M.L.D. v. L.T.P.W.

2010 BCSC 1262 M.L.D. v. L.T.P.W. IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: M.L.D. v. L.T.P.W., 2010 BCSC 1262 Date: 20100907 Docket: E71006 Registry: Kelowna Between: M.L.D. Plaintiff And L.T.P.W. Defendant Before: Master B.M. Young Reasons for Judgment Counsel for the Plaintiff: M.A. Newcombe Appearing on his own behalf: L.T.P.W. Place and Date of Hearing: Kelowna, B.C. June 23, 2010 Place and Date of Judgment: Kelowna, B.C. September 7, 2010 [1] The plaintiff brought an application to vary child support, by notice of motion dated July 16, 2009, to increase child support in accordance with the Child Support Guidelines retroactive to March 2006. In fact, this is the first child support order that is being made, and therefore it is not a variation application. The plaintiff also applied for costs and for an order waiving the judicial case conference as the defendant resides in England. [2] A judicial case conference was held, and this matter came before me first on January 15, 2010 for scheduling of the hearing of the application. I had offered leave for the defendant, L.T.P.W., to send written submissions but he chose to schedule the hearing for when he was going to be in Canada. [3] In support of her application, M.L.D. filed four affidavits, in addition to the affidavit of service, and two form 89 financial statements. L.T.P.W. filed two affidavits and two form 89 financial statements. Background [4] The parties lived together from 1998 to 2003 and spent some of that time in Egypt. Both parties worked as scuba diving instructors. [5] There are two children of the relationship: E.H.W., born February 10, 2000; and J.L.W., born November 26, 2002. [6] After the parties separated, the plaintiff moved to Canada with the children in 2005. [7] In 2007 the defendant relocated to the United Kingdom from Egypt. He currently resides in the United Kingdom. [8] The plaintiff is in a new relationship with C.B. in Kelowna. C.B. and M.L.D. began living together in November 2009. [9] The defendant is married and his wife has just finished her maternity leave. They have a one‑year‑old baby and Mrs. W. is unemployed. [10] The parties entered into a consent order in March 2006 dealing with custody, guardianship and access only. That desk order was signed on March 10, 2006. It gives the plaintiff sole custody and guardianship of the children, and gives the defendant reasonable and generous access. The order adjourned the issue of child support, and no order was sought until the plaintiff applied in July 2009 for an order. [11] Despite the fact that there was no child support order in place, L.T.P.W. did pay child support in the amount of $650 per month voluntarily. [12] The plaintiff initially deposed that the defendant's payment of child support was sporadic and there were several months where the children did not receive any child support. In her third affidavit she recanted that statement and says that the defendant has been paying child support every month but that he has deducted various amounts from the cheque and she does not believe he has been paying the amount set out in the Child Support Guidelines. This is a far cry from what she said in her first affidavit. [13] Although the defendant says he made payments every month, M.L.D. said he made certain deductions from the child support including deductions for air travel to bring the children for visits to England and deductions for when the children are visiting him and he did not feel obliged to pay child support for that month. [14] In her first affidavit, the plaintiff speculated that the defendant earned income of $100,000 a year. This estimate has been completely unfounded on the evidence. At the current exchange rate, the defendant's income is under $50,000 a year. [15] At the hearing of the application, M.L.D.'s counsel submitted the child support should be $840 per month based on an imputed income to L.T.P.W. of $55,000 CDN per year, based on her calculations of what the value of £30,000 is in Canadian funds. [16] M.L.D.'s income is very low. She is a full‑time university student, and should graduate in 2011. Her 2008 annual income was $2,768 for part‑time employment at Okanagan Gymnastics Centre. It was $2,535 in 2009. She does not report child tax benefit or BC family bonus on her financial statement. Quite remarkably, she has extraordinary expenses that far exceed her income. In 2008 extraordinary expenses for one child were $8,970 and $4,250 for the other child. In 2009 extraordinary expenses were $11,000 for both children. In 2010 she anticipates extraordinary expenses for both children will be $14,500. Clearly someone else is funding the extraordinary expenses because she is certainly not doing so on her income. [17] In her third affidavit the plaintiff discloses that her parents are helping her with expenses, and that she has a student loan which consists of a revolving line of credit which she does not disclose in either of her financial