Kwantes v. Kwantes

2025 BCSC 901 Kwantes v. Kwantes

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Kwantes v. Kwantes, 2025 BCSC 901 Date: 20250514 Docket: E163246 Registry: Vancouver Between: Shannon Watchorn Kwantes Claimant And James Theodore Kwantes Respondent Before: The Honourable Justice Hoffman Reasons for Judgment The Claimant, appearing in person: S. Kwantes The Respondent, appearing in person: J. Kwantes Counsel for the Attendee, BC Family Maintenance Agency: J. Anderson Place and Date of Trial/Hearing: Vancouver, B.C. February 20, 2025 April 2, 2025 Place and Date of Judgment: Vancouver, B.C. May 14, 2025 Table of Contents Overview.. 3 Review of the Parties' Evidence. 4 Marriage and Separation. 4 Mr. Kwantes' Financial Situation. 6 BCFMA Arrears and Enforcement Proceedings. 9 Ms. Kwantes' Financial Situation. 10 Legal Framework Preliminary Issue: What Legislation Applies to this Application?. 10 Legal Test Applicable to the Variation Application. 11 Analysis. 15 Application to Retroactively Vary Child Support 15 Application to Vary Child Support Going Forward. 18 Application to Retroactively Vary Spousal Support 20 Material Change in Circumstances. 20 Effective Date of Notice - Spousal Support 20 Application of D.B.S. Factors to Variation of Spousal Support - Is it Unfair to Apply Effective Date of Notice?. 21 Application to Vary or Cancel Ongoing Spousal Support 23 Legal Framework. 23 Disposition..

26 Overview [1] In this application, the respondent, Mr. Kwantes, seeks variation of a final order for both child and spousal support made by Justice MacNaughton on November 27, 2017 (the "Final Order") pursuant to ss. 152 and 167 of the Family Law Act, S.B.C. 2011, c. 25 [FLA]. [2] The variations sought are as follows: a) To vary or cancel the terms relating to spousal support and to apply retroactive accounting to reduce or cancel BC Family Maintenance Agency ("BCFMA") arrears; b) To vary child support and to apply retroactive accounting to reduce or cancel BCFMA arrears; and c) To apply off-setting and ongoing child support for the parties' son retroactively to January 3, 2019. [3] Mr. Kwantes seeks these variations on the basis of a decrease in his annual income and the change of residence of his son who moved in with him in 2019. [4] Ms. Kwantes opposes all of the relief sought by Mr. Kwantes. [5] The Final Order was based on Mr. Kwantes having a Guidelines income of $90,000 and Ms. Kwantes having no income. The order provided that Mr. Kwantes would pay $1,345 per month in child support for E.K. and L.K. and $1,409 to Ms. Kwantes in spousal support. [6] Also included in the Final Order were a review clause providing for an annual process to review and make necessary adjustments to child support by the end of October 2018 on the basis of the exchange of yearly tax

information, and a review clause providing for the review and adjustment of the amount of monthly spousal support payable after October 2021. [7] In January 2019, coincident with E.K. coming to live with him, Mr. Kwantes began to miss support payments which he says was the result of a steady decrease in his income and arrears began to accumulate. With the exception of a few months in which Mr. Kwantes entirely missed both child and spousal support payments, his payments have covered his child support obligation, which was adjusted by BCFMA in April 2019 to reflect E.K.'s change of residence. His payments, however, represented a large shortfall in his spousal support obligation. [8] As of the date of this application, the arrears are $69,538.11, and enforcement proceedings are ongoing in the Provincial Court. An additional $2,000 in late payment fees is also owing. Further to enforcement proceedings in the Provincial Court, Mr. Kwantes has paid $50,000 into court towards the arrears. [9] BCFMA appeared through counsel at an initial hearing in this matter to address the court's jurisdiction with respect to an order to suspend BCFMA enforcement action which was originally sought by Mr. Kwantes in his notice of application. I dismissed this aspect of his application at the initial hearing, and the remaining of the relief sought was adjourned to allow the parties to file further

financial statements with supporting income tax documents. [10] At the second hearing day, the parties agreed to have child support terminate when L.K. turns 19 years of age and that each party will be responsible to financially support the child residing with them. Each party agreed that they will contribute to the post-secondary education of both children within their means. [11] When counsel for BCFMA appeared at the initial hearing, she advised the Court that BCFMA would not apply to release the funds paid in to court until Mr. Kwantes' application is adjudicated by this Court. Review of the Parties' Evidence Marriage and Separation [12] The parties were married on November 8, 1998, and their two children, a daughter, L.K., and a son, E.K., are aged 18 and 23 respectively. [13] The parties separated in October 2016. At the time of separation, the children resided with Ms. Kwantes on the Sunshine Coast. In February 2017, Ms. Kwantes relocated with the children to Surrey. [14] As a result of a court application, L.K. went to live with Mr. Kwantes in March 2017. By consent in the summer of 2017, L.K. returned to live with Ms. Kwantes. L.K. currently attends university but lives at home with Ms. Kwantes. She works part time in a retail position. [15] E.K. lived with Ms. Kwantes until December 2018 when he had some mental health challenges. Since January 2019, and after E.K.

