C.J.T. v. G.A.T., 2012 ABQB 193

Court of Queen ’ s Bench of Alberta Citation: C.J.T. v. G.A.T., 2012 ABQB 193 Date: 20120322 Docket: 4801 126847 Registry: Calgary Between: C.J.T. Plaintiff - and - G.A.T. Defendant _______________________________________________________ Reasons for Judgment of the Honourable Chief Justice Neil Wittmann _______________________________________________________ Introduction [ 1 ] Two applications were brought by the divorced parties, who will be referred to hereafter as “the Wife” and “the Husband”. The Wife has a new common law partner and the Husband a new wife. [ 2 ] The Wife’s application asks for a variation of a previous Order with respect to the Husband’s obligation to pay

section 7 expenses of the children and for reimbursement to the Wife for certain alleged

section 7 expenses since April 2010. The application also requests that the Court direct that the Wife is not required to obtain consent or authorization from the Husband for registering the

children in activities, in which they have already been involved or for incurring necessary and reasonable expenses for the children for educational or medical requirements (“the

section 7 application”). [ 3 ] The other application, brought by the Husband, is for an Order terminating the Husband’s obligation to pay spousal support to the Wife (“the spousal support application”). Background Facts [ 4 ] The Husband and Wife were married July 20 th , 1991 and divorced February 14 th , 2007. There are two children of the marriage, a son, 16 years old and a daughter, 14 years old. The Husband and Wife entered into a Separation Agreement dated May 18 th , 2006. Matrimonial property was divided by the agreement and is not in dispute.

At the time, both the Husband and Wife had legal advice with respect to all of the rights and duties resulting from the execution of the Separation Agreement. A Consent Final Corollary Relief Order was signed by Madam Justice S.L. Martin on August 1 st , 2006 (“the Martin Order”), which incorporated the terms of the Separation Agreement.

The Separation Agreement / Martin Order [ 5 ] Relevant to these applications, the Separation Agreement / Martin Order contained the following: Child Support 3.1 The Husband and the Wife acknowledge their joint obligation to support the children in accordance with their ability to pay. That for the purposes of calculations pursuant to the Federal Child Support Guidelines , the husband’s income is determined to be $84,000.00 and the wife’s income is determined to be $9,000.00. The Husband shall pay $1,207.00 to the Wife per month ...

Section 7 Expenses 4.1 The parties agree that the following extra additional reasonable and necessary expenses will be shared by the parties proportionate to their respective incomes, meaning that currently the Husband shall pay 70% and the Wife shall pay 30% of the following expenses:

a) Child care expenses incurred as a result of [the Wife’s] employment or educational training for employment;

b) Health related expenses that exceed insurance reimbursement by at least $100.00 annually, including but not limited to orthodontic treatment, professional counselling provided by a Psychologist, Social Worker, Psychiatrist, or any other person; Physiotherapy or occupational therapy, speech therapy and prescription drugs, hearing aids, glasses or contact lenses;

c) Extraordinary expenses for primary and secondary school education; or any other educational program which meet the child’s particular needs;

d) Expenses for post-secondary education;

e) Neither party shall incur additional expense as per paragraph 4.1 without the consent of the other party, such consent shall not be unreasonably withheld.

4.2 The parties agree that the following extra additional reasonable and necessary expenses will be shared equally between the parties and that being:

a) the cost of hockey registration and equipment for both children, and

b) the cost of extra curricular recreational activities for both children. 4.3 Neither party shall register the children of the marriage in an extra curricular activity or incur an expense relative to an extra curricular activity without first obtaining the other party’s consent, which consent will not be unreasonable withheld. Spousal Support 7.1 The Husband shall pay to the Wife the sum of $651.00 in spousal support for the period March 15 th , 2006 to March 31 st , 2006. Commencing April 1 st , 2006 and continuing thereafter, the Husband shall pay to the Wife the sum of $1,302.00 per month for spousal support.

This support shall be paid in two equal instalments per month in the amount of $651.00 on the 1 st and 15 th day of each and every month to and including March 15 th , 2016, at which such payments shall terminate absolutely. Prior to March 15 th , 2016, if there is a material change in circumstances, either party may apply to vary the quantum of the spousal support (increase or decrease) or the duration of the spousal support (decrease only). Regardless of any change in the material circumstance of either party the spousal support shall not continue past March 15 th , 2016.

Assuming that all payment have been made by the Husband pursuant to this paragraph or any subsequent court order, and that no outstanding payments or arrears exist as at March 16 th 2016, the absolute waiver of spousal support by the Wife, as contained in paragraph 7.2 to 7.10 shall govern. [ 6 ] As stated above, the Martin Order incorporated verbatim, the provisions relating to the amount of child support, the guideline income, the

section 7 expenses and the obligations detailed in

section 4.1 of the Settlement Agreement above.

Section 4.2 of the Settlement Agreement was also incorporated in the Martin Order with slightly different wording, which is not material.

Section 4.3 of the Settlement Agreement was incorporated, in the Martin Order, verbatim. Similarly, with

section 7.1 of the Settlement Agreement dealing with spousal support. The Evidence A. The Husband [ 7 ] The Husband’s affidavit evidence states that the Wife is currently working and earning a salary of $33,174.00 per year, which is 269% more than the $9,000.00 per year she was earning in 2006 as stipulated in the Separation Agreement. This is based on the wife’s 2010 income tax assessment. He also states, that this income is based on four days a week and that by extrapolation, she could earn $41,467.50 per year, were she to work five days a week.

He also deposes to the fact that the Wife’s new common law partner is now on the title to the Wife’s house and has an estimated base salary of approximately $84,000.00 per year with the potential to earn more. The Wife and her new partner have conducted some extensive renovations in their house. [ 8 ] With respect to his own income, the Husband states that he has remarried and that his new wife has recently lost her job.

He deposes that his current income is approximately $95,000.00 per year, which is only 13 % more than his guideline income of $84,000.00 stated in the Separation Agreement, that using the Spousal Support Advisory Guidelines as a reference, a fair amount of spousal support in 2006 for him to have paid to the wife would have been, the sum of $1,030.00 per month. [ 9 ] The Husband admits to being provided with legal advice not to sign the Separation Agreement, but states at the time that he was still interested in repairing his relationship with the Wife, and was lead to believe by her that if he signed the agreement, she would think about reconciliation.

