Gonek v. Gonek, 2011 ABQB 166

Court of Queen ’ s Bench of Alberta Citation: Gonek v. Gonek, 2011 ABQB 166 Date: 20110316 Docket: 4803 118954 Registry: Edmonton Between: Cindy Lou Lorette Gonek Plaintiff/Respondent - and - Michael Gonek Defendant/Applicant _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Background [ 1 ] The parties were divorced pursuant to a divorce judgment issued in February of 2003. In 2004, four different Justices of this Court granted Orders, albeit by way of consent.

The parties appeared one time in 2005 to obtain a further Consent Variation Order. Case management was ordered and in May of 2006 Justice Trussler (as she then was) became the case management Judge. She issued two Case Management Orders in 2006 and one in 2007. Upon her retirement, I became the case management Judge. I issued a Case Management Order in 2007, one in 2008 and one in 2010. While this action was under my case management, Justice Clackson granted two Consent Orders, one in 2008 and one in 2010.

[ 2 ] The number of times the parties have commenced applications and sought assistance from this Court, and the allegations made by them against one another in their supporting affidavits filed in connection with such applications, confirms the level of conflict that continues to exist between the parties post-divorce. The main thrust of the allegations made by Ms. Gemmell (formerly Ms. Gonek) is that Mr. Gonek has repeatedly breached Court Orders. For his part, Mr. Gonek blames Ms. Gemmell for their ongoing antagonistic interactions.

I will outline a few examples of these in this Judgment. [ 3 ] In affidavits filed in the Fall of 2004 Ms. Gemmell alleged that Mr. Gonek had taken the children on a trip, without her permission, on days when, by Court Order, the children were to be in her care. Mr. Gonek responded by asserting that Ms. Gemmell had consented to the children going on the trip. In these same affidavits Ms. Gemmell claimed that Mr. Gonek had not adequately informed her of his vacation plans with the children, contrary to the Consent Variation Order granted by Justice Acton in April of 2004.

The Order required that the parties were to provide each other with details regarding their respective holiday plans, including destination, itinerary, intended length of stay and contact information. Ms. Gemmell deposed that she had been provided with inadequate information. Mr. Gonek responded that his mother-in-law had forwarded the holiday itinerary to Ms. Gemmell by e-mail. [ 4 ] Apparently the parties had agreed to obtain an Open Custody Assessment. Although not originally mandated by Court Order, this agreement of the parties was referenced in the

preamble of the Acton Order. Apparently Mr. Gonek had agreed to pay $12,000.00 towards the assessment and Ms. Gemmell $3,000.00. Mr. Gonek then declined to participate in the assessment. Once the assessment was ordered by Justice Acton it was completed and thereafter Justice Marshall granted an Order based on the assessment results. One of the terms of the Marshall Order stipulated that one of the Gonek children and one of Mr. Gonek’s step-children were not to be placed in the same classroom and that the Gonek child would be transferred to another classroom.

Notwithstanding this term of the Order, the assessor then provided a letter stating that it would be preferable to transfer Mr. Gonek’s step-child, rather than the Gonek child, but Mr. Gonek and his wife refused to do so. Ms. Gemmell alleged that the lack of cooperation from Mr. Gonek and his wife prevented the Gonek child from being transferred to a new classroom until five and a half weeks into the school year. [ 5 ] The Marshall Order also ordered that Mr.

Gonek and his new wife were to “resume marital counselling by no later than October 1, 2005 and remain in counselling until the psychologist feels that sufficient progress has been made in addressing marital issues that therapy can be discontinued”. In affidavits filed by Ms.

Gemmell in 2006, she alleged that a letter provided by the psychologist provided insufficient information to determine if that Court Order had been followed, since it was unclear what dates the Goneks had attended marital counselling and did not indicate whether they had remained in counselling until the psychologist felt therapy could be discontinued. [ 6 ] The Marshall Order also contained a direction that Mr. Gonek “complete a course in anger management and ... produce a letter of verification that he has attended all sessions”. In her 2006 affidavit, Ms.

Gemmell alleged that there may not have been a legitimate effort made by Mr. Gonek to complete the course. In his responding affidavit, Mr. Gonek explained his non-compliance with three other components of the Marshall Order. That Order had also required that the Gonek children attend “counselling on a short-term basis [with] a psychologist experienced in working with children of high conflict divorce”. Mr. Gonek confirmed that this Order had never been complied with but he placed the blame for non-compliance on Ms. Gemmell.

