IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           T.D.C. and E.S.K. were married on December 30, 2000 and separated in June 2005.  They have two children together: K.K.(1) who was born on [omitted for publication] and K.K.(2) who was born on [omitted for publication].

[2]           Sadly, T.D.C. and E.S.K. have been before the court a great number of times since their separation.  Fortunately, despite the conflict, K.K.(1) and K.K.(2) sound like wonderful young men and, on a positive note, T.D.C. and E.S.K. were able to resolve, on an interim and without prejudice basis, a great number of outstanding issues during a family case conference (FCC) before Judge Dickey on May 10, 2017.  By agreement, K.K.(2) will be moving in August 2017 from Whitecroft near Sun Peaks with his mother to Coldstream near Vernon with his father.  K.K.(1) will continue to reside primarily with his mother.  Parenting time for the non-primary parent and how the parties will exercise their parental responsibilities were also resolved during the FCC.

[3]           Where K.K.(2) would attend school in the fall remained an issue after the FCC but T.D.C. has subsequently agreed to K.K.(2)’s choice to attend [omitted for publication] next year.

[4]           The issues that remain outstanding are:

[5]           Since shortly after the parties relocated to the Sun Peaks and Vernon areas, the vast majority of exchanges have occurred at what is now known as the BVD Truck Stop just east of Kamloops.  Exchanges have been at this location under the terms of an interim without prejudice order since February 22, 2012.

[6]           According to Google Maps, the current exchange location represents a 50 minute drive for T.D.C. and a 76 minute drive for E.S.K.  After five years, E.S.K. is looking for “parity” and proposes that exchanges occur at the intersection of Highway 97 and Barnhartvale Road which would represent a 60 minute drive for T.D.C. and a 66 minute drive for E.S.K.

[7]           Of course, all parenting issues, including the location of exchanges, must be decided on the basis of the best interests of children.  In this case, with all due respect, E.S.K.’s proposed exchange location is not in the children’s best interests.  Having travelled Highway 97 countless times myself, I know the intersection with Barnhartvale Road well.  There is a small gravel area where cars can park but the area has no services and is not lit.  The current exchange location at the BVD Truck Stop, on the other hand, has a large parking lot and a restaurant which is open 24 hours a day.  The parties both indicated a preference not to interact with each other at exchanges and, in fact, are able to park 50 - 100 feet away from each other at the BVD Truck Stop.

[8]           In my view, it is best for K.K.(1) and K.K.(2) to have exchanges at a location where the risk of them being exposed to conflict is minimized and where they can be comfortable and access services in the event that the parent who is picking them up is running late.  These benefits to K.K.(1) and K.K.(2) are available only at the BVD Truck Stop and not on the side of the highway as proposed by E.S.K.  Alternatives further east in Monte Lake, Westwold or Falkland would be better than the side of the highway but none would be as large, well-lit or provide the same level of services as the BVD Truck Stop.  Each of these alternative locations would require T.D.C. to do more driving than E.S.K.  My view about the best location for exchanges is reinforced by the fact that E.S.K.’s proposed exchange location, as well as the alternatives, would be difficult for T.D.C.  I accept that T.D.C. has difficulty sitting for extended periods of time, travels to exchanges with her four year old son, G., and is experiencing significant financial strain right now.

[9]           E.S.K.’s application to change the location of exchanges is, therefore, dismissed and I make a final order that exchanges will occur at the BVD Truck Stop on Highway 1 east of Kamloops.

[10]        The parties have agreed to equally share Spring Break and, on a two week on, two week off rotation, summer holidays.  They also agree that T.D.C. should have parenting time on Mother’s Day and E.S.K. on Father’s Day.  Neither cares much about Easter and Thanksgiving.  Both are content for Easter and Thanksgiving to be coordinated like any other weekend according to the existing parenting time order.

[11]        The only issue is how to share Christmas parenting time.  I am asked to make a Christmas parenting time order that would apply to both K.K.(1) and K.K.(2).  That said, Judge Dickey’s FCC order already provides that E.S.K.’s parenting time with K.K.(1) is subject to K.K.(1)’s wishes so largely the Christmas parenting time issue is about K.K.(2).

[12]        Historically, the children have spent Christmas Eve and Christmas Day with T.D.C.  T.D.C. would like that to continue because she has many Christmas traditions, because K.K.(1) and K.K.(2) have a younger half-sibling and because T.D.C. has no other family close by.  T.D.C. believes that Christmas traditions are not as important to E.S.K.

[13]        E.S.K., on the other hand, says that he and his new family, and more importantly, K.K.(2), would like K.K.(2) to spend Christmas Eve and Christmas Day with E.S.K. this year and then alternate between the parties.