The Husband also states that he has a household budget (revised) deficit of $3,780.00 per month, that he and his new wife have incurred $100,000.00 in debts, not including the mortgage on the matrimonial home.

[ 10 ] Further, the Husband states that on Child View Standard of Living Test comparing his and his Wife’s households, the Husband’s household total adjusted income is $45,146.00 and the Wife’s household total adjusted income is $116,908.00. He concludes his Household Income Ratio according to the Child View Standard of Living Test is 3.11 and the Wife’s Household Income Ratio is 5.63. [ 11 ] Further, the Husband says he is having difficulty paying his proportionate share of the

section 7 expenses, which amounts to approximately $2,400.00 per year, largely due to his spousal support obligations. The Husband asserts that his children’s interests should take priority over the interests of the Wife. In a later affidavit, the Husband indicates that both he and his new wife have significant hearing impairments and that hearing aids will cost a total of $10,290.00 and his new wife needs significant dental restoration work, which at an anticipated future cost of $28,000.00. The Husband also indicates that he is in debt, that the Wife receives more than 50% of his after tax income on a monthly basis, not including any

section 7 expenses. [ 12 ] In short, the Husband’s position is that he cannot afford to pay spousal support and his proportion of

section 7 expenses, if he is told to pay them. He states it is inequitable and that the Wife no longer requires spousal support due to her change in circumstances and his change in circumstances. B. The Wife [ 13 ] The Wife details the tortured history of several court applications, failed mediation attempts and friction over the exercise of access to the children, the Husband’s refusal to agree to any

section 7 expenses for extra curricular activities or educational needs, especially the daughter’s basketball and the son’s tutoring. She describes the Husband as uncooperative in responding or consenting to things that the children need. She also describes him as obstructive and intransigent, notwithstanding other Court orders. She wishes the

section 7 expenses provision in the Settlement Agreement and Court orders, whereby the Husband’s consent is required before a

section 7 expense can be incurred, to be dispensed with. [ 14 ] The Wife refutes much of the Husband’s evidence about the circumstances surrounding the signing of the Separation Agreement, displays anger about the Husband’s number of partners since the separation, his changes in living accommodations and states that his desire to reconcile was “always superceded by his new romances”.

She also says that any debt the Husband has incurred since the date of the Separation Agreement is his fault, “entirely due to his decisions and mismanagement of the substantial yearly income”. [ 15 ] The Wife’s counsel questioned the Husband on his affidavit and the Husband agreed that although his income went up substantially to $106,000.00 by 2008, he acknowledged the Wife had never applied to have the spousal support increased. The Wife’s counsel does however, in the same breath, indicate that her income went to $30,000.00 by 2008. With respect to

section 7 expenses, the Wife states that this issue remains outstanding, that the daughter is an outstanding basketball athlete, and that the Husband has refused to pay for this sport as a

section 7 expense. The Wife says that she has sent the Husband receipts for

section 7 expenses that she has paid in the past in terms of the son’s tutoring and previous registration costs for the daughter’s basketball, for a total of $4,230.00 since April 2010. The Wife acknowledges that the Husband has never consented to paying any of these expenses. [ 16 ] The Wife resists the application for the termination of spousal support by stating that the Husband knew perfectly well when he signed the Separation Agreement what he was doing and deposes to the number of partners and residences that the Husband has had in the last three years.

She believes at least half of the Husband’s “budget” is either overstated or shows payments for his wife’s assets. After questioning by the Wife’s lawyer, the Husband submitted an amended budget. The Wife also disputes the debt of over $100,000.00 in the past two years, stating that the September 2011 wedding of the Husband and new wife was paid for by relatives, which he now claims he has to pay back. She also disputes the Husband’s extrapolation of her 4 day work week, indicating that she is only allowed to work 30 hrs per week, which she could spread over 5 days but choses to do it in 4 days.

She also states she has repeatedly offered to allow the Husband the option of buying out her spousal support entitlement for the lump sum of $50,000.00 and has received no response to that proposal. [ 17 ] Further, the Wife states that she and the Husband had a 15 year cohabitation during which she was a stay at-home caregiver for the two children and a homemaker for the Husband and that she lost significant time in the workforce through that role, promoted the Husband’s career advancement to her own detriment and understood that the reason she was entitled to spousal support, was that she

would never be able to have a career that would give her the level of income achieved through her marriage to the Husband and that they were to “be equalizing the standards of living in her 2 homes for the benefit of the children, over and above the child support paid.” [ 18 ] The Wife acknowledges that her new common law partner shares expenses and contributes $2,000.00 per month to the household. She considers herself fortunate in this regard, having shared accommodations with him since July 2010.

Other Court Orders and Proceedings [ 19 ] In addition to the Martin Order, there are three other Orders referred to in argument. The first is an Order of Madam Justice Horner, (“the Horner Order”), the second is an Order by Madam Justice Erb (“the Erb Order”) and the third, an Order by Madam Justice Eidsvik (“the Eidsvik Order”). A. The Horner Order [ 20 ] This Order was made December 17 th , 2007 and adjourned the Husband’s application to terminate spousal support to a Domestic Special and directed the parties attend a mediation prior to the Domestic Special and choose a Counsellor for the son. B.

