Weaver v. Cahill, 2011 ABQB 121

Court of Queen ’ s Bench of Alberta Citation: Weaver v. Cahill, 2011 ABQB 121 Date: 20110302 Docket: 4803 129929 Registry: Edmonton Between: Nancy Ella Weaver Applicant - and - Eugene Ronan Cahill Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _______________________________________________________ [ 1 ] These parties married in June 1993, and separated in 2003.

There are two children of the marriage, presently 10½ and 8½ years of age. [ 2 ] After a five day trial, a Divorce Judgment was granted on August 15, 2005 in this Court which also ordered Dr. Weaver to pay child support to Mr. Cahill in the sum of $2,000 per month for the children of the marriage commencing January 1, 2005. This Court ordered child support was based on Dr. Weaver’s Guideline income being set at $175,000 per year, and Mr. Cahill’s Guideline income being set at $75,000 per year. Written Reasons now reported at 2005 ABQB 618 dated August 15, 2005 were issued after the five day trial.

[ 3 ] Dr. Weaver submits that her financial situation has changed considerably over the five and half years since the 2005 Court Order, and in particular has deteriorated significantly recently. At the time of the marriage the husband was studying Physiotherapy at the University of Alberta, and the wife had graduated from the Orthodontic Program, and was practising as an orthodontist. [ 4 ] Dr. Weaver is now seeking an Order from this Court to declare her annual income at $109,342 per annum, and to adjust child support payments effective August 1, 2010 to $419. Mr.

Cahill is seeking an Order from this Court to impute an annual income to Dr. Weaver for 2007 through 2011 of $275,000 per annum, and retroactive child support to January 1, 2007. [ 5 ] Dr. Weaver has been a Dentist since 1989, and an Orthodontist since 1993. Mr. Cahill deposes that in 1989 during her first year as a dentist, Dr. Weaver earned over $100,000. Prior to the separation which occurred in this matter in 2003, Mr. Cahill says that Dr. Weaver was earning an average income of $10,000 per day. He believes that Dr.

Weaver has reduced the amount of hours she works drastically, and that she takes a great deal of time off from her practice on a regular basis. [ 6 ] Dr. Weaver indicates that she is presently in the process of winding up her orthodontic practice as of the end of June 2011 because it is uneconomical, and that she no longer wishes to be an orthodontist. She plans to do unskilled labour after June 30, 2011 and believes that her hourly wage will be approximately $15. She submits that her Guideline income should be again revisited in July 2011. [ 7 ] Dr.

Weaver’s present financial disclosure filed on December 30, 2010 shows the following income for the years 2007, 2008 and 2009: – 2007: Line 150 of her Income Tax and Benefit Return: $196,950.03 Net earnings for the year on Statement of Earnings: 76,535.00 Total: $273,485.03 2008: Line 150 of her Income Tax and Benefit Return: $300,832.79 Net earnings for the year on Statement of Earnings: ( 12,407.00 ) Total: $288,425.79 2009: Line 150 of her Income Tax and Benefit Return: $109,324.60 Net earnings for the year on Statement of Earnings: 2,321.00 Total: $111,663.60 [ 8 ] Dr.

Weaver’s Line 150 income does not include the retained earnings at the beginning of each year in her Professional Corporation which are as follows:– 2006: $361,893

2007: $417,000 2008: $442,535 2009: $332,128. [ 9 ] Dr. Weaver’s December 30, 2010 Affidavit also shows that her gross income from her orthodontic practice was as follows:– 2006: $861,956 2007: $671,690 2008: $706,071 2009: $584,219. [ 10 ] The husband submits that the wife is now attempting to reduce her income to virtually nothing by closing her orthodontic office in order to avoid the payment of child support. He argues that for the past eight years that wife has made every effort to have shared custody and thus have child support changed.

