R.M.E. v. R.A.E.

2003BCSC0002 Citation: R.M.E. v. R.A.E. Date: 20030102 2003 BCSC 2 Docket: D081012 Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: R.M.E.

PLAINTIFF AND: R.A.E.

DEFENDANT

REASONS FOR JUDGMENT

OF THE HONOURABLE MR. JUSTICE SCARTH (IN CHAMBERS) Counsel for the Plaintiff: Barry D. Bennett The Defendant, R.A.E.: In person Counsel for the Director of Maintenance Enforcement: Wilson Lee Date and Place of Hearing: December 3, 2002 Vancouver, BC [1] By notice of motion dated May 17, 2002 the defendant, R.A.E., applies to vary the order of this Court made on October 28, 1994 by reducing the amount of child support payable by him for his two children and for an order reducing or cancelling the arrears of child support. [2] Shortly stated the factual background to the applications is as follows. The parties were married on March 26, 1988. Their daughters, J.R.E. and M.N.E., were born on [ ], 1986 and [ ], 1989 respectively. The children are now 16 and 13 years of age respectively. Mr. R.A.E. and the plaintiff, R.M.E., separated in May, 1991. They were granted a divorce on March 12, 1993. [3] Under the divorce order and by consent Ms. R.M.E. was awarded sole custody of the two children and, amongst other things, Mr. R.A.E. was ordered to pay child support of $100 per month per child commencing April 15, 1993. Provision was also made for joint guardianship of the children, reasonable access by Mr. R.A.E. to the children including certain specified access, and the transfer to Ms. R.M.E. of the matrimonial home and assumption by her of the family debts except for a certain debt in

the amount of $9,000 which Mr. R.A.E. was obliged to satisfy by payments of $300 monthly commencing April 1, 1993. [4] Mr. R.A.E. fell into arrears with respect to both child support and the debt obligation. Pursuant to an order made October 13, 1993 a registrar of the Court conducted a hearing on December 2, 1993 to determine the amount of the arrears. Mr. R.A.E. did not appear at the hearing. The registrar found that as of December 2, 1993 the arrears of child support amounted to $3,207.70; the arrears of debt amounted to $2,700. [5] On March 21, 1994 the Court confirmed the registrar's report and ordered Mr. R.A.E. to pay $200 per month toward the arrears of child support commencing April 1, 1994. The Court adjourned Ms. R.M.E.'s application for increased child support to March 31, 1994. Mr. R.A.E. did not appear at the hearing on March 21st. [6] Mr. R.A.E. did appear in Court on March 31, 1994. The Court ordered that he provide to Ms. R.M.E.'s solicitor on or before April 30, 1994 proof of his course enrolment and expected date of graduation with a Bachelor of Arts Degree, as well as proof of income, financial support or other financial contributions from the Indian Band of which he is a member. Ms. R.M.E.'s application for increased child support was not dealt with by the Court on that occasion. [7] Arrears of child support and of the debt continued to accrue. In her

affidavit sworn to February 22, 1994 Ms. R.M.E. deposes that since the registrar's report dated December 2, 1993 was made she had received from Mr. R.A.E. payments totalling $300. In a later affidavit sworn to September 29, 1994 Ms. R.M.E. deposes that the arrears of child support had increased from $3,207.70 to $3,407.70. [8] Ms. R.M.E.'s application for increased child support came before the Court on October 28, 1994. Mr. R.A.E. did not appear. The Court ordered that the order of March 12, 1993 be varied by increasing the amount of child support payable from $100 per month per child to $350 per month per child. The Court set the arrears of child support owing at $3,407.70. It is not clear from the materials provided to me what the basis for the variation was. [9] Mr. R.A.E. applied to the Court on December 1, 1994 to vary the order made October 28, 1994. The Court did not reduce the quantum of support, but did order that Mr. R.A.E. need not make the payments in "the amount of $350.00 per month for the months of December, 1994, January and February, 1995 for each of the parties children" and that such payments accrue as arrears of child maintenance. He was directed to resume making the child support payments on March 1, 1995. His application to vary the order made March 21, 1994 with respect to arrears was dismissed; his application for an appointment to conduct a hearing