turned 19, he has lived with Mr. Kwantes. E.K. works part time 15-28 hours per week, also in retail positions. [16] According to the evidence of both parties and the medical records before me, E.K. experienced significant mental health issues in December 2018. In his evidence, Mr. Kwantes says that while E.K. was in his care, E.K. was hospitalized on five occasions between January 2019 and August 2020. During this period, E.K. received a significant mental health diagnosis and required close monitoring in order to find appropriate treatments. [17] According to the evidence of both parties, E.K.'s mental health is now stable, and he is working part time. Mr. Kwantes says that E.K. still needs day-to-day assistance to monitor his health and to navigate relationships as well as work and social dynamics. E.K.'s income allowed him to contribute $200 a month to rent in 2024. Mr. Kwantes takes the position that E.K., who is uncertain about his post-secondary education and career options, will require financial support for the foreseeable future due to his mental health challenges. [18] Ms. Kwantes says that she has spoken to E.K. once per month from 2024 to present. She says that E.K. is taking active steps to pay attention to his health, is engaged in social events, is working part time and has taken the initiative to lead ultimate frisbee workshops. She points to these as signs that

he is working towards living independently. Mr. Kwantes' Financial Situation [19] Mr. Kwantes had a lengthy career as a journalist. At the time of the marriage breakdown, he was working as a self-employed writer after taking a buyout from his job as an editor with the Vancouver Sun. In 2015, he took over a subscriber-supported junior mining sector newsletter. He has a following among investors in the junior resource sector, and through the newsletter he generated revenue through subscriptions, company reports, company sponsorships and site visits. Mr. Kwantes describes this sector as heavily cyclical and in steady decline since 2015. Further, he explains that the proliferation of free investment and financial information online made his subscription revenue plummet and caused him to conclude that this business model is unsustainable. [20] At the time he swore his affidavit in January 2025, Mr. Kwantes says that a change to his subscription model in July 2022 allowed him to generate $1,370 per month. At the hearing, Mr. Kwantes advised that he is winding up this business. However, this is not addressed in his affidavit. [21] Mr. Kwantes also describes his efforts to find other employment on the Sunshine Coast. He has earned some employment income working part time with Canada Post and as a part-time union labourer at a mill. He has also generated income through various other ad

hoc endeavors, such as a working as a TV extra, a life model and a mover. [22] As set out in his updated F8, in late March 2025, Mr. Kwantes secured a full- time position with the Province of British Columbia as a writer with an annual gross salary of $70,000. [23] Mr. Kwantes says that the Final Order, and in particular, his Guidelines income of $90,000, was based on an interim order made at a judicial case conference in April 2017. Mr. Kwantes takes the position that he has earned less than $90,000 each year since the Final Order. [24] Mr. Kwantes says the parties exchanged notices of assessment for 2016 and 2017 in October 2018 as contemplated by the Final Order. These show 2016 and 2017 income of $51,778 and $89,230 for Mr. Kwantes and $23,608 and $33,128 for Ms. Kwantes. [25] Mr. Kwantes acknowledges that after this exchange he neglected completing and filing his personal and corporate tax returns for his business, New Pacific Publishing, and did not complete these until sometime in 2024. [26] In the evidence before me, the first communication from Mr. Kwantes that he wished to re-negotiate his spousal and child support payments came on January 13, 2024. In an email to Ms. Kwantes, Mr. Kwantes advised that a lot had changed since the Final Order, in particular, the change of residence for E.K., L.K being in grade 12 and the fact that his Guidelines income of $90,000 did

not accurately reflect his actual income. He advised that he was finalizing his personal and business taxes and would provide her with copies of the notices of assessment once received. He explained that his business had been struggling and that he was applying for other jobs to ultimately transition away from the newsletter as his main source of income. [27] Ms. Kwantes declined to negotiate on the basis that due to her registration with BCFMA, Mr. Kwantes needed to deal with that agency in relation to all matters relating to finances. [28] On April 10, 2024, Mr. Kwantes sent his notices of assessment for the years 2018, 2019 and 2020 to Ms. Kwantes and asked for hers in return but says he did not receive any. The email does not include a request to review and negotiate the terms of the Final Order. The copies of the notices of assessment for these years attached to Mr. Kwantes' affidavit are not sufficiently clear for me to confirm to what years those assessments relate. Ms. Kwantes does not address in her affidavit whether she received these notices of assessment. [29] The arrears that are the subject of this application started to significantly accumulate once E.K. came to live with Mr. Kwantes. Prior to this, Mr. Kwantes paid the full amounts under the terms of the Final Order, which by the end of 2018 was $2,754.00 per month. Starting in January 2019, Mr. Kwantes

unilaterally reduced the amount he paid to $2,269.00 to reflect that E.K. was living with him. However, BCFMA continued to charge the previous monthly amount of $2,754.00 for January, February and March 2019 plus a default fee of $400 which placed his account in arrears. Starting April 2019, BCFMA adjusted the amount of child support to reflect payment for only one child. [30] Until October 2019, Mr. Kwantes paid spousal support in the amount set out in the Final Order and child support for one child ($2,269.00 per month). The payment for November was not made, and only $500 was paid in December 2019. [31] Starting in January 2020, Mr. Kwantes again unilaterally reduced his monthly payments to $1,500, two thirds of the mandated child and spousal support, which he explains was the result of running out of money. In his affidavit, Mr. Kwantes says that he has been selling investments and going into debt to make up for the shortfall between his actual income and the amount he has been paying in support. His monthly payments remained consistent at this level until February 2024 and have subsequently ranged from $860 to $1,500. [32] Mr. Kwantes describes the years after the marriage breakup as tumultuous and that he struggled with depression and mental health issues. Attached to his affidavit is a very brief letter from a counsellor which confirms that Mr. Kwantes received