[14]        I accept that Christmas is extremely important to T.D.C. but Christmas parenting time must be based only on the children’s best interests.  In my view, the children have much to gain from experiencing Christmas traditions with both sides of their family, not just one.

[15]        In my view, Christmas holidays should be shared equally but without the disruption of travelling on Christmas Day.  I, therefore, order that the parties will share parenting time over the Christmas holidays equally.  Commencing in 2017, E.S.K. will have parenting time during the first half of the school Christmas holiday, including all of Christmas Day, in odd years and the second half of the school Christmas holiday, excluding all of Christmas Day, in even years.  T.D.C. will have parenting time during the second half of the school Christmas holiday, excluding all of Christmas Day, in odd years and the first half of the school Christmas holiday, including all of Christmas Day, in even years.

[16]        The final parenting issue is whether the FCC order made by Judge Dickey ought to remain an interim order or become a final order.  At the crux of the issue is whether K.K.(2)’s move to Coldstream should be considered permanent and final or merely temporary and interim.

[17]        Frankly, I am satisfied that K.K.(2) has reached the age and stage of development when he can, should and will decide for himself where he wants to live.  At this point, I accept that he wants to permanently move to Coldstream to live with his father and attend a regular high school.  That said, K.K.(2) may find that life in Coldstream and attendance at [omitted for publication] is not what he was expecting or hoping for and he may wish to return to Whitecroft to live with his mother.

[18]        Given the litigious history between the parties, in my view, finality and stability is best for K.K.(1) and K.K.(2).  In the circumstances, it is best for K.K.(1) and K.K.(2) that the FCC order made by Judge Dickey on May 10, 2017 be a final order.

[19]        In making this order, I take into account that both parties have respected the wishes of their children in reaching their current parenting time arrangements and have promised to continue to do so.  I also note that the FCC order already contemplates reviewing whether the parenting time arrangements regarding K.K.(2) should be subject to K.K.(2)’s wishes after the next school year when K.K.(2) is 15 and a half.  In these circumstances, there is nothing to gain in maintaining the FCC order as an interim order.  Doing so can only be negative in the sense of keeping the door more ajar to ongoing conflict.

[20]        Under the Family Law Act, child support must be determined in accordance with the Federal Child Support Guidelines.  The Guidelines are based on the payor’s income and the number of children.  The Guidelines are intended to eliminate conflict between the parents and depend on full, frank and timely disclosure of financial information by the parents.

[21]        In this case, neither party has given the other all of the required financial documents in accordance with the Rules of Court and numerous court orders.

[22]        Moving forward, both parents have to understand that their non-disclosures have simply built up their dislike and distrust of each other and resulted in unnecessary litigation that has been expensive and undermined their ability to financially support their children.  Both parties must understand the importance of complying strictly with court orders.  They cannot decide for themselves what is necessary or appropriate to disclose.  Rather, they must abide by court orders and the Rules of Court.

[23]        Though the parties’ conduct regarding financial disclosure has substantially increased their cost of dealing with child support issues, as it turns out, on the merits, nothing much turns on their lack of timely, full and frank financial disclosure.  I say this because:

[24]        Starting in August 2017, K.K.(2) will reside primarily with E.S.K. so, going forward, I must determine the anticipated income of both parents in order to determine how much child support each should pay the other once the change occurs.  Looking backward, I must also determine whether to adjust an interim child support order made by Judge Cleaveley on June 15, 2016 which required E.S.K. to pay T.D.C. child support of $1,478 per month starting on July 15, 2016 based on an annual income of $100,000.  Judge Cleaveley specifically left open a review of child support after November 1, 2016, presumably because E.S.K.’s employment and earnings were in a state of flux and because E.S.K. had not provided his 2015 Income Tax Return (ITR) to T.D.C. when the interim order was made.

[25]        On a go forward basis, I accept E.S.K.’s testimony that he works as an electrician in Fort McMurray on a six days on, six days off rotation, 12 hours a day at $58/hour with any overtime largely offset by requested days off.  I have verified E.S.K.’s calculation that this will translate to a gross annual employment income of $128,000.

