Hayden v Hayden, 2011 ABQB 731

Court of Queen ’ s Bench of Alberta Citation: Hayden v Hayden, 2011 ABQB 731 Date: 20111124 Docket: 4803 149310 Registry: Edmonton Between: Tracy Alan Hayden Plaintiff - and - Rosarie Marie Hayden Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _______________________________________________________ [ 1 ] The Court is asked to deal with issues of custody and access, as well as ongoing and retroactive child support issues. [ 2 ] The mother seeks an Order for: 1. Joint custody and primary residential care of the child of the marriage born in February 2001;

2. Specified parenting time to the father; 3. Ongoing child support and

Section 7 expenses based on the parent’s current Guideline income; 4. Retroactive child support in the amount of $24,936.00 as of August 31, 2011. [ 3 ] The father replies that since November 2009 when he lost his job the parties have had by agreement, shared residency of the child on a week on/week off basis, and that this should continue. He submits that even if these parties were not initially in a

Section 9 arrangement, they certainly were after February 2011. If that is the case, it is submitted that the mother owes the father child support from December 1, 2009 until January 1, 2011 based on the parties’ 2010 tax returns, although notwithstanding this, the father says that he has been paying $150.00 per month to the mother. Background [ 4 ] The parties were married on January 24, 2003 and separated on September 1, 2007. They have one child presently 10½ years of age. The mother is 43 years of age and the father is 46 years of age. [ 5 ] The parties signed a Separation Agreement in October 2007. In addition to dividing property and waiving spousal support, the agreement provided for:

a) Joint custody, with the child to reside primarily with the mother;

b) Reasonable and generous access to the father;

c) The father would pay child support of $600.00 per month commencing November 1, 2007 based on guideline income of $63,300.00, such payment to include the father’s portion of

section 7 expenses, except that the parties would discuss and agree on extra after school sports and activities expenses, which they would share equally. [ 6 ] At the time of separation, when the parties were negotiating the terms of the Separation Agreement, the father advised the mother that his income was $63,300.00 and the mother relayed that information to her lawyer for the purpose of the Separation Agreement.

Counsel for the mother used that income, and the mother’s income of $40,433.00, to prepare a draft Separation Agreement that required the father to pay child support of $550.00 per month and contribute $233.83 per month as his proportionate share of childcare expenses. The father refused to sign that version of the Separation Agreement and took the position that he could only afford to pay $600.00 per month only. The Separation Agreement was revised and finalized at $600.00 per month.

The mother’s evidence is that she signed the Separation Agreement accepting $600.00 per month in child support as otherwise she would have been unable to close the purchase of her home. [ 7 ] From September 2007 to the fall of 2009 the father exercised little access to the child. Over this period of time the father continued his work as the Golf Professional and General Manager of the Stony Plain Golf Course through his corporation Hayden Golf Company Ltd.

At questioning he gave evidence that during golf season from April to October he would work as much as 16 hours a day, six or seven days a week. [ 8 ] The father paid child support of $600.00 per month beginning November 1, 2007 to and including October 1, 2009. He did not make any additional contributions to childcare or extracurricular activities for the child although the mother asked him to contribute, and even though he was aware of the cost of childcare including a cost of $650.00 per month in the summer. The father then lost his

contract with the Stony Plain Golf Course in October 2009, and essentially stopped paying child support. [ 9 ] The mother was required to take the child out of daycare after November 2009 as she could not afford it. It is submitted that the father continuously set the access

schedule and the mother was required to comply with it. [ 10 ] When the mother could not afford daycare for the child she asked the father to allow the child to be dropped off at his home in the mornings before school and have her at his home after school. He agreed for the seven months December 2009 to June 2010. In July 1, 2010 the child returned to daycare as the father obtained employment. [ 11 ] The father continued to set his

schedule of access focussing on his work schedule, his return to school to obtain an M.B.A. and the obligations that resulted including evening classes, his vacation schedules and so on. [ 12 ] Beginning July 2010 the father began to pay one half of the cost of childcare expenses and each of the parties have deducted their respective payments.

