Adams v. Adams, 2011 ABQB 576

Court of Queen ’ s Bench of Alberta Citation: Adams v. Adams, 2011 ABQB 576 Date: 20110923 Docket: 4801 119740 Registry: Calgary Between: Fatin Hassan Adams Plaintiff - and - Gareth Mark Adams Defendant Corrected judgment: A corrigendum was issued on October 5, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Supplemental Reasons for Judgment of the Honourable Madam Justice M.C.

Erb _______________________________________________________ [ 1 ] These Reasons are supplemental to those issued by this Court on June 6, 2011 and reported at 2011 ABQB 306 . In the original reasons, the parties were invited to seek any clarification needed for the preparation of the Judgment Roll. The parties subsequently sought clarification on certain issues.

Those considered appropriate are addressed herein. [ 2 ] Counsel have also asked for clarification of the use of the Line 150 income stated in their personal tax returns for the relevant years, specifically the non inclusion of the Plaintiff’s balance in her professional corporation for support purposes. This matter is first addressed here with other matters following.

[ 3 ]

Section 18 of the Guidelines provides that where a spouse is a shareholder, officer or director of a corporation and the Court does not believe that the spouse’s annual income as determined under s. 16 fairly reflects all of the income available for child support, the court may include all or part of the pre-tax income of the corporation as income. [ 4 ] Having found that the Defendant was not disadvantaged in his career other than by his own lack of initiative and his own choices, spousal support was not ordered.

Therefore the Plaintiff’s income is not relevant to any question of spousal support payable to him in that regard. [ 5 ] Further, the original reasons required clarification on the issue of shared parenting of the children commencing in the year 2009.

However, for the reasons stated below, this Court finds that the factors set out under s. 9 do not favour a child support order payable by the Plaintiff. [ 6 ] The Plaintiff’s income has been determined on the basis of her Line 150 income and funds held in her professional corporation have been viewed as an asset. [ 7 ] It is clear that since the date of separation (and indeed, since the birth of the children) the Plaintiff bore the vast majority of the children’s expenses. Except for a brief period of shared custody, she has had primary care of both children.

The Defendant has paid negligible child support. [ 8 ] The inclusion of corporate pre-tax income is within the discretion of the Court, although such discretion must be exercised judicially: Miller v. Joynt, 2007 ABCA 214 , 422 A.R. 150 at paras. 31-32 . In the case here, there are unique circumstances involving a payor parent who is (but for a brief period) an access parent settling on a lower income for his own lifestyle reasons and a custodial parent who earns a much higher income.

In this case, the Defendant has given every indication that he will continue to expect the Plaintiff to shoulder the majority of the costs associated with raising the children. [ 9 ] In this Court’s view, it would be a perversion of justice to condone this approach to child support by including any or all of the Plaintiff’s professional corporation’s pre-tax income in determining the proportional calculation under s. 7 or even in establishing the base set-off under s. 9(

a) and I refuse to do so. In exercising this Court’s discretion, it is important to emphasize the fact the children are not being negatively influenced by this decision, given the nine/five custodial arrangement and corresponding child support payments to the Plaintiff and her acceptance of responsibility for their needs. [ 10 ] In addition, despite my finding that the Defendant clearly had the ability to earn additional income and that his limited salary was not due to any factors related to the marriage, I chose not to impute income to him under s. 19(1)(

a) of the Guidelines. The decisions in Taylor v. Taylor , 2009 ABCA 354 , 464 A.R. 245 and Hunt v. Smolis-Hunt , 2001 ABCA 229 , 286 A.R. 248 state that the Court may, in its discretion, chose to impute income where a parent is intentionally under-employed because he intended to avoid or evade support obligations. In treating the incomes of the parties in this manner, balance is achieved. [ 11 ] At para. 100 of my original reasons I stated that “the Defendant’s

section 3 and

section 7 child support obligations from 2008 forward are based on the Plaintiff having parenting time amounting to day to day care and control and the Defendant having parenting time in the nature of access.” The parties are in agreement that the Defendant had the children for at least 40 per cent of the time in 2009 and 2010. Shared custody occurs where a child spends at least 40 percent of the time with each parent over a one year period.

Section 9 of the Guidelines contains the complete code for determining child support in situations involving shared parenting:

Section 9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account (

a) the amounts set out in the applicable tables for each of the spouses; (

b) the increased costs of shared custody arrangements; and

(

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought. [ 12 ] The application of s. 9 of the Guidelines was recently addressed by the Supreme Court of Canada in Contino v. Leonelli-Contino , 2005 SCC 63 , [2005] 3 S.C.R. 217. Shared custody was discussed at para. 3: Guidelines amounts applicable to the former non-custodial parent or to the highest income earner in the case of a first application cannot therefore be considered to be presumptively applicable. Shared custody arrangements are not a simple variation of the general regime, they constitute by themselves a complete system. [ 13 ] The wording of this

section is imperative, meaning that the Court must determine child support in accordance with the enumerated factors once the 40 percent threshold has been established. The criterion defined in s. 9 confers considerable discretion on the court. As the majority held, at para. 27: The three factors structure the exercise of the discretion. These criteria are conjunctive: none of them should prevail... Consideration should be given to the overall situation of shared custody and the costs related to the arrangement while paying attention to the needs, resources and situation of parents and any child.