[26]        In order to earn this income, I accept E.S.K.’s testimony, supported by various documents, that he has a number of deductible expenses.  On an annual basis, I accept E.S.K.’s testimony that this includes rent of $8,400 and flights of $10,126.  I also accept E.S.K.’s testimony that he has meal expenses of $15 per day while he is in Fort McMurray - but he must eat whether he is in Coldstream or Fort McMurray.  Because E.S.K. prepares his own meals in Fort McMurray, I find these expenses to be the same in both locations.  Accordingly, I am unwilling to deduct E.S.K.’s claimed meal expenses of $2,760 for purposes of determining his income for child support purposes.  Based on all of the above, I find E.S.K.’s 2017 income for child support purposes to be $128,000, less $8,400, less $10,126 to equal $109,474.  This translates into a child support payment to T.D.C. for two children in the month of July 2017 in the amount of $1,598.  Commencing August 2017, this translates into child support payments to T.D.C. for one child in the amount of $998 per month.

[27]        Regarding T.D.C.’S obligation to pay child support to E.S.K. for one child commencing in August 2017, I find there is none.  I accept T.D.C.’S testimony that her earnings from her home based sewing business are negligible, that she is fully engaged in her part time studies to become a paramedic and that she will not be qualified to work as a paramedic until the spring of 2018 at the earliest.  She will also remain a full time parent to K.K.(1) and G.  Further, T.D.C. has recently separated from her current husband and is struggling to deal with issues arising from the breakdown of that relationship, particularly financial issues.

[28]        E.S.K. submits that I ought to impute an annual income to T.D.C. of $30,000 per year based on full time work at $15 per hour.  Respectfully, it is completely unrealistic to expect T.D.C. to add full time work to her already heavy load of responsibilities.  At best, it would take her some time to line up day care and find part-time work, perhaps starting in the fall when things have settled with her separation and when G. starts Kindergarten.  While it is possible that T.D.C.’s current husband will have to pay for G.’s day care or that T.D.C. could find subsidized day care, it is not clear to me that appropriate work with suitable hours will be readily available to T.D.C. or that it would make financial sense for her to take such employment.  It is also unknown at this stage whether T.D.C. will receive spousal support from her current husband and, if she does, when that will start and in what amounts.

[29]        In the circumstances, I am not prepared to impute any income to T.D.C.  It would be appropriate, however, to require T.D.C. to immediately inform E.S.K. regarding any agreement or order made for spousal support to be received by her and/or any employment she obtains, including the amount, frequency and duration of the spousal support and the name of any employer as well as her position, rate of pay and benefits.  Subject to any potential claim for undue hardship, based on this information, I would expect T.D.C. to voluntarily agree to pay E.S.K. child support for K.K.(2) according to the Guidelines which could then be used to offset E.S.K.’s child support payments to T.D.C.

[30]        The most difficult issue is T.D.C.’s claim for retroactive child support back to the effective date of Judge Cleaveley’s interim child support order, namely back to July 1, 2016.

[31]        First of all, given that Judge Cleaveley’s June 15, 2016 order was an interim order and that it specifically contemplated a review of child support, I do not consider the circumstances to be governed by D.B.S. v. S.R.G., 2006 SCC 37.  I consider myself free to make an appropriate order now that E.S.K.’s 2015 and 2016 incomes can be determined.

[32]        Though E.S.K. has breached the Rules and a number of orders by failing to disclose his 2015 ITR, including all attachments, he has filed his 2015 Notice of Assessment.  E.S.K. has also failed to disclose his 2016 ITR but he has filed various tax slips for that year.  

[33]        I am seriously troubled by E.S.K.’s lack of full, frank and timely financial disclosure of his 2015 ITR.  E.S.K.’s 2015 Notice of Assessment reveals that his total line 150 income that year was $155,988 with deductions from total income of $44,916.  E.S.K. acknowledges that the deductions from his income were not employment expenses and I accept that the deductions were mainly or entirely related to RRSP contributions.  Such contributions resulted in a significant tax savings for E.S.K. in what appears to have been a very high income year.  I can also accept that these contributions were made, at least in part, in contemplation of E.S.K. taking advantage of Canada’s Home Buyer’s Plan which allows eligible participants to withdraw up to $25,000 from their RRSP for purposes of purchasing a first home - which E.S.K. appears to have done in 2016.  According to publicly available information on the Canada Revenue Agency website, the money can be withdrawn without becoming income provided the amount withdrawn is repaid to the person’s RRSP in specified minimum annual amounts within 15 years.

[34]        What I struggle with is E.S.K.’s explanation that his income in 2015 was so high because he cashed in some RRSPs.  This is inconsistent with and would negate the benefit of his substantial contribution to his RRSP in the same year.  Further, E.S.K. has simply not been transparent regarding his earnings in 2015.