Prior to this, the mother’s childcare expenses were as follows:– a) 2008 - $4,000.00 b) 2009 - $4,000.00 [ 13 ] The mother’s income since separation has been as follows:– RRSP Income Other Income Total a) 2008 $ 3,804.08 $46,529.50 $50,333.58 b) 2009 $ 5,322.15 $67,982.14 $73,304.29 c) 2010 $10,000.00 $57,977.37 $67,977.62 [ 14 ] Since 2008 the mother has been required to cash in RRSPs in order to meet expenses including the expense of childcare and the need increased after the father stopped paying child support in October 2009. [ 15 ] The amounts shown at line 150 of the father’s Income Tax Returns are as follows:– a) 2008 - $23,500.00 b) 2009 - $19,500.00 c) 2010 - $21,666.00 [ 16 ] Clearly Line 150 of the father’s Income Tax Returns does not accurately set out the income available to him each year.

The father paid himself through his corporation Hayden Golf Company Ltd. The gross income of the corporation was as follows:– a) 2008 - $ 90,985.00 b) 2009 - $101,175.00 c) 2010 - $104,983.00

[ 17 ] Income for the 2007 golf season is reflected on the January 31, 2008 financial statement and so on. In other words, the 2010 income of $104,983.00 was earned over the 2009 golf season and paid or available to be paid to the father in 2010. His contract was from each October to each October. [ 18 ] By letter of December 20, 2010 the father was asked to produce details of the expenses shown by his company for travel, amortization, delivery, meals, entertainment and was again asked to produce this documentation at questioning on Affidavit on May 24, 2011.

However I conclude that the voluminous production that resulted is not specifically helpful in determining the father’s income. [ 19 ] Based on the income available to the father from his corporation the mother submits that the father’s child support should have been as follows:– a) 2008 - $800.00 per month b) 2009 - $891.00 per month c) 2010 - $925.00 per month [ 20 ] Including his proportionate share of childcare expenses, the mother argues that the father ought to pay retroactive child support including childcare for the years 2008, 2009 and 2010 as follows:– Should Have Paid Paid Amount Owing a) 2008 $11,160.00 $7,200.00 $ 3,960.00 b) 2009 $12,276.00 $6,000.00 $ 6,276.00 c) 2010 $11,100.00 $0.00 $11,100.00 d) 2011 $3,600.00 (8 months) $0.00 $ 3,600.00 $24,963.00 Total Owing as of August 31, 2011 [ 21 ] At questioning on Affidavit, the father acknowledged with respect to his corporation that:– - He used his house as his office and wrote that off - Internet and telephone were charged to the corporation - Travel to play in tournaments or attend a conference was extended to a holiday - He borrowed from the corporation to make major purchases such as his Corvette - He has had a corporation in different provinces for 15 years and dissolved the current corporation in January 2010 after transferring the assets to himself. [ 22 ] At questioning the father stated that he “probably made $40,000.00 to $45,000.00” per year.

He paid tax on approximately

$20,000.00 only. Joint Custody/The Mother to have Primary Residential Care Argument [ 23 ] The mother has been the child’s primary caregiver since the child’s birth. When the parties separated, they agreed this would continue and this was specified in their Separation Agreement of October 2007. [ 24 ] When the father filed his Statement of Claim for Divorce on April 15, 2009 he proposed that the two of them have joint custody and the mother have primary residence.