counselling between 2016 and 2024 but provides no other information. [33] For the years 2019 to 2023, Mr. Kwantes' notices of assessment and/or reassessment reported the following income: Year Income 2019 $56,084 2020 $61,080 2021 $68,311 2022 $69,938 2023 $38,435 [34] For 2024, Mr. Kwantes sets out his income information in his Form F8 Financial Statement and states that his income was $45,164 (consisting of self-employment income, employment income and after deducting union dues). This number does not include the approximately $2,400 Mr. Kwantes disclosed that he receives from E.K. as contribution for living expenses. [35] In 2025, Mr. Kwantes estimated that this income will be $75,000. [36] Ms. Kwantes takes the position that Mr. Kwantes has been underemployed during the years that he seeks to reduce arrears. She says that his extensive connections in the resource sector and skillset make him highly valuable to many employers. Ms. Kwantes expressed the belief that Mr. Kwantes may be hiding financial assets through his family and that a forensic accounting was required to reveal the true extent of his wealth. BCFMA Arrears and Enforcement Proceedings [37] According to his affidavit, BCFMA cancelled Mr. Kwantes' passport in March 2022, and subsequently, BCFMA threatened to cancel his driver's license. [38] Ms. Kwantes takes the position that Mr. Kwantes failed to take any

steps to file his tax returns until the BCFMA initiated proceedings to compel him to do so. [39] Counsel for the BCFMA advised the court that Mr. Kwantes was ordered to file his income tax returns and notices of assessment for his business for the years 2021, 2022 and 2023 at a hearing on June 6, 2024. [40] At a subsequent hearing in the Provincial Court on January 8, 2025, Mr. Kwantes was ordered to pay $50,000 to the BCFMA which was to be held by the agency for a period of 90 days to allow Mr. Kwantes to bring an application to reduce the arrears and/or ongoing support. At the conclusion of the hearing, I ordered that these funds be held until such time as my decision on Mr. Kwantes' application is released. Ms. Kwantes' Financial Situation [41] Ms. Kwantes takes the position on this application that she has experienced significant difficulty in securing gainful employment because she was out of the job market for most of their children's lives to support Mr. Kwantes' career and raise the children. She says that she sporadically worked part time while raising the children, including as a realtor although she has not worked as a realtor since 2014 and her license has expired. [42] After the marriage breakdown, Ms. Kwantes moved into her elderly mother's home in Surrey. According to her affidavit, her mother developed pain in her hip and mobility issues, and, as a result, Ms.

Kwantes has assumed all of the household duties and provides 24-hour care to her mother. In June 2022, she and her mother reached an agreement whereby her mother would pay Ms. Kwantes $1,500 per month for these services. This amount was recently increased to $1,800 in late 2024. In addition, Ms. Kwantes does not pay rent or utilities. [43] Between 2017 and 2021, Ms. Kwantes has also worked at various full- and part-time jobs. She successfully completed the strata management exam in 2023 and, in the fall of 2024, applied to multiple organizations but, thus far, has been unable to secure a position in this field. Her long-term objective is to be financially independent. She says that if she received the proper amount of child and spousal support, she would have been better equipped to pursue gainful employment. Legal Framework Preliminary Issue: What Legislation Applies to this Application? [44] Mr. Kwantes has brought this application pursuant to ss. 152 and 167 of the FLA which provide for the variation of child and spousal support respectively. [45] Although Mr. Kwantes is relying on the FLA to ground the relief he seeks, a preliminary question must first be answered regarding the statutory basis for the Final Order. The answer to this question determines which statutory provisions I must apply in considering the application before me. [46] The Final Order does not explicitly say that it was made pursuant to the FLA or the Divorce Act., R.S.C. 1985, c. 3 (2nd Supp.). As the parties were married spouses and a divorce was granted in the Final Order, I will assume that the application to vary support is brought pursuant to the Divorce Act instead of the FLA as it typical: Domirti v. Domirti, 2010 BCCA 472 at para.

7. Practically, this makes little difference to my conclusion as to whether a variation, retroactive or otherwise, is justified in this case as the test to be applied under the FLA and Divorce Act both focus on whether there is a material change in circumstances. Legal Test Applicable to the Variation Application [47] Mr. Kwantes seeks to vary the Final Order retroactively on the basis that his subsequent income never corresponded to the $90,000 Guidelines income attributed to him and upon which the spousal and child support terms were premised. If granted, any variation may have the effect of reducing the BCFMA arrears on the basis of the varied Final Order. However, it is important to distinguish this application from one brought either under s. 17.1 of the Divorce Act or under s. 174 of the FLA to cancel arrears. [48] The difference between an application to retroactively vary and an application to cancel arrears was helpfully explained by Justice Verhoeven in Kelly v. Martel, 2022 BCSC 756: [45] As the court explains in Colucci, there are two types of applications, which (as in this case) are often brought at the same time. The first is for a retroactive variation of a child support order. This is the type of application referred to in s.