This will allow sufficient flexibility to ensure that the economic reality and particular circumstances of each family are properly accounted for. It is meant to ensure a fair level of child support. [ 14 ] In brief, the Court held that s. 9 promotes flexibility and fairness by ensuring that the economic reality and the circumstances peculiar to each family are adequately addressed. The presumption specifically created in s. 3(2) and 4 for determining support - that is, the guideline amount is mandatory unless the court considers it inappropriate - is not found in s.9. [ 15 ] A discussion of the factors follows.

a) the table amount for each spouse [ 16 ] The table amount for each spouse for the years in question can be determined based upon their respective incomes at para. 85 of the original reasons. During the years 2002 - 2008 inclusive the Plaintiff had sole custody and the Defendant had access, and as such those years are not in issue (nor were they considered for the purposes of retroactive child support in any event). The Defendant introduced evidence that he had the children for 40 percent of the time commencing in 2009.

While I appreciate the Plaintiff’s submission that any extra time spent with the children appears to have been spent to gain an advantage with respect to the issue of child support, this is not one of the factors considered under s. 9. [ 17 ] The court may begin the analysis by looking at the set-off approach that is utilized under s. 8 . A court may depart from the set-off amount or make adjustments to it if it is inappropriate in light of the factors considered under ss. 9(

b) and 9(c). The set-off amount must therefore be followed by an examination of the continuing ability of the recipient parent to meet the needs of the child, especially in light of the fact that many costs are fixed.

b) the increased costs of shared custody arrangements [ 18 ]

Section 9(

b) addresses increased costs of shared parenting associated with maintaining two households. The majority in Contino concluded that all of the payor parent’s costs associated with the children should be considered under s. 9(b), at paras. 52-53: Consequently, all of the payor parent's costs should be considered under s. 9(b). This does not mean that the payor parent is in effect spending more money on the child than he or she was before shared custody was accomplished.

As I discuss later in these reasons, it means that the court will generally be called upon to examine the budgets and actual expenditures of both parents in addressing the needs of the children and to determine whether shared custody has in effect resulted in increased costs globally. Increased costs would normally

result from duplication resulting from the fact that the child is effectively being given two homes. I say this because not all increases in costs will result directly from the actual amount of time spent with the child. One parent can simply assume a larger share of responsibilities, for school supplies or sports activities for example. For these reasons, the court will be called upon to examine the budgets and actual child care expenses of each parent.

These expenses will be apportioned between the parents in accordance with their respective incomes. [ 19 ] The Defendant argued that he required a larger home in order to accommodate the children for 40 percent of the time. I agree with counsel for the Plaintiff that his housing would be required in any event and it does not necessarily follow that it was required once the Defendant’s parenting reached the 40 percent mark. At trial, there was a dearth of evidence as to the additional costs alleged to have been incurred during the period of shared parenting.

Argument presented as to extra costs was framed generally not specifically. In fact, the majority in Contino found that simply assuming that the costs would be reduced in the recipient parent’s household and increased in the payor parent’s household as a result of the child’s presence constituted an error: para. 77 As J.D. Payne & M.A. Payne reference in Child Support Guidelines in Canada, 2006 (Toronto: Irwin Law, 2006) at 281: Increased costs of shared custody under

section 9(

b) of the guidelines will only be considered where evidence of those costs has been adduced. Increased costs to the spouse who invokes

section 9 of the Federal Child Support Guidelines would include increased food and travel costs. ...it should also be borne in mind that increased expenses incurred by one parent are not necessarily offset by reduced expenses being incurred by the other parent. Furthermore, housing, food, clothing and other expenses incurred by the respective parents are not necessarily correlated to the time spent with each parent and such expenses are often difficult to calculate for the purposes of invoking paragraph 9(

b) of the guidelines. [ 20 ] Here, the Defendant failed to prove he had additional expenses associated with having the children for 40 percent of the time for the period in question. The limitations in evidence in this regard cause this Court to conclude that there has not been a substantive increase in costs in assuming shared custody: ( Schick v. Schick , 2008 ABCA 196 , 433 A.R. 242 at para. 19 ; Sherritt v. Sherritt , 2006 ABQB 484 at paras. 12 - 17 ).

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought This factor is summarized by J.C. MacDonald & A.C. Wilton, Child Support Guidelines Law and Practice , 2d ed., looseleaf (Toronto: Carswell, 2004) at 9-9: Under this clause the court retains the discretion to modify the set-off amount where, considering the financial realities of the parents, it would lead to a significant variation in the in the standard of living experienced by the children as they move from one household to the other.

