Matthews v Yurich, 2012 ABQB 299

Court of Queen ’ s Bench of Alberta Citation: Matthews v Yurich, 2012 ABQB 299 Date: 20120508 Docket: 4803 153525 Registry: Edmonton Between: David John Matthews Respondent/Plaintiff - and - Teresa Louise Yurich Applicant/Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _______________________________________________________ Background [ 1 ] These parties were married in October 1998 and separated in October 2006. They have one child together who is currently 7 ½ years of age.

The Respondent was a self-employed business owner with significant assets when he first met the Applicant, who was at that time employed in one of his businesses herein. The parties entered into a pre-nuptial contract and a cohabitation agreement was executed by both of them immediately prior to their marriage in October 1998. In reliance upon that agreement, on the subsequent breakdown of the marriage in September 2006, the Respondent husband paid the Applicant wife $200,000 in cash, and the Applicant left the matrimonial home.

Issues to be Addressed 1. Did the parties have a shared parenting arrangement wherein the child of the marriage resides with each party equally? 2. Is this a case in which retroactive child support should be ordered? (

a) If so, what is an appropriate amount? (

b) If so, what is the date at which retroactivity begins? 3. What is the Respondent ’ s Guideline income? Analysis [ 2 ] The Applicant submits that the parties have had a shared parenting arrangement since separation. The Applicant submits that the parenting arrangement was the following from November 2006 when the parties separated each and every week as follows: – (

a) The father had the child in his care from Sunday nights to Thursdays after work; (

b) The mother had the child in her care from after work Thursdays to Sunday night at 7:00 p.m. [ 3 ] Then at some point he parties mutually agreed to change the

schedule such that in weeks one and two the mother had the child from Thursdays to Monday mornings; and in weeks three and four the mother had the child from Thursdays to Sunday evenings at approximately 7:00 p.m. [ 4 ] The father ’ s position is that from November 2006 until September 2009 the child was in his primary care, notwithstanding that the father voluntarily chose to pay set up child support to the Applicant from the outset as if there was a shared parenting arrangement in place between the parties. [ 5 ] In any event a Consent Order was signed in this Court on September 30, 2011 at the initiation of the father so a shared parenting Order has been completed going forward. [ 6 ] As for the mother ’ s income, she has never actually earned more than $40,000.

The father points out however that although the mother ’ s reported income after separation never exceeded $40,000 a year, she has chosen to work only 80% of full-time hours, and in questioning and during her Examination, admitted to earning certain revenues that were never reported on her income tax returns. It is submitted that the Applicant ’ s income in 2007 would have been $58,363; in 2008 $52,413; in 2009 $52,413; in 2010 $53,194.

It is submitted that the Applicants actual 2011 Guideline income is believed to exceed $66,000 if the ongoing “ purse parties ” revenues resulting from the sale of knock off purses had been fully reported on the Applicant ’ s tax returns.

[ 7 ] The bigger problem however exists with respect to the father ’ s Guideline income. Notwithstanding the father ’ s position that he had primary care of the child since separation, at no point between 2007 and the present has there ever been a child support Order in place. The father unilaterally apparently decided to pay the mother $631 per month which works out to a set off income amount for him at the time he began making those monthly payments of approximately $122,000 of annual income, and approximately $108,000 of set off annual income currently.

It appears to me accordingly that the father accepted that he was earning an annual Guideline income of at least $100,000 since the time of his separation. [ 8 ] The father ’ s expert Lance Clark concludes that the father ’ s 2007 through 2010 income is as follows: – 2007 $ 286,930 2008 ($ 46,480) 2009 $ 247,816 2010 $ 126,371. [ 9 ] The average income for child support purposes it is submitted by the father for the last three years ending 2008, 2009 and 2010 is $109,235. [ 10 ] In marked contrast to these calculations are Ms.

Brenda Pisko ’ s conclusions that estimate the father ’ s income as follows: – Income After Income After Attributing

Schedule III Adjustments Corporate Income 2007 $328,539 $391,463 2008 $219,216 $299,898 2009 $165,036 $249,721 3 Year Average $237,597 $313,694. [ 11 ] Mr. Lance Clark in rebuttal to Ms. Pisko ’ s conclusions states that he believes the principal reasons for the differences in annual income figures are that Ms. Pisko has chosen to include all capital gains earned by the corporations while ignoring the capital losses sustained by one of the corporations, as well as her decision to add back into the father ’ s income both the corporate dividends which the father says Ms. Pisko chose to count twice. [ 12 ] Ms.

Pisko ’ s initial response to Mr. Clark ’ s annual Guideline income conclusions was that the Clark report provided for reduction in Canadian exploration expenses, whereas her calculations did not, and included the capital dividends as those funds were actually received by the father. [ 13 ] It is fair to conclude however at this point that the experts have not yet resolved all of the differences between them in their 2007 to 2009 income analysis, and that this continues to be a particular problem in this matter because the 2010 income has not been even estimated by the experts.

Furthermore this process with respect to the father ’ s 2011 income has not even commenced at this point because his corporate returns do not have to be submitted and filed until June/July 2012.