152. The court in Colucci explains that an application for retroactive variation is based upon a material change in circumstances, most often a material change in income. If the payor gives effective notice, which includes financial disclosure sufficient for the payee to evaluate the circumstances, there is a presumption that retroactive variation may take place to the date of effective notice, up to three years prior to the date of the formal application. However, the court retains a discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair; in such cases, the factors from D.B.S. v. S.R.G., 2006 SCC 37 [D.B.S.] are relevant. 46] The second type of application is a "rescission" application. As the court explains in Colucci, these applications differ from retroactive variation applications. This, I observe, is reflected in the differences between ss. 152 and 174 of the FLA - s. 174 refers to reduction or cancellation of arrears, while s. 152 refers to "change" or in other words, variation of a prior order. A rescission application is one where the prior order corresponds with the payor's income, but the payor is seeking cancellation. It is a form of hardship application, not based upon a past material change of circumstances justifying a retroactive decrease (Colucci at para. 134). [Emphasis added.] [49] As I understand from both

the notice of application and his submissions at the hearing, Mr. Kwantes is advancing the first type of application, despite the use of the phrase "cancel arrears" in the relief sought section of the notice of application. The legal basis for the notice of application does not refer to either s. 174 of the FLA or s. 17(1) of the Divorce Act. The second type of application is subject to a stringent test, and the payor must establish a current and ongoing inability to pay: Semancik v. Saunders, 2011 BCCA 264. [50] Pursuant to s. 17(4)-(4.1) of the Divorce Act, similar to the test under the FLA, a payor seeking variation of support orders must first establish a material change in circumstances or means and needs of one of the spouses. A material change is one that, if known at the time the order was made, would likely have resulted in different terms: L.M.P. v. L.S., 2011 SCC 64. [51] A variation application must treat the original order as correct, and the court must confine its role to examining whether changes after the order justify its variation under s. 17 of the Divorce Act: Aspe v. Aspe, 2010 BCCA 508 at para. 33. [52] Where a retroactive variation is premised upon a decrease in income, that change must be significant, have some degree of continuity and must not be the result of the payor's choice: Colucci v. Colucci, 2021 SCC 24 at para.

61. The onus is on the payor to disclose sufficiently reliable evidence to allow the court to make the determinations as to why, when and how far their income fell: Colucci at para. 62. [53] Once a material change in circumstances is established, the analysis shifts to the question of how far back changes can be made. In Colucci, the Supreme Court developed a presumptive date of retroactivity that is the date on which the payor gives effective notice of the change in circumstances. There is, however, an upper limit on the presumptive period of retroactivity up to three years before formal notice of the application to vary. [54] In an application to decrease support, the extent to which the payor has communicated and substantiated the change in their income is a key consideration in determining when effective notice has been given. As explained in Colucci: [87] In the decrease context, by contrast, experience has shown that it is not enough for the payor to merely broach the subject of a reduction of support with the recipient. A payor seeking a retroactive decrease has the informational advantage. The presumptive date of retroactivity must encourage payors to communicate with recipients on an ongoing basis and move with reasonable dispatch to formalize a decrease through a court order or change to a pre-existing agreement. The timing and extent of disclosure will be a critical

consideration in ascertaining whether and when effective notice has been given and determining whether to depart from the presumptive date of retroactivity. [Emphasis added.] [55] In Colucci, Justice Martin also explained the different considerations at play for applications by recipients to increase support as opposed to applications made by payors to decrease support on the basis for material changes in income. With respect to the latter, the Supreme Court held as follows: [78] Conversely, in a claim for a retroactive decrease, as indicated in D.B.S., at para. 98, the interest in certainty lies with the recipient parent and child, while the interest in flexibility lies with the payor parent. Under the Guidelines, the payor is only responsible for child support commensurate with income, but a retroactive reduction in support means a disruption to the certainty enjoyed by the child and the recipient. The recipient is entitled to expect that the existing order will be complied with unless they are in receipt of reasonable proof that a relevant change in the payor's circumstances has occurred. Again, the payor holds the relevant information and knows when there has been a decrease in income. It is in the payor's own best interest to use this knowledge to notify the recipient of the change in circumstances and take steps to formally vary a child support order. [Emphasis

added.] [56] Accordingly, where a payor seeks to decrease support, effective notice must be accompanied by reasonable disclosure of changed financial circumstances sufficient to substantiate the change to allow the recipient to meaningfully assess the situation and plan accordingly: Colucci at paras. 87, 113 and 119. It is not sufficient for a payor to advise the recipient that their income has fallen without taking further steps: Colucci at para. 119. [57] The presumption that a retroactive variation can be made only from the date of effective notice can be departed from where the result would be otherwise unfair in the particular circumstances before the court. The D.B.S. factors adapted in Colucci at para. 113 to be taken into account by the court in determining whether there is unfairness are: (4) (i) whether the payor had an understandable reason for the delay in seeking a decrease; (ii) the payor's conduct; (iii) the child's circumstances; and (iv) hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased). The payor's efforts to pay what they can and to communicate and disclose income information on an ongoing basis will often be a key consideration under the factor of payor conduct. [58] It is important to note that Colucci was dealing with child support rather than spousal support. Nonetheless,