The Erb Order [ 21 ] The Erb Order was made April 21 st , 2008. It indicated that the parties shall refrain from denigrating the other parent in the hearing of the children. It also defined Horse Camp as being a

section 7 expense for the daughter and a cost sharing of this expense to be shared equally between the Husband and Wife with a contribution from grandparents. The Erb Order went on to deal with the requirement that the Husband “shall be responsible for his proportionate share of other

section 7 expenses”. The entire transcript of the proceedings in front of Madam Justice Erb on April 21 st , 2008, was tendered to the Court. It was tendered to show, as the Wife said in her affidavit, that Madam Justice Erb “lectured” the Husband during the proceedings and that he agreed that some of the

section 7 expenses he is now contesting, were reasonable. He was self-represented at the time. The Erb Order also contained a direction that the parties continue with their mediation. C. The Eidsvik Order [ 22 ] This Order was entitled a “Consent Variation Order” dated August 31 st , 2009. It detailed that the guideline income of the Husband was $96,000.00 and the Wife’s was $43,934.00, for the purpose of calculating the proportionate shares of

section 7 expenses. It purported to modify the Martin Order, directing the Husband to pay ongoing

section 3 child support of $1,372.00 per month, commencing January 1 st , 2009, and 69% of the agreed

section 7 expenses, including child care expenses incurred as the result of the wife’s employment, medical and dental insurance premiums attributable to children and uninsured health related expenses. It also stated in paragraph 2: The [Wife] shall not incur any non-emergency

section 7 expenses without obtaining the prior written consent of the [Husband], said consent not to be unreasonably withheld. If either party incurs any non-emergency

section 7 expenses without prior consent of the other, then the party incurring same is responsible for 100% of the cost. Facts A. The Incomes [ 23 ] On the basis of the evidence presented, there is no disagreement that the Separation Agreement and Martin Order was made

on the basis of an income for the Wife of $9,000.00 and an income for the Husband of $84,000.00 and I so find. The incomes of the parties have changed since 2006. One of the issues is the Husband’s income for 2011. His 2011 Income Tax Return is not in evidence, presumably not having yet been prepared or filed. However, a pay stub for December 31 st , 2011 was presented in evidence. On it is stated that the year-to-date earnings including a bonus were $95,040.60. Under the heading “Other Benefits and Information” the pay stub lists taxable benefits and other benefits as follows: 1.

The company portion of an RRSP in the sum of $3,231.60 2. Life taxable benefit of $972.96; 3. Dependant’s life taxable benefit of $36.84 and 4. Auto Allowance Taxable benefit of $2,126.00. 5. In addition, there is reference to the payment for AD&D of $159.92; 6. Paid dental $1,340.16 and 7. Paid health $2,210.40. [ 24 ] The Husband argues that the earnings for 2011 of the Husband should be calculated at $95,040.60.

The Wife says that the taxable benefits and other benefits, totalling $10,077.82 should be added, bringing the Husband’s total income to $105,118.42. [ 25 ] There is no significant dispute about the Wife’s income. For the purposes of these proceedings, I accept that it is as she has stated, namely $33,174.00. B. Budgets

i) The Wife [ 26 ] The Wife’s income and money received calculation is $3,011.90 salary or wages, $1,372.00 child support and $1,302.00 spousal support (all monthly) for a total gross monthly income of $5,685.90. Her mandatory deductions include Income Tax, Canada Pension Plan, Unemployment Insurance, Group Health Insurance and Long Term Disability for a total of $736.74 giving her a net monthly income of $4,949.16. She admits her common law partner contributes $2,000.00 per month to household expenses, as does she, for a total of $4,000.00.

Deducting all of her housing expenses including taxes, utilities, mortgage, insurance, groceries, meals, personal items, children’s clothing, transportation, health, medical and an RRSP payroll deductions, she calculates her expenses to be $4,949.00 for a surplus of 16 cents. ii) The Husband [ 27 ] The Husband presented his amended budget as follows. Total monthly gross income of $7,833.00 based on a yearly income of $95,040.00. Mandatory deductions of $2,392.00 and net monthly income of $5,442.00. His housing, food, toiletries, sundries, clothing, transportation, health and medical total $3,493.00.

His loan payments amount to $2,135.00 and other expenses including child support and spousal support total $3,319.00. RRSP contribution is $274.00. The total expenses are $9,221.00 for a current monthly deficit of $3,780.00. [ 28 ] These amounts are in dispute and on a number of bases as articulated by counsel for the Wife. First, the amount of debt is disputed and it is argued that his credit card statement show a maximum of $25,000.00 debt.

Secondly, the wedding cost, which the Husband now says, when questioned, has to be paid back in terms of an $8,000.00 loan was according to his affidavit of January 16 th , 2012 at paragraph 39, paid for by family. Also, as indicated above, the amount of his income is in dispute, because he has not included taxable benefits. [ 29 ] The correct characterization of the Husband’s employment income is difficult to determine. This is due to the lack of evidence

presented by counsel. There is no T1 Income Tax Return for any recent year of the Husband in evidence. What is in evidence are the Income Tax Assessments for the Husband for the 2008 and 2009 taxation years. The assessment for 2008 shows the Husband’s Line 150 income at $106,390.00. The Husband’s assessment for 2009 shows his Line 150 income assessed at $98,274.00. The pay stub referred to earlier, for December 31 st , 2011, was produced on an undertaking, resulting from the questioning of the Husband on January 27 th , 2012. Counsel were of no particular assistance to the Court.

The Husband’s counsel simply said that the Husband’s income is $95,040.60 and the Wife’s counsel said ‘No’, the Husband’s income as shown on the pay stub has to include taxable and other benefits and thus, should be $105,118.42. This amounts to nothing more than a ’tis so, ’tis not, argument. It puts the Court in a position of having to research the provisions of the Income Tax Act , the Federal Child Support Guidelines and still leaves unanswered some questions. [ 30 ] The Court will do the best it can on the evidence it has.

Aside from the above evidence, there is no evidence as to the income of the Husband for 2010. The issue is what income should properly be included, in Line 150 of a T1 Return for 2011, were it before the Court. The Court also understands that T4 Slips are required to be provided by an Employer to an Employee no later than the end of February in the year following the taxation year in question. Indeed, counsel for the Wife, in her questioning of the Husband on January 27 th , 2012, asked for an undertaking that the Husband produce his year end pay stub for 2011, which is in evidence.