He deposes that the wife has made multiple Court applications over the last eight years costing tens of thousands of dollars, as well as spending tens of thousands of dollars on private investigators to follow him, all in the hope of gaining shared custody. [ 11 ] Since the divorce was granted, the husband deposes that he never asked the wife for her share of

Section 7 expenses that he incurred for the children even though the wife’s income had always been more then the $175,000 set at trial in 2005, and even though it took him approximately four years in order to increase his income as a physiotherapist to the approximate sum of $75,000 per year. [ 12 ] The husband also deposes that given his work in the medical field as a physiotherapist, and through friends in the dental profession, he knows that an orthodontist is capable of earning a minimum of $500,000 a year, especially when one considers that a set of braces costs approximately $10,000. [ 13 ] The wife responds that the average set of braces costs more in the approximate range of $6,500 to $7,000, and that whatever the typical orthodontist is capable of earning, her situation is remarkably and materially different. [ 14 ] While acknowledging the past revenue and earnings described above, the wife insists that there is absolutely no money in the Professional Corporation bank account irrespective of what her Financial Statements may show as retained earnings.

The wife further points to a letter dated January 22, 2010 provided as part of her Affidavit from a senior account manager at CIBC which lists a number of concerns about the way her personal finances and the finances of the Professional Corporation are operating.

The CIBC letter suggests that these concerns need to be addressed immediately and no later then February 15, 2010, or the bank will consider it’s position to be in jeopardy. [ 15 ] In addition to the fact that there has been income reduction and deterioration laterally, and that there will be a significant income reduction or a total elimination of income related to her upcoming occupation change on July 1, 2011, the wife also points out that her Professional Corporation is facing termination payments to patients and other expenses as a result of the pending closing of her orthodontic practice.

She may have to also engage in a fire sale with respect to her office and dental equipment notwithstanding having been self-employed for the past 21 years. [ 16 ] Dr. Weaver details some of the reasons for her financial difficulties, and support for her position in her Reply Affidavit sworn on February 7, 2011 as follows at paragraphs 3 through 9:– 3. Referring to my affidavit of December 30, 2010, Exhibit “B”, “Reasons for Judgment of the Honourable Mr. Justice Gerald A.

Verville”, Page: 8 [34], contrary to Ronan Cahill’s affidavit of February 2 nd , 2011, a straight set-off of guideline incomes would have resulted in monthly child support payments of $1167. The child support payments of $2000 are $833 in excess of the 2005 guidelines.

4. Referring to my affidavit of December 30, 2010, Exhibit “L”, Line 150 for the years 2006, 2007, 2008 and 2009 may have been inflated by RRSP and insurance withdrawals. This money was used to help support the practice and to continue residence at a house that seemed to have some emotional importance for my daughter. If the respondent is using “Net earnings for the year on Statement of Earnings” to illustrate personal access to business assets, the reduction in these values over the years indicate that such access is extremely limited. 5.

Given the trend to diminishing gross incomes, I am very concerned about imputing an income of $275,000 for 2009, 2010, and 2011. Referring to my affidavit of December 30, 2010, Exhibit “C”, CIBC’s Mr. Moe Rawji calculated total income available at May 2009 as $114,490. My accountant has requested refinancing disbursement information before finalizing the 2010 year-end.

Attached and marked collectively as Exhibit “A” to this my Affidavit are the following: Newwest Enterprise Property Group 2011 Monthly Rental Advice Notice, indicating monthly rent of $5560.57; January 5/11 letter from Crosby Property Management Ltd confirming lease termination July 31/11; Ceridian Funds

Summary period ending 110131 indicating payroll cost $13,173.82 for the month of January 2011; my pay stub January 2011 which indicates my income that month (relative to total payroll cost); Daily Totals Report for January 2011 indicating Total Daily Receipts $24,717.52; the contract used at my clinic to structure orthodontic fees. The average cost of full braces at my clinic is currently approximately $6500 to $7000. I have suspended taking new patients and am giving others the option of starting elsewhere if they don’t want interruption in treatment provider July 31/11.