D.B.S. factors apply to applications to retroactively vary spousal support although they are to be weighed differently to reflect the different principles and objectives underpinning spousal support: Kerr v. Baranow, 2011 SCC 10 at para. 208; Willms v. Willms, 2020 BCCA 51 at para. 28. [59] Concerns about notice, delay and misconduct generally carry more weight in relation to retroactive applications to vary spousal support: Gebresadik v. Tesfay, 2021 BCSC 127 at paras. 190-191. [60] In the application before me, there is an ongoing obligation in the Final Order to disclose financial information. As such, I consider the guidance from Colucci regarding the critical role of financial disclosure in the determination of the date of effective notice to be applicable to the application to vary spousal support as well as child support. Analysis Application to Retroactively Vary Child Support [61] Under s. 15.3(1) of the Divorce Act, the court must give priority to the consideration of child support before addressing issues relating to spousal support. Accordingly, I will address the application to vary child support first. [62] There are two aspects to the retroactive variation of child support. I must determine whether there was a material change in circumstance requiring Ms. Kwantes to pay child support for E.K. to Mr. Kwantes from 2019 to 2024. I must also determine whether there

was a material change in circumstance with respect to Mr. Kwantes' income justifying a retroactive variation to the child support he owed for L.K. from this same period. [63] I am satisfied that E.K.'s moving in with Mr. Kwantes in January 2019 is a material change in circumstances. Under s. 14 of the Federal Child Support Guidelines, a change of residence as between parents, results in a different support table amount and, accordingly, constitutes a change in circumstances for the purposes of a variation order. [64] While BCFMA did adjust the amount of child support to account for the change of residence, it did so only on the basis that Mr. Kwantes was only required to pay support for L.K. No deduction or set-off was applied to reflect that he was now caring for E.K. who in January 2019 was 17 years of age. Despite being in arrears in the overall amounts he was required to pay, Mr. Kwantes has continued to pay amounts that covered his child support obligation to L.K., with the exception of a few missed payments, while covering the full costs of caring for E.K. [65] Both parents should have been alive to possibility that an additional adjustment to child support, over and above the adjustment made by BCFMA, may be required to reflect E.K.'s change of residence. I recognize that given the lack of financial disclosure from Mr. Kwantes, it would not have been apparent to Ms.

Kwantes what specific adjustments were required. However, Ms. Kwantes also had an obligation to disclose her tax returns and income under the Final Order to allow child support to be adjusted as required. Both parties needed to cooperate to ensure that child support in accordance with the Federal Child Support Guidelines was being paid. [66] Accordingly, I find that the effective date of notice that Mr. Kwantes was seeking child support from Ms. Kwantes to account for E.K.'s change in residence was January 2024 when he also sought financial disclosure from Ms. Kwantes that she did not provide. After consideration of the factors in D.B.S., I find it would be unfair to use January 2024 as the date of retroactivity and find that the date of retroactive payments of child support by Ms. Kwantes for E.K. should commence January 2019 which is the date E.K. moved in with his father. [67] For the reasons set out in greater detail below, I am also satisfied that there has been a material change in circumstance with respect to Mr. Kwantes' income. However, I find that Mr. Kwantes did not give effective notice of this change until this application was filed on January 7, 2025. This is due to his failure to prepare and file his income tax returns. I have considered the factors under D.B.S. and do not find it would be unfair to use this date for determining any variations to the amount of

child support owed by Mr. Kwantes for L.K. Accordingly, his application to retroactively vary child support for the period of January 2019 to December 2024 will be based only on E.K.'s change of residence. To find otherwise would undermine the importance of full financial disclosure and communication between payors. [68] Following from this, I find that the child support arrears should be adjusted from January 1, 2019, to present to reflect that Ms. Kwantes had an obligation to pay child support to Mr. Kwantes for E.K. In other words, there will be no variation of Mr. Kwantes' obligation for child support from 2019 to 2024 but there will be a determination of the amount of child support Ms. Kwantes' should have paid during this period. The retroactive child support will be calculated using the Guideline income of Mr. Kwantes of $90,000 set out in the Final Order. [69] I am satisfied that E.K remains a child of the marriage due to his significant mental health challenges in 2019-2020 and the ongoing guidance and financial support he requires from Mr. Kwantes. [70] Based on his new employment with the Province and the possibility that he will earn a small amount of income from his business which he is still in the process of wrapping up, I impute his 2025 income at $75,000. [71] Ms. Kwantes' income from 2019 and 2024 is more than the nil amount assigned to her in the Final Order.

