IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Streeper v. Streeper,

 

2017 BCSC 1093

Date: 20170531

Docket: 3825

Registry: Fort Nelson

Between:

John Wilkinson Streeper

Claimant

And

Krista May Streeper

Respondent

Before: The Honourable Madam Justice Church

Oral Reasons for Judgment

In Chambers

Counsel for the Claimant appearing by teleconference:

N.R. Bauder

Respondent appearing on her own behalf by teleconference:

K.M. Streeper (Burrows)

Place and Date of Hearing:

Prince George, B.C.

May 29, 2017

Place and Date of Judgment:

Fort Nelson, B.C.

May 31, 2017


 

[1]             THE COURT:  The applicant, John Streeper, applies, pursuant to s. 17 of the Divorce Act, to vary his child support obligations, as set out in an order of this court, dated September 26, 2012.  He submits that there has been a change in circumstances that would result in a different child support order.

[2]             Mr. Streeper says that there has been a significant reduction in his Guideline income, as a result, firstly, of the sale of his business, which was the source of his income at the time of the 2012 order, and secondly, as a result of being laid off from his employment, from ATK Oilfield Ltd., in November 2015.  The onus is on Mr. Streeper to establish a change of circumstances since the making of the order of September 26, 2012.

[3]             The key evidence of Mr. Streeper is set out in his affidavit filed April 25, 2017.  At the time of the September 2012 consent order, Mr. Streeper was employed by his company, Streeper and Sons Trucking Ltd., and his income was $130,000 per annum.  The parties consented to an order that Mr. Streeper would pay Ms. Burrows (formerly Streeper) $2,500 a month, which would include $1,860 of child support for the couple's two children, and $640 for special and extraordinary expenses.  The order also settled all outstanding property issues between the parties, and the property settlement resulted in the respondent, Ms. Burrows, receiving a cash payment of $140,000 in full and final settlement of her property and spousal support claims, and Mr. Streeper  retaining the company and other assets.

[4]             At the time, Mr. Streeper was also obligated to pay child support of $2,200 per month for his two children from a prior marriage pursuant to an order dated January 10, 2007.

[5]             In November 2014 Mr. Streeper sold the company, Streeper and Sons Trucking Ltd., to ATK Oilfield Ltd. and became a salaried employee of ATK Oilfield Ltd.  He earned $14,000 per month gross for the first three months, and then his monthly income reduced to $12,600 after that.  Due to the downturn in the oil and gas sector, Mr. Streeper was laid off by ATK Oilfield Ltd. on November 4, 2015.  After he was laid off Mr. Streeper started a new company, JWS Logistics Ltd., and he is a director and 50 percent shareholder of that company.  He is the sole employee, and the company provides trucking services on contract. primarily to three companies in the oil and gas sector.  The work has been sporadic, due to the enormous slowdown in that sector, and Mr. Streeper's income is somewhat uncertain.

[6]             His 2016 income tax return shows only dividend income, investment income, and RRSP income.  He estimates that his Guideline income in 2017 will be approximately $50,000, but that is only an estimate. 

[7]             To Mr. Streeper's credit, he has been able to continue to pay his child support obligations under both orders, and there are no arrears owing with respect to either order.  Mr. Streeper is also applying to vary the earlier child support order in the other proceeding on the same grounds.

[8]             While there is no evidence about the sale price for the company, I note that Mr. Streeper's affidavit material indicates that he invested the majority of the sale proceeds in ATK Oilfield Ltd., by the issuance of shares in that company to him.  He notes at paragraph 16 that ATK Oilfield Ltd is now in receivership and the share value has since reduced from $2.25 per share to almost zero per share, due to the receivership.

[9]             Ms. Burrows is opposed to the order sought.  She is skeptical about Mr. Streeper's submission that his income has decreased to that extent, and she is concerned that her daycare costs in Fort Nelson are significant.  She submits that she has care of the couple's children “100 percent of the time”, and she relies on the agreement that she had with Mr. Streeper in 2012.  Ms. Burrows has not filed a financial statement in response to this notice of application.  She has not denied the assertion by Mr. Streeper that she earns at least $40,000 per annum, but says simply that she works part-time for Northern Rockies Regional Recreation.

[10]         Madam Justice Martinson noted in the case of Hanson v. Hanson, [1999] BCJ 2532, that:

Parents have a joint and ongoing legal obligation to support their children.  In order to meet this legal obligation, a parent must earn what the parent is capable of earning.  Section 26.1(2) of the Divorce Act says that the Guidelines "shall be based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation."

She went on to note that:

. . . the court must consider not only the amount of income a spouse actually earns, but [also] "the amount of income a spouse could earn if working to capacity."

[11]         There is no question that an increase in income that would increase a payor parent's child support amount is a material change in circumstances.  So too is a decrease in income, provided that the payor is not under employed and the reduction of income is not self-induced.