I am in the process of suspending payments for patients at risk of overpaying by June 30/11. This is going to reduce the monthly receipts. At this time, I estimate that I may need to be prepared to reimburse approximately 88 patients between $83887 and $106637 in contract fees by July 31/11. There are various reasons why the proportion of treatment paid for can exceed the proportion of treatment completed. Research shows that orthodontic treatment typically is in excess of 24 months. Orthodontic contracts are typically 24 months or less, to reduce risk to the orthodontist of having to deal with bad debt.

Patients who pay, but don’t attend, don’t make treatment progress. I still incur overhead costs for those who don’t give sufficient notice or just don’t show up. Some patients pre-pay contracts in part or full. I am ethically bound to provide overtime work. Although the contract suggests that I can terminate my obligation to patients at any time, I think there is risk that patients would take action in small claims court if they foresaw having to duplicate orthodontic costs to complete treatment.

The gross income for 2011 will be less than $150,000 (less than $25,000/month due to suspended examinations, reduced treatment starts, and suspension of payment where there is risk of overpayment; times 6 months from January to June). The total rent excluding the annual operating cost reconciliation and other landlord expenses will be more than $38923.99. Pending variation in child support, the total payroll may exceed $92216.74. This leaves 18859.27 to cover telephone, supplies, bank, accounting, insurance, which will likely be insufficient.

Further residential downsizing or liquidation of assets is likely to be necessary to cover the estimated $83887 to $106637 in contract fee refunds. The gross income, assets, and obligations of the professional corporation currently disallow the respondent’s demands. The respondent’s demands are more likely to jeopardize the children’s well being than to enhance it. I will find myself in the awkward position of having to choose between violating court-ordered exorbitant child support or compromising funds available for patients or government agencies to pay for completion of treatment. 6.

As a first year dentist, I worked 8 hours/day 6 days/week often, in an extended-hours mall practice. As a new orthodontist, I took over a 1-day/week practice and worked 1 day/week at the university and donated most of my university earnings back to the university. It was difficult to make mortgage payments. My patient base gradually expanded. Around 1997, I gave up the university position and worked at two clinics, extended hours, 5 or 6 days/week, 9 to 12 hours/day. I reduced hours as I wound down the first clinical obligation.

I reduced hours to approximately 24/week since having children, and have increased that slightly more recently. I try to work 4 days/week, 6 or more clinical hours/day, depending on whether I am responsible for children that week and what their days off school are. I save financial records for about 6 years. The contracts and impending contracts of my 6 days/week

schedule may have carried forward a little after my first child was born in mid-2000. 7. It is not my goal to avoid paying child support. Past affidavits and exhibits indicate child protection concerns which have been stressors and which have led to allocation of time and resources which might have been devoted to other tasks, including the orthodontic practice.

Two of my following actions have had a negative impact on current practice finances: increased leased premises space and therefore cost, when patient volumes were higher; decreased hours of work and therefore income about 4 months after my first child was born. The decisions to increase space and reduce hours were both made when practice financial performance wasn’t worrisome. My clinical days per week and hours per day are not unusual for orthodontic practice. Practice income may have been favourably affected by extended hours (evening, weekend). Most orthodontists do not really extend hours.

Extended hours were difficult to staff and staff seemed to expect better wages in return even though our fees weren’t higher than average. In response to practice financial constraints, I have increased my clinical hours slightly, increased my non- clinical hours, and reduced expenses, but practice financial security remains a concern. I have never pressured the respondent to work differently or work more so that he could contribute more to child support. My proportion of leisure to working time is not irresponsible. 8. Because

section 7 expenses have never been contentious, I have not calculated the magnitude of excess that I have paid over the years.

9. The average cost of braces at my practice is $6500 to $7000. I was capable of earning more than I do. However, basing child support on past and comparative capabilities rather than available income makes no sense. [ 17 ] The husband seeks an imputation of $275,000 annual income to the wife for the years 2009, 2010, and 2011.