She also requested that the Husband produce his T4 slip for the year 2011, if he received it prior to the middle of February. Presumably, that did not happen. Also presumably, it did happen by the end of February. This application was heard on March 1 st , 2012 and it would have been an easy matter for counsel to tender the T4 slip for 2011 to the Court at the hearing. [ 31 ] Returning to the issue, “Income” is defined in the Federal Child Support Guidelines as follows: “Income” means the annual income determined under sections 15-20. [ 32 ] The relevant

section is

section 16 which states: Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with

Schedule III. [ 33 ] As stated earlier, the Husband has not produced any recent T1 General form. From the form in evidence on behalf of the Wife, it is noted that the T1 General form contains a

section entitled “Total Income” being Line 150. Subsumed in that form is “Employment Income” which is described as (Box 14 on all T4 Slips). This is Line 101 and this is the Line referred to stating the Wife’s employment income at $33,160.71 for the year 2010. The Court is left trying to interpret the pay stub produced and from that, determine what would be on the Husband’s T4 slip, which he no doubt has now received.

Section 6 of the Income Tax Act , R.S.C. 1985 c.1 as amended, is entitled “Inclusions” and lists a number of benefits, taxable benefits to be included in the calculation of income. The general clause is that the value of any benefit of any kind, whatever received or enjoyed by the taxpayer, in respect of or in the course of or by virtue of employment, is to be included: section 6(1)(a). The difficulty is that there follow a number of exceptions. [ 34 ] There are details of the exceptions in subsections to

section 6 of the Income Tax Act , which the Court is unable to apply, based solely on the pay stub made available. The pay stub does, however, purport to list taxable benefits for the year prior to the description of the paid AD&D, paid Dental and paid Health. The taxable benefits total $6,367.40. It is not certain whether the last three items, stated above, form part of the Taxable Benefits or not. Therefore, the Court, doing the best it can on the evidence, finds that the Husband’s income from employment for 2011 is $101,408.00. The Law -

Section 7 Expenses The

Section 7 Application [ 35 ] As indicated earlier, the Wife’s application asks for a variation of a previous Order with respect to the Husband’s obligation to pay

section 7 expenses of the children and for reimbursement to the Wife for certain alleged

section 7 expenses, since April 2010. Relevant to the disposition of this issue is case authority, the Federal Child Support Guidelines, SOR/97-175 , as amended to December 31 st , 2011, and the context of the Separation Agreement and the previous Orders of this Court.

[ 36 ] It is plain and obvious that the Husband and the Wife cannot agree on what a proper non-emergency

section 7 expense is, nor the affordability of it by the Husband, even given that it is appropriately categorized. Morever, the Wife claims that consent or authorization from the Husband to incur necessary and reasonable expenses for the children for educational or medical requirements, ought not to be prerequisite to her being entitled to his proportionate contribution of the

section 7 expenses. A. The Federal Child Support Guidelines [ 37 ] Perhaps one of the most forgotten aspects of The Federal Child Support Guidelines is the statement of objectives in

section 1 . There are four. They include establishing a fair standard of support for children, reducing conflict and tension between spouses, by making the calculation more objective, improving the efficiency of the legal process by giving Courts and spouses guidelines and ensuring consistent treatment of spouses and children who are in similar circumstances. A number of

definitions are then stated. This case is not concerned with

section 3 child support contained in the Guideline Tables. Rather, it is concerned with

section 7 expenses.

Section 7 states in its heading “Special or extraordinary expenses”. It then provides: 7.

(1) In a child support order the court may, on either spouse's request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child's best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family's spending pattern prior to the separation: ... (

d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child's particular needs; ... (

f) extraordinary expenses for extracurricular activities. [ 38 ] There are other sub-headings under section 7 (1) which pertain to medical, dental, childcare and other health related expenses and for post secondary education. Despite the relief asked for in the Wife’s application, with respect to “necessary and reasonable expenses for the children for educational or medical requirements”, the evidence tendered and the main thrust of the application appears to relate to the daughter’s basketball expenses and the son’s tutoring expenses. [ 39 ] Section 7 (1.1) of the Child Support Guidelines contains a definition of extraordinary expenses. It states:

(1.1) For the purposes of paragraphs (1)(

d) and (f), the term “extraordinary expenses” means (

a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or (

b) where paragraph (

a) is not applicable, expenses that the court considers are extraordinary taking into account (

i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, (ii) the nature and number of the educational programs and extracurricular activities, (iii) any special needs and talents of the child or children,

(iv) the overall cost of the programs and activities, and (

v) any other similar factor that the court considers relevant. [ 40 ] The provisions of the Separation Agreement / Martin Order quoted above are relevant for their context, in terms of the present application.

Section 4.1 of the Separation Agreement tracks with specific clauses in section 7(1) of the Guidelines. For example,

section 4.1(

a) is identical to section 7(1)(

a) of the Guidelines.

Section 4.1(

b) is almost identical to section 7(1)(

c) of the Guidelines. Similarly,

section 4.1(

c) is almost identical to section 7(1)(d).

Section 4.1(

d) is identical to section 7(1)(e). [ 41 ]

Section 4.1(

e) of the Separation Agreement / Martin Order states that neither party will incur additional expense referenced in that paragraph without the consent of the other party, but that such consent shall not be reasonably withheld. It is also somewhat noteworthy that

section 4.2 of the Separation Agreement / Martin Order indicates that the cost of hockey registration and equipment for both children, as well as the cost of extracurricular recreational activities for both children, be shared equally, with the same proviso that neither the Wife nor the Husband may register the children in an extracurricular activity or incur an expense relative to that activity, without first obtaining the other parties’ consent, again, which will not be unreasonably withheld.

Section 4.2 of the Separation Agreement / Martin Order represents a deviation from the section 7(2) of the Guidelines which indicates as follows:

(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child. [ 42 ] The case authority cited by counsel includes C.L.E. v. B.M.R. , 2010 ABCA 187 ; G.A.M. v. C.R.M. , 2008 ABQB 621 ; MacIntosh v. MacIntosh , 2003 ABQB 498 . The Court also makes reference to Piwek v. Jagiello , 2011 ABCA 303 ; Peleshaty v. Peleshaty , 2007 ABQB 598 . [ 43 ] In C.L.E. , the

section 7 expense issue was whether tutoring was a proper expense to share and this activity was conceded as a proper expense during the oral hearing of the appeal. Other items were disputed, including school fees, school supplies, horse riding lessons, soccer and gymnastics. Côté J.A. gave the unanimous decision of the Court and in so doing, set out ss. 7(1) and 7(1.1) of the Federal Child Support Guidelines . [ 44 ] He stated at paragraph 55, that

section 7 expenses cannot be “everyday ones”. He also indicated that the disputed items could fit, if anywhere in

section 7, only in section 7(1) (d), (

f) and then only if they were “extraordinary” which is a defined term in section 7(1.1) , meaning they had to be either beyond the payee’s means or disproportionate to her means, taking into account the nature of the activities and the child’s special needs, talents and the costs. He directed the gymnastics claim to be the subject of a trial of an issue as to whether it fell within the category of childcare, because the mother stated that the expense was necessary because she was at work.