She was earning some income from various part-time positions and from caring for her mother. Although Ms. Kwantes' affidavit states that starting in June 2022 she invoiced her mother $1,500 every month for care services, Ms. Kwantes does not declare on her tax return any self-employment income for 2023 in respect of these services. For 2023, I impute this income grossed up to account for taxes to Ms. Kwantes pursuant to s. 19(1) of the Federal Child Support Guidelines. The compensation for her care services increased to $,1800 per month in December 2024. [72] From 2019 to 2024, Ms. Kwantes also has received some modest income from her RRSP and a Registered Retirement Income Fund. I have also allowed deductions for union dues and carrying charges as set out in Ms. Kwantes' tax returns in 2019 to 2021 and 2023 pursuant to Schedule III of the Guidelines. However, in 2022 the amount claimed for carrying charges was also deducted from Ms. Kwantes' self-employment income and I did not deduct it again from her Line 150 income. [73] Mr. Kwantes submitted calculations of proposed support owing at the hearing based on Ms. Kwantes' line 150 income without deducting the spousal support she received. Spousal support payments are not to be included in the calculation of her income for support purposes. [74] I do not have before me any tax information for 2024 and 2025. In the absence of this

information, I have determined Ms. Kwantes' income based on the monthly payments she receives from her mother and her pattern of earnings in previous years which has included modest amounts received for seasonal work usually in retail positions. [75] For the purposes of determining retroactive child support, I find that the Guidelines income of Ms. Kwantes is as follows: Year Guidelines Income Monthly Child Support Yearly Total 2019 $13,835 $54 $648 2020 $9,858 Nil Nil 2021 $12,409 $16 $192 2022 $16,425 $101 $1,212 2023 $47,938 $450 $5,400 2024 $22,000 $185 $2,220 2025 $25,000 Total: $9,672 [76] Under s. 8 of the Federal Child Support Guidelines, where there are two children and each parent has the majority of parenting time (defined as over 60%) with one child, the appropriate amount of support is determined by setting off the Guidelines table amount of support that each parent would be required to pay the other based on each parent's income for the child principally resident with them. [77] Accordingly, based on the above Guidelines incomes, Ms. Kwantes should have paid $9,652 in child support to Mr. Kwantes from January 2019 to December 2024. This amount will be set off from the arrears of support owed by Mr. Kwantes. [78] I also find that the arrears should be reduced by $1,455.00 to correct the over-payment of child support in January, February and March 2019 and the

default fee of $400 charged for these three months should be set aside. Application to Vary Child Support Going Forward [79] As discussed below in greater detail, I am satisfied that there has been a material change in circumstance with respect to Mr. Kwantes' income effective January 2025. Based on his new employment with the Province and the possibility that he will earn a small amount of income from his business which he is still in the process of wrapping up, I find his Guidelines income for 2025 to be $75,000. Mr. Kwantes used this number in the support calculations he submitted to the court. [80] To their credit, the parties were able to agree to an order regarding the payment of child support going forward on the basis that each child will be supported by the parent with whom they reside and no table amount will be payable by either parent once L.K. turns 19. Section 3(2) of the Guidelines applies to the amount of child support payable for children over the age of majority. I consider the agreement reached by the parties to be appropriate having regard to the means and financial abilities of both parties and the ability of both children to work and contribute to their expenses. [81] Commencing January 1, 2025, based on Mr. Kwantes having a Guidelines income of $75,000 and Ms. Kwantes having a Guidelines income of $25,000, Mr. Kwantes will pay child support to Ms. Kwantes

for L.K. in the amount of $716 per month, and Ms. Kwantes will pay child support to Mr. Kwantes for E.K. in the amount of $209 per month. To satisfy each party's obligation to pay child support, Mr. Kwantes will pay to Ms. Kwantes the set-off amount of $507 per month up to and including September 2025. [82] Commencing October 1, 2025 (after L.K. turns 19), the table amount of child support will no longer be payable for each child, but the parties will continue to contribute to post-secondary expenses for the children. [83] I note that paras. 2-5 of the Final Order defines Section 7 expenses and sets out how those are to be shared. Neither party sought a change to these provisions, and they shall remain in place until October 2025. Paragraph 6 regarding the payment of post-secondary expenses will remain in place so long as the children are attending post-secondary school. Application to Retroactively Vary Spousal Support Material Change in Circumstances [84] The application to vary spousal support is based on a change in the income of both parties. Based on Mr. Kwantes' F8 Financial Statement and the attached tax returns, his reported income between 2018 and 2023 has been consistently below $90,000 and in some years, quite substantially so. [85] Ms. Kwantes raised concerns during the hearing regarding the accuracy of the tax returns filed by Mr. Kwantes given that he filed them

many years after the fact. To reinforce her concerns, she also seeks to rely on an application for an investment account signed by Mr. Kwantes during their marriage which were handed up to the court and not attached to the affidavit. As these documents were not attached to an affidavit, I have not considered them as part of the evidence in this matter. [86] Based on the financial disclosure before me, I am satisfied that Mr. Kwantes has done his best to accurately reflect the changes to his income since 2018 for the purposes of this application. [87] I am satisfied that there has been a material change to Mr. Kwantes' income. With respect to whether Mr. Kwantes has deliberately chosen to earn less income, I accept his evidence that his business has declined due to market forces beyond his control. While Ms. Kwantes took the position in her affidavit that Mr. Kwantes is under employed, I accept his evidence that he struggled to find work to replace the declining income generated by his business. As such, I find that the decrease in his income is not a deliberate choice on his part. Effective Date of Notice - Spousal Support [88] I now turn to the presumption of retroactivity. For the reasons that follow, I find that the date of effective notice of Mr. Kwantes' change in circumstances regarding his income is January 7, 2025, the date that this application was filed. While Mr.

