenses that the mother has presented and proved is more than offset by money that is owing to the father pursuant to Fitzpatrick J.'s order. On the materials before me, I am not satisfied that the father has unreasonably failed to make s. 7 expenditures. [72] Taking everything into account, I do not consider that the father's conduct prior to September 2019 was blameworthy. [73] As to the children's circumstances, the evidence does not establish that the children have been deprived or suffered hardship, apart from that which

inevitably flows from the fact of their parents' divorce and the reduction and diminution in the resources available to fund what was formerly a very comfortable lifestyle. [74] The mother has been aware that this application was pending, and has been in a position to assess the probability of success. I am not persuaded that the degree of retroactivity sought by the father, reducing child support effective from the commencement of the application, will impose hardship on her or the children. [75] Taking everything into account, I am satisfied that the adjustment in the child support payable should be effective from August 1, 2019. Should I direct the distribution of the remaining proceeds of sale of Pharmax? [76] As I have already noted, the net proceeds of sale from Pharmax are held by Mr. Brown of the law firm, Harper Grey. They are $19,201.95, less whatever fees may be deducted by Mr. Brown on a final accounting for his time spent dealing with this matter. Pharmax was sold five years ago and it is past time for this loose end to be tidied up. [77] There are two outstanding financial disputes that stand in the way of a final distribution. The first involves insurance premiums and the second involves s. 7 expenses paid by the mother. (1) Insurance premiums [78] By letter agreement between counsel on January 15, 2016, the parties agreed: There will be an accounting of all the

insurance premiums paid by each party since 2010 and the party paying the lesser amount will compensate the other party by paying that party ½ of the difference in the premium payments. [79] Counsel have been debating the accounting ever since. The father accepts the mother's statement of the insurance premiums she paid. The mother does not accept the father's statement. Some of the father's payments were made by Pharmax. He maintains that those payments were expensed against his shareholder loan account so that they were really paid by him. The mother disputes that the father has established that and seeks production of extensive further documentation. [80] The father obtained a letter dated June 4, 2016, from the former outside accountants for Pharmax confirming that the insurance premiums in question were expensed against his shareholder loan account. The mother was not satisfied. She sought source documentation. The father offered to obtain the source documentation, on condition that the mother pay the reasonable expenses associated with its production. To put this proposal in context, the expenses in question were paid monthly by an operating business over the course of several years, and it is reasonable to expect that to extract them from a mass of historical accounting records would entail significant time and expense. The father provided a further letter from the

outside accountants and extracts from Pharmax's general ledger pertaining to the payment of the life insurance premiums. [81] The mother was still not satisfied. She declined to agree to pay the cost of producing the source documentation she says she needs. [82] The mother did not seek to cross-examine the father on his affidavits sworn for this application. [83] In my opinion, the father's position is reasonable and the mother's is not. The father has provided the accounting he agreed to provide. Pursuant to that accounting, he is owed $12,900.14 by the mother. (2) S. 7 expenses [84] In her order of March 23, 2016, Fitzpatrick J., addressed the father's responsibility to pay special or extraordinary expenses pursuant to s. 7 of the Guidelines. Paragraph 6 of the order addresses 10 different categories of expense. In respect of some categories, it requires payment upon production of receipts or other documentation. In respect of other categories, amounts are identified without reference to receipts. Notably, paragraph 6(j) of the order requires the father to pay his proportionate share of JA's university expenses, stating: (j) $16,594.87, representing the shareable costs relative to [JA's] attendance at McGill University net of shareable RESP withdrawals. 10% of the RESP withdrawals in 2015 should be attributed to the Claimant's required contribution to this expense. [85] Paragraphs 7 and 8 of the order state: 7. The Respondent's contribution to the s. 7 special or extraordinary expenses set out in paragraph 6 are payable within 30 days of receipt of relevant documentation and finalization of the sum payable.

8. The parties are at liberty to apply to the court in respect of s. 7 special or extraordinary expenses, including whether claimed expenses come within this category or the reasonableness of the amount claimed. [86] Afterward this order was made, counsel were unable to agree on what was required. By letter dated May 19, 2016, Mr. Hayward's associate tendered on the father's behalf what Mr. Hayward describes as a comprehensive reconciliation, taking into account the receipts provided by the mother and the changing proportionate shares of the father and mother as their respective incomes changed. According to the reconciliation, the father owed the mother $10,504.94. Counsel for the mother, Mr. Daltrop, disagreed with the reconciliation, but did not state the grounds of his disagreement. He took the position that the order required immediate payment of certain amounts, even if others remained to be settled. [87] In oral argument before me, Mr. Daltrop contended that the father's continuing failure to make payments required by Fitzpatrick J.'s order is egregious. Mr. Hayward contended, in effect, that nothing is payable until everything is settled. He pointed to the reference in paragraph 7 to finalization of "the sum" payable. Mr. Hayward submitted that, absent a notice of application from the mother, I should not require payment of any amount in respect of outstanding s. 7