He found that school fees and school supplies were not “extraordinary”, that this cost was modest, nor were they expenses that most children do not undertake. He did find that horse riding lessons and soccer were not proper

section 7 expenses, because the child in question did not need this much money spent on extracurricular activities. The cost of horse riding lessons and soccer totalled $1,104.00 for a year. [ 45 ] In MacIntosh , Veit J. of this Court agreed with the submission of the father, that for parents with income levels involved in that case, the extracurricular expenses for ballet and tae kwondo were not extraordinary. The father’s deemed income was $88,000.00. The amount of the mother’s income was approximately $60,000.00. [ 46 ] In G.A.M. , the father’s latest income was $74,100.00 and the mother’s imputed income was $35,000.00. Langston J. in considering a claim for retroactive

section 7 expenses, found some of the claims of the mother were not legitimate

section 7 expenses and that certain health care costs paid by the father were. He did find that had the parties been able to communicate, the children would have been enrolled in some of the programs claimed by the mother, which he fixed retroactively upon the father as his “section 7 obligations” at $1,000.00. There were three children. Both the mother and father were teachers. I do not find this case of much assistance because we do not know what the

section 7 claims were that were not legitimate and what programs the children were enrolled in unilaterally by the mother. [ 47 ] Piwek , from our Court of Appeal, stands for the proposition that the tuition for a private school for the child may be an

extraordinary expense within

section 7 of the Guidelines. The case was returned to the Court of Queen’s Bench for a “properdetermination of the reasonableness of the expense based on evidence.” In this regard, the Court referenced Bland v. Bland, 1999 ABQB236 at paragraph 24 which set out a number of factors to be considered. In Peleshaty, Nielsen J. considered those factors. The claim forsection 7 expenses in Peleshaty was $2,693.00 for 2006 and $5,288 for 2007, falling into the categories of school and bus expenses;hockey expenses for the boys; and expenses for other extracurricular activities such as skating and swimming: paragraph 92. Afterreferencing

section 7 of the Federal Child Support Guidelines, Nielsen J. quoted Dawson J. in Miller v. McClement (1997), (SK KB), 160 Sask. R. 232 (Q.B.), with respect to the definition of extraordinary. In the latter case, the Court stated at paragraph19: The expression “extraordinary” implies that the expenses must be exceptional or out of the ordinary, either in their nature or in theiramount, when compared to the expenses ordinarily incurred by a typical household with a similar income. “Extraordinary” in thatsubsection means extraordinary in relation to the average child.

In interpreting the categories there is also a conjunctive test; the expensemust be necessary in relation to the child’s best interests and as well reasonable having regard to the means of the spouses, the child andthe family’s spending pattern. [48] Further, the factors to be considered at paragraph 24 of Bland, adopted by Nielsen J. at paragraph 95, were as follows: (

a) the combined income of the parties; (

b) the fact that two households must be maintained; (

c) the percentage of the combined income represented by the expense; (

d) any debt of the parties; (

e) any prospect for the decline or increase in the parties’ means in the future (in Bland, the income of the parent from whom thecontribution was sought was anticipated to decline by about 30% in near future); (

f) whether that parent who had paid the expense in the past will be able to continue to do so without the contribution of the otherparent; and (

g) whether the parent from whom the contribution was sought was consulted about the expense before it was incurred. [49] Nielsen J., concluded that school and bus expenses were not extraordinary because they were usual expenses associated withattending school. He found that the expenses associated with hockey and the extracurricular activities, to be extraordinary expensesincurred in relation to the best interests of the children. The sharing formula to be applied is also expressed at paragraph 100 ofPeleshaty.

There, Nielsen J. set out the father’s income, then stated that the amount of spousal support must be deducted from thepayor’s total income for the purposes of calculating the share of

section 7 expenses and should be added to the payee’s income forsection 7 purposes. Then, the

section 7 expenses are to be shared proportionately. Obviously, to apply that formula, the amount ofspousal support must be determined first. The Law - Spousal Support [50] Both parties cited a recent case of L.M.P. v. L.S., 2011 SCC 64, a Supreme Court of Canada case from Quebec decided December 21st, 2011. In addition, the Divorce Act, RSC 1985, c.3 (2nd Supp.), section 17(1), (4.1), (7); Spousal Support AdvisoryGuidelines authored by Professor Carol Rogerson and Professor Rollie Thompson, July, 2008. Another relevant authority since LMP isBarnes v.

Barnes, 2012 NSSC 21. [51] In LMP, the wife was diagnosed with multiple sclerosis shortly after the parties married in 1988 and did not work thereafter.Upon separation in 2002, the parties entered into a Settlement Agreement that was incorporated into a Court Order in 2003. By the termsthereof, the wife was to receive spousal support in the amount of $3,688.00 per month, which sum was to be indexed.

The husband madean application to vary spousal support in 2007, by reducing it and ultimately cancelling it on the grounds that there was a change in hisfinancial circumstances and work. [52] The case is instructive on the issue of how to approach an application for variation of a Spousal Support Order under section

17(4.1) of the Divorce Act , where a Settlement Agreement has been incorporated into a Supposal Support Order, which is a circumstance here. The majority of the Court, in a judgment authored by Abella and Rothstein JJ., considered the policy reasons and role of separation agreements in the context of divorcing parties, the relationship of those agreements when considering the application of the provisions of

section 17 of the Divorce Act on an application to vary, the threshold for variation and how a Court should approach the variation should the threshold be met. [ 53 ] The majority reinforced the concept that there were sound policy reasons to encourage a negotiated settlement between the parties. The test for Initial Support Orders under the Divorce Act was discussed and then, consideration was given to the role of separation agreements in a variation application, pursuant to

section 17 . The provisions of

section 17 of the Divorce Act referred to above, are as follows: 17.