His child support calculations including arrears since 2007 read as follows:– 2007: Child support payable: Less: Child support paid: Total Arrears: $2,962 x 12 = $35,544 $2,000 x 12 = $24,000 $11,544 2008: Child support payable: Less: Child support paid: Total Arrears: *Adjusted by the Court $2,918 x 12 = $35,016 * $2,000 x 12 = $24,000 $11,016* 2009: Child support payable: Less: Child support paid: Total Arrears: $3,043 x 12 = $36,516 $2,000 x 12 = $24,000 $12,516 2010: Child support payable: Less: Child support paid: Total Arrears: $2,955 x 12 = $35,460 $2,000 x 12 = $24,000 $11,460 2011: Beginning January 1, 2011,

section 3 ongoing child support payable: $3,088

[18] With respect to the issue of arrears and ongoing child support our Court of Appeals’ decision in Hunt v. Smolis-Hunt, 2001ABCA 229 is applicable here. The payor is an orthodontist who says that she has been having financial difficulties in her practice, andwho in a few months she will have virtually no income as an orthodontist.

Under the heading “Unreasonable consequences for theobligors” Berger, J.A. and Wittmann, J.A. (as he then was), in a two to one decision wrote as follows at paragraphs 18 through 23:– 18 Interpreting the Guidelines to require spouses to support their children to the maximum of their earning capacity also has theeffect of dictating to divorced spouses that they may engage in a limited range of employment, namely, only those which pay themaximum they are capable of earning.

This fails to recognize the fundamental importance of work to a person's life and fails to value thefreedom to choose work which fulfills needs and interests extending beyond the receipt of an income. 19 The significance of work was recognized in Re Public Service Employee Relations Act (Alta.) (1987), (SCC), 38D.L.R. (4th) 161 at 199 (S.C.C.), where Dickson, C.J.C. stated: "Work is one of the most fundamental aspects in a person's life, providing the individual with a means of financial support and, asimportantly, a contributory role in society.

A person's employment is an essential component of his or her sense of identity, self-worthand emotional well-being." 20 In response to the argument that the Charter right to freedom of association does not include associational activity for the pursuitof economic ends, he responded at 198-9, "If by this it is meant that something as fundamental as a person's livelihood or dignity in theworkplace is beyond the scope of constitutional protection, I cannot agree." His statements have been reiterated and stressed in numerousother decisions, most recently, for example, by Cory, J. in United Food and Commercial Workers, Local 1518 v.

KMart Canada Ltd., (SCC), [1999] 2 S.C.R. 1083 at para. 25. 21 Given the importance of work, it is equally important to allow individuals the freedom to pursue work which provides not only alivelihood but also a sense of identity, self-worth and emotional well-being, subject to the right of the state to impose, in accordance withthe principles of fundamental justice, legitimate and reasonable restrictions on the activities of individuals: Wilson v. British Columbia(Medical Services Commission) (1988), (BC CA), 53 D.L.R. (4th) 171 (B.C.C.A.). Similarly, Kerans, J.A. for thisCourt stated in Black v.

Law Society of Alberta (1986), 1986 ABCA 68 , 27 D.L.R. (4th) 527 at 543, "The pursuit of a livelihoodthrough a trade or calling has been, in Canada, accepted as an appropriate and vital human ambition, available to those of either sex whowant or need to pursue it . . ." 22 We do not say that parental interests and rights should directly compete with children's interests. The latter should be paramountand the central focus of the trial judge's assessment.