Kwantes first broached the subject of adjusting support in January 2024, that was not accompanied by any financial disclosure that would allow Ms. Kwantes to substantiate the change in his income. While some financial disclosure came in April 2024, in the form of three notices of assessment for the years 2018, 2019 and 2020, this disclosure was incomplete and was not accompanied with any proposal as to how the support amounts should change. It was not until this application was filed, and then adjourned to allow for further financial disclosure, that Ms. Kwantes received a full picture of Mr. Kwantes' income since 2018. [89] While I appreciate that Ms. Kwantes was less than receptive to his overture in January 2024, she was entitled to expect that the terms of the Final Order would be complied with and that support would continue until she was provided with reasonable proof of a material change in Mr. Kwantes' income. [90] Mr. Kwantes had an obligation arising from the Final Order to prepare, file and provide his tax returns to Ms. Kwantes. His failure to do so since 2018 left Ms. Kwantes in an informational vacuum with no insight into the income he was generating from his business, despite the clear terms of the Final Order for the exchange of financial information. To find that the effective notice was earlier than the complete disclosure of financial information would not be

consistent with the rationale for the presumption which is to encourage payors to engage in full communication and act with dispatch regarding decreases in their incomes. Application of D.B.S. Factors to Variation of Spousal Support - Is it Unfair to Apply Effective Date of Notice? [91] The next question is whether it would be unfair to apply the effective date of notice in this case. [92] The first consideration is whether Mr. Kwantes had an understandable reason for his delay in seeking a decrease of spousal support. The underlying obstacle to Mr. Kwantes seeking a decrease was his failure to prepare, file and exchange his income tax returns. Mr. Kwantes provided evidence that he has struggled with his mental health and that, as a result, he neglected to file his tax returns. The letter from his counsellor confirms only that he received counselling and provides no information to substantiate how this may have impacted his ability to prepare his income tax returns. [93] It is relevant to consider that E.K. was experiencing mental health issues in 2019 and 2020, a fact which both parties agree on. I accept that dealing with E.K.'s issues demanded much of Mr. Kwantes' attention after E.K. moved in with him. In addition, Mr. Kwantes' evidence is that they were evicted in 2019 and had to move to a smaller but more expensive rental. These would have been very challenging issues to

deal with on top of E.K.'s multiple hospitalizations. All of this would have taken a toll on Mr. Kwantes' well-being and his productivity. I accept that there would be some reasonable delay in completing tax returns during this period. This, however, does not explain the delay from 2021 to 2024, when E.K. began to stabilize. During this period, the enforcement actions of BCFMA should have brought home to Mr. Kwantes the importance of preparing his tax returns so that he could take steps to give effective notice to Ms. Kwantes as to the reduction in his income. [94] As a result, I cannot conclude that his delay in preparing his tax returns after 2022, particularly in the context of his obligation to do so under the Final Order, constitutes an understandable reason. [95] With respect to Mr. Kwantes' conduct, instead of taking the steps required to seek a review under the Final Order based on reduced income, he unilaterally chose, starting in January 2020, to pay less than the amounts required by the Final Order, with no explanation as to why he was doing so. [96] While it is to his credit that Mr. Kwantes continued to pay child support during much of this time despite his financial struggles, the shortfall in spousal support had a negative impact on Ms. Kwantes who had to continue to cover expenses for L.K. on a reduced amount of support. [97] In respect of hardship to Mr.

Kwantes, the financial documents indicate that in addition to the BCFMA arrears, he has a considerable tax debt arising from his failure to prepare returns. Fortunately, and to his credit, Mr. Kwantes has secured steady employment. This, together with $50,000 paid into the Provincial Court in the BCFMA enforcement proceedings, suggests that he has the ability to pay his arrears. Any hardships with respect to the amount owing above $50,000 can be addressed through a reasonable payment plan negotiated with BCFMA. [98] For these reasons, I cannot conclude that it would be unfair to apply the date of retroactivity to January 7, 2025, to the application to vary spousal support. Accordingly, this disposes of the application to vary any spousal support payable up to January 7, 2025, and no adjustments to the arrears owing are to be made for spousal support up to this date. Application to Vary or Cancel Ongoing Spousal Support [99] Mr. Kwantes seeks to terminate the payment of spousal support going forward and takes the position that Ms. Kwantes has the capacity to be employed in a better paying position. Ms. Kwantes opposes any change to the spousal support provided for by the Final Order. [100] The Final Order provided for spousal support in the amount of $1,409 for an indefinite period. This is consistent with the "Rule of 65" set out in s. 7.5 the Spousal Support Advisory

Guidelines (SSAG) in that the years of marriage (18) together with Ms. Kwantes' age at separation (48) exceeds 65 presumptively entitling her to indefinite support. While the SSAG are advisory only, this presumption reflects the reality that it will take a spouse who has been out of the work force for a lengthy duration to care for children considerably longer to become self-supporting after marriage breakdown. [101] The Final Order also provides that Mr. Kwantes' retirement at or after the age of 65 would constitute a material change of circumstances and that spousal support would not be subject to any review until after October 1, 2021. Legal Framework [102] The court may vary an order for spousal support prospectively pursuant to s. 17 of the Divorce Act. Section 17(4.1) provides as follows: (4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. [103] The court should not lightly disturb the original spousal support order, and the party seeking variation must show not only the changes in circumstances but also the