(1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively, (

a) a support order or any provision thereof on application by either or both former spouses; or ...

(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. ...

(7) A variation order varying a spousal support order should (

a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown; (

b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (

c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time. [ 54 ] After citing section 17(1) , (4.1) , (7) of the Divorce Act , the majority made a point of indicating that the objectives of variation orders are virtually identical to those of an Initial Support Order but made it clear, that the factors to be considered are significantly different because of the provisions of section 17(4.1) which indicated that a “change in the circumstances” of the parties was the sole factor, whereas making an initial order, other considerations, pursuant to

section 15.2(4)(a), (b), (

c) were under consideration: paragraph 22. The majority considered these differences when considering a Variation Order or an Initial Support Order and noted, that unlike

section 15.2(4)(

c) which directs a Court to consider an order, agreement or arrangement relating to support of either spouse, section 17(4.1) does not reference agreements but simply requires that a change in the condition, means, needs or other circumstances of either former spouse has occurred: paragraph 23. [ 55 ] The threshold for variation of a prior Spousal Support Order under

section 17 , involves a Court considering whether there has been a change in the conditions, means, needs or other circumstances of either former spouse since the making of the Spousal Support Order: paragraph 29. The Court stated that the onus is on the party seeking a variation to establish such a change and that, the change must be “material”, which means a change that if known at the time, would likely have resulted in different terms.

The Court also indicated that the material change must have a degree of permanency and not be a temporary change and that the threshold variation question is the same, whether or not there has been a Separation Agreement incorporated into a Court Order. [ 56 ] If a Separation Agreement exists, the Court asks whether it contemplated future events or defined what would be a material change in the future and whether the agreement purports to be final or not. The Court’s jurisdiction under

section 17 cannot be ousted: paragraph 41. Given that there is a material change, a Court is cautioned that in making a Variation Order, the Court is to limit themselves to making the appropriate variation, depending on what material changes are found and is not to weigh all the factors that would be required to make a fresh Order unrelated to the existing one unless the effect is to void the previous Order or Agreement: paragraph 47.

Finally, the Court then directs that variation applications, once the threshold question has been answered entitling the Court to make a variation, is mandated to consider and reflect upon the objectives in section 17(7) . [ 57 ] In LMP, the Court found the threshold question had not been answered to the effect that there had been a material change, so that no variation could occur.

[ 58 ] In Barnes , Jollimore J. had before him a couple that co-habited since 1988, were married since 1999, separated in 2008 and entered into a comprehensive Separation Agreement incorporated into an Order which include a provision for spousal maintenance payments. That Agreement and Order was made in the first half of 2008. The husband’s annual income was stated to be approximately $50,000.00 and the income of Ms. Barnes was $27,000.00, according to the Agreement. Thereafter, the husband would pay the wife $300.00 for maintenance and support indefinitely.

The husband applied to terminate his spousal maintenance payments in December 2008, but discontinued that effort and made the application again in 2010, which was subject to a later settlement. The application for Jollimore J. was made in October 2011. Jollimore J. purported to apply jurisprudence pursuant to the Divorce Act to variation applications pursuant to the Maintenance and Custody Act , RNSN 1989, c.160 and cited LMP in this regard.

After analysing the evidence before him, Jollimore J. found that the husband’s income was less than it was when the Order was registered and a reduction from $50,000.00 to $32,500.00 for an approximate decrease by 35% was “ongoing and significant”: paragraph 34. He found that this was a change in circumstances, which allowed him to vary the Spousal Maintenance Order. Applying that test, he reduced the monthly spousal maintenance to Ms. Barnes to $225.00 from $300.00. Analysis - Spousal Support 1.

Material Change in Circumstances [ 59 ] Applying the principles in L.M.P. , I must first determine whether the threshold question has been answered affirmatively, so as to permit any variation in the Spousal Support Order. No material change, no variation. The position of the Husband is that there has been a material change in circumstances.

He refers to that part of paragraph 7.1 of the Separation Agreement / Martin Order, which contains the following condition: Prior to March 15 th , 2016, if there is a material change in circumstances, either party may apply to vary the quantum of the spousal support (increase or decrease) or the duration of the spousal support (decrease only).

Regardless of any change in the material circumstance of either party, the spousal support shall not continue past March 15 th , 2016. [ 60 ] The Husband submits that if the Spousal Support Advisory Guidelines were in place when the parties were negotiating the Separation Agreement, the range of support would have been from $772.00 per month on the low end to $1,210.00 per month on the high end and that the $1,302.00 per month “greatly exceeds” this range.

He further submits that the Wife’s income has increased 712% from that reported on her Income Tax Return for 2006 of $4,842.00, to over $39,322.00 in 2011 and he argues that she has the potential to earn even more if she chooses to accept more hours per week. The Wife, during questioning, stated that at the time she signed the Separation Agreement, she did not anticipate this increase in her income. Further, the Husband submits that his income has decreased since 2008, when his income was $106,000.00, down to $95,000.00 in 2011 and anticipates it will go down to $94,000.00 in the year 2012.

A number of other submissions were made by the Husband with respect to the contribution of the Wife’s common law partner to the home, including $2,000.00 per month towards the household. Further, the Husband indicates that during questioning, that the Wife stated that she did not anticipate that she would have a new partner living with her and sharing expenses with her at the time she signed the Separation Agreement.

The Husband also argues that a comparison of the standards of living in the homes is that after payment of child support and spousal support, the Husband’s adjusted income is $45,218.00 and the Wife’s adjusted income (including her common law partner’s estimated income at $84,000.00 per year) is $120,706.00. Household income ratios were then compared with and without spousal support. [ 61 ] The position of the Wife is basically that a deal is a deal. She argues that there is no information about why the Husband agreed to the amount of spousal support he did in the Separation Agreement, contrary to legal advice.