That having been said, the best interests of children are often best served when theidentity, self-worth and emotional well-being of both parents are also carefully considered. 23 Therefore, we cannot support an

interpretation of s. 19(1)(

a) which has the effect of telling a person that he or she may notengage in a career which was undertaken, as here, with bona fide intentions, commenced prior to and not in contemplation of separationor marriage breakdown, and with the agreement of the other spouse. [19] As for “Inferring intention” the majority decision in Hunt v. Smolis-Hunt reads as follows at paragraphs 24 through 39:– 24 We agree with the conclusions of Vertes, J. in Williams v. Williams (1997), (NWT SC), 32 R.F.L. (4th) 23(N.W.T.S.C.), and Aston J. in Hall v. Hall, [1999] O.J. No. 453, 91 O.T.C. 230 (Gen. Div.), that s. 19(1)(

a) implies that before a courtwill impute income, there must be a deliberate course of conduct related to the purpose of the Guidelines. A court should only imputeincome under s. 19(1)(

a) of the Guidelines when it has evidence of the obligor's intention to avoid or undermine child supportobligations. 25 Imputing income to situations where the unemployment or under-employment is unreasonable, as suggested by Picard, J.A., is not,without more, a sufficient limit. What is reasonable or unreasonable still leaves too much discretion to the court and fails to implementthe objectives of certainty and predictability. As well, it does not provide sufficient scope to the obligor to choose his or her employment.The correct approach was followed by the Ontario Court of Appeal in Dennis v. Wilson (1997), (ON CA), 35 R.F.L.

(4th) 146, when the court declined to impute income after a spouse changed occupations, even though it resulted in a decrease in income. 26 Proof of intention is a difficult evidentiary burden and usually reserved for situations where culpability is a concern. TheGuidelines' primary focus is to meet children's interests for financial support. As stated by Martinson J. in Hanson, supra, the Guidelinesare not designed to punish parents who try to avoid child support payments.

They do not require proof of culpability. 27 In keeping with those Guidelines objectives, therefore, the intent to evade support obligations may also be found where theunemployment, under-employment or other acts of the obligors indicate a deliberate refusal to live up to the obligation to support one'schildren. 28 Examples where a court inferred intent may be found in Melzack v. Germain, (ON CA), [1998] O.J.

No. 2341,where the Ontario Court of Appeal agreed with the trial judge that a unilateral decision to stop support payments and move out of thecountry demonstrated the obligors's intent. 29 Similarly, in Currie v. Currie (1999), (ON SC), 2 R.F.L. (5th) 153 (Ont. S.C.), the husband's stated intent inchanging his employment from a Crown prosecutor to the private practice of law was to make more money in the long term.

However,on the basis of his other actions including the lack of effort to build his practice, his previous failure to meet his support obligations, hislack of intention to pay outstanding support arrears, untrue statements he made to his former spouse about his employment situation andhis lavish life style relying on the income of his new spouse, the court at 158 found it evident that the husband was "of the view that [hisformer wife], with her higher income, should assume the entire burden of child support" while he made his career move.

The courtinferred an intent to fail to provide support for his children and imputed income. 30 We also read the decision of the British Columbia Court of Appeal in Van Gool v. Van Gool (1998), (BC CA),166 D.L.R. (4th) 528, as inferring an intent to avoid support obligations. Although some decisions relying on Van Gool, such asDonovan, supra, 2000 MBCA 80 , [2000] M.J. No. 407 (citing Dr. Julien D.

Payne, Imputing Income, "Determination ofIncome, Disclosure of Income," Child Support in Canada, Danrab Inc., August 3, 1999), have interpreted the case as holding that incomemay be imputed where the unemployment or under-employment was unreasonable, those later decisions failed to note that the court inVan Gool inferred that the mother deliberately chose to avoid her child maintenance responsibilities. 31 In Van Gool, the mother had part time employment, was making no effort to seek other employment, was not upgrading hereducation or skills and gave no persuasive reason for refusing to seek additional employment.