statements. [18] When M.L.D. initiated this application, she was not seeking reimbursement of these expenses. That claim has only come about as a result of L.T.P.W. advancing a defence of undue hardship due to the high costs of access. [19] L.T.P.W.'s income is reported on a form called a P60 Year End Certificate. His 2009 P60 issued in April 2010 shows an income of £30,000, and in 2008 £28,000. [20] The plaintiff refutes the defendant's undue hardship claim by saying that the defendant drives a Jaguar, and lives in a country estate with a swimming pool and tennis courts in one of the most expensive areas in England. [21] The defendant says that he rents a two‑bedroom annex at the back of a larger home and pays the equivalent of $950 per month in rent. He attaches his lease agreement to his affidavit. He does not have a swimming pool or tennis court, and the Devin area is three times cheaper to live in than London so he travels every day into London to work. [22] The plaintiff is now living with C.B. who earns $56,249 per year. They both depose that they do not intermingle their finances, and C.B. deposes that he does pay $546 child support for another child. [23] The plaintiff is not paying rent for herself or the children, but she does pay for food. [24] At paragraph 5 of the plaintiff's third affidavit in support of her new claim for special and extraordinary expenses the plaintiff says the reason she and the defendant agreed that she could move to Kelowna is because of the presence of the Waldorf School in Kelowna and because she does have family here. She then attaches a list of payments she made to the Waldorf School. [25] The defendant says this is simply not true. The children were 6 months old and 3 years old when the plaintiff moved to Canada and there was no discussion about private school plans. [26] I prefer the evidence of the defendant over that of the plaintiff because the plaintiff has made some fairly exaggerated assertions in her early affidavit and then has rescinded when the defendant has provided proof that she is exaggerating. [27] Special and extraordinary expenses may be shared if they are necessary in relation to the child's best interests and if the expense is reasonable in relation to both parents' means. Private school may be in these children's best interests, but it is not a reasonable expense in relation to the means of these parents. If the grandparents chose to gift the tuition to their grandchildren that is wonderful, but I could not impose this expense on parents of three children who have a combined annual income of $48,000. Decision [28] I accept the defendant's evidence that his income is £30,000 per year and that the current exchange rate is 1.5 and that the average exchange rate for 2009 was 1.7. [29] Plaintiff's counsel has proposed that the court fix a date and agree to use the average exchange rate for that year for the purpose of calculating child support for the coming year. This is a sensible proposal. [30] With the current exchange rate of 1.5, the defendant's Guideline income is $45,000. Section 20 of the Child Support Guidelines says where a spouse is a non‑resident of Canada, the spouse's annual income is determined as though the spouse was a resident of Canada. The defendant should be paying child support for two children in the amount of $684 in Canadian funds. [31] The amount that L.T.P.W. will have to deposit each month may change because of the exchange rate and his bank charges, but this is an expense he must incur and it should not come out of the child support received by the plaintiff. He is required to pay support in Canadian funds. I will take this extra expense into account in reviewing the special and extraordinary expense claim. [32] L.T.P.W. does have high access costs. In order to receive any reduction in the amount of child support payable, he would have to meet the undue hardship test set out in s. 10 of the Child Support Guidelines. It is a two‑part test. The first part of the test is to determine whether the hardship complained of by a spouse is actually undue. Section 10(2) lists some examples of circumstances that may cause a spouse to suffer undue hardship, and s. 10(2)(b) lists unusually high expenses in relation to exercising access as one of the circumstances that may cause undue hardship. Clearly the defendant's access costs to take the children to England or to travel from England and rent a motel are unusually high access expenses. [33] The second part of the test is mandatory. If I find as I have that the expense might cause undue hardship, I have to compare the standards of living of the two households, and then I may be able to reduce the child support from the Guideline amount if the payment of the expense and full child support would reduce the defendant's household standard of living below that of the plaintiff's. [34] The plaintiff's household is living on $56,249, plus her $2,500 a year, plus some undetermined child tax benefits and