Conclusion [14] There is a Consent Order outlining the current parenting arrangement that has been in place between the parties sinceSeptember 30, 2011, and that Order will continue to reflect the current shared parenting arrangement in place between the parties. [15] As for what occurred in terms of a parenting arrangement between the time the parties separated in October 2006, until theConsent Order of September 30, 2011, the father disagrees with the mother’s claim that the residence of the child was equally shared bythem.

He submits that from November 2006 until September 2009 the child was in his primary care. Irrespective of the father’s claim inthis matter, he voluntarily chose to pay set off child support to the Applicant from the outset in the sum of $631 a month, which roughlyequates to an annual Guideline income for him between $108,000 currently to $122,000 a year in 2007.

This is consistent with hisexpert’s three year average used to calculate his income for determining the father’s Guideline income between 2006 and 2009 of$109,000 a year. [16] Allegedly however the father may also earn additional income from pool tables each and every month of $600 to $700 amonth or $7,200 to $8,400 a year, none of which is declared as income.

Similarly the mother acknowledges not declaring income fromthe sale of knock-off purses. [17] At this stage, I conclude that it is not possible given there is so much competing expert evidence on the father’s yearlyincomes in 2007 and 2008 that it is difficult or impossible to determine what his annual Guideline income is for those years. With respectto the father’s 2009 income the experts coincidentally reached a similar conclusion on – $247,816 vs $249,721. Since there is only asmall difference, it can be split between the parties equally for calculating the 2009 income of the father.

Otherwise there is a profounddifference that exists both with respect to the final income amount as well, as the source of the incomes, of these parties for 2007 and2008. [18] Furthermore I conclude that the 2010 income still has to be analyzed and determined by the experts. The 2011 incomedetermination has not even begun because the corporate returns do not have to be filed until June/July 2012.

I conclude that a trial of anissue will be necessary to determine all but the 2009 annual Guideline income for the father, and to determine the mother’s income for allrelevant years. [19] At that trial, the Supreme Court of Canada’s decision in Contino v Leonelli-Contino, 2005 SCC 63 , 2005, 3 S.C.R.217 and it’s application to

Section 9 in this case will have to be determined. [20]

Section 9 of the Family Child Support Guidelines states:– 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 thecourse 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. [21] In Contino, the Supreme Court of Canada provided guidance on the application of

Section 9 as follows:–

Section 9 of the guidelines expressly provides of a particular regime in cases of shared custody, and this implies a departure from the payor/ recipient model that comes under

section

Section 9 requires a court to determine the amount of child support in accordance with the three listed factors once the 40% threshold is met. The specific language of

section 9 warrants emphasis on flexibility and fairness to ensure that the economic reality and particular circumstances of each family are property accounted for. The three factors structure the exercise and none of them should prevail.... Under s. 9, there is no presumption in favour of awarding at least the guidelines amount under s. 3.

Nor is there a presumption in favour of reducing the parent ’ s child support obligation downward from the Guidelines amount, as it is possible that, after careful review of all of the factors in s. 9, a court will come to the conclusion that the Guidelines amount Is the proper amount of child support. (paras. 19-31) (para. 39) Under s. 9(a), a court is required to take the financial situations of both parents into account, but the provision does not include a conclusive formula to determine how the table amounts are to be considered or accounted for.

The simple set-off amount is the preferable starting point for the

section 9 analysis, but it must be followed by an examination of the continuing ability of the recipient parent to meet the needs of the child, especially in light of fact that many costs are fixed... 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 standard of living experience by the children as they move from one household to the other. (paras. 40-51)

Section 9(

b) does not refer merely to the expenses assumed by the payor parent as a result of the increase in access time from less than 40 percent to more than 40 percent, as argued in this Court. This paragraph recognizes that the total cost of raising children may be greater in shared custody situations than in sole custody situations. 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. These expenses will be apportioned between the parents in accordance with their respective incomes. (paras. 52 -53) s. 9(

c) vests the court with broad discretion to analyse the resources and needs of both the parents and the children. It is important to keep in mind the objectives of the Guidelines, requiring a fair standard of support for the child and fair contributions from both parents.

The court will look at the standard of living of the child in each household and the ability of each parent to absorb the costs required to maintain the appropriate standard of living in the circumstances... (paras. 68-72) [ 22 ] At the trial it can be determined whether or not it is appropriate to set off the mother ’ s notional financial contribution to the child ’ s support against the contribution of the father, and whether there should be a retroactive application of this factor, the appropriate amount of that retroactive child support, and the date of retroactivity. [ 23 ] I conclude that a trial of an issue is required in this case because the conclusions of the experts and their analysis is extremely difficult if not impossible to comprehend without some detail explanation from the experts as to how they reach their conclusions with respect to 2007 and 2008.

Furthermore the experts have only estimated income pursuant to the Federal Child Support Guidelines for the father for 2007 and 2008 so that 2010 and 2011 income is still to be determined on any basis and analysis. Heard on the 5 th day of April, 2012. Dated at the City of Edmonton, Alberta this 8 th day of May, 2012.

Donald Lee J.C.Q.B.A. Appearances: Terry S. Hunt Academy Place Law Offices for the Plaintiff Collista Coles Barr Picard for the Defendant