with respect to the arrears of child maintenance was dismissed. [10] According to the Director of Maintenance Enforcement Mr. R.A.E. is in arrears with respect to child support as at December 2, 2002 in the amount of $48,982.19 including interest. He also owes the Director $2,000 as default fees. The total owing is $50,982.19. [11] This is not disputed by Mr. R.A.E.. His submission to the Court is that his level of income did not at any time justify an award of $700 per month for child support. Under the Federal Child Support Guidelines, which came into force on May 1, 1997, he would have been required to pay $205 per month for two children based on his 1994 income of $13,190.37, and not $700 per month as ordered by the Court on October 28, 1994. At the time the order was made he was working part time at Sears Canada. To warrant monthly payments of $350 per child Mr. R.A.E. says that he would have to have annual income of $50,300, a level he never achieved between 1994 and 2001. [12] In his affidavit sworn to May 16, 2002 Mr. R.A.E. deposes that in 1995 he enrolled in the University of British Columbia Law Programme. He graduated from the Programme in May, 1999 with a Bachelor of Laws degree. His total income for 1995, including a non-taxable education allowance of $2,700 received from the K.[ ] Indian Band, was $10,554. His total income for 1996, including an education

allowance of $5,400, was $12,569. His total income for 1997, including an education allowance of $5,400, was $13,741. During the years 1998 and 1999 his total income amounted to $18,435, including an education allowance of $5,400, and $17,623, including an education allowance of $2,700, respectively. He calculated his total income for the year 2000 at $22,257, and for the year 2001 at $13,309. He did not receive an education allowance in either of those years. [13] According to Mr. R.A.E. his work history since obtaining his degree in law consists of a seven month stint as a paralegal in a Vancouver law firm, and working as a contractor for the Circle of E.[ ] from January, 2000 to August, 2001. He has a consulting business, R.[ ] Consulting, but denies deriving income from the K.[ ] Indian Band. According to Mr. Bennett, counsel for Ms. R.M.E., the total deposits made to the business account with the Bank of Montreal in 2001 amounted to $16,463.39. No financial statements for the business are included in the material before the Court. Mr. R.A.E. says that he is "considering" applying for dissolution of the business due to his lack of success in obtaining "any further consulting work opportunities" beyond the sporadic opportunities that have arisen since September, 2001. [14] Mr. R.A.E. has also derived $1,668.65 from Labour Unlimited in 2001, and $1,878.16 for the four month

period beginning in January, 2002; $600 in February, 2001 from the W.[ ] Indian Band, $150 from a board of school trustees, and $2,900 in the form of money orders from two individuals. He calculates his income for the first four months of 2002 to be $4,528.16. [15] At the hearing of the present application on December 3, 2002 Mr. R.A.E. told the Court that he had worked for three weeks on a temporary basis as a contractor for F.[ ] Ltd. He had had interviews with two law firms. [16] According to the figures provided by Mr. R.A.E. his average annual income during the period 1995 to and including 2001 was $15,457. Based on that amount, support pursuant to the Guidelines for two children would total $230 per month. Mr. R.A.E. submits that since the variation order was made on October 28, 1994 there has been a material change of circumstances: (1) his income has never been more than $22,000; (2) he has furthered his education by attending law school for four years. Had the Court been aware of his true income in 1994 and that he would be at school from 1995 to 1999 it would not have ordered him to pay child support of $350 per month per child. But for the order he would not be in the situation he is. What he seeks is cancellation of the arrears whilst he was at the law school and reduction of the present support to $100 per month per child. [17] On behalf of Ms. R.M.E., Mr. Bennett submits that there is a heavy or substantial onus resting upon Mr. R.A.E. in order to obtain reduction of the quantum of child support payable under the order made October 28, 1994 or cancellation of the accumulated arrears: Reid v. Reid (1992), 40 R.F.L. (3d) 92 (B.C.C.A.), at p. 97 (per Taylor J.A.); Earle v. Earle, [1999] (Civ. L.D. 213 (B.C.S.C.), at para.