The court also noted her ongoinganimosity towards her former husband. Prowse, J.A. stated at para. 36, that the evidence in the case, including the background evidence,"leads overwhelmingly to the conclusion that [the mother] was intentionally under-employed at the time of the review application with aview to avoiding, or minimizing, her child support obligations." [Emphasis added.] She went on to conclude at para. 38: "In

summary, I am satisfied that the only reasonable inference to draw from the limited and desultory efforts made by [the mother] toobtain part-time employment, her failure to comply with the directions of Mr.

Justice Coultas as to the ongoing steps she should take tomaximize her employability, the history of the relationship between the parties, including [the mother's] animosity toward [the formerhusband], is that she decided to remain under-employed for as long as possible." 32 In this case, the learned trial judge noted that the Appellant and the Respondent moved to Edmonton to permit the Appellant toenter the Faculty of Law at the University of Alberta in September 1982. This was a joint decision, no doubt arrived at in the bestinterests of the family. The Appellant received his law degree in 1985.

He was admitted to the Bar in September 1987. He worked as anassociate of a veteran legal practitioner from September 1987 until April 1988 and from September 1988 until May 1989. 33 In July 1989, the Appellant went to work with Statistics Canada as a term employee for the 1991 Census of Canada. In July 1992,the Appellant opened a law office and practised as a sole practitioner. He did poorly, and by the Fall of 1994 prospects for improvementwere, as found by the trial judge, less than promising. 34 The trial judge, in her reasons for judgment, accurately summarizes that which followed (at para. [43]):

"The Petitioner acknowledged that because he was doing so poorly in the practice of law, he did investigate other employment options,including a position in a corporate law department but his application was unsuccessful. In 1995 Statistics Canada required individuals toconduct the 1996 census. If he took this employment he would have had to commit full-time to Statistics Canada and therefore would notbe able to continue practicing law. His salary level would have been $37,000.00, $11,000.00 to $12,000.00 less than he had previouslybeen making with Statistics Canada.

However, he did acknowledge that there was a potential that his salary could have increased to$42,000.00. He did not pursue this option. He had invested so much money in the practice of law, and had incurred a real financial lossin doing so that he reasoned that such a salary level would not service his debts. I note that the income from his law practice has beenhistorically much lower than $37,000.00.

Taking such a position would have improved his financial situation, not exacerbated it.However, it appears that the Petitioner, despite numerous warning signs, remained steadfast in his resolve to continue with his lawpractice." 35 Where then was the attributed income figure of $55,000 derived? Paragraph [39] of the reasons below provides the answer. Thetrial judge stated: "In the summer of 1991, the Petitioner testified that he spoke with the Respondent about a job opportunity in Calgary with StatisticsCanada which would earn an income of $55,800.00.

He indicated that it was not a job offer but an opportunity to compete for theposition. Basically it was a sales position and as he was not a salesperson-type' he did not think it was appropriate to pursue thispermanent position with Statistics Canada. Further it was not a paid move to Calgary.

Rather, he chose to establish his law practice...." 36 Mindful of the foregoing, the trial judge reasoned as follows (at para. [123]): "In the face of repeated unsuccessful years in the practice of law since his graduation in 1986, I am satisfied that the Respondent has metthe onus of establishing that the Petitioner is deliberately under-employed as defined by s. 19(1) of the Guidelines. My finding ispredicated on the fact that by choosing to continue in his unsuccessful practice of law with no reasonable prospect of futureimprovement, he is undervaluing his earning capacity.

If a payor stubbornly adheres to a career path that permits him to pay a level ofsupport demonstrably inadequate to cover the needs of his children, when he has the ability and capacity to earn more, as history asdemonstrated, then he falls within the definition prescribed by s. 19(1)(

a) of being "intentionally under-employed...." 37 There was no finding or inference by the trial judge that the Appellant intended to undermine or avoid his child support obligationsby deliberately continuing to pursue his less than lucrative practice of law. He continued the pursuit of the career he commenced duringthe marriage after separation. There was no change in the way he pursued it.