conditions that call for court intervention: Walters v. Walters, 2011 BCCA 331 at para. 48, citing Oakley v. Oakley, 48 R.F.L. (2d) 307, 1985 CanLII 847 (B.C.C.A.) at 313. In Oakely, the Court of Appeal held that: [16] Maintenance will be varied where the balance between the parties has become so distorted that it has become unjust. Where a decree nisi is obtained by consent or where the decree nisi has incorporated maintenance provisions contained in the separation agreement made between the parties the court should not lightly disturb the order and the party seeking the variation must show not only some changes in circumstances, but conditions which arouse the conscience of the court and call for action. [104] The court must be cautious not to undermine the agreement of the parties regarding the payment of support as incorporated into a final consent order, as its terms may have taken into account who will bear the risk that any changes may occur: L.M.P. at para. 38. [105] Based on my findings above, since the Final Order, there has been a material change in Mr. Kwantes' means as a result of the significant reduction in his income. If Mr. Kwantes' pattern of income had been known at the time of the Final Order, it would have resulted in different terms. Ms. Kwantes' means have also increased since the time of the Final Order. [106] Although Mr. Kwantes did not explicitly

argue that income should be imputed to Ms. Kwantes, he did take the position that she has the capacity to be earning more than she does currently. [107] Based on the evidence before me, I accept that Ms. Kwantes has taken reasonable steps to become self-sufficient. She has retrained in the field of strata management. However, the need to look after her elderly mother as well as her responsibilities to support L.K. have understandably delayed her plans to secure full- time employment in that field. Ms. Kwantes was out of the job market for a considerable length of time to raise her two children. Her age and gaps in experience will continue to present challenges in her search for full-time work. Further, she has been deprived of spousal support since 2020, funds which could have facilitated her efforts toward self-sufficiency. Accordingly, I am not prepared to impute any additional income to Ms. Kwantes beyond including in her income the undeclared amounts she received for the care of her mother in 2022 as set out above. [108] Ms. Kwantes continues to suffer disadvantages from the breakdown of the marriage and the time she spent outside the work force caring for their family. As a result, there is a strong compensatory claim for ongoing spousal support which has not yet been fully compensated. Accordingly, I am not prepared to terminate spousal support on the evidence before

me. [109] However, there has been an increase in the means of Ms. Kwantes. This, together with the change in the income of Mr. Kwantes, satisfies me that the quantum of spousal support going forward should be varied. In determining the appropriate range of support, it is relevant to consider that L.K. is now in university and requires less care than she once did. At the same time, this comes with the increased costs of tuition and other post-secondary education expenses. While L.K. is employed and able to cover some of these costs, Ms. Kwantes has provided evidence to the court that she has covered tuition. It is also relevant to consider that Ms. Kwantes has had very low housing costs because she does not have to pay rent or utilities to live in her mother's home. [110] For 2025, utilizing $75,000 in income for Mr. Kwantes and $25,000 for Ms. Kwantes and considering the residence of the children, the with adult children formula provides the following range of monthly support: low $554, mid $778 and high $1,001. [111] When child support terminates, this often has the effect of increasing the spousal support payable. That is the case here. Starting in October 2025, when the parties have agreed to end the payment of child support, the without child support formula in the SSAG provides the following monthly range: low $1,125, mid $1,312 and high $1,500. [112] Given the factors

mentioned above, I am of the view that utilizing the mid range of support is appropriate. Accordingly, I vary the monthly amount of spousal support payable to $778 from January 2025 to September 2025. From October 2025 going forward, the amount of monthly support will be $1,312. [113] Based on the efforts of Ms. Kwantes to retrain and her desire to move into more remunerative employment when she is no longer caring for L.K. and her mother, there are likely to be future changes to her means and needs. Should either party take the position that there is a need to further adjust spousal support, para. 20 of the Final Order contemplates a review and remains in place. Full and timely disclosure by both parties of their incomes will facilitate such a review. If agreement cannot be reached, the Final Order contemplates that either party can set the matter before the court to determine the adjustment. Disposition [114] In respect of the application to vary the Final Order, I order as follows: (a) The amount of $9,672 in retroactive child support payable by Ms. Kwantes for the period of January 2019 to December 2024 is to be deducted from the arrears. (b) Commencing January 1, 2025, based on a Guidelines income of $75,000 for Mr. Kwantes and $25,000 for Ms. Mr. Kwantes, $716 per month in support for L.K. is payable by Mr. Kwantes while $209 per month is payable by Ms. Kwantes for E.K.

resulting in a set-off of $507 per month payable by Mr. Kwantes up to and including September 2025. (c) Commencing October 1, 2025, child support will no longer be payable for either child, but the parties will continue to contribute to post-secondary expenses for the children as set out in the Final Order. (d) Commencing January 1, 2025, Mr. Kwantes will pay monthly spousal support to Ms. Kwantes in the amount of $778. From October 2025 going forward, the amount of monthly support will be $1,312. (e) BCFMA is directed to reduce the arrears by $1,455.00 to correct the over-payment of child support in January, February and March 2019, and the default fee of $400 charged for these three months should be set aside. (f) BCFMA is directed to further adjust the arrears in light of the variation of child and spousal orders set out above. [115] Finally, given the divided success on this application, I order that each party bear their own costs in this matter. "Hoffman J."