Hodgson v. Hodgson, 2011 ABQB 233

Court of Queen ’ s Bench of Alberta Citation: Hodgson v. Hodgson, 2011 ABQB 233 Date: 20110408 Docket: 4803 119240 Registry: Edmonton Between: Linda Fern Hodgson Plaintiff / Respondent - and - Ricky Thomas Hodgson Defendant / Applicant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L. Shelley _______________________________________________________ The Application [ 1 ] Mr.

Hodgson applies to cancel or vary spousal support, to set a payment plan for the arrears owed to Maintenance Enforcement, and to discharge the Creditor’s Statement of Debtor’s Land registered by the Director of Maintenance Enforcement against his home. Facts [ 2 ] The Hodgsons were married for 24 years, separated in 1999 and divorced in 2004. On January 17, 2002, the parties entered

[ 2 ] The Hodgsons were married for 24 years, separated in 1999 and divorced in 2004. On January 17, 2002, the parties entered into Minutes of Settlement that provided for spousal support of $2,500.00 a month, effective January 1, 2002, based on stated income of the parties of $75,000.00 for Mr. Hodgson and $17,460.00 for Ms. Hodgson. Mr. Hodgson’s actual income at the time was $95,381.65. The Minutes further provided that Ms. Hodgson could not apply to vary the spousal support under any circumstances, while Mr.

Hodgson could apply to vary “where a change in conditions, means, needs or other circumstances of the husband has occurred”. [ 3 ] The parties have three children, now independent adults. At the time of the separation they were 18, 14, and 13. Mr. Hodgson paid child support for the two youngest children until they were adults. At the time the Minutes were entered into, Ms. Hodgson was employed part-time as an administrative assistant and operated a home business. [ 4 ] The Minutes of Settlement were incorporated into the Divorce Judgment.

Unlike the Minutes, the Judgment provided that: Either party shall be at liberty to make application to the court for a variation of spousal maintenance where a change in the condition, means, needs or other circumstances of the parties has occurred, since the execution of the Minutes of Settlement on January 17, 2002. [ 5 ] Mr. Hodgson unilaterally stopped making spousal support payments in 2009 because of problems he said he was having with the Canada Revenue Agency (the CRA). He believed that Ms.

Hodgson was not reporting all of her spousal support income, and that was why CRA had adjusted his deductions for spousal support. Ms. Hodgson’s tax returns clearly indicate that she reported all her spousal support income. As of November 2010, Mr. Hodgson was more than $18,000.00 in arrears. Ms. Hodgson registered the Divorce Judgment with the Maintenance Enforcement Program (MEP). [ 6 ] MEP has sought full payment of the arrears. It has registered a Creditors’ Statement of Debtor’s Land against title to Mr. Hodgson’s home, and has limited his access to motor vehicle registry services. [ 7 ] Mr.

Hodgson filed an affidavit in which he details the change in his company’s income from 2001 to 2009. He notes that, in 2001, the company’s income was $233,911.00, its gross profit was $165,460.00 and it had net income of $20,388.00. In 2008, the company’s income was $83,192.00, its gross profit was $52,355.00 and its net income was a loss of $14,780.00. On the other hand, Mr. Hodgson’s income from the company has increased. In 2001 his management salary was $97,000.00, in 2009 his total income was $106,743.24, including $20,000.00 in management salary and a $70,000.00 dividend from cash in the company.

He deposes that his 2010 income will be roughly the same as 2009. [ 8 ] In 2009, the CRA garnisheed $78,000.00 from his bank account to pay tax arrears. [ 9 ] Mr. Hodgson has not provided his tax returns or the financial information for his company for the years 2002-2007, saying that they are not relevant. [ 10 ] Ms. Hodgson currently holds two part-time jobs, and earned about $44,000.00 in 2009. Including the spousal support, Ms. Hodgson says she clears about $4,500.00 per month, $2,000.00 in employment income and $2500 in spousal support. Mr.

Hodgson disputes this, saying her net employment earnings were $2875 per month. He submits that if Ms. Hodgson’s budget did not include RRSP contributions, line of credit interest, loan and credit card payments, vacation fund contributions and gifts to others, her expenses would be $2810.41. [ 11 ] Ms. Hodgson’s employment situation is precarious, as she works for the Provincial Government, and the Government has attempted to abolish one of her part-time positions. She furthers says that her expenses have increased since the separation and the Minutes of Settlement were signed.