He said he had only been given one psychologist’s name to consider and his suggestions for a psychologist were rejected for reasons that he did not consider valid. Ms. Gemmell responded by providing the names of three psychologists. [ 7 ] The second part of the Order that Mr. Gonek acknowledged had not been complied with related to paragraphs which addressed the parties’ joint responsibilities in making decisions regarding their children’s extra-curricular activities. Mr.

Gonek stated in his affidavit that these provisions were “ineffective in dealing with the issues surrounding the children’s recreational activities” and cited seven reasons why the Order was ineffective. [ 8 ] The third portion of the Order which Mr. Gonek acknowledged had not been complied with required the parties to meet four times a year for “planning purposes” in the presence of an arbitrator or a psychologist, in keeping with the Order’s direction that arbitration was to be the method of dispute resolution. Mr.

Gonek’s affidavit indicated that the parties were having difficulties with both the selection of an arbitrator and the scope of the arbitrator’s decision making authority. Accordingly, the parties were not complying with the Court directed dispute resolution process. [ 9 ] By this time Justice Trussler had become case manager. She ordered the parties to attend intervention counselling with Dr. Stephen Carter, who was to assess:

a) whether Mr. Gonek had satisfied the requirements of the Order requiring him to complete a course in anger management and to produce a verification letter confirming his compliance with that direction; and

b) whether Mr. Gonek had satisfied the Court ordered requirement that he and his new wife were to resume marital counselling and remain in it until their psychologist felt it could be discontinued. Dr. Carter was to further address whether it was appropriate or necessary for the Gonek

children to attend with a child psychologist in the circumstances that existed between the parties. [ 10 ] Following a written report from Dr. Carter, Justice Trussler ordered Mr. Gonek to “attend a minimum of ten hours of one-on- one counselling with a registered psychologist to address anger management issues”. I assume from this direction by Justice Trussler that she was not satisfied that Mr. Gonek had complied with the previous anger management course direction. Justice Trussler also ordered Mr.

Gonek and his new wife to “attend ten hours of counselling together with a registered psychologist to address marital issues”, again presumably because she was not satisfied that Mr. Gonek had complied with the Court’s previous direction in that regard. [ 11 ] Since I became case manager in June of 2007, most of the disagreements between the parties have involved the determination of Mr. Gonek’s income and corresponding child support obligation. In January 2007 Justice Trussler had directed Mr. Gonek to provide Ms. Gemmell with “ complete disclosure regarding his business expenses” [emphasis added].

In connection with Mr. Gonek’s application for an adjustment to his then arrears of child support, Mr. Gonek had supplied (in a May 2007 affidavit) summaries of receipts associated with “accounting fees, vehicle expenses, including repairs, maintenance, car wash, fuel and lease payments together with cell phone supply expenses” for 2003, 2004, 2005 and 2006. In reply, Ms. Gemmell argued that she had not been provided with complete financial disclosure as Justice Trussler had directed, claiming that the receipts provided by Mr.

Gonek were “incomplete or illegible”, that it was inappropriate to claim a deduction for an assistant without identifying the name of his employee, and that a large portion of his vehicle expenses should not have been claimed as a business expense. She further submitted that Mr. Gonek had not complied with the increased child support obligation that had been ordered by Justice Trussler in January of 2007. [ 12 ] In response to the latter allegation, Mr.

Gonek replied that he had authorized Maintenance Enforcement to begin collecting the increased child support amounts but that it was “out of his control” as to when Ms. Gemmell would begin receiving them. He deposed that he had signed the authorizations that were required from Maintenance Enforcement to withdraw higher amounts from his account and that this had occurred “in mid-May”. Ms. Gemmell responded by asserting that Mr. Gonek’s sworn statement was false.

She provided a letter from Maintenance Enforcement confirming that “there have been no authorized changes to the direct withdrawal information on file for Mr. Gonek to reflect the new Order that was granted on 23 Jan. 2007". [ 13 ] As a result of this 2007 Application, I ordered (in a Case Management Order dated June 11, 2007) that Mr. Gonek’s “car expenses will be allowed at 70% with future allowances to require appropriate documentation including a mileage log”. Notwithstanding this direction, in his affidavit of December 8, 2008, Mr.