These are significant facts when assessing the Appellant'sintention. 38 On the question of quantum, the learned trial judge stated (at para [124]): "Accordingly, for purposes of the Guideline income I impute income of $55,000.00 per year, the same figure he earned with StatisticsCanada in 1991 and which I have determined he had the capacity to earn from 1994 onward...." 39 In our opinion, the evidentiary foundation cited by the trial judge does not support her conclusion. The Appellant's employmenttrack record arguably demonstrated that he was capable of earning between $37,000 and $42,000; not $55,000.

The latter remunerationwas attached to a position for which the uncontradicted evidence revealed the Appellant was entirely unsuited. Moreover, as found bythe trial judge, "it was not a job offer but an opportunity to compete for the position." The position would have required anon-compensated move to Calgary. In our respectful opinion, to attribute income on the basis of such a speculative job opportunity is anerror warranting appellate interference. [20] The facts in Hunt v.

Smolis-Hunt (and the basis for her dissent) were listed by Picard J.A. as follows:– 81 The trial judge thoroughly reviewed the facts and they are set out in the decision, reported at (1998), 1998 ABQB 389 , 39R.F.L. (4th) 143. It is not necessary to restate all of them. In

summary, the payor was, at the time of the trial, a 45 year-old lawyer,

having graduated in 1985, articled, worked in various law office arrangements, and finally setting up practice as a sole practitioner in 1992. The law practice suffered losses for the first three years.

From the 1995/96 period to the date of trial, profits increased from $2,066.72 but it is difficult to say by exactly how much because the figure given for the year ending January 1998 of $18,024.88 was said by the trial judge to be exclusive of monies payable to Revenue Canada. 82 After his graduation from law school, when the payor had difficulties getting established in the practice of law, he returned to a previous employer, Statistics Canada. In 1991, while so employed, his taxable income was $55,000.

However, in 1991, he refused to apply for a permanent position that would have paid approximately $55,800 because, in spite of the patchy career he had had in the law, his goal was to set up a law practice. There is also evidence that in 1995 he had an opportunity to work for Statistics Canada for between $37,000 and $42,000. 83 In this case, the trial judge was assisted by a considerable amount of evidence related to the objective and subjective factors. 84 The trial judge thoroughly canvassed the objective factors. In

summary, the father was a healthy, well-educated man in mid-life who had a work record with a government agency and the real potential of a position with his former employer, albeit not in law. He was less successful in his attempts to practice law and, while there was some evidence of improvement, it appeared to be slow. 85 The subjective factors were also canvassed thoroughly by the trial judge but are more problematic. The payor asserted his interest in continuing to set up a law practice, even though it has not been, and appears it might never be, as remunerative as his prior employment.

As for the details of this career change, the trial judge accepted the evidence of the payee; that the decision to study law was a joint one, but that the decision to set up a practice instead of taking a job was not. The trial judge found he used a considerable portion of the matrimonial assets in setting up his practice. She also measured the reasonableness of his goals and his handling of his financial situation. 86 The trial judge concluded that the payor was intentionally under-employed.

She said, at para. 123: If a payor stubbornly adheres to a career path that permits him to pay a level of support demonstrably inadequate to cover the needs of his children, when he has the capacity to earn more, as history has demonstrated, then he falls within the definition prescribed by s. 19 (

a) of being "intentionally under-employed". 87 This was not a simple decision to change careers. The payor took the opportunity to change careers when he left a job to become a law student. The payee supported this decision and agreed to use her own as well as family resources provided to her by her father. The payee also worked outside the home and carefully managed property given to her and to both of them so that the two children could be supported.

However, she also built up a debt load that the trial judge found correlated with the financial demands placed on her because of the consistent lack of support from the payor. By the time of trial, 13 years had passed and the payor's income from the practice of law was less than $20,000; he was heavily in debt.

