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MAINTENANCE AND SUPPORT - Child support - Calculation or attribution of income

Monday, March 30, 2020 @ 9:28 AM  

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Appeal by the husband from a decision varying a 2015 child support order taking into account changes in the parties’ incomes. The parties had a shared parenting regime. Pursuant to the 2015 order, the husband was to pay $469 per month in child support for two children. In 2018, the wife sought a recalculation of the 2015, 2016 and 2017 child support obligations. The two controversial issues with respect to income were the husband’s investment in a rental property and the wife’s withdrawal of funds from an RRSP. The judge ignored the profits and losses from the rental property for the purposes of assessing the husband’s Guideline income for support from 2016 to 2018. She considered that the property was an investment property, and that any losses in respect of it were part of that investment. The judge accepted the wife’s claim that the withdrawal from her RRSP in 2016 was for the purpose of paying off legal expenses that should not be included in income for child support purposes. The judge thus did not include either the rental property profits and losses or the RRSP withdrawal in her income calculations and concluded that the husband owed $4,851 in child support from 2016 to 2018 and ordered the husband to pay a set-off amount of $261 per month going forward. The judge declined to make the order requested by the husband that the parties exchange cheques every month to enable the husband to claim a tax credit, finding that the absence of any ability on the part of the parties to act co-operatively militated against such an arrangement.

HELD: Appeal allowed in part. The order was clarified to avoid any duplication of payment of the arrears. The judge did not grant any indulgences to the self-represented wife that made the hearing unfair to the represented husband. The judge’s questions elicited factual assertions from the wife, some of which were not included in the affidavit evidence but were relevant to the proceedings. The judge gave no weight to the wife’s unsworn allegations, presumably on the basis that they were not properly in evidence. Given that most of the allegations were of marginal relevance to matters in issue, that was an entirely proper course for the judge to follow. The judge did not err in considering the rental property to be a real estate investment by the husband and in treating it entirely separately from the husband’s income. The judge’s view that expenditures for the property in 2017 after it was no longer rented were capital expenditures was a reasonable one. While she was led to believe that the property was sold in 2018, the fact that it was not did not make her determination unfair. It was not improper for the judge to rely on the wife’s statement that the RRSP money withdrawn in 2016 was used to pay off a debt and to treat that statement as evidence. Given the circumstances of this case, including the relatively modest sum of the arrears, a retroactive award was justifiable. The judge provided a cogent reason for refusing to alter the existing payment arrangements as sought by the husband to exchange cheques so that they could deduct the spousal equivalent and save taxes. The trial judge was not compelled to impose artificial arrangements in order to assist parties in their tax planning. The proposed tax saving was also speculative.

Brown v. Brown, [2020] B.C.J. No. 184, British Columbia Court of Appeal, M.V. Newbury, H. Groberman and P. Abrioux JJ.A., February 13, 2020. Digest No. TLD-March302020002