Gonek admitted that he had not kept a mileage log as ordered because he “did not know how to keep a mileage log or how to do so sufficiently”. Instead, Mr. Gonek again attached a

summary of his expenses. In relation to telecommunications expenses, Mr. Gonek estimated that at least 50% related to business use but provided only the monthly amounts of his cell phone bills, with no breakdown between business and personal calls. Motor vehicle expenses were summarized by giving the date and amount of gas receipts with no further explanation or breakdown. [ 14 ] Ms. Gemmell deposes, in an affidavit sworn June 18, 2010, that Mr.

Gonek has never provided the documentation required pursuant to the June 2007 Order and that she entered into a Consent Order granted by Justice Clackson on December 18, 2008, notwithstanding the non-compliance because she could not afford to incur any further legal expenses at the time to debate the issue further. She further deposes that, although the next child support review date was June 15, 2009, Mr. Gonek’s 2008 income tax return was not provided until December 3, 2009, approximately seven months later than the date ordered by this Court (being May 15 of each year). Ms.

Gemmell’s affidavit was filed in connection with her application for an Order suspending an Order granted by the Government of Alberta Child Support Recalculation Program (the “Program”) on June 7, 2010, as well as an Order directing that the Program not recalculate child support in the action either then or in the future. Ms. Gemmell’s grounds for the application included her assertion that recalculation of child support in this action has always been difficult and complicated, that Mr.

Gonek had never complied with the specific guidelines which had been set by the Court in relation to the deduction of certain business expenses for the purposes of determining guideline income, that Mr. Gonek had registered with the Program over her express objection, that correspondence from the Program confirmed the calculation might not have been done in compliance with the previous Orders granted by the Court, and that the Program would not provide Ms.

Gemmell with financial disclosure to which she was entitled pursuant to Court Order. [ 15 ] As a result of the information provided to me at the hearing of the application of September 13, 2010, I vacated the calculation decision which had been issued by the Program and ordered that the Program not recalculate child support payments without prior leave of this Court.

I further directed that the review of child support as of June 15, 2010, and issues related to it, be rescheduled to a further case management meeting and directed deadlines for the filing and serving of materials in relation to that further application. I also ordered that any parenting issues that Mr. Gonek wished to deal with were to be dealt with in a separate case management meeting. I reiterated the obligation to exchange income tax returns by May 15 of each year.

Paragraph 7 of the Order specifically provided that nothing in the Order was intended to vary or alter the terms of the previous Case Management Orders addressing the method by which the parties’ respective guideline incomes are to be determined and in particular would not vary the obligations regarding expenses as set out in the June 2007 Order.

This Application [ 16 ] In November, 2010, Mr. Gonek filed and served an application to determine his child support obligation for the period of June 15, 2010 to June 14, 2011, to calculate any over or under payment of child support for the period between June 2009 and June 2010, to direct that the parties could use the Program to resolve child support matters on an ongoing basis, and to seek direction as the sharing of holiday periods and the ongoing parenting schedule. [ 17 ] Ms. Gemmell pointed out that the application and Mr.

Gonek’s affidavit raise a number of parenting issues, contrary to the September 13, 2010 Order. As a result of this, Ms. Gemmell argued that she had not had sufficient time to respond to the parenting issues raised in Mr. Gonek’s affidavit and that she would like an opportunity to question Mr. Gonek on his affidavit. [ 18 ] I declined to deal with parenting issues at the December 2, 2010 application, directing Mr. Gonek to comply with the September Order by arranging another date at which there would be sufficient time to deal with parenting matters.

Therefore, this Judgment deals only with matters related to the determination of the parties’ guideline income and their child support obligations. Issues [ 19 ] I must determine:

a) the guideline income of the parties for 2009;

b) the resulting child support obligations: of Mr. Gonek to pay

section 3 support; and of both parties to contribute their proportionate share to

section 7 expenses;

c) the amount of any over or under payment for the period between June 15, 2009 and June 14, 2010;

d) how any such over or under payment will affect ongoing child support payments; and

e) whether the parties will be at liberty to use the Program in the future in order to effect a recalculation of child support on an annual basis. Analysis Determination of 2009 Guideline Income Mr. Gonek’s Position [ 20 ] Mr. Gonek submits that his 2009 guideline income for child support purposes should be $156,552.30. He arrives at this number by taking his total income of $174,093.00 and deducting from it an RRSP withdrawal of $12,107.89 that he made in that year. He takes this position on the basis that the RRSP withdrawal was “uncharacteristic” and used to help him meet his expenses.