expenses. [88] Mr. Daltrop's failure to engage in correspondence with the details of the reconciliation tendered by the father was profoundly unhelpful. Nevertheless, I do not agree that Fitzpatrick J.'s order contemplated only a single payment in respect of s. 7 expenses. Some categories of expense represented ongoing costs. The father having conceded that at least $10,504.94 was owing, that amount should have been considered as finalized and paid within 30 days as required by paragraph 7 of the order. [89] I conclude that the father owes the mother at least $10,504.94 in respect of proven s. 7 expenses incurred prior to May 19, 2016. On the other hand, the mother owes the father $12,900.14 in respect of insurance premiums. These are the proven claims before me. After set-off, the mother owes the father $2,395.20. [90] Since May 2016, the mother has continued to incur expenses in connection with JA's attendance at university. She has also incurred expenses in connection with JE's attendance at university. Some of these expenses have been covered by RESP withdrawals. The mother's affidavit includes receipts and statements in respect of various expenses. There is no reconciliation and nothing to indicate the total amount the mother says is owing. [91] Following a comment that I have already quoted concerning the lack of communication, cooperation, compromise and common sense in

the parties' dealings with one another, Fitzpatrick J. stated: [115] Until the parties have improved upon this aspect of their relationship, the state of affairs requires that the Court impose fairly rigorous requirements on the party incurring these expenses. The party incurring the expense must disclose it before it is incurred and deliver receipts and other relevant documentation prior to demanding payment or contribution from the other party. [92] It does not appear from the record before me that the mother has communicated with the father in advance of incurring expenses since 2016. (3) Conclusion [93] The mother asks me to order that the entire fund held by Mr. Brown be paid to her or continue to be held as security for the payment of future s. 7 expenses by the father. Taking into account the mother's failure to communicate and bring forward her claims since May 2016, I do not think that is appropriate. [94] Taking the $2,395.20 owed by the mother into account, the fund held by Mr. Brown, net of his fees, should be distributed to the mother and the father with the father receiving $4,790.40 more than the mother. Should I grant an injunction requiring the mother to maintain the confidentiality of personal information received from the father in this proceeding? [95] Rule 5-1(29) provides: Confidentiality (29) Any person who has access to documents obtained under this rule

must keep the documents and any information contained in them in confidence and must not disclose the documents or information to anyone other than (a) for the purposes of a valuation of an asset, (b) for a determination of the disclosing party's income, or (c) in the course of permitting the documents to be introduced into evidence during the family law case. [96] Rule 5-1(29) performs the same function as the "implied undertaking" rule in ordinary civil litigation; Duncan v. Lessing, 2016 BCSC 1386 at para. 153-155, aff'd 2018 BCCA 9. The rule and the undertaking provide a measure of privacy to litigants who are required to disclose personal information through the discovery process; Duncan v. Lessing, 2018 BCCA 9 at paras. 34-38. [97] The father maintains that an injunction is necessary because the mother has disseminated information contrary to the rule. He points to statements in the poison pen letters - specifically, references to the father having been audited by the Canada Revenue Authority and to a tax debt - reflecting information that he says was disclosed to the mother through the discovery process. [98] Mr. Daltrop replies that the audit and the tax debt might have become a matter of public knowledge in some other way. That is possible, but it is not terribly likely. [99] I am satisfied that the mother had a role in the letter writing campaign. I come to this

conclusion based on the expert evidence and also having regard to the contents of the letters. While they contain many disparate allegations, they also tend to address matters of particular interest to the mother: the parties' divorce; accusations of non-payment of child and spousal support; an allegation of illicit drug use that parallels a request, made by the mother through counsel, that the father submit to a drug test. [100] It appears that the mother's anger at the father has led her into conduct that is neither prudent nor respectful of the father's interests and privacy. It is likely that the mother has made use of confidential information from the litigation in writing to third parties for purposes unrelated to the prosecution of the litigation. She has breached R. 5-1(29) and, in these unusual circumstances, she should be enjoined against future breaches. Disposition [101] For these reasons, I order as follows: a) The father's application to terminate the payment of child support for JA and JE on the ground that they are no longer children of the marriage is dismissed. b) Justice Fitzpatrick's order of March 23, 2016, is varied to provide that the father's annual Guideline income is $120,000. His obligation to pay support is varied, and the father must pay child support for two and one-third children from August 1, 2019; c) The father must also contribute his share of

JA's expenses while she remains a child of the marriage and is away at university in an amount to be agreed or determined following further submissions; d) The parties will jointly direct Mr. Brown to distribute the remaining funds held by him, net of his final account, to them with the father receiving $4,790.40 more than the mother; e) The mother must keep the information and documents obtained by her pursuant to R. 5-1 in confidence and must not disclose them to anyone except as provided by Rule 5-1(29). [102] Success on this application has been divided. The parties will each bear their own costs. Gomery J.