[12]         The evidence before me does not suggest that Mr. Streeper is intentionally under employed.  It appears that his layoff by ATK Oilfield Ltd. was not something that he voluntarily undertook, and the letter of termination suggests that it was directly related to what was occurring in the oil and gas sector.  Mr. Streeper appears to have made efforts to start again to build another business that I imagine he hopes will be as remunerative as his previous trucking business.  That appears to be consistent with his abilities and his capacity to earn income.  The financial statements of JWS Logistics Ltd. for 2016, which are attached to his filed financial statement, show gross revenue of $81,485, and direct costs of $17,931, leaving a gross margin of $63,554.  Counsel for Mr. Streeper submits that imputing a Guideline income to Mr. Streeper of $50,000 would be a reasonable estimation of the money available to Mr. Streeper to pay child support, rather than the net earnings from the operation as set out in the company's financial statements, which is only $11,194.

[13]         As I have already noted, Mr. Streeper has continued to pay his child support, as required under both this order and the earlier order, despite his layoff in November 2015, and a significant reduction in his income, and there are no arrears of child support owing with respect to either order. 

[14]         Despite Ms. Burrows' skepticism, I accept the evidence of Mr. Streeper that his income has been significantly reduced since November 4, 2015 and that constitutes a material change in circumstance since the September 2012 order was granted.  His layoff by ATK Oilfield Ltd. was not anticipated and was directly related to the downturn in the oil and gas sector.  Mr. Streeper has responded by starting another business but the impact of the downturn on his industry continues to be felt and his income is not yet back to its former level.

[15]         In the meantime, he has continued to pay child support in accordance with the orders, but he clearly cannot continue to do so.  I agree with the submission of counsel for Mr. Streeper that $50,000 represents a reasonable estimation of his current income based on the 2016 financial statements.  The financial statements of JWS logistics Ltd. are consistent with this estimate.

[16]         I note that Mr. Streeper's personal expenses are modest and consistent with his income level, with the exception of his child support obligations.  I note that Mr. Streeper has two significant lines of credit for which he is liable, which I would expect if his income has been insufficient to meet his child support obligations.

[17]         The September 2012 order, to which the parties consented, included an amount for base child support, and an additional amount of $640 per month for special and extraordinary expenses whether or not they were incurred by the respondent.  The parties' Guideline incomes in that order were noted to be $130,000 and zero dollars respectively and so the additional amount was paid entirely by Mr. Streeper.

[18]         Counsel for Mr. Streeper submits that the order should be varied to provide that Mr. Streeper pay the respondent base child support for two children in the amount of $758 per month and that Mr. Streeper pay special and extraordinary expenses in accordance with the Child Support Guidelines, that is, in proportion to the parties respective incomes provided that Ms. Burrows provide Mr. Streeper with receipts for those expenses.  In other words, Mr. Streeper would only pay those special and extraordinary expenses actually incurred by Ms. Burrows.

[19]         While I accept that Mr. Streeper's reduction in income is a material change in circumstances which would result in a different amount of child support under the tables, this variation proposed by counsel for Mr. Streeper would fundamentally change the way the parties agree to address special and extraordinary expenses, and I am not satisfied on the evidence before me that this is appropriate.  There is no evidence before me regarding the nature or amount of the special or extraordinary expenses of the respondent although she did provide, at my request, brief submissions regarding her estimate of daycare expenses.

[20]         I cannot determine from the affidavit material how the parties determined the amount in the September 2012 order and what was included in that amount, and why they agreed that the amount was payable, regardless of whether the expense was incurred.  Without further evidence in this regard, I have concluded that Mr. Streeper's change in circumstances warrants only a variation in the proportion of the additional amount of $640 per month payable by him, rather than a wholesale change in how the parties deal with these expenses.

[21]         As I have already noted, I am satisfied that $50,000 is a reasonable estimation of Mr. Streeper's current Guideline income, and I therefore impute that income to him.  There is no financial statement of the respondent, and although I initially thought that her income was not relevant to the calculation of child support, it is clear that it is relevant to the issue of sharing special and extraordinary expenses.  The claimant alleges that the respondent's income is at least $40,000 per year, and that is not denied or disputed by Ms. Burrows.  The only reference in her affidavit material to her employment confirms that she works part-time for Northern Rockies Recreation.   Based on the limited evidence before me, I therefore impute an income of $40,000 to Ms. Burrows.  Using those incomes, Mr. Streeper would be responsible for fifty-five percent of the additional amount of $640, which is $352.

[22]         Given the current uncertainty regarding Mr. Streeper's income, I am also going to order specific financial disclosure each year, to ensure that Ms. Burrows is fully aware of any changes in Mr. Streeper's income that might impact his child support obligations. 

[23]         I will therefore make the following orders.

[24]         I find that the claimant has an imputed income of $50,000, and the respondent has an imputed income of $40,000. 

[25]         Paragraph 1 of the order of September 26, 2012, is varied to provide that the claimant shall pay to the respondent child support in the amount of $1,110 per month, commencing June 1, 2017.  This child support consists of $758 of base support and $352 (55% of $640) as contribution towards special or extraordinary expenses.

[26]         By May 1st of each year, commencing in 2018 and for so long as the children are children of the marriage under the Divorce Act, the claimant will provide to the respondent a copy of his T1 general tax return, and a copy of the financial statements for any corporation in which he has a controlling interest, or holds a fifty percent or greater interest.

“The Honourable Madam Justice Church”