The trial judge made no error in finding that the payor was intentionally under-employed. (ii) of imputed income 88 As is necessary, the trial judge went on to decide what income she would impute to him and she set that at $55,000, referring to the amount he had earned in 1991 while employed at Statistics Canada. She imputed that income from 1994, which was the year of the separation, nine years after he received his law degree.

The payor says that this was an error since it was the highest amount he ever earned, was founded on non-legal work and overtime and there is no evidence that he could obtain employment with that remuneration.

He did acknowledge that in 1995, had he taken employment with Statistics Canada, he could have earned $42,000. 89 Although there was no evidence of what a lawyer 13 years from graduation could expect to make in the practice of law, given the evidence the trial judge had as to the education, work experience, and age of the payor and given the standard of review, I am unable to find that she made any error in imputing income as she did. 90 I find there is no basis upon which to disturb the trial judge's finding on under-employment or on imputed quantum.

Conclusion [ 21 ] I take majority decision in Hunt v. Smolis-Hunt to mean that the Court should impute income to a spouse only in circumstances where the spouse is “intentionally underemployed or unemployed”, and that Section 19(1)(

a) of the Guidelines should be interpreted to impute income where the obligor has pursued a deliberate course of conduct for the purpose of evading child support obligations, where there is either proof of the specific intention to undermine or to avoid support obligations, or there are circumstances which permit the Court to infer that the intention of the obligor is to undermine or avoid his or her support obligations. [ 22 ] Under Section 19(1)(a), the circumstances described do not state that bad faith or specific intent to evade child support obligations is required. In the present case, it appears that Dr.

Weaver has had complete control over her Professional Corporation, and that at least on paper through her Financial Statements has built up significant retained earnings, as well as taken out salary as personal income. However I accept that retained earnings is an accounting function which may not necessarily mean that excess funds actually exist in liquid form in the Professional Corporation.

Notwithstanding this the Line 150 income for the wife is undisputed in this matter. [ 23 ] The wife obviously has had and continues to have some significant personal issues as to the quality of her lifestyle and working environment. As well she has some definite views as to the professional standards she aspires to, which do not maximize her income from her professional practice. Given these stressors and problems, it is not surprising that the wife has incurred a significant decrease in cash flow and income from her orthodontic practice.

However this would not normally lead to the termination of her career as an orthodontist and effectively reduce her income and revenue stream to zero as of the end of June 2011 as Dr. Weaver now proposes. [ 24 ] I am prepared to give the wife the benefit of the doubt and set her annual Guideline income at $109,342 as of August 1, 2010 as Dr. Weaver has requested since Hunt v. Smolis-Hunt appears to be applicable here.

However this imputed annual Guideline income of $109,342, will continue throughout 2011 notwithstanding that the wife intends to close her orthodontic practice and take a $15 an hour unskilled labour position. [ 25 ] The wife was an orthodontist at the time of marriage, and continues to be an orthodontist today. The husband never agreed to the wife’s sudden and drastic change in careers, unlike in Hunt v. Smolis-Hunt . She cannot have the matter of her imputed income revisited during 2011 because she now wishes to become an unskilled labourer.

Her actions in undertaking employment as an unskilled labour person at $15 an hour, assuming that it ever transpires as such, is clearly an attempt to evade child support obligations. [ 26 ] For 2009 and 2010 until August 1, 2010 the wife’s annual Guideline income will remain at $175,000 as previous determined. [ 27 ] Given the husband’s substantial success in this matter, I award costs to him for this application. In addition, the wife’s materials and presentation of her application were not very well organised or concise.

Her inability and/or defensiveness in answering the Court’s questions were also unhelpful and time consuming. Costs should appropriately be awarded to the husband for this application. Heard on the 22 nd day of February, 2011. Dated at the City of Edmonton, Alberta this 2 nd day of March, 2011.

Donald Lee J.C.Q.B.A. Appearances: Nancy Ella Weaver Appeared On Her Own Behalf Katie Noel for the Respondent