22. To obtain a reduction of the amount of child support payable he bears the onus of showing that a material change of circumstances since the making of the support order sought to be varied has occurred. To obtain cancellation or reduction of the arrears he bears the onus of showing that it would be grossly unfair not to cancel or reduce the arrears. Mr. Bennett argues that Mr. R.A.E. has failed to meet the onus resting upon him in either instance. [18] Mr. Bennett refers to s. 19(1) of the Guidelines. Subsection 19(1)(a)(b) and (f) are relevant and read as follows: 19.(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; (b) the spouse is exempt from paying federal or provincial income tax; ... (f) the spouse has failed to provide income information when under a legal obligation to do so; [19] With reference to s. 19(1)(b), it is pointed out that on his education allowance received from the Band Mr. R.A.E. was exempt from paying federal or provincial income tax. Mr. R.A.E. no longer receives that allowance,

however, and denies receiving any children's allowance from the Band. [20] With reference to s. 19(1)(f), Mr. Bennett argues that although Mr. R.A.E. was under a legal obligation to provide income information he has not, apart from the year 2000, provided copies of his income tax returns. For the years 1996 to 1999 he provided copies of his Revenue Canada notices of assessment which do not indicate the sources of his income. Nor, with respect to R.[ ] Consulting, has he provided financial statements. He has simply provided copies of certain bank statements. As stated in Earle, supra, at para. 27: [27] People ... can only get a reduction or a cancellation of arrears if they present detailed and full financial disclosure, under oath (usually in the form of an affidavit) that: i. the change was significant and long lasting and ii. the change was real and not one of choice and iii. every effort was made to earn money (or more money) during the time in question, and those efforts were not successful. [21] This brings me to the crux of Ms. R.M.E.'s submission: that Mr. R.A.E. was intentionally under-employed and still is: s. 19(1)(a) of the Guidelines. [22] In her affidavit sworn to June 6, 2002 Ms. R.M.E. deposes in part as follows: (4) The Defendant has an almost obsessive determination to avoid his financial responsibilities flowing from the breakdown of our marriage. The

Defendant lives by the motto "only stupid fathers pay child support", which the Defendant has often voiced to me. The Defendant does not consider himself to be a "stupid father", but rather views himself as being smart enough to outwit and outmanouever [sic] any attempt by me or the courts to have him live up to his financial responsibilities to his children. (5) The Defendant's attitude towards his financial responsibilities, and toward the courts, is one of disdain. This was manifested in part by the Defendant's pattern of not appearing in court although duly served. The Defendant did not appear before Master Tokarek on December 2, 1993, although duly served. ... The Defendant did not appear before Madam Justice Baker on March 21, 1994 although duly served. ... The Defendant also did not appear before Mr. Justice Williamson on October 28, 1994, although duly served. (6) The Defendant subsequently tried to vary Mr. Justice Williamson's Order by applying before Mr. Justice Brenner on December 1, 1994, but that application was dismissed. ... (7) Having failed to vary the child support order, the Defendant pursued a policy of disregarding his financial obligations pursuant to the order, and organizing his affairs in such as [sic] way as to frustrate enforcement of the order. (8) After obtaining his law degree, the Defendant embarked upon his articling year. Rather than proceeding

on to a financial [sic] rewarding and lucrative career in law, however, the Defendant abandoned his law career and he has been intentionally under employed ever since. (9) Had the Defendant continued on with his law career, by this point I would expect he would be earning at least $100,000.00 per year in gross income. That, however, would require the Defendant to live up to his financial responsibilities, and so the Defendant has deliberately kept his reported income at around the minimum wage level ever since. Further, because of his Native status, the Defendant is not required to report, or to pay income tax on, all his income. [23] In his affidavit sworn to November 25, 2002 Mr. R.A.E. responds to Ms. R.M.E.'s assertions as follows: 4.) I do not have an obsessive determination to avoid my financial responsibilities flowing from the breakdown of the marriage, further, I do not live by the motto "only stupid fathers pay child support", and have never said any such statement to the Plaintiff, R.M.E.. And, I have not attempted to "outmanoeuvre" any attempt by the Plaintiff or the Courts to avoid living up to my financial responsibilities to my children. 5.) I do not have an attitude of "disdain" towards my financial responsibilities or towards the Courts. ... 6.) I did attempt to vary Mr. Justice Williamson's Order on December 1, 1994, and that application was dismissed. 7.) I

