Hard-Luck Case Leads to Cancellation of Child Support Arrears

DSC01152_2 (2)_2There’s a saying “If it wasn’t for bad luck, I’d have no luck at all”, a sentiment that the litigants in K.S. v. M.B. 2017 BCSC 2390 should heartily embrace.

The parties lived together for 9 years and had a daughter born in 1986. They separated two years later with mother having custody of their child and father paying regular child support. In 2004 a court found their daughter was no longer eligible for child support as she was living independently and working in the sex trade.

In 2010 another judge of the court heard evidence from the parties and made an order that the father owed arrears of child support of $18,543 for the period between May of 1991 and April of 2003. However, the order was not entered until January 2017 and the mother made no efforts to collect the child support monies she was owed.

Tragically in 2014 their daughter, who had been living in California, was found murdered in New Orleans.

The father, who graduated from high school in 1976, began working as a long-haul truck driver, however, in 1990 he fell off the truck roof, a fall that damaged rods in his back placed there in 1974 to treat his scoliosis. He was in a full body cast for a year as a result.

The nineties were not good times for the father. Between 1992 and 1995 he was involved in criminal law proceedings and was convicted for criminal negligence causing death, He served one year of a three-year sentence. Trying to work his way back to productivity he obtained a diploma in computer networking and telecommunications and found work as a computer technician, until his employer went bankrupt.

He went back to truck driving but injured himself on the job and broke three ribs, an injury that compromised his already damaged spine. While recovering he was diagnosed with two different types of cancer and was on chemotherapy from 2013 to 2016. He welcomed the remission, but was unable to be gainfully employed as he could not stand for long periods of time and even walking was difficult. He was also diagnosed with rheumatoid arthritis in his lower back and hands.

The issue before the court was whether is would be “grossly unfair” to cancel the arrears of child support arising from the 2010 order. At the time of the hearing he was 59 years old and surviving on a pension of $1,600 per month, which would terminate at age 65.

On the other side, the recipient parent was also living on a disability pension which was to end in November 2017, following which she would have only her Canada Pension Plan and Old Age Security benefits. She had also suffered from bad health and in 2010 had taken legal custody of their daughter’s child. She advised the court that she needed the arrears to support herself and her grandchild.

The court reviewed the legal principles relevant to an application to cancel arrears, noting the following:

1. Arrears will only be cancelled if the person has no present and no future ability to pay;
2. Delay in enforcing an order for arrears is generally not a legal basis to cancel or reduce child support;
3. Arrears will not be cancelled because the children were “taken care of” financially by others;
4. Arrears payments of a large sum will not be considered a windfall to the recipient parent.

The court commented that the death of a child does not automatically cancel arrears of support, however, it is a factor the court may consider to determine if it would be “grossly unfair” not to do. The court also promptly dismissed the mother’s argument that she required the child support arrears to support her grandchild, a submission that very likely hurt the mother’s case.

Taking into account all of the circumstances, Mr. Justice Ball ordered that all arrears, interest and penalties be cancelled and that each party pay their own costs.

Another sad family law case where poverty plays a central role.

Lawdiva aka Georgialee Lang

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No-Show Father Ordered to Pay Over a Half a Million Dollars in Child Support Arrears

GeorgiaLeeLang025In this British Columbia Supreme Court case, the parents of two children separated in 2001 and in 2003 entered into a separation agreement. The agreement stated that the father’s income was $90,000 per year and that he would pay $1,128.00 in monthly child support, together with some additional costs for transportation, as the children lived primarily with their mother on Denman Island. Later, the amount payable was increased to $1,600.00 per month to include the cost of certain extraordinary expenses.

At the time the mother signed the agreement she was not aware that the law provided for a review of child support each year and an adjustment, either upward or downward, depending on any change in the father’s income. The payment of $1,600.00 continued until February 2015 when the father arbitrarily, and without notice, reduced his payment to $800.00 per month, on account of the eldest child attaining the age of 19.

That was his first mistake…As a result of this unilateral action the mother retained counsel who informed her of the children’s rights to receive child support commensurate with their father’s income, as determined on an annual basis. Mother filed an application to vary child support in April of 2016 and in June of 2016 she became aware of the father’s income for 2013, 2014 and 2015, amounts of $477,000; $465,000; and $156,000 respectively.

With respect to the father’s sudden drop in income in 2015, it is noteworthy that by the time he filed his 2015 tax return in 2016 he would have been aware of his ex-wife’s claim for increased child support. Family law lawyers call this phenomenon “RAIDS”: recently acquired income deficit syndrome.

Before filing her application, the mother asked her ex-husband to reinstate the $1,600.00 a month payments, but he ignored her. That was his second mistake.

Later she learned that his income had been as high as $773,000 in 2010; $548,000 in 2011; and $444,000 in 2012. All this time she scrimped and saved what she could of her measly teacher’s aide earnings of $28,470 per annum in an effort to provide the bare minimum for her children, who, contrary to the law, were not receiving the benefit of their father’s increased income levels. Meanwhile, the mother had gone into debt to provide for her children.

