Arnault v Arnault, 2011 ABQB 487

Court of Queen ’ s Bench of Alberta Citation: Arnault v Arnault, 2011 ABQB 487 Date: 20110729 Docket: 4803 155184, FL03 26806 Registry: Edmonton Between: Action No. 4803 155184 Kristian Allen Arnault Plaintiff - and - Shawna Marie Arnault Defendant Action No. FL03 26806 Shawan Marie Arnault Applicant - and - Kristian Allen Arnault Respondent _______________________________________________________ Reasons for Judgment

of the Honourable Mr. Justice Donald Lee _______________________________________________________ [ 1 ] This matter deals with the determination of interim child and spousal support, both ongoing and retroactive. The wife seeks an imputation of income to the husband of $62,848.53 a year, interim child support of $907 a month retroactive to September 1, 2010, and interim spousal support of $1,200 a month retroactive to September 1, 2010. [ 2 ] The parties married in March 1997 and separated in March 2010. There are two children of the marriage currently 13 ½ and 11 years of age.

From the time of separation, the children have been in the day to day care of the wife, however the wife was hospitalized from April 2010 until June 2010 during which time the children were cared for by the husband in the matrimonial home. [ 3 ] The matrimonial home was sold in a transaction that close in March 2011, and there remains the sum of $120,000 in trust. The matrimonial home was sold for approximately $389,000. [ 4 ] In 2009 and 2010, the husband was employed Alta-Fab until September 22, 2010.

His earnings from Alta-Fab were $53,453.92, and then he earned $8,694 with Northgate, for a total of $62,147.92 income in 2010.

He has been off work due to a work related injury receiving WCB payments since December 11, 2010. [ 5 ] His line 150 income for 2007 to 2009 is as follows: – 2007 $46,261.00 2008 $24,184.00 2009 $42,990.00. [ 6 ] The husband ’ s income dropped in September 2010 as a result of a job demotion, having been hired as a “ supervisor ” , but later demoted back to “ entry level position ” . [ 7 ] The wife has not been employed since April 2010 and she has been receiving assistance of $1,162 per month. [ 8 ] The husband claims that he has paid the wife $710 from the date of separation in March 2010 for spousal support, in addition to making the mortgage payments on the matrimonial home.

The wife denies receiving regular spousal support payments of $710, and alleges that from the time of the parties ’ separation, the husband made no utility payments or mortgage payments on the matrimonial home. [ 9 ] The wife argues that the husband ’ s 2010 income should be attributed at between $62,000 and $64,000, and that child support be awarded at the Guideline amount between $895 to $925, retroactive to September 2010. Additionally the wife submits that

Section 7 expenses should be attributed to the husband 100%. [ 10 ] The wife submits that the husband terminated his employment with Alta-Fab voluntarily after the separation, and accepted employment for less money. The wife submits that the Court should impute income pursuant to

Section 19 of the Guidelines including

Section 19.1(

a) and 19.1(

f) since the husband left a well paying job for a lesser paying position.

Conclusion [ 11 ] The Court of Appeal in Hunt v Smolis-Hunt , 2001 ABCA 229 decided that income should not be imputed to the payor unless the payor has pursued a deliberate course of conduct with a purpose of evading child support obligations, as they discuss below at paragraph 39 to 42: – 39 Section 19(1)(

a) of the Guidelines permits a court to impute income to a spouse in circumstances where the spouse is "intentionally under-employed or unemployed". The case authorities have not consistently applied this section. 40 There are at least two irreconcilable lines of authority interpreting the necessary circumstances imposed by the word 'intentionally' in s. 19(1)(a). One

interpretation allows a court to impute income where the spouse with support obligations fails, through intentional actions, to maximize income from employment. There is no additional requirement of proving a specific intention to evade his or her child support obligations. The other

interpretation imputes income where the spouse with support obligations has pursued a deliberate course of conduct for the purpose of undermining or avoiding his or her child support obligations. 41 As we understand the reasons of Picard, J.A., she adopts the first

interpretation. In our view, that

interpretation is not supported by statute or regulation, fails to meet one of the objectives of the Guidelines by creating too much discretion, and has potentially untenable consequences for the obligor, i.e. the spouse who must pay support. 42 The

section should be interpreted to impute income where the obligor has pursued a deliberate course of conduct for the purpose of evading child support obligations. We read the

section as requiring either proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to infer that the intention of the obligor is to undermine or avoid his or her support obligations. [ 12 ] In this particular case, the husband changed jobs in September 2010 with the result that he received less income then he was making, his reduced income was consistent with his past history of earnings in the previous three years between 2007 and 2009. It is difficult to conclude that the husband changed jobs to avoid his child support obligations, so that no income should be attributable to him under

Section 19 of the Guidelines . [ 13 ] As for the husband ’ s current circumstances, this Court in December 2010 set his Guideline in an Interim Without Prejudice Order at $43,000, however subject to the Court later determining a different amount without showing a change in circumstances. The husband has been off work since the middle of December 2010 having suffered a herniated disc. He began receiving WCB payments in about February 2011, netting $1,493 every two weeks.