The father swore an Affidavit of Applicant in support of an application for a Divorce Judgment on January 25, 2010 and in it asked that the parties have joint custody and the mother have primary residential care. [ 25 ] The mother has had primary residential care of the child since separation and she argues that is in the child’s best interests that this continue. The mother proposes that the father be give specified access as follows:–

a) Every second weekend from Friday after school until Monday morning, extended to Tuesday morning if a long weekend;

b) Every Thursday after school and overnight to Friday morning;

c) Alternate Christmas Eve and Christmas Day and an equal amount of the non-school Christmas holiday. In even years the mother would have the child on Christmas Eve and overnight to Christmas morning and would decide which half of the Christmas holidays she would have. The father would have the child on Christmas Eve and overnight to Christmas morning and would decide which half of the Christmas holiday he would have in the odd numbered years;

d) One half of the Spring Break/Easter break each year, attached to his weekend;

e) Two, two week periods during the summer School Vacation. In summer 2012 the father would have the first two weeks and the 5th and 6th weeks and the

schedule would alternate in odd numbered years. Conclusion [ 26 ] The father’s position was that at least since November, 2009 he has had shared residency of the child. Once his contract with the Town of Stony Plain’s golf course was terminated in October 2009, the parties agreed that he would provide all before and after school care, along with his frequent and regular access. I conclude that the parties certainly began a one week on/one week off arrangement by February, 2011.

Child Support [ 27 ] The father’s employment income declared to the Revenue Canada Agency (the “CRA”) is:– 1. 2007- Line 150 Employment Income -$20,000.00 (gross company sales - $77,786.00. Net Company Income - ($933.00). Pre Tax

Corporate Income ($933.00)). 2. 2008 - Line 150 Employment Income -$23,500.00 (gross company sales - $90,985.00. Net Company Income - ($1,053.00). Pre Tax Corporate Income ($1,053.00)). 3. 2009- Line 150 Employment Income -$19,500.00 (gross company sales - $101,174.00. Net Company Income - $1357.00. Pre Tax Corporate Income $1,652.00). 4. 2010 - Line 150 Employment Income - $21,667.00 (gross company sales - $104,983.00. Net Company Income -($1719.00).

Pre Tax Corporate Income $1,719.00). [ 28 ] The company posted a Loss in every year except 2009, and it is also clear that the father received various personal benefits from the company. [ 29 ] The mother’s guideline employment income is as follows:– 1. 2007 - $43,419.00 2. 2008 - $50,333.00 3. 2009 - $67,982.00 4. 2010 - $57,977.00 [ 30 ] The father paid annual child support as follows:– 1. 2007 - $2,400.00 2. 2008 - $7,200.00 3. 2009 - $6,600.00 4. 2010 - $1,300.00 5.

January 1 to September 1, 2011 - $1,350.00 (based upon $150.00 per month) until September 1, 2011. [ 31 ] In the October 2007 Separation Agreement, the father’s guideline income was determined as a result of bargaining and negotiation between the parties, with the help of independent legal advice. Presumably the lawyer for the mother had all relevant financial disclosure necessary. The father’s income was inserted into the agreement to match the number for child support arrived at by the parties.

The “ Guideline income” figure does not reflect the father’s claimed income at any point in time as his line 150 was much lower than the agreed “ Guideline income”, and as of November 2009 until July 2010 his earned income was essentially zero. [ 32 ] The father also feels that the mother received a greater matrimonial property settlement, more than one-half, as he assumed more debt. The mother states it was one-half.

The father’s guideline income was apparently “reverse engineered” to provide to the mother the agreed child support and the cash payment she needed to buy her new home, which she had already contracted to buy before the Separation Agreement was concluded or even done its final form. [ 33 ] Section 15 (2) of the Federal Child Support Guidelines reads as follows:– 15(2) Where both spouses agree in writing on the annual income of a spouse, the court may consider that amount to be the spouse's

income for the purposes of these Guidelines if the court thinks that the amount is reasonable having regard to the income informationprovided under

section 21. [34] Section 15(2) is applicable here in that the parties agreed to deem the father an income for support purposes. In thecircumstances, including facilitating the mother’s acquisition of a new home, the deemed income was not unreasonable.