Although the father was served personally with the mother’s application and was sent multiple letters advising him of the scheduled court date, he made his third mistake. He was a no-show at the hearing, so the court proceeded in his absence.

The court reviewed the applicable law, which generally provides that a court may go back three years with respect to a retroactive increase in support. However, in the absence of any argument to the contrary, Madam Justice Young found that the father was guilty of “blameworthy conduct”and that a large retroactive support award would not place a financial hardship on him. He was ordered to pay support based on his annual income from 2002 to 2017, an amount that totalled $522,408.24. He was also ordered to pay it immediately and to pay costs to his former spouse.

Would the retroactive order have been significantly different if he had attended the court hearing? That is difficult to ascertain, however, the usual evidence provided by a payor with respect to his conduct and his financial circumstances may have led to a smaller award and could also have given him more time to pay the amount ordered.

Mr. No-Pay…You Can Run, But You Can’t Hide.

GEO#1Family law lawyers now have access to information that can transform a case from an up-hill battle to a slam-dunk, and it’s all thanks to the internet.

Case in point: I have a client whose ex-husband, a venture capitalist, stopped paying his child support about one year ago. Exhibiting the patience of a saint, my client bided her time, hopeful her ex would reinstate his payments and make up the arrears. Didn’t happen.

She then contacted my office and the legal process began. Her ex was obliged to provide the usual financial documents including income tax returns and corporate financial statements. His tax returns showed nominal income and gosh, darn, he said that all of his businesses were insolvent so he hadn’t bothered to have his accountant prepare financial statements.

With a little help from the internet, we learned he was selling his home with an asking price of just over $900,000.00. After the usual land title searches, we found out he had already purchased a new home in another community. He said he was downsizing. He paid about $850,000.00 for his new home. It was a lovely estate property, larger than his last home, in a less expensive rural area.

Next stop was his Linkedin page and from there we simply googled his name and the names of his corporations. Here’s what we found.

Earlier that year, he made an offer of $25 million to purchase a golf course/housing development project that was very close to his new home and in financial trouble. Press releases abounded announcing the pending acquisition and his superior business acumen.

Several years earlier he had been a finalist for an entrepreneur of the year award. He was on the Board of his local Chamber of Commerce and associated with at least two consulting firms touting his business expertise. His allegations of insolvency were not born out. His only business debt was related to a wine store he operated. He was paying $1000.00 per month to pay down the $40,000.00 debt, $1000.00 more than he was paying for his two kids!

With this information and his feeble explanations, he no longer looked as broke as he said he was. My client got her happy ending when a judge ordered Mr. No-Pay to pay up asap!

It’s not always this easy, but his “high profile” doomed any chance of a judge buying what he was selling. And don’t get me started on the gems you can find on Facebook!

You can run, but you can’t hide from the internet!

A Clever Way to Collect Child Support

GEO#1Getting an order for child support is the first step and thankfully, for many children, also the last. Unfortunately, there are too many cases where a child support order is not worth the paper it’s written on because the paying parent refuses to pay despite the existence of a court order.

How do they get away with it? They move away and hide, they work under the table, they feign illness and swear they are unable to work, they retire prematurely, they commence custody proceedings in an attempt to have primary residence of their children, thus avoiding the payment of child support, and on and on.

Collecting child support from a scoundrel parent can be a futile exercise, one where time, emotion, and most of all, money is thrown away trying to obtain “blood from a stone”.

However, Beth Ann Holderman from Pennsylvania found a novel way to pursue the father of her child who had not paid one cent and owed $42,803 in child support arrears. She hired bounty hunter Scott Bernstein to lure Joshua Garlathy to leave his home in Maui and return to Pennsylvania so she could get him before a judge.

What trap did Bernstein set? He convinced Garlathy that he was up for a role in a movie starring Jennifer Aniston, that was filming in Pennsylvania. A plane ticket was sent to him and when he arrived at the airport, Mr. Bernstein had a film crew on hand who videotaped his arrival and arrest for a reality TV show about parents who refuse to pay child support.

Mr. Garlathy defended himself calling the Pennsylvania court system unfair and insisting that he survived on disability payments and food stamps as he suffered from arthritis, psoriasis and depression. He said he had $80 in his bank account and his only assets were a guitar and a saxophone. He refused to admit that he was working as a musician in Maui, asserting that he only played at open mike nights and received no income.

Suggesting that perhaps Mr. Garlathy lacked talent, Judge Kelly Banach found Mr. Garlathy in contempt of court for his failure to pay support and sentenced him to six months in county prison with a work release so that he could earn money in prison to pay the support owed. The judge also ordered Garlathy’s release from prison once he had paid of a minimum of $10,000. Criminal charges are pending against him as well.

For Mr. Garlathy to have fallen for this ploy he must have a tremendous ego. Imagine starring in a film with one of the highest paid actresses in Hollywood.

Lawdiva aka Georgialee Lang