He therefore feels it should not be included as income. He further reduces his total income by the total amount of line 229 employment expenses of $8,077.89. However, he recognizes that certain of his expenses may have been related to personal use and feels that 30% of his vehicle expense and 50% of his cell phone expense should be added back in for that reason. This results in a guideline income of $156,552.30.

Ms. Gemmell’s Position [ 21 ] Ms. Gemmell takes the position that Mr. Gonek’s line 150 income should be used without deduction. In particular, she submits that Mr. Gonek’s failure to comply with the terms of the June 2007 Order as it relates to expenses should result in Mr. Gonek not being entitled to any deduction for such expenses. Decision on this Issue [ 22 ] Mr. Gonek was well aware of his obligation to provide a mileage log and detailed breakdown of his expenses as between business and personal use. He has failed to do so and his stated reason is not acceptable. Mr.

Gonek has a history of failing to comply with Court Orders, often because he finds it inconvenient or he alleges that it is not effective. He has not appealed those Orders; instead he has chosen to ignore them. I made it clear to him that, given that he uses his vehicle and his phone for both business and personal use, he would have to provide supporting documentation to justify any portion claimed as an expense against income for child support purposes.

Having repeatedly failed to do so, I will not allow any deduction for these expenses. [ 23 ] I see no reason in this case why there should be a deviation from the general rule that line 150 income is to be used for child support purposes. Mr. Gonek’s RRSP withdrawal was available for child support purposes. Although he says he needed it to meet his expenses, his income from employment was $161,986.00 and it can hardly be argued that he required this RRSP withdrawal to meet his necessities of living. Determination of the Parties’ Child Support Obligations [ 24 ] Having rejected Mr.

Gonek’s argument that his 2009 guideline income should be $156,550.30, his submission regarding his

section 3 obligation is also rejected. Rather than the $2,182.00 he suggests he ought to pay in

section 3 child support for the period June 15, 2009 to June 14, 2010, the

section 3 support should be calculated on his line 150 income of $174,093.00. His proportionate share of

section 7 expenses, if any, should also be calculated on the line 150 income of $174,093.00 and Ms. Gemmell’s share should be calculated on the basis of her line 150 income less the amount of business expenses which she has claimed and for which she has provided supporting documentation as required under the June 2007 Order. If there is any dispute as to Ms. Gemmell’s income calculated on that basis, the parties are free to bring the matter back before me for the purposes of determining same.

The amount of any over or under payment for the period between June 15, 2009 and June 14, 2010 and its repayment [ 25 ] Once Mr. Gonek’s child support obligation has been recalculated in accordance with this Judgment, the amount of any over or under payment can be calculated. If the parties cannot agree on the amount, or the manner of repayment of same to the party to whom it is owed, the parties may bring the matter back before me for a determination. Will the parties be at liberty to use the Program in the future in order to effect a recalculation of child support on an annual basis? Mr.

Gonek’s Position [ 26 ] Mr. Gonek deposes: My desire to engage in the Child Support Recalculation Program is driven by the needless disputes in relation to the setting of guideline income and because I do not think it is necessary for Cindy and I to continue to spend money on lawyers to sort out this issue.

[ 27 ] He also expresses the view that he and Ms. Gemmell should be able to engage in the Program on the basis that he suggests - namely than 50% of cell phone expenses and 70% of motor vehicle expenses should be allowed without any backup documentation. He proposes in the alternative that he would agree to engage in the Program on the basis that neither one would claim any employment expenses. He then proposes the further alternative that he would also agree to enter into the Program on the basis that Ms.

Gemmell claim 50% of her cell phone expenses and 70% of her motor vehicle expenses and that he not deduct any such expenses as long as Ms. Gemmell’s expenses were not more than 8-10% of her employment income. Ms. Gemmell’s Position [ 28 ] Ms. Gemmell objects to the use of the Program because of the ongoing difficulties that she has encountered in resolving issues related to the calculation of guideline income, and Mr.