Further, the Wife argues that the living arrangements are not relevant material changes contemplated in the Separation Agreement, because paragraph 7.1 which refers only to a change in the material circumstances of “either party”, that paragraph 7.7(

b) of the Separation Agreement contains an acknowledgement by both parties that they were advised of and considered the Wife’s career and employment opportunities and any limitations or changes of the same and that “this refers to future as well as past employment”. The Wife insists that the Husband’s income for the purposes of this application, should be $105,118.00 but concedes that the Wife’s Guideline income for 2011, will be $39,322.00. She also refers to a number of household ratios, with and without

section 7 expenses and each party disputes the other’s budget. [ 62 ] As stated earlier, I find, for the purposes of this application, that the Husband’s income for 2011 is $101,408.00 per year, not the $105,000.00 claimed by the Wife.

[63] I do not accept the Husband’s argument that had there been Spousal Support Advisory Guidelines in place at the time hesigned the Separation Agreement, his agreed amount of spousal support would have been different and that therefore, now that there areSpousal Support Advisory Guidelines, there exists a material change. The evidence is, and I find as a fact, because it is not disputed byeither party, that the Husband signed the Separation Agreement contrary to legal advice.

His evidence was that he signed it because hethought that if he signed it contrary to legal advice, there was a chance he could reconcile with the Wife. The Wife’s evidence on thisissue is to the contrary. The Wife now has a common law partner, sharing expenses and she is earning substantially more than she was in2006. It is to be remembered that the test is not only whether there has been a material change in the income of the parties; it is whetherthere has been a material change in the circumstances of the parties, according to the Separation Agreement / Martin Order.

The DivorceAct, section 17 (4.1) is more expansive, referring to “a change in the condition, means, needs or other circumstances.” Therefore, abroader consideration than simply whether the incomes of either party have changed materially is mandated. “Circumstances” allows aCourt to consider the whole context of the living arrangements, expenses and income of both parties. Put another way, as stated in Willickv.

Willick, (SCC), [1994] 3 S.C.R. 670 by Sopinka J., quoted with approval in L.M.P., where he said at page 688: In deciding whether the conditions for variation exist, it is common ground that the change must be a material change of circumstances.This means a change, such that, if known at the time, would likely have resulted in different terms. The corollary to this is that if thematter which is relied on as constituting a change was known at the relevant time it cannot be relied on as the basis for variation. [64] The Husband argues that this is a subjective test. The Wife quotes

section 7.7.

Section 7.7 falls under the heading “Waiver ofSpousal Support by a Wife”.

Section 7.1 falls under the heading “Spousal Support”. As indicated,

section 7.1 is the

section that enablesthe parties to seek a decrease or the Husband to seek a termination or the Wife to seek an increase, if there is a material change incircumstances.

Section 7.7 cannot be read as deeming forseeable, changes in income and living arrangements, as argued by the Wife.

Ido not accept that argument. [65] In considering the changes in their respective incomes of each party based on 2011 incomes, as I have found them to be, thechange in living arrangements both of the Husband and the Wife and the contribution of the common law husband of the Wife of$2,000.00 per month towards living expenses, as well as the respective budgets and other obligations and debts of both parties, Iconclude that if all of these circumstances that existed in 2011 were known by the parties in 2006, the Separation Agreement and MartinOrder would have contained different terms.

Thus, the Willick test has been met and the threshold condition is met to allow the Court tochange spousal support. 2. Termination or Variation [66] The change in spousal support could either be a termination of it or a reduction. I will first test what kind of a variation wouldresult by applying the Spousal Support Advisory Guidelines to the present circumstances. I note that a Court is cautioned in L.M.P. notto be starting afresh as if it were making an initial Spousal Support Order. Acknowledging that admonition, it is appropriate to look at theSpousal Support Advisory Guidelines.

The basic with with child support formula in those Guidelines, requires the determination of theIndividual Net Disposable Income (“INDI”) of each spouse. The payor spouse’s INDI is guideline income, minus child support, minustaxes and deductions. The recipient’s INDI is her guideline income, minus notional child support, minus taxes and deductions, plusgovernment benefits and credits.

When the INDIs are added together, a range of spousal support can be determined that would berequired to leave the lower income recipient’s spouse with between 40 and 46% of the combined INDI. [67] Using the Spousal Support Advisory Guidelines and the Child View Software with Children Support Formula, applying thechild support and income amounts as stated below, the range of annual spousal support that the Husband would pay to the Wife is from$4,030.00 to $12,867.00 per year or a monthly spousal support of $336.00 to $1,072.00.

The mid-range spousal support is an annualvalue of $8,449.00 or $704.00 a month. [68] For this purpose, I have used the Husband’s 2011 income at $101,408.00, the Wife’s 2011 income at $39,322.00 and childsupport at $16,464.00 based on the monthly amount of $1,372.00 per month as stipulated in the Eidsvik Order. [69] Also, as stated earlier, the parties in this application are polarized. The Husband wants me to terminate spousal support; theWife wants me to continue it on the basis of the Separation Agreement / Martin Order.

It is important for any court engaging in thisexercise, to understand that the Spousal Support Advisory Guidelines are only guidelines and advisory at that. They do, however,provide a helpful range.

[ 70 ] In considering whether to terminate or whether to continue the spousal support, I have regard to the circumstances of the Husband and the Wife, including their living arrangements and the fact that the Wife’s household has a contributing member to the extent of $2,000.00 per month from her common law partner. I have also considered the financial circumstances of the Husband and the fact that his new wife is not presently employed, that there is a substantial amount of debt.

I also accept the evidence that the Husband made an improvident bargain when he entered into the Separation Agreement / Martin Order. [ 71 ] People who make improvident bargains with the benefit of legal advice should not be rewarded for their conduct, absent exceptional circumstances which I find do not exist here.

But given I have found a material change in circumstances, as contemplated in the Separation Agreement itself, considering all of the personal and household circumstances of the parties, including the notional application of the Spousal Support Advisory Guidelines to the facts as I have found them, I consider it appropriate to reduce spousal support to the mid-range of spousal support yielded by the Spousal Support Advisory Guidelines. I am also mandated to consider the section 17(7) factors set out in the Divorce Act referred to above. The Wife is moving towards self sufficiency.