As far as possible within child support principles, the child should not suffer a noticeable decline in his or her standard of living in the moves. [ 21 ] On the limited evidence before me, despite the disparity in incomes between the parties, the children have a relatively comparable standard of living in each household. A budget was entered evidencing some indebtedness on the part of the Defendant which did not arise from circumstances related to the marriage. Both parties are able to take the children on vacation. The Defendant has utilized travel perks through his employment.

Both parties take the children shopping, and participate in various activities, take them out for dinner on occasion and both households have a television, computers and the usual array of electronic gadgets. There is no evidence that the children enjoy a notable difference in the standard of living between the two households, resulting in neutrality on this factor. [ 22 ] In addition, the Plaintiff had primary custody of the children from the date of separation until January 2009 when a brief period of shared custody began.

She was not awarded retroactive child support for this period nor did the Defendant voluntarily contribute anything significant.

[ 23 ] Following trial, it was this Courts conclusion that it was in the best interests of the children that the ongoing parenting be on a nine/five rotation over each two week period which replaces the shared custody regime. There is no cogent reason for this Court to make any adjustment for the period of shared custody. [ 24 ] After analyzing the three factors considered under s. 9, I conclude that in the circumstances of this particular shared parenting arrangement, the normal guideline amounts applicable to sole custody should be paid in full.

No alteration is necessary to para. 100 of the original reasons which instructs the Defendant to pay s. 3 child support based on the Plaintiff having parenting time in the nature of day-to-day care and control and the Defendant having parenting time in the nature of access. Remaining clarifications [ 25 ] The parties sought clarification of paragraph 53(

h) of the original reasons addressed parenting time. The parties seek further clarity of the summer holidays because the children attend different schools and their holiday schedules may not be the same. The original

schedule was intended to achieve two objectives: particularity because of communication difficulties between the parties and consistency. The allocation of one month for each parent’s summer holidays to be exercised in July and August on alternating years provides consistency. For clarity, one month means 30 days. The children commence the holiday time notwithstanding the specific day on which school ends for the summer and recommences in the fall. [ 26 ] The remaining parenting time excepting school holiday parenting time and special occasions continues on the nine/five parenting rotation. Accordingly, the beginning of para. 53(

h) is amended to read as follows: The Plaintiff and the Defendant shall share all school holidays and special occasions as follows. There shall be no special accommodation for statutory holidays other than as referenced herein. [ 27 ] To clarify a parent’s spouse’s exercise of the right of first refusal over caring for the children, paragraph 53(

m) is amended as follow: If, because of inability to care for the children themselves through work or other commitments out of the City of Calgary, the other parent or that parent’s spouse has the right of first refusal over child care services for the children. Such additional time shall not affect the time the children are in the care of a parent for child support purposes.

If a parent or that parent’s spouse declines to exercise the right of first refusal, the decision shall be graciously accepted without derogatory or other comment. [ 28 ] The Defendant also raised the timing of the children’s pre-trial interview by his counsel which took place not prior to but after they had been interviewed by Dr. Fong. A court order had provided for the children’s interview specifically by Dr. Fong. However, after this interview the Defendant father took the children to his lawyer’s office where another interview took place.

The incident was cited in the original reasons as an example of the Defendant’s poor judgement. The obvious intention of the order engaging Dr. Fong for the interview was to protect the children. At trial Dr. Fong noted after the fact that the children appeared not to have been harmed. However, this has little to do with the Defendant’s exercise of judgement in allowing the additional interview without concern for any impact on the children.

The fact of it, not the timing was of concern to this Court. [ 29 ] The Plaintiff learned of this interview from her lawyer after the fact from information provided by Defence counsel. [ 30 ] Other clarifications include: a. the Plaintiff’s

section 7 expenses for the year 2010 referred to at para. 61 of the original reasons were $32,794.79 not $16,369.00;

b. The heading “other matters” beginning at para. 105 of the original reasons, is amended to include the following: Each party is responsible for their own debts as of the date of separation onward and the lis pendens registered by the Defendant against the Garrison Woods property shall be discharged upon the presentment of any equalization payment due to the Defendant pursuant to this judgement. [ 31 ] Counsel for the Defendant also asked that this Court revisit a number of additional findings contained in the original Reasons.

His submissions went beyond a request for clarification and deal more with disagreement with the Court’s conclusions. His proper remedy reposes with the Court of Appeal as do any other concerns about the original judgement. Dated at the City of Calgary, Alberta this 23 rd day of September, 2011. M.C. Erb J.C.Q.B.A. Appearances: William T. Aaron, Q.C. Spier Harben for the Plaintiff Charles Ruff McLean Ruff for the Defendant _______________________________________________________ Corrigendum of the Supplemental Reasons for Judgment of The Honourable Madam Justice M.C.

Erb _______________________________________________________

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