Gonek’s ongoing failure to comply with Court Orders, including those requiring him to exchange information on a timely basis and to provide backup documentation in support of certain deductions claimed. Decision on this Issue [ 29 ] There is no doubt that the Program works well for many parents in determining their respective child support obligations. However, I am satisfied that this is not such a case. I agree with Ms. Gemmell that there would be a reduced need for Court applications if Mr. Gonek complied with the Orders of this Court, something which he has repeatedly failed to do. Mr.

Gonek has consistently been late in providing his income information. While the program does provide for automatic increase where a party fails to provide income information in a timely fashion, that may not be a sufficient deterrent or incentive for Mr. Gonek given the significant fluctuations in his income.

While it may well act as an incentive to provide income information in a lower income year, it would not do so in years where his income increases significantly. [ 30 ] In addition, it is clear that the Program does not have a discretion to consider individual circumstances or to conduct an analysis of the business expenses that have not been challenged by Canada Revenue Agency. The Government of Alberta, Child Support Recalculation Program, Information Sheet states, in part, the following: Self-employed people can be eligible for certain benefits and income tax deductions that salaried employees are not.

Depending on the type and extent of self-employment income, courts may add some of those benefits or deductions back into the calculation when deciding on the self-employed person’s income for child support purposes . To make this decision, Judges can do a comprehensive review of the self-employed party’s finances, examining business and personal financial documents and questioning the party of those documents. Since these reviews involve investigation and discretion, they are not suitable for an administrative recalculation program like RP.

Unlike a court, RP cannot use discretion to take into account each person’s particular situation. RP has a simple, administrative process that recalculates child support based on Line 150 of the parent’s filed income tax return as assessed by Revenue Canada. There is a risk that in self-employment situations, tax documents may show less income than is actually available for child support purposes. [emphasis added] [ 31 ] In 2010, Mr. Gonek submitted calculation of his child support obligation to the Program over Ms. Gemmell’s objection. Ms.

Gemmell received a letter from the Program acknowledging her concerns regarding the employment expenses in light of the June 2007 Order. The Program acknowledged that the Order addressed how future employment expenses were to be allowed. However, the Program was of the view that the Federal Child Support Guidelines contemplates the deduction of the full amount of employment expenses and accordingly they were not certain that paragraph 12 of the Order remained in effect. [ 32 ] The June 2007 Order was clearly in effect and arose as a direct result of the parties’ inability to agree on employment expenses.

It is hard to rationalize the letter received from the Program with the Program’s own Information Sheet, which clearly indicates that in a self-employment situation tax documents may show less income than is actually available for child support purposes because, on a review, a Court may add in some benefits or deductions for child support purposes. [ 33 ] If Mr. Gonek wishes to revisit this issue again, he should ensure compliance with the outstanding Orders of this Court,

particularly as they relate to the provision of his financial information by May 15 th of each year (something which he has repeatedly failed to do notwithstanding its inclusion in several Court Orders) and the provision of backup information necessary to determine an appropriate split between business and personal use of his vehicle, cell phone or other expenses which he may seek to deduct from his income. Conclusion [ 34 ] In the result:

a) Mr. Gonek’s guideline income for 2009 is set at $174,093.00;

b) Mr. Gonek’s child support obligation shall be recalculated in accordance with the guideline income as determined in this Judgment;

c) Mr. Gonek’s over or under payment of child support shall be recalculated in accordance with this Judgment; and

d) Mr. Gonek shall not be at liberty to use the Program for the automatic recalculation of his child support obligations without further Order of this Court or the written agreement of Ms. Gemmell. [ 35 ] The parties’ existing obligations, in respect of the exchange of financial information (by May 15 th of each year, followed by any Notice of Assessment or Reassessment received from CRA) and the provision of backup documentation, as set out in the June 2007 Order in relation to expenses, remain in effect. Heard on the 2 nd day of December, 2010. Dated at the City of Edmonton, Alberta this 16 th day of March, 2011. D.L. Shelley J.C.Q.B.A. Appearances: C. M. Klassen for the Applicant

D. J. Kiss for the Respondent