child support. For some reason, C.B. only owed income tax of $1,027 last year. I do not have the breakdown of his income in the notice of assessment, so I do not know why he is being taxed at such a low rate. [35] The plaintiff's household is a four‑person household. Ordinarily I would say that the child support that C.B. pays his child should be factored in, but because of his unusually low tax rate I will not factor the child support in but I will also not impute a higher income because of the low income tax rate. [36] I have calculated the standard of living for the plaintiff's household using the formula set out in Schedule III of the Child Support Guidelines: Plaintiff's partner's income: $56,249 Minus $1,027 income tax on his income: $ 1,027 Plaintiff's income: $ 2,768 Total household income (which does not include the BC Child Tax Benefit): $57,999 Receipt of annual amount of Guideline child support: $ 8,208 Total income with child support: $66,198 Low income measure as set out in Schedule III: $20,764 Ratio for plaintiff's standard of living: 3.188 [37] The defendant's household of three lives on an income of $45,000. This might increase once his wife returns to work, but for now she has no income. Defendant's income: $45,000 Minus tax of £4,704 (or $7,056): $ 7,056 Partner's current income: $0 Minus the payment of Guideline child support: $ 8,208 Minus estimated annual access costs: $ 5,328 Defendant's total household income, for a family of three: $24,408 CDN Divided by the low income measure in Schedule III: $17,649 Ratio for defendant's standard of living: 1.38 [38] The defendant's household standard of living is 1.38, which is lower than one‑half of the plaintiff's standard of living ratio. The plaintiff's standard of living ratio is only higher because she is residing now with C.B. [39] I have discretion to lower the child support payable by the defendant. In exercising my discretion, I have considered the following: (a) At this time, neither the plaintiff nor the defendant's wife is working, but this is hopefully a temporary situation; (b) The plaintiff has just started living with C.B. They do not intermingle their finances, and C.B. has no obligation to support the parties' children or to support the plaintiff; (c) The access costs of $444 a month for the defendant do create an undue hardship, but the children's continued contact with their biological father is in their best interest and is to be facilitated; (d) The children enjoy a number of extracurricular actives and attend a Montessori school only because of the generosity of their grandparents. These parties cannot afford those special and extraordinary expenses; and (e) These parties need certainty in the formula for ongoing child support so that they can recalculate it on an annual basis without the need for court intervention. [40] I order that the defendant pay the base child support amount of $684, commencing August 1, 2010. I dismiss the application to back date this child support. The defendant cannot afford to pay a retroactive award and continue to pay child support and high access costs. [41] The defendant is to pay that amount each and every month. That amount is not to be reduced during the months that he has the children with him as their housing, clothing, transportation and medical expenses do not disappear when they are visiting their father. These basic expenses continue every month. The defendant is not to reduce child support during months that he incurs travel expenses either. [42] The defendant cannot afford to contribute to the special and extraordinary expenses, and so I order that his contribution to those expenses is offset by his access costs and he is not responsible at this time for those costs. [43] If, in the future, the plaintiff intends to make an application for payment of special and extraordinary expenses, she must first consult with the defendant before incurring the cost and keep in mind the financial means of the defendant and herself before incurring the expense. [44] The parties will exchange financial documents showing their incomes and their partners' incomes and taxes payable by May 15 of each year, commencing May 15, 2011. The calculation of the defendant's income will be based on the average exchange rate as at May 15th. Child support will be varied annually, based on his Guideline income using that average exchange rate and Schedule I of the British Columbia Child Support Guidelines table unless either party files a notice of application in the Supreme Court of British Columbia on or before June 1st seeking a variation of that amount due to a change in financial circumstances. [45] The defendant has been substantially successful in this application; however I decline to award him his costs. At an income of $2,700 per year, the plaintiff could only afford to pay those costs if she did so out of the child support payment. Each party will, therefore, bear their own costs of this application. "Master B.M. Young"