This was a long term marriage, the parties having been married July 20 th , 1991 and divorced February 14 th , 2007. The Wife did suffer an economic disadvantage as the result of the marriage.

I have also considered the terms of the Separation Agreement / Martin Order that the spousal support will, in any event, end, or in the words of the Separation Agreement “terminate absolutely, March 15 th , 2016.” [ 72 ] Considering all of these factors, the Husband’s spousal support will be reduced to $700.00 per month effective April 1 st , 2012 and continue thereafter until March 15 th , 2016 absent a material change of circumstances. Non-Emergency

Section 7 Expenses [ 73 ] I do not find it difficult to deal with non-emergency

section 7 expenses incurred to date. The evidence is clear. The Wife spent the money claimed, $4,210.00, on non-emergency

section 7 expenses without the consent of the Husband since the making of the Eidsvik Order. The Eidsvik Order states unequivocally that “if either party incurs any non-emergency

section 7 expense without prior consent of the other, then the party incurring same is responsible for 100% of the cost.” [ 74 ] Court orders are to be respected and adhered to. Applying after the fact for a prohibited remedy ought not to be countenanced. Therefore, the Wife’s claim for any non-emergency

section 7 expenses incurred without prior consent of the Husband is dismissed. It does not matter whether he unreasonably withheld his consent and I make no finding in that regard. [ 75 ] On a go forward basis, I cannot forsee that these parties will be reasonable with each other or agree on what is an appropriate non-emergency

section 7 expense. The focus of their dispute appears to be the daughter’s basketball and the tutoring charges attributable to the son. One of the Husband’s arguments was that his children’s expenses should come first and take priority over the interests of the Wife. This Court does not make any finding in that regard but acknowledges the importance of the best interests of the children, including the payment of appropriate

section 7 expenses, depending on the quantum of

section 3 child support, the income of the parties and the nature and quantum of the

section 7 expenses claimed. [ 76 ] Two things are important here. The first is that according to the Separation Agreement / Martin Order, certain

section 7 expenses were to be shared 70% by the Husband and 30% by the Wife including extraordinary expenses for primary and secondary school education or any other educational program to meet a child’s particular needs. The proportionate shares were changed to 69% and 31% by the Eidsvik Order. Secondly, the reasonable and necessary expenses for extracurricular recreational activities of the children were to be shared equally according to the Separation Agreement / Martin Order. [ 77 ] The evidence clearly demonstrates an inability for these parties to agree on either, what is best for the son’s tutoring needs, or the daughter’s basketball aspirations. The approximate cost for non-emergency

section 7 expenses over approximately 2 years, or is $4,200.00 per year, or $115.00 per month. [ 78 ] The parties have argued strenuously whether this sum is a proper

section 7 expense at all. The Husband argues that the daughter’s basketball expenses were not extraordinary, citing C.L.E. and MacIntosh . The Wife argues to the contrary. The main thrust of the Husband’s argument is that the non-emergency

section 7 expenses for the son and daughter were incurred needlessly in the sense that

there are other available, less costly alternatives, rather than characterizing them as improper. [ 79 ] The Court again refers to the Separation Agreement / Martin Order where there was an acknowledgement in paragraph 4.2, that reasonable and necessary expenses, which the parties defined as including the cost of hockey registration and equipment for both children and the costs of extracurricular recreational activities for both children, would be shared equally. On the other hand, an extraordinary expense for education under

section 4.1(

c) was to be shared proportionately, at that time 70% to the Husband and 30% to the Wife. [ 80 ] The new proportionate shares would be based on the Husband’s income of $101,400.00 and the Wife’s income of $39,300.00. The new Spousal Support is to be subtracted from the Husband’s income, that is $8,400.00 per year, and added to the Wife’s income for the purposes of calculating the proportionate share of

section 7 expenses: Peleshaty at paragraph 100 . Thus, the proportionate shares are 66% for the Husband and 34% for the Wife. [ 81 ] To avoid further disputes, which seem to be irreconcilable, short of expensive Court proceedings, I order that the Husband pay $100.00 per month starting April 1 st , 2012, as non-emergency

section 7 expenses, in addition to his

section 3 child support obligations. This sum will continue to be payable each and every month along with his

section 3 child support for so long as the son’s tutoring continues and the daughter’s basketball continues. Should either cease, the Husband’s non-emergency

section 7 payments will be reduced to $50.00 per month. If both should cease, the Husband’s non-emergency

section 7 expense will be reduced to $0.00. [ 82 ] If a new activity for non-emergency

section 7 expenses arises and is disputed, the parties may apply to the Court, only after proceeding to mediation. The Court is aware that this ruling blends the proportionate share of the educational non-emergency

section 7 expense contemplated in the Separation Agreement and Eidsvik Order and the equal division for extracurricular, non-emergency recreational expenses. But, on the present evidence, it hopefully eliminates the need for the parties to continue fighting about it. Conclusion [ 83 ] Effective April 1 st , 2012, the Husband’s spousal support obligation to the Wife will be $700.00 per month, to be continued until March 15 th , 2016, subject to a material change in circumstances. [ 84 ] The non-emergency

section 7 expenses payable by the Husband to the Wife, effective April 1 st , 2012, will be fixed at $100.00 per month, which will be added to his

section 3 support payments each and every month, to continue so long as the son is obtaining extra tutoring that is being paid for by the Wife and the daughter is enrolled in a paid basketball program. If either should cease, the Husband’s non-emergency

section 7 expense payment will be reduced to $50.00 per month and if both should cease, the Husband’s non- emergency

section 7 expense payment will be reduced to $0.00. This

section 7 expense ruling relates only to non-emergency

section 7 expenses and the Separation Agreement and Martin Order, as modified by the Eidsvik Order, remains in full force and effect with respect to any emergency

section 7 expenses. As success was divided in this matter, the parties will bear their own costs. Heard on the 1 st day of March, 2012. Dated at the City of Calgary, Alberta this 22 nd day of March, 2012.

Neil Wittmann C.J.C.Q.B.A. Appearances: Ruellen Forsyth-Nicholson for the Plaintiff Diana Richmond for the Defendant