The standardhere is not one of perfection, but merely one of “reasonableness”. [35] I conclude that it would be unfair to allow a review of support retroactive to the October 2009 change in circumstances asboth parties made a number of concessions, and gave up a number of benefits in exchange to get the “bargain” they arrived at as a whole.To review support retroactively now could reward bad faith negotiations, facilitate subsequent cash grabs, and promote uncertainty inagreements made between parties with independent legal advice. Both parties were aware of the Guidelines and were represented bycounsel.

After October 2009 the father’s income is either zero until July 2010 or more than the amount negotiated in October 2007, until2011. [36] As the father is a golf professional, it is difficult to determine his actual income. The father had a number of expenses forfood, drink, goods and services, subcontractors, training, and event/volunteer costs that he had to pay himself out of his salary, as well asother real expenses. Therefore it is not reasonable to use his gross corporate income to determine his annual Guideline income.

Similarly,because the father wrote off a large number of expenses for CRA tax purposes his line 150 is also not reasonable to use for his Guidelineincome. [37] I conclude that the father’s reasonable actual income was between $40,000.00 to $60,000.00 while he was on contract withthe City of Stony Plain golf course which amounts are consistent with the bargain these parties agreed to in October 2007 andafterwards. From December, 2009 to July, 2010, the father’s income is essentially zero. From July, 2010 to September 1, 2011 it is$45,999.00, and currently it is $90,244.00. [38] D.B.S. v.

S.R.G., 2006 SCC 37 , 2006 S.C.C. 37 allows for arrangements made between the parties that werereasonable in all of the circumstances especially in this type of case where the agreement was reached with the help of course. D.B.S.adopts a holistic approach and eschews a needs based approach. [39] There was no change in circumstances until the loss of the father’s job in October 2009 when both his income and hisparenting responsibilities changed. [40] Furthermore, the agreement permitted the mother to a tax advantage and to claim the child related benefits for tax.

A reviewof their evidence shows some serious differences, but is open to argument that they were in fact “over the course of the year” in a sharedarrangement. One presumes the mother would not like to have to pay back the tax adjustment or deal with any inequities in the propertysettlement found in the Separation Agreement. Again a number of concessions were made by each party. [41] The October 2009 change of circumstance is a mere two years after the agreement was signed in October 2007.

No requestby either party was made for review nor any effective notice given to suggest either party was unhappy with the respective advantagesand disadvantages of the negotiated bargain by the parties. [42] Even after the father lost his job and had zero income, the parties reached an agreement (at the mothers request) to deal withthe change, namely that the father would provide all day care” on top of his regular access, saving the parties money. [43] It was only in 2011 after the father had been pressing for over a year to get the Divorce finalized that the mother indicated shewas unhappy with past child support payments.

There is no suggestion that the child has suffered or went without, and in fact the childappears to be well adjusted. There is no suggestion that the father’s income changed upwardly dramatically from the time of settlement tothe time of job loss so as to warrant any adjustment prior to the real change in circumstances being October 2009’s job loss. There is nocompelling evidence to suggest the parties bargain and agreement was unreasonable.

[ 44 ] The father will pay ongoing child support $793.00 each month based on his current Guideline income of $90,244.00 as of September 1,

Section 7 expenses will be shared by the parties on a 60/40 basis based on the parties respective Guideline incomes. Shared Residency for the Child [ 45 ] The father may have initially set the access schedule, but there were a number of untracked changes such that it is impossible to accurately reconstruct the actual time spent with the child to permit a retroactive

Section 9 analysis. [ 46 ] However since February/March, 2011, the parties have clearly by agreement, been on a week on/week off basis. I conclude that this should continue in the child’s best interests. The parties were not initially in a

Section 9 arrangement, however they began to be in such an arrangement in November 2009 after the father lost his job. Costs [ 47 ] The father is awarded costs of this application. Heard on the 22 nd day of November, 2011. Dated at the City of Edmonton, Alberta this 24 th day of November, 2011. Donald Lee J.C.Q.B.A. Appearances: Michele Reeves Attia Reeves Tensfeldt Snow for the Plaintiff Shirley A. McNielly,Q.C. Emery Jamieson LLP for the Defendant