Her budget shows a surplus of just over $200.00. Parties’ submissions [ 12 ] Mr. Hodgson argues, among other things, that there was an unequal property division, that Ms. Hodgson could revise her budget by eliminating, among other things, RRSPs, her vacation fund and gifts, and that she now earns almost as much as he pays her in

spousal support. He argues that he has now paid a total of $253,000.00 in spousal support since January 2002 and that he has fulfilled his spousal support obligations. [ 13 ] Ms. Hodgson says there was no unequal division and, in any event, that is not relevant to the question of whether spousal support should now be terminated or arrears cancelled. She argues that her traditional role in the lengthy marriage has limited her income-earning potential, and that this was reflected in the Minutes and the Divorce Judgment. Without spousal support, she would be running a significant deficit. Counsel for Ms.

Hodgson notes that the Spousal Support Advisory Guideline would suggest spousal support of between $1825 and $2510 a month. Issues [ 14 ] The issues raised in this application are: 1. Should spousal support be terminated? 2. Should any variation be retroactive? 3. Should arrears be repaid under a payment plan? 4. Does the Court have the jurisdiction to discharge the Creditors’ Statement of Debtor’s Land? Analysis a.

Should spousal support be terminated? [ 15 ] According to the Divorce Judgment, either party may seek a variation of spousal support if there has been a change in the condition, means, needs or other circumstances of the parties since the Minutes of Settlement were entered. Mr. Hodgson alleges that there has been such a change in circumstances because his company is now earning less than it was in 2001. [ 16 ] However, it is impossible to determine if the company’s decreasing income is a continuing trend or a result of the economic downturn because Mr.

Hodgson has not provided any financial information in regards to his company for the years 2002-2007. I note that Mr. Hodgson is an oilfield consultant , and is the sole shareholder and director of his company. Based on his tax returns, it is apparent that significant portions of his income in 2008 and 2009 have come from dividends from a corporation - presumably his own. [ 17 ] Moreover, Mr. Hodgson’s personal income has not decreased, and his evidence was that in 2010 it would likely be the same as in 2009.

In fact, not only has his income increased between 2001 and 2009, from $97,000 to $106,743, it is much higher than the income of $75,000 set out in the Minutes. [ 18 ] Mr. Hodgson argues that Ms. Hodgson’s income has increased significantly, from $17,000 set out in the Minutes to $44,000 today. He suggests that she is now self-sufficient, and that she has been compensated for any economic disadvantage. [ 19 ] Ms. Hodgson works two part-time jobs because she cannot find a full-time job, and her jobs are subject to Provincial Government cut-backs. Mr. Hodgson’s suggestion that Ms.

Hodgson forgo RRSPs, vacations and gifts ignores the law, which confirms that self-sufficiency means more than mere subsistence. In Heimsoth v. Heimsoth , 2009 ABCA 129 , the Court of Appeal noted (at para. 29): We agree with the following definition of self-sufficiency approved by Prowse J.A. in McEachern : "that is, capable of supporting herself at a level in keeping with the standard of living she enjoyed during the marriage without the aid of financial support."

[20] To obtain a variation or cancellation of the spousal support provisions in the Minutes and the Divorce Judgment, Mr.Hodgson must show a change in circumstances that were not reasonably anticipated by the parties and that the change in circumstanceshas lead to circumstances that cannot be condoned: Miglin v. Miglin, 2003 SCC 24 , [2003] 1 S.C.R. 303 at para. 88. The Courtfurther noted (at para. 89): We stress that a certain degree of change is foreseeable most of the time.

The prospective nature of these agreements cannot be lost onthe parties and they must be presumed to be aware that the future is, to a greater or lesser extent, uncertain... The test here is not strictforeseeability; a thorough review of case law leaves virtually no change entirely unforeseeable. The question, rather, is the extent towhich the unimpeachably negotiated agreement can be said to have contemplated the situation before the court at the time of theapplication. [21] In my view, the parties would have reasonably anticipated that Ms.

Hodgson’s income would increase as the children lefthome and she was able to seek further employment. Without the spousal support, Ms. Hodgson would be running a fairly large budgetdeficit. Further, she incurs significant expenses in keeping her employment. One of her part-time jobs requires a 60 km commute toEvansburg, necessitating a reliable car, and its attendant expenses. Her budget is not extravagant or unreasonable. [22] Further, while an unequal division of property may be a factor to consider in assessing spousal support, there is insufficientevidence here that there was an unequal division.

The Minutes allocate property to the spouses, without referencing this as an unequaldivision. Ms. Hodgson received the matrimonial home and Mr. Hodgson received a 1/4 section, plus the land inherited from his fatherduring the marriage. There is no evidence as to the increase in value of this property in the course of the marriage. The family farmedthe property.

The time to have determined whether the assets should be divided unequally was at the time of settlement. [23] Moreover, this does not constitute a change of circumstances, and therefore is not a basis for terminating or varying spousalsupport. [24] In all of the circumstances here, the lengthy traditional marriage, the relatively short period in which Mr. Hodgson has paidspousal support (seven years), the instability of Ms.

Hodgson’s employment and its part-time nature, and the significant increase in Mr.Hodgson’s income from that stated in the Minutes, I find that there is no change in circumstances justifying either a termination orvariation of spousal support. b. Should any variation be retroactive? [25] It is not necessary to deal with this issue, as I have found that there is no change in circumstance warranting a variation inspousal support. However, had it been necessary to deal with it, I note that Ms. Hodgson’s evidence was that she tried repeatedly in early2010 to contact Mr.

Hodgson regarding his failure to pay spousal support and he did not return her calls. [26] Mr. Hodgson says that he made an offer of settlement in August 2010, after Ms. Hodgson registered with MEP, that was metwith a counter-offer in October. This application was made in late November for the next available date. Therefore, he argues, theeffective date of any variation should be the date of notice, relying on the Supreme Court of Canada decision in D.B.S. v.

S.R.G., 2006SCC 37, [2006] 2 S.C.R. 231, which held that the effective date for retroactive child support is the date of effective notice. [27] I note that in making the August offer, Mr. Hodgson continued to believe that Ms. Hodgson was not reporting all her income,and that he unilaterally chose to discontinue making spousal support payments, without notice to Ms. Hodgson or application to theCourt. He only began to communicate after MEP became involved. I would not have made any variation retroactive to the date of hisapplication had I found a variation to be warranted. c.

Should arrears be repaid under a payment plan?

[ 28 ] Mr. Hodgson argues that he has serious financial difficulties, given his tax arrears and the money garnisheed from his bank account by CRA. He cannot make full payment of the arrears immediately, but he is paying $3000.00 a month. He attaches a budget to his affidavit, but it only sets out his expenses of $5658 (not including spousal support) and provides no statement as to net monthly income. [ 29 ] Ms. Hodgson has no objection to Mr. Hodgson entering into some kind of payment plan with MEP. Counsel for MEP says that no payment arrangements have been made because Mr.

Hodgson has not yet filed a completed Financial Statement. [ 30 ] MEP requires a completed Financial Statement before it will enter into payment arrangements. This Court will not interfere with that requirement. Mr. Hodgson will file a completed Financial Statement and then work out an arrangement with MEP. d. Does the Court have the jurisdiction to discharge the Creditors’ Statement of Debtor’s Land? [ 31 ] Mr. Hodgson seeks an order requiring the Director of MEP to discharge the Statement of Debtor’s Land and that all motor vehicle registry services be reinstated. Mr.

Hodgson’s license has not been suspended and the motor vehicle license restrictions were not significantly at issue at the application. However, Mr. Hodgson argued that the Court has jurisdiction to discharge the lien against his home, relying on ss. 23(4) and 23(5) of the Maintenance Enforcement Act , R.S.A. 2000, c. M-1 (the MEP Act ), which reads: 23(1) A maintenance order may be registered in any land titles office and the registration, so long as the order remains in force, (

a) binds all legal and equitable interests of the debtor in any land registered in the debtor’s name at the time of or after registration of the maintenance order, and (

b) operates on those interests in the same manner and with the same effect as registration of a charge by the debtor on the land of the debtor.

(2) The Registrar under the Land Titles Act shall discharge or register the postponement of a maintenance order registered under this

section only if the discharge or postponement is signed by the person entitled to the benefit of the maintenance order...

(4) The person against whose land a maintenance order is registered under subsection (1) may apply to the Court of Queen’s Bench for an order directing the Registrar under the Land Titles Act to cancel the registration of the maintenance order.

(5) The Court of Queen’s Bench may make an order directing the Registrar under the Land Titles Act to cancel the registration under subsection (1) of a maintenance order against part or all of the estates and interests of the debtor under any terms and conditions the Court considers appropriate. [ 32 ] Counsel for MEP argues that s. 32(3) of the MEP Act prevents the Court from suspending any registration or filing by the MEP Director under the Land Titles Act. It reads: 32(1) If the Director has issued a support deduction notice or a creditor has obtained an order for payment under

section 19, the debtor may apply to the Court of Queen’s Bench for an order suspending those proceedings on any condition the Court considers appropriate for a period specified in the order, not to exceed the periods provided for under subsections (5) and (6).

(2) An order granted under this

section suspending the proceedings referred to in subsection (1) may be made only if the Court is satisfied that the debtor is unable for valid reasons to make the payments required under the maintenance order.

(3) Notwithstanding subsection (1), an order granted under this

section does not suspend or affect (

a) any enforcement proceedings respecting the payment of maintenance carried out in relation to a federal enactment; (

b) any registration or filing made by the Director under the Land Titles Act or in the Personal Property Registry; (

c) any proceeding or action taken under

section 22. [33] Therefore, MEP argues, the Court cannot grant a stay of enforcement unless it has granted a variation order. Moreover, MEPdoes not consider Mr. Hodgson to be a good payor as he is $18,000.00 in arrears. Further, MEP notes, Mr. Hodgson has not provided areason for wanting the charge on the land removed. [34] Ms. Hodgson does not object to removing the lien. [35] In Nugent v. Nugent, 2004 ABQB 741, Park J. dealt with the question of whether to discharge a Court Order charging theproperty of a payor father who had failed to regularly pay child support.

Park J. considered the application of s. 23 of the MEP Act, and referred to the factors set out in Kumar v. Kumar (1988), (ON SC), 48 D.L.R. (4th) 559 (Ont. H.C.). In that decision,Rosenberg J. was dealing with s. 10 of Support and Custody Orders Enforcement Act, 1985, S.O. 1985, c. 6, a provision very similar to s.23 of the MEP Act. He applied the jurisprudence dealing with when it would be appropriate to order security for a support order and setout a list of relevant factors (at para. 6): The best

summary of the situations in which security may be ordered is found in the reasons of the Honourable Judge Clements in Re LaFond and La Fond, [1979] 2 A.C.W.S. 117: (

a) where a party has a history of dissipation of assets, that is, unable to handle money ...; (

b) where the respondent is likely to leave the jurisdiction and become, in effect, an absconding debtor; (

c) where the respondent has, in the past, refused to honour a support obligation, whether it came by court order or contract or hasrefused to provide support at all, ... conduct in disregard of obligations as a father and husband;... husband also deserting wife andchildren;;); (

d) where the respondent has a poor employment history or has indicated that he will leave his employment..., payor spouse had noincome, savings or prospect of employment;... payor spouse also had an extravagant life-style and had been unco-operative with payee inthe past; (

e) where the respondent is out of the jurisdiction at the time of hearing but has assets in Ontario capable of forming the basis of asecurity order; (

f) where the respondent has declared that he will not pay an eventual support order... (Citations omitted) [36] In my view, Mr. Hodgson has refused unilaterally to honour support obligations, has a history of financial problems, including

[ 36 ] In my view, Mr. Hodgson has refused unilaterally to honour support obligations, has a history of financial problems, including issues with CRA and tax arrears, and has been unco-operative with Ms. Hodgson in the past by, for example, refusing to return her calls about his failure to pay spousal support. Moreover, he has not set out any reason, such as an imminent sale of the property, for wanting the lien removed from his property. Therefore, even if the Court has, as Mr.

Hodgson argues and MEP disputes (which, for the following reason, I do not have to decide) the jurisdiction to stay the enforcement of or to discharge the encumbrance on his title, in these circumstances I conclude that it would be inappropriate to do so. Conclusion [ 37 ] I dismiss Mr. Hodgson’s application in its entirety. Heard on the 2 nd day of February, 2011. Dated at the City of Edmonton, Alberta this 8 th day of April, 2011. D.L. Shelley J.C.Q.B.A. Appearances: Ms. D. Gosselin for the Plaintiff / Applicant Ms. L. Johnson for the Defendant / Respondent