The husband had surgery on his back in May 2011 wherein his herniated disc was “ dissected ” in a surgical procedure called “ micro-dissectomy ” . [ 14 ] On July 16, 2011, the date that this matter is being revisited, the husband began working again half-time, half days as per his doctor ’ s orders. His employer is paying him at the rate of $25 an hour for about 20 hours work per week. The husband expects the WCB to “ top up ” his part-time employment earnings to the full WCB benefit he is entitled to of $1,493 every two weeks, until he can be employed again full-time.

His return to full-time work is however uncertain at this time as I am advised by his counsel that his surgeon has requested another MRI as the husband may have some nerve damage in his left leg. [ 15 ] The husband ’ s net earnings therefore currently total approximately $39,000. His current Guideline income has been set at $43,000, with the result that he pays child support of $618 a month.

The wife is currently receiving $1,162 a month in assistance, from which every dollar of spousal support paid by the husband would apparently be deducted dollar for dollar. [ 16 ] The current income situation of the parties is important because it best reflects the reality of the two incomes as discussed in Lavergne v Lavergne , 2007 ABCA 169 at paragraphs 18 to 22 as follows: –

18 Reading s. 16 with s. 2(3) directs that for the Guidelines, the most current information about those sources must be used. A court following this directive would end up with an estimate of the payor's current annual income. 19 An alternative would be to estimate future income based on current information. With the exception of retroactive support, child support is normally ordered on a prospective basis. Many payors will have income that is relatively stable. In such circumstances, both the current and future income can be determined by looking at information about the previous year or year's income. The Guidelines appear to anticipate that either period may be considered. 20

Section 16 stipulates the primary method for determining income, but s. 17 provides that where s. 16 is not a fair means to determine levels of support, income can be calculated by the alternative method of looking to the income over the past three years to determine "an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non- recurring amount during those years."

Section 18 similarly provides an alternative means to calculate annual income where it is based on corporate income and reliance on s. 16 would not provide a fair reflection of the payor's income. 21 As a general principle, the Guidelines direct that the method for determination of the payor's income be fair. While s. 16 specifies how income is to be determined, s. 17 directs the court not to rely on s. 16 if, in the court's opinion, the s. 16 method "would not be the fairest determination" of income.

Similar exceptions in favour of fairness are made in ss. 18 and 19. 22 The appellant is correct that the Guidelines strive to achieve a simple and certain means of calculating income to determine child support. But he overlooks the ultimate objective, fairness, in his proposal that past year's income, as reflected by line 150 of the payor's income tax return, determine the level of child support for the following year. That approach will often sacrifice fairness for efficiency and certainty.

The child is entitled to be supported according to the payor's current income, if ascertainable, and if not, by a reasonably accurate estimate of the payor's current income with an adjustment at year's end once the actual income is known. [ 17 ] The Court of Appeal in Lavergne and in Hunt speak of the concept of “ fairness ” in determining a payor ’ s income, save and except for a finding that the payor undertook a “ deliberate course of conduct ” to avoid child support payments. [ 18 ] In this particular case the wife is seeking a retroactive adjustment to September 1, 2010, even though it appears that the husband did make some direct financial contributions to the matrimonial home.

Although the exact amount and extent of the husband ’ s financial contribution is disputed, he did move back into the matrimonial home to take care of the children when the wife was hospitalized due to self-inflicting injuries for approximately two months between April and June 2010. [ 19 ] The husband ’ s current annual Guideline income is set at $43,000 as my colleague Ouellette J ordered on December 20, 2010.

I conclude that the husband ’ s new annual Guideline income should be set at $60,000 a year to reflect his net WCB earnings, and that the new interim child support payments of $866 a month are retroactive as of January 1,

Section 7 expenses however will be 100% attributable to the husband in all cases for all time periods. [ 20 ] On an ongoing basis starting August 1, 2011, the husband will pay interim spousal support payment of $1,000 a month based on the husband ’ s actual net income at this time. These parties were married for 14 years, and the wife was the primary caregiver for the two children, and continues to be. She currently has no other source of support other than the support provided by her husband or from government.

I decline to award retroactive spousal support to September 2010 because I understand that the wife could/would be subject to a dollar for dollar deduction of such spousal support payments from her assistance payments retroactively. [ 21 ] On an incidental matter, there will be an Order that the wife answer all of her undertakings requested of her at her Examinations on Affidavit given on December 6, 2010. [ 22 ] There will be no order as to costs in this matter given the mixed success of the parties.

Heard on the 20 th day of January, 2011. Written Submissions Received on the 22 nd day of July, 2011 from the Defendant and on the 26 th day of July from the Plaintiff. Dated at the City of Edmonton, Alberta this 28 th day of July, 2011. Donald Lee J.C.Q.B.A. Appearances: Jerry Kiriak Kiriak Law Office for the Plaintiff Eric Kahlke For the Defendant