have never attempted to organize my affairs in anyway to frustrate a Court Order or Family Maintenance. I have never been in a position to pay what was ordered and was frustrated on my previous application to vary. 8.) I did attempt a "consulting" business which has been unsuccessful to date and have been employed in a temporary basis while attempting to secure other means of employment, in fact I have just been getting by, however, I am still in the process of securing relevant employment to my law degree. 9.) I think it is fanciful thinking to assume that I would be making an income of at least $100,000.00 per year at this point in time. Further, I have not deliberately kept my reported income around the minimum wage level ever since, in fact I have been attending university for the past several years, and, I have reported all my income to Revenue Canada at all material times. 10.) I have been unable to comply with my child support obligations as the amounts were set to [sic] high in relation to my income. I did not quit my articling job to avoid the garnishment order. [24] In his affidavit sworn to May 16, 2002 Mr. R.A.E. admits that he was not present at the hearing on October 28, 1994 but states that he does not, at this time, recall why. [25] The principles of law applicable to a case such as this are not difficult to state; it is their application to the particular

circumstances which can prove difficult. Manifestly, as parents of these two children, the parties have a joint and continuing legal obligation to support the children. It is the children who, by law, have the right to maintenance. It is not the right of the other spouse. Child support is not spousal support in disguise. [26] In my judgment it would be wrong to reduce Mr. R.A.E.'s child support obligation from $350 per month per child (total $700) to $100 per month per child (total $200). [27] Mr. R.A.E. has the benefit of a superior education from which he earned a Bachelor of Arts degree and degree in law. He represented himself at the hearing before me on December 3, 2002. His presentation was articulate and forceful, and displayed his intelligence. There is no material to suggest he is not able-bodied or that he suffers from any medical or other disability. [28] I find that at the present time Mr. R.A.E. is intentionally under-employed, and that it is appropriate to impute to him a higher level of income than he presently declares. In short he is capable of earning more, much more. [29] Given his qualifications I am not satisfied that his attempts to find a better paying job are at all satisfactory. I set out earlier in these reasons that he had a temporary job as a contractor and had had interviews with two law firms. In his affidavit of May 16, 2002 he deposes: 38. I have

been actively seeking work since September of 2001 and am registered in two career and employment centres. I am registered with Tully and Company with Jobwave BC and Landell & Associates Consulting Ltd. I have been working with career counsellors and have been actively sending out resumes as well as conducting Internet job search strategies. [30] A question which leaps to the forefront is: why did Mr. R.A.E. not pursue a career in the law. To that question one can discern in the material no acceptable answer. [31] Mr. R.A.E. dismisses as "fanciful" the suggestion that he could earn $100,000 per year at this point in time. There is no evidence before the Court upon which I could base a finding as to what level of income he could expect at the present time from the practice of law. On the other hand I find it reasonable to impute to him income of at least $50,300 year given his qualifications in that field. Guideline support for two children on the basis of annual income of $50,300 is $700 per month. What it boils down to is that Mr. R.A.E. has not met the test for varying the child support order of October 28, 1994 by demonstrating a material change of circumstances sufficient to justify the variation sought. [32] A different approach is indicated with respect to reducing the arrears during the time Mr. R.A.E. was attending law school - September, 1995 to May, 1999. Subsection

19(1)(a) of the Guidelines provides that with respect to imputing income where a spouse is intentionally under-employed an exception applies where the under-employment results from "the reasonable educational ... needs of the spouse". [33] It is not suggested that pursuing a degree in law was not a reasonable educational need of Mr. R.A.E.. It affords him the opportunity to derive a higher level of income and hence greater ability to fulfil his child support obligations. [34] On the other hand, the question is whether it would be grossly unfair not to reduce or cancel the arrears of child support which accrued during the time Mr. R.A.E. was at law school. [35] I conclude it would not be grossly unfair not to reduce or cancel those arrears. Although Mr. R.A.E.'s level of income during the period he attended law school would justify child support payments of only $200 per month, he had by the spring of 1994 obtained a Bachelor of Arts degree and was no doubt by then capable of earning more than $15,457. Again, it is not unreasonable to impute income of $50,000 "but for" his attendance at law school. In essence, without the sanction of the Court, Mr. R.A.E. suspended his obligation to pay child support while he attended law school. Given his increased earning power as a result of his law degree it is appropriate he pay the arrears. [36] In the result Mr. R.A.E.'s applications to reduce his child support payments and to reduce or cancel the arrears are dismissed. [37] Ms. R.M.E. is entitled to her costs of the application on Scale 3. [38] No costs are awarded to the Director of Maintenance Enforcement. "W.B. Scarth, J." The Honourable Mr. Justice W.B. Scarth