[35]        In the circumstances, E.S.K.’s lack of transparency has left me in the unfortunate situation of having to reject his testimony that the reason he has never provided his 2015 ITR, despite a number of clear orders that he do so, is because he did not understand the difference between an ITR and a Notice of Assessment.  E.S.K. is a very bright man and the difference is not hard to understand.  By E.S.K.’s actions, I am forced to conclude that the reason he has never disclosed his 2015 ITR is because he did not want T.D.C. or the court to have the information.  In all the circumstances, I find that E.S.K.’s 2015 income for child support purposes was $155,988 and should not be discounted on account of E.S.K. having cashed in RRSPs.

[36]        Turning to 2016, I accept E.S.K.’s explanation that he has not disclosed his 2016 ITR because he has not yet filed it and that his 2016 income can be determined from the tax slips he has provided.  I reach these conclusions based on the nature and amount of income E.S.K. earned from various sources in 2016.  Specifically, I accept that, in 2016, E.S.K. earned:

[37]        I also accept that E.S.K. earned his employment income from Gladiator in the last three months of 2016 and incurred one-quarter of the deductible annual expenses he has identified in order to earn this income.  I must, therefore, deduct one quarter of a year’s worth of rent ($8,400) and flights ($10,126) which totals $4,631.50.

[38]        Adding together all of E.S.K.’s 2016 income and reducing this number by his deductible expenses, I find that E.S.K.’s 2016 income for child support purposes to be $103,402.26.

[39]        Having made income findings, the next question is what to do with those findings.  

[40]        E.S.K. submits that there is no need to make any retroactive adjustments to his child support obligations.  He submits that Judge Cleaveley’s order properly reflected a material change in his financial situation precipitated by the recent decline in world oil prices.

[41]        T.D.C., on the other hand, submits that E.S.K. ought to pay child support based on the usual annual adjustments that ought to have been made each summer based on E.S.K.’s previous year’s income.  This would result in child support payments based on E.S.K.’s 2015 income of $155,988 commencing July 1, 2016.  T.D.C. submits that this should continue until E.S.K. provides a copy of his 2016 ITR.

[42]        When a payor’s income is steady or steadily increasing, annual adjustments of child support work well.  Annual adjustments of child support do not work as well when there are sudden increases or decreases to a payor’s income.  If there is a sudden decrease, payors generally rush into court relying on the material change in their circumstances to obtain a reduction in child support.  If a reduction in child support is granted, the child at issue does not receive the benefit of a full year’s child support at the payor’s previous higher annual income.  This would be fine if payors equally rushed into court seeking to increase their child support payments as soon as they experienced a sudden increase in income - but, as is evident from E.S.K.’s own conduct in 2015, this generally does not happen.

[43]        In this case, if I accept E.S.K.’s submission, he will escape having to ever pay child support based on his exceptional earnings of $155,988 in 2015, which, in my view, would clearly be unfair to his children.  On the other hand, if I accept T.D.C.’s submission, no recognition would be given to E.S.K.’s significant change in circumstances due to economic forces beyond his control.

[44]        Unlike Judge Cleaveley, I have the benefit of more complete financial information and the comfort of knowing that E.S.K.’s financial situation has stabilized.  Given that the parties’ agreement in 2012 that child support be based on an income of $125,000 worked well, on average, from 2012 to June 2016 and that it would continue to reflect a rough average of E.S.K.’s income through to the present, a proper outcome in all of the circumstances would be to simply set aside Judge Cleaveley’s interim child support order made June 15, 2016.  Doing so will restore E.S.K.’s obligation to pay child support to T.D.C. in the amount of $1,798 per month from July 1, 2016 to the present based on an annual income of $125,000.  This roughly reflects E.S.K.’s average earnings since 2012 and more specifically in 2015 and 2016, ensures that K.K.(1) and K.K.(2) benefit from E.S.K.’s very high income in 2015 and takes into account E.S.K.’s sudden change in income last year.

[45]        I appreciate that my order will result in E.S.K. having “instantly” accumulated arrears.  I expect the parties will be able to agree on the amount of arrears owing and a reasonable monthly amount for E.S.K. to retire these arrears expeditiously.  If not, the parties may return to me so that I may set the amount of arrears and a payment schedule.

[46]        To summarize, I make the following final orders:

[47]        In the hopes of reducing future conflict and ensuring that both K.K.(1) and K.K.(2) receive the appropriate financial support of their parents in the future, I also make the following order:

[48]        Regrettably, given the parties’ history of breaching financial disclosure orders, I must remind them of the importance of complying strictly with the disclosure orders I have made.  Any failure to do so could result in financial penalties.

[49]        I extend my sincere best wishes to K.K.(1) and K.K.(2).  I hope that K.K.(2)’s relocation to